Editor's Note: Technology Daily is taking its annual end-of-summer recess beginning on Aug. 25. We will resume publication on Sept. 2.
Telecom
Industry Braces Itself For Lawsuits Over Recent FCC Order
by Teri Rucker
While companies were appeased Thursday evening when the FCC delivered its long-awaited final order on new rules for the telecommunications industry, experts say any feeling of complacency will be rocked as soon as the first court case is filed.
The FCC on Thursday released the more than 500-page decision that deregulates new investments by regional Bell companies, outlines a phase-out period for competitor access to certain portions of the network and gives states a greater role in deregulation.
Companies and industry groups affected by the order are studying the decision to determine its impact and how to proceed.
The decision "does bring some certainty," Claudia Jones, spokeswoman for AT&T, said. While AT&T disagrees with the portion of the order deregulating broadband, "on face value, it brings certainty because it presents guidelines going forward," she said.
The rules will become effective 30 days after they are published in the Federal Register, or in approximately six weeks. However, the order includes some information requests requiring approval from the Office of Management and Budget that could delay the effective date, an FCC official said.
The decision "provides the right incentives" for investment in high-speed Internet infrastructure and is "a historic decision," because it represents a shift to facilities-based competition, said Grant Seiffert, vice president of government relations at the Telecommunications Industry Association.
Looming over the entire process is the threat of litigation. "Clearly, this order is going to be appealed and it is going to be appealed by both sides," said Russell Frisby, president of CompTel. It is likely lawsuits will be brought and companies will file petitions for reconsideration or clarification at the FCC, he noted.
In the meantime, CompTel will begin working with state utility commissions, which already have begun work to implement their portion of the order that requires them to study the competitiveness of certain portions of the Bell network.
But it is ironic that the industry keeps itself in turmoil with these lawsuits, Qwest CEO Richard Notebaert said at the Progress and Freedom Foundation's Aspen Summit this week. "We have created within our industry a lawyers' dream," he said, noting that the same rules have been remanded repeatedly to the FCC because of industry-lead lawsuits. "Let's get less litigious," he said.
Even FCC Chairman Michael Powell said some of the rules are shoddy. "There are some fateful decisions as well that I believe represent poor policy and which flout the law," he said upon releasing the final order.
When the lawsuits flood in, agency lawyers must defend an order that the head of the FCC has criticized in part. But an FCC official said that will not affect the quality of the defense. The Office of the General Counsel will be charged with the legal defense, and they are some of the most professional, ethical, skilled lawyers in the business, the official said.
Besides, the decision is well crafted and should withstand court scrutiny, he said.
Seiffert said he is concerned about the lawsuits: "If we end up in litigation, I hope the courts act swiftly. If they don't, we will be going to Congress asking them to make some decisions faster."
White House
Tech Industry Lauds Appointment Of New NTIA Chief
by Ted Leventhal
Members of the technology community welcomed the news of Michael Gallagher's nomination to lead the National Telecommunications and Information Administration (NTIA).
President Bush on Thursday nominated Gallagher, deputy chief of staff at the Commerce Department, to succeed Nancy Victory as assistant secretary of Commerce for communications and information.
Gallagher was the NTIA's deputy assistant secretary and joined Commerce after working in the wireless industry as director of government relations for AirTouch Communications, and vice president of state public policy for Verizon Wireless.
He also worked for former Rep. Rick White, R-Wash., who is now president of lobbying group TechNet. A lawyer, he had worked for the firm Perkins Coie.
"Mike has demonstrated the management skills and policy background that will be critical to serving in this position," Commerce Secretary Donald Evans said in a statement. Evans said Gallagher's "vast experience" in telecommunications policy will be an asset in dealing with upcoming broadband and wireless issues.
"It's hard to think of a better guy to get this job," said White.
Gallagher was White's administrative assistant for four years in Congress, and White remains impressed with his protégé's energy and enthusiasm.
"He has the energy to get things off the dime and get something done," he said.
"We think he's provided leadership in past on spectrum issues and will do so in future," said Grant Seiffert of the Telecommunications Industry Association. "He's attended our annual trade shows," he said. "We've had a good working relationship with him over past few years."
Michael Englehardt, pubic relations director with Wind River Systems, said Gallagher always has impressed industry with his depth of knowledge on the issues and is known for reading every FCC study on broadband deployment and going toe-to-toe with industry on the topic of broadband deployment.
"For a guy who looks like he's 18 years old, his depth of knowledge is impressive," he said. "Gallagher has always gone deeper into the issues," Englehardt said. "He hasn't always told us what we wanted to hear, but he doesn't pay lip service on the issues, either," he said.
Trade
U.S. Tech Industry Presses For WTO Gains In Cancun
by William New
The beleaguered information and communications technology industry has been largely left out of the heated negotiations at the World Trade Organization, but is poised with suggestions for further opening world markets for its goods and services at next month's WTO ministerial.
"A number of sectors are actively lobbying for total elimination of duties in the context of the Doha round," said Tim Bennett, senior vice president at electronics group AeA. "The hope is that all 146 WTO countries would be subject to those eliminations" with longer phase out periods for developing countries.
The WTO ministerial in Cancun, Mexico, from Sept. 10-14 is the midway point to the end of the current round of negotiations launched in Doha, Qatar, in November 2001.
An industry goal is to get all WTO members to agree to eliminate tariffs on a list of technology products. They are pushing for agreement in the non-agricultural market access negotiations that duties across all countries be reduced and eliminated for certain sectors, including high-tech.
The list of products would include those in the 1996 Information Technology Agreement, which about 60 countries have joined, plus new technologies. U.S. industry is not in full agreement on which products should be added, but generally agrees on the idea. U.S. negotiators support the idea as well, Bennett said.
Other groups involved are the Information Technology Industry Council (ITI), Electronics Industry Alliance, Semiconductor Industry Association, and Semiconductor Equipment and Materials International.
A second tech priority in the round is to make progress in the services negotiations, which is being held hostage by a snarl in the agriculture talks. The industry is seeking full market access and fair treatment for services essential to supporting e-commerce transactions, Bennett said. These include telecommunications, computer services, advertising, distribution and express delivery.
A third priority is for ministers to discuss "trade facilitation," which includes harmonization and modernization of customs procedures.
Robert Vastine, president of the Coalition of Service Industries, said services negotiations cannot wait for the agriculture talks to move forward because it will be too late by then.
"The bottom line is that there is not going to be time" for services if negotiators wait for a breakthrough on agriculture, Vastine said. In trade negotiations, deadlocks often break at the very end of the allotted time period, which could be the final months of 2004 since talks end in January 2005. "We cannot have a good services negotiation in two months," Vastine said.
Vastine said the services sector will begin right after Cancun to "start marking time" for its negotiation. "We cannot go on this way," he said.
Colleen Morton, ITI vice president for technology and trade, said U.S. industry representatives are going to Cancun in order to "keep our issues on the radar screen."
"We're basically going down there with other IT organizations saying, 'Don't forget about us,'" Morton said. "We still feel we can make a huge contribution to global economic growth but if there are a lot of barriers that don't get addressed, there won't be that contribution."
Budget
Information Technology Permeates Defense Appropriations Bills
by William New
The Defense Department appropriations bills passed by Congress are peppered with references to information technology programs.
Defense appropriations eclipse all other agencies in the federal government. The White House requested $372 billion overall; the House provided $369 billion, the Senate $386.6 billion.
The House offered $27.6 billion for information technology, undercutting the White House request of $27.9 billion by some $321 million. The committee said it "remains concerned about the continued growth in information technology programs, particularly the growth in operation and maintenance accounts."
The committee said that during the past two years the IT budget has increased over 15 percent in the operation and maintenance accounts. The committee said it fully supports the department's "transformation" of its systems and methodologies, but said it "continues to believe that the Department of Defense must be more effective in eliminating unneeded legacy [pre-existing] systems and consolidating the large number of disparate networks that are currently being maintained."
This led to reductions of $100 million for Navy and Air Force, and $60 million for Army and department-wide.
Programs in the IT category of the budget include Army programs in online technology training and distance learning. It also includes a study on how Internet and wireless technology are transforming military life, and an Army Web-based portal initiative.
Another significant IT appropriation is the Future Combat System, which the House would give $1.7 billion. That program is a family of advanced, networked systems that are air and ground-based and will work as a single entity instead of a collection of disparate systems.
Also, the Air Force requested $439 million for an advanced wideband system, but the House cut that to $289 million. The system is envisioned as using satellite laser communications and Internet protocols to provide a "significant leap" in communications bandwidth for the military, intelligence community and NASA, the committee said.
But the committee said it fears the "extremely aggressive [advanced wideband system] acquisition schedule could ultimately become a rush to failure." The committee said it is "further concerned" that certain activities will occur "prior to a firm understanding of detailed user requirements, a problem significantly exacerbated by the number and variety of users that must be satisfied with this system."
The House Appropriations Committee instructed the undersecretary of Defense for acquisition, logistics and technology to provide a report within 120 days of enactment of the law on the steps the department has taken to ensure that "lead systems integrator" contracting mechanisms have adequate safeguards. The notion is that lead contractors must ensure sensitive information is protected as they subcontract portions of the contract. The report must include a review of how the department intends to ensure adequate firewalls exist between the parent company and the subcontractors.
The Senate would cut the Defense Information Systems Agency funding request of $1.1 billion to $1 billion.
The Senate also includes $7 million for a Defense biometrics program. The Appropriations Committee encouraged the Homeland Security Department to establish a biometrics office to coordinate their biometrics efforts with Defense.
Budget
Congress Earmarks Funds For 'Intelligent Transportation'
by Ted Leventhal
Congressional interest in using technology to create "intelligent transportation systems" (ITS) continues to grow, with the House Appropriations Committee having approved a bill that would allocate more than $100 million in fiscal 2004 for research and development into such projects.
ITS incorporates both traditional and wireless telecommunication systems into the transportation infrastructure, including vehicles themselves, to monitor and manage traffic flow, reduce congestion, provide directions to travelers, and implement other time-saving and productivity-enhancing activities. It also generates data for transportation officials on the performance of systems during peak hours, helping them respond to emergencies and improve planning.
Congress has been funding ITS research through the Transportation Department since 1991, and the Intelligent Transportation Society of America formed the same year to coordinate the development and deployment of intelligent transportation systems.
Dozens of House members also belong to the Congressional ITS Caucus, which tries to educate lawmakers and their staff on ITS projects and seeks the expansion of them. Reps. Mike Rogers, R-Mich., and Ellen Tauscher, D-Calif., founded the caucus in January 2002.
Funding for ITS projects is part of the annual spending bill for the Transportation and Treasury departments. The Appropriations Committee approved its fiscal 2004 measure, H.R. 2989, on July 30, and Congress must finish action on the legislation when lawmakers return in September.
The bill would provide $110 million for intelligent transportation systems, and the committee report earmarks the money for more than 100 specific projects in lawmakers' districts. Examples include $5 million for the Great Lakes ITS effort to improve commutes in Michigan and expedite both deliveries and cross-border commerce with Canada, and $4 million for an Internet-based "regional traveler information system" at the University of Massachusetts in Amherst. (See Transportation's ITS project book for details on other ongoing works.)
The committee also calls for the Federal Highway Administration to report by March 1 on the costs and benefits of "intelligent bridge system" (IBS) technology, especially compared with competing technologies and systems. IBS devices monitor the structural health of bridges, identify vehicles using the bridges, and provide logistics for efficient and safe movement of goods along economic corridors.
The committee praised ITS coordination through Transportation's Joint Program Office (JPO), particularly the office's "close association" with the Federal Highway Administration and its "positive working relationship" with the Federal Motor Carrier Safety Administration and Federal Transit Administration. Any changes in the JPO must be justified to Congress, the report added.
Separately, the bill would provide $1 million in the Federal Aviation Administration's budget for research into advanced cargo-monitoring systems that would consist of miniature chemical- and fire-detection sensors linked to a notification system via a wireless network. The system seeks to enhance security for passengers and transportation workers alike, the committee report said.
Budget
Telework Gets A Push In House Appropriations Bill
by Drew Clark
The Commerce, Justice and State departments, along with the federal judiciary, would have to implement policies promoting telecommuting for 100 percent of their workforce within six months of lawmakers' passage of a House appropriations bill.
Rep. Frank Wolf, R-Va., a long-time advocate of telecommuting, included that language in the House Appropriations subcommittee conference report, saying the committee "expects the departments, the Judiciary, and the Small Business Administration to be in full compliance with this timetable."
The subcommittee's report stressed advances in information technology and the growth of high-speed Internet access, including wireless devices, as among the reasons for the federal government to adopt more widespread telecommuting policies.
"Management considerations, such as productive and satisfied workers; environmental considerations, such as reduced traffic congestion and improved air quality; and quality of life considerations, such as accommodating the short- or long-term health needs of employees, require the establishment of telework programs," the report continued.
Although the report praised the Patent and Trademark Office for successful implementation of a teleworking policy permitting 2,000 employees -- 25 percent of its total employees -- it criticized many departments for failing to designate a telework coordinator.
The bill includes funding for each of the departments under the subcommittee's jurisdiction to implement telework policies and report to the subcommittee on its use of the funds. And it repeated the fiscal year 2003 requirement for a telework coordinator.
"The committee understands that 110 trademark examining attorneys, or 44 percent of the examining corps, are working from home," it said, while praising the agency for extending it to approximately 700 patent examiners.
Launched in 1997, the PTO's program allows lawyers to work from home via computers and Internet connections. The agency expanded the program in 2001 with the introduction of "hoteling." Attorneys that need to work in the PTO's Arlington, Va., offices, reserve desks in advance, enabling approximately five workers to share one office, a patent official said.
"Except for a couple of hours a week, they work from home full time, so they share offices and save over a million in a year" in real estate costs, said agency spokeswoman Brigid Quinn. The program has been quicker to take hold in the trademark side of the PTO because database for examining prior patents are more complicated and difficult to access online, she said. The demands of security and confidential are also greater in patent-pending applications than in those of trademarks.
Hailing from Washington's distant suburbs, Wolf has vigorously promoted telecommuting with other D.C. area representatives. He was responsible for telecommuting goals to the fiscal 2001 transportation appropriations bill, which established a four-year timetable designed to keep pressure on the government to expand telecommuting.
Intellectual Property
Panelists Ponder Next Move For 'Open Source' Movement
by Teri Rucker
ASPEN, Colo. -- As more big industry players adopt "open source" software that lets users view and modify the underlying code to suit their needs, observers wonder whether the founders of the open-source movement will mature along with the industry.
There is no question that "the Penguin has landed," Bruce Mehlman, the Commerce Department's assistant secretary for technology policy, said in a reference to the trademark of the open-source software maker Linux.
The flexibility of the platform and its often lower cost are attractive to people who want an alternative to proprietary software, Mehlman said, adding that open source also appeals to those who want to knock Microsoft, the king of proprietary software, off its thrown. "The challenge to being the biggest and most successful is [that] everybody wants to knock the battery off your shoulder," Mehlman said here this week at the Progress and Freedom Foundation (PFF) summit.
James DeLong, a senior fellow at PFF, agreed that such thinking originally motivated the open-source movement, saying that an "almost religious element" surrounds the concept. The entrepreneur who sees a business opportunity in open source is going to have to "work in tandem with these ideological, religious elements," he said.
Now that big firms like IBM and even Microsoft have embraced open source to some extent, the equation has changed, said James Stallings, IBM's general manager of Linux. There is "no strategy that IBM says it will do this to fight some holy war," he said. "This is good business."
IBM began dabbling with open-source products at the request of customers and found that it could do some things "faster, better, cheaper" than proprietary software, Stallings said, adding that different business models call for different kinds of software.
Jason Matusow, Microsoft's shared-source manager, agreed. "There is no correct method that is the end all and be all of developing software," he said, adding that in some situations proprietary software with secret code is needed, but in other situations open source codes or a software hybrid known as shared source is the better option.
But Michael Tiemann, the chief technology officer at the Linux provider Red Hat, sees little value in proprietary and shared-source software, particularly the shared-source concept as Microsoft has adopted it.
"In the royal look-but-don't-touch way, Microsoft shared some peeks at the source code," Tiemann said, but he noted that the value of open-source software is in being able to view and modify the code and to share changes. "If I have the freedom to modify without the freedom to share, I can easily code my way to my own private Idaho" of obsolescence, he said.
One panel observer noted that the dynamics of the discussion were odd because no one questioned the validity of open source. The movement seems to be at a crossroads and people who support it can choose to mature and learn to work and play well with others, he said or they will alienate themselves from the rest of the industry.
Today's Feature:
Issue of the Week
When Yale University freshmen make their trek to campus this fall they will find included in their orientation literature a map of the campus, a list of student activities and a booklet warning against the illegal file sharing of digital music. A high-profile push by the recording and motion picture industry has changed the intellectual property landscape on a number of fronts, forcing university administrators onto a defensive position.
Every Monday, read the Issue of the Week by Technology Daily staff
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Today's Feature:
Executive Summary
The FCC issued final rules governing the telecommunications industry that do not fully please the agency's chairman and likely will be a magnet for lawsuits. Meanwhile, a new study by the National Telecommunications and Information Administration found that Internet-filtering software largely satisfies the needs of schools seeking to shield students from pornography.
Every Friday, read the Executive Summary by Editor Sharon McLoone
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E-briefs
White House: Rick White, president of Silicon Valley lobbying group TechNet, was among a handful of business leaders who briefed President Bush on economic matters during the president's trip Friday to Washington state, according to sources. White and the president discussed the technology industry, the state of the economy and politics in general. White is expected to have lunch with the president. White previously worked on Capitol Hill as a Republican lawmaker from Washington state.
Security: The U.S. Chamber of Commerce on Friday proposed modifications to the Homeland Security Bureau of Customs and Border Protection's draft regulations concerning high-risk cargo. "[The] Chamber recognizes the need to both protect legitimate commerce and to allow it to continue to operate efficiently and reliably," wrote Andrew Howell, chamber vice president for homeland security. "We offer our comments as modifications to improve a proposed rule that we believe is effective at balancing security and business concerns." The chamber requested a more detailed briefing on how costs of automation were assessed, and said businesses may not be ready to file electronically by the expected mid-2004 implementation of a rule requiring advance electronic filing of cargo information. It also said trucking companies may have problems meeting requirements, opposed the possible exclusion of the Postal Service, and raised concern about possible slow-downs for expedited deliveries and sought assurances on the confidentiality of manifest data.
Cyber Security: The Information Technology Association of America on Thursday released a survey showing that more than 40 percent of computer users had not properly protected their systems from the Blaster worm. The study, co-conducted by Brainbench, noted that 55 percent of respondents said they themselves, their company or a personal contact had been directly affected by the Blaster worm; 23 percent said they do not regularly download software upgrades to prevent attacks and 21 percent said they do not perform routine cyber hygiene tasks like updating anti-virus software definitions. Forty-two percent of respondents said they did not download the necessary fix in advance of the worm attack. "The results of this Blaster worm survey should blast away any remaining doubts that the American public is far too blasé when it comes to computer security," said ITAA President Harris Miller.
E-Government: The Electronic Records Archives (ERA) in use at the National Archives and Records Administration (NARA) does not consistently conform to industry standards, according to General Accounting Office (GAO) study released Friday. NARA chose to abide by the standards of the Institute of Electrical and Electronics Engineers (IEEE), but GAO found that ERA does not have key policy and planning documents as required by its standards. It lacks a comprehensive concept of operations, which the GAO said could lead to serious long-term risks to the cost, schedule and performance of ERA. In addition, NARA is not adequately tracking the program's cost and schedule. It omits significant tasks and activities, which will result in funds being spent in an inefficient manner. The GAO recommends that NARA revise key planning documents and develop a schedule based on a comprehensive work breakdown structure.
Security: The electric industry is more to blame for last week's Northeast power outages than the federal government, according to a new poll released Friday by CSO magazine. The magazine polled 382 chief security officers (CSOs) and senior security executives and found that 59 percent thought the electric industry was at fault for the blackouts. As a result, 55 percent called for the government to expand its oversight of the electric industry. Thirty-one percent said the electric industry should continue with voluntary compliance of security and backup systems. "Regulations are often regarded as the necessary evil in securing the nation's infrastructure," said Lew McCreary, editor in chief of CSO magazine. "It's interesting that CSOs, who are traditionally anti-regulation, are calling for increased government control in this industry, having now been faced with a glaring example of so-called market forces at work."
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