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Taxes
Backers Rally For Permanent Ban On Internet Taxes
by David Hatch
Senate supporters of a permanent ban on local- and state-imposed taxes on Internet access are mobilizing to pass legislation before a temporary moratorium expires Nov. 1.
On Thursday, Senate Republican High-Tech Task Force Chairman Gordon Smith, R-Ore., and Sen. Wayne Allard, R-Colo., held a teleconference to promote passage of a measure, S. 156, sponsored by Sen. Ron Wyden, D-Ore., that would make the exemption permanent.
Republican presidential contender John McCain of Arizona and GOP Sens. Trent Lott of Mississippi and John Sununu of New Hampshire held an afternoon briefing to rally support for the bill, which has 20 cosponsors and is awaiting action by the Senate Commerce Committee. Two bills also are pending in the House with a similar approach.
"Americans will be forced to pay a lot more" if the Democratic leadership fails to act, McCain warned. "We all know what taxes do to innovation," he said, suggesting the fees would hit middle-income Americans particularly hard. Sununu emphasized the irony of lawmakers seeking to promote broadband growth while failing to stave off these new charges.
In a statement, Commerce Committee Chairman Daniel Inouye, D-Hawaii, said his panel would vote on "reasonable legislation" to extend the moratorium. At press time, Wyden said in a statement that he has received a commitment from Senate Majority Leader Harry Reid, D-Nev., to extend the ban.
"People use the Internet to access information and purchase goods and services," Smith said. "On that basis, it is not appropriate to tax someone for walking into a library or a shopping mall. I believe we have the votes to make the tax moratorium permanent. It is really, though, in the province of the Democratic leadership in the Congress to bring up the bill and make this a priority."
Allard warned that taxation inadvertently could restrict interstate and international trade conducted via the Internet. "How do you collect taxes from somebody who lives in Great Britain or Canada or Peru, or whatever?" he asked rhetorically.
"Broadband, frankly, is new technology. I think we have to give it an opportunity to grow," Allard said, while leaving open the door for revisiting the issue later. The federal moratorium on state taxation of Internet access was imposed in 1998 and extended in 2001 and 2004.
Some municipalities and state governments contend that they should be allowed to impose taxes on Internet access because they already apply such fees to telecommunications services.
The National Governors Association has endorsed legislation offered in May by Sens. Tom Carper, D-Del., and Lamar Alexander, R-Tenn., both former governors, that would impose a four-year extension of the ban but also grandfather Internet taxes in seven states that pre-date the 1998 moratorium.
The bill would tighten the definition of Internet access to clarify that ancillary services sometimes bundled with broadband, such as television programming, would not be covered by the ban. "We're trying to make sure that the moratorium applies to really getting people on the Internet," said David Quam, director of federal relations at the association.
The wireless association CTIA, which sees strong growth in the wireless broadband sector, has been lobbying for a durable extension.
"Wireless users already face an enormous tax burden," CTIA spokesman Joe Farren said, arguing that broadband should remain tax free to keep it affordable.
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On The Hill
Panel Backs Limits On White House, Justice Interaction
by Michael Posner, CongressDaily
The Senate Judiciary Committee on Thursday approved legislation that would limit the people in the White House who can communicate with top Justice Department officials over probes.
Sen. Sheldon Whitehouse, D-R.I., said hundreds of people in the executive branch have the ability to contact Justice, and about 40 people at Justice Department have permission to discuss matters with the White House. "The greatest hazard to the independence of the Justice Department is the White House," said Whitehouse, a former U.S. attorney.
Communications between the two entities have been an issue for months because of concerns that multiple U.S. attorneys were fired for political reasons. Missing e-mails have figured into the dispute, as Democrats in Congress have sought to determine who said what to whom.
The bill, S. 1845, which was approved on a 14-2 vote, would limit authority for communications about civil or criminal investigations to four White House positions: president, vice president, counsel to the president, and counselor to the president. Those at Justice who could discuss ongoing investigations with the White House would be limited to the attorney general, deputy attorney general and associate attorney general.
The measure would permit other communications between White House and Justice officials about various non-investigation matters, including policy, appointments, legislation, rulemaking, budgets and intergovernmental relations.
The bill backed by the committee was a substitute by Whitehouse that would require semi-annual disclosures by Justice and White House to the House and Senate Judiciary committees of those communicating about ongoing investigations. Sen. Jon Kyl, R-Ariz., said Justice has concerns about the bill disclosing names publicly and potentially alerting suspects in terrorism or other investigations.
But Judiciary Committee Chairman Patrick Leahy, D-Vt., tried to allay Kyl's fears about disclosure, saying that classified information is kept secret. Leahy said the Whitehouse bill is an important step toward repairing the damage done to Justice's reputation in recent years.
He said former Attorney General Alberto Gonzales "dramatically expanded" the number of people permitted to communicate about investigations. In a statement, Whitehouse said that during the Clinton administration, a total of seven people at the White House and Justice Department were allowed to discuss ongoing investigations or cases.
"We do not have to merely imagine the threat to the independence of law enforcement arising from those communications," Leahy said. "Our investigation revealed instances in which the department had been reduced to a political arm of the White House."
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Telecom
FCC Agenda Includes 'Forbearance,' 'Special Access'
by David Hatch
Dominant telecommunications carriers are lining up to seek regulatory relief from the Republican-controlled FCC, moves that will test the agency's ability to deregulate while under the watchful eye of congressional Democrats.
AT&T, Embarq, Frontier and Qwest Communications International are seeking exemptions from price caps governing their provision of high-capacity, high-speed Internet access to businesses.
They filed "forbearance" requests after the FCC granted similar relief to Verizon Communications last year. But Verizon prevailed on a technicality after inaction due to a stalemate resulted in its proposal being granted. On Sept. 11, Qwest withdrew its petition because it lacked the votes for passage, but the company refiled it the next day.
"The Bells generally want to get rid of as much regulation as possible," said David Kaut,
a telecom analyst at the investment firm Stifel Nicolaus. It views FCC member Robert McDowell, a Republican, as the swing vote in these matters. FCC Chairman Kevin Martin and Commissioner Deborah Taylor Tate, also Republicans, support deregulation, but Democrats Jonathan Adelstein and Michael Copps oppose it.
The FCC must act on AT&T's petition by Oct. 11 but also might decide on other requests that day, sources said.
Meanwhile, in six markets, Verizon is seeking to remove federal regulations that grant competitors access to its networks at heavily discounted rates. The company says there is sufficient competition to justify the change, but carriers such as XO Communications that rely on discounted rates disagree.
On Wednesday, XO and its allies held a briefing to reiterate their concerns and urge the FCC to adopt a more transparent process for reviewing forbearance requests. In an interview, XO spokesman Jim Crawford accused Verizon of inflating data on XO's presence in Boston and New York, cities where Verizon seeks relief. "They're making up the numbers," he said.
Verizon spokesman David Fish said the criticism is "another attempt to deflect attention" from the fact that XO and other small carriers have failed to give the FCC comprehensive data about their market presence.
In 2005, the FCC eased similar regulations for Qwest in Omaha, Neb., but the move was not implemented until this spring due to court challenges. Smaller competitors say Qwest hiked its prices, but Qwest said its fees rose to market rates. It is seeking to expand the deregulation to four other metro areas.
A storm also is brewing over efforts by some wireless carriers and smaller phone providers to persuade the FCC to re-regulate markets it previously deregulated. At issue is "special access," the reduced rates that dominant firms offer competitors for telecom network capacity. Critics say rates are rising too fast where regulation was lifted.
AT&T, Embarq, Qwest, Verizon and their supporters counter that the FCC and independent analysts consider the special-access sector to be competitive. Brian Adkins, director of federal legislative affairs at Embarq, said his company would lose hundreds of millions of dollars if it is subject to re-regulation.
The FCC, under pressure from House Democrats to act, could issue a decision within weeks.
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Security
No Agreement On Spying Changes Is In Sight Yet
by Chris Strohm
Despite a week of congressional hearings and classified briefings, lawmakers and the nation's top intelligence official did not appear any closer Thursday to reaching an agreement on new legislation to govern the Bush administration's spying activities.
Tension between lawmakers and the administration was evident as Director of National Intelligence Michael McConnell finished testimony to the House Intelligence Committee, with some Democrats questioning his credibility.
McConnell was testifying on the call for permanent changes to the Foreign Intelligence Surveillance Act. "Do you understand that there are some doubts about your ability to act as an unbiased source of information?" Rep. Rush Holt, D-N.J., asked McConnell.
Holt cited comments that McConnell made to the Senate Homeland Security and Governmental Affairs Committee last week, in which he indicated that temporary changes to FISA made last month helped disrupt a terrorist plot in Germany. Two days later, McConnell issued a statement clarifying that old FISA authorities had helped disrupt the plot.
McConnell, usually mild-mannered and soft-spoken, was clearly upset with Holt's questions and said his comments were being taken out of context. McConnell said multiple times that he did not feel he was getting his points across to Congress.
He emphasized that the administration needs a permanent law clarifying that a warrant from the secret FISA court is not needed when monitoring the communications of foreign targets abroad if those communications are routed through U.S. telecommunications infrastructure. He also asked lawmakers to give retroactive immunity to private U.S. companies that have assisted the administration in surveillance activities.
Lawmakers and McConnell tangled on several other issues as well. McConnell reiterated, for example, that the administration recently had to go through a FISA court process to monitor the communications of Iraqi insurgents who had kidnapped U.S. soldiers.
Committee Chairman Silvestre Reyes, D-Texas, called the situation "an abhorrent failure of leadership." Anna Eshoo, D-Calif., who heads the committee's Community Management Subcommittee, scolded McConnell for recently saying that Americans will be killed because Congress is holding a public debate over making changes to FISA.
McConnell stood by the comments, saying public discussion could compromise intelligence sources and methods. "That's a heavy statement," Eshoo countered. "I really think that's a stretch." She told McConnell that such claims "put a dent" in the administration's argument for FISA changes.
Reyes also said the administration still has yet to provide the committee documents related to its spying activities, including presidential authorizations and legal opinions from the Justice Department. He said those documents are needed to help lawmakers craft a new FISA bill, which must be done by early February.
McConnell said the White House and Judiciary committees in both chambers are negotiating over the documents. Rep. Darrell Issa, R-Calif., added that lawmakers on the Intelligence Committee are "selectively handed" information from the administration when it comes to sensitive intelligence matters.
"I'm afraid I don't have any additional information on where those negotiations are at," said Assistant Attorney General Kenneth Wainstein, who also testified.
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Civil Liberties
House Lawmaker Blasts Bush Over Civil Liberties
by Andrew Noyes
An outspoken member of the House Judiciary Committee said the Bush administration has waged a "frontal assault on the Constitution" since the Sept. 11, 2001, terrorism attacks, and citizens' free speech and privacy have suffered as a result.
Virginia Democrat Bobby Scott, chairman of the Judiciary Crime, Terrorism and Homeland Security Subcommittee, told a forum sponsored by the American Civil Liberties Union and the American University law school that provisions under the anti-terrorism law known as the USA PATRIOT Act are the most egregious.
The reason Congress cleared the statute so swiftly was that "it didn't take any original thinking," Scott said. Republican lawmakers "just reached up on the shelf and pulled down everything they couldn't get passed for years, stapled it all together and put patriotism in the title."
Electronic eavesdropping allowances written into the law, which was reauthorized in the 109th Congress, are the most troublesome, he said at the two-day symposium. "The wiretapping has gotten worse to the point where the most recent version has virtually no oversight."
Congress passed a temporary foreign intelligence overhaul bill before the August recess that some hoped would quell critics' fears. Instead, opponents said the measure, which is set to expire in six months, made the situation worse.
The update authorizes the director of national intelligence and the attorney general to grant spying without first getting warrants from a secret court created by the 1978 Foreign Intelligence Surveillance Act.
Despite repeated congressional hearings, Scott complained that he "can't find any oversight" within the executive branch with respect to wiretapping. "The fact that we passed [the bill] at all ought to be extremely disturbing to a lot of people," he said.
ACLU President Nadine Strossen said she was dismayed "that we have to fight so hard for what should be core constitutional principles." The government's tendency to collect and conceal information is "a universal and permanent challenge," she said.
An afternoon panel elaborated on the concerns about surveillance. Scheduled speakers included the Heritage Foundation's James Carafano; the Cato Institute's Jim Harper; ACLU National Security Project Director Jameel Jaffer; and AU law professor Herman Schwartz.
Rep. Mike Pence, R-Ind., also spoke at the summit about legislation aimed at guarding journalists, including bloggers, who protect confidential sources from federal prosecution. He has championed the federal "shield" proposal for several years.
The bill, H.R. 1202, would "put a stitch in a tear of First Amendment freedom of the press," Pence said. The House Judiciary Committee approved it in August.
Pence recalled that the initial version was not well-received among bloggers so it was important to expand the scope of those covered by the proposed shield. "When I Googled my name a couple of years ago and my hard drive crashed, I realized maybe we've got a problem here," he said.
"This legislation is not about protecting reporters; it's about protecting the public's right to know," Pence said. "A free and independent press is the only check on unlimited government power in real time."
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Privacy
Privacy Advocates Are Wary Of Data 'Fusion Centers'
by Andrew Noyes
Privacy concerns persist with state-run "fusion centers" designed to help law enforcers investigate suspected terrorist plots, a panel of nongovernmental policy watchers told a Homeland Security Department panel on Wednesday.
More than 40 state, local and regional centers have been established in recent years, and several bills now pending before Congress have elements that address the centers. Fusion centers are financed by the states and the Homeland Security Department, and there is no uniform structure.
A July report from the Congressional Research Service found that the high-tech intelligence operations "have increasingly gravitated toward an all-crimes and even broader all-hazards approach." The move worries privacy advocates, who voiced concerns to Homeland Security's Data Privacy and Integrity Advisory Committee.
Mike German, a former FBI agent now with the American Civil Liberties Union, told Technology Daily the centers are "not really working as they are supposed to." The "mission creep" could have serious privacy implications for citizens -- many of whom are unaware that the programs exist, he said.
A 125-page Justice Department handbook released in August 2005 made multiple suggestions for the centers, "but it's unclear whether those guidelines have been adopted by every fusion center," German said.
He said the ACLU, which has its own report coming out next month, fears that inclusion of non-law enforcement agencies and private-sector players is "going to create information-sharing relationships that don't require the legal process that is required now."
The Constitution Project's Sharon Bradford Franklin said in an e-mail before the meeting that she planned to discuss her group's published guidelines for public video surveillance and its report on promoting accuracy in using government watch lists.
Technology has rushed ahead of the law, she said, and the Constitution Project's report provides practical guidance on how communities can establish video surveillance systems that protect residents' privacy rights and civil liberties.
The Electronic Privacy Information Center also offered recommendations. The group said the location, jurisdiction and amount of funding each center receives should be disclosed, adding that any federal money for them should be suspended pending a full privacy-impact analysis.
EPIC also called for a Homeland Security inspector general probe, as well as annual reports from the centers on the numbers of arrests, prosecutions and convictions by category of offense directly related to each program's operations.
"There are too many unanswered questions regarding the creation, purpose and use of fusion centers," EPIC Associate Director Lillie Coney said in written testimony.
Robert Riegle, Homeland Security's point person for fusion centers; Sue Reingold from the office of the director of national intelligence; and Lt. Jeff Wobbleton of the Maryland State Police acknowledged that the programs are working well but need improvements.
Riegle called the initiative "a novel and different approach to information-sharing" and said privacy was a top concern when each center was formed. Wobbleton said transparency is a core part of the mission. "We do not want to mess this up," he added.
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Cyber Security
White House Sees 'Utter Chaos' In Securing Agencies
by Heather Greenfield
GAITHERSBURG, Md. -- A Bush administration official who has dictated the next round of security changes that federal information technology departments must make defended the new rules at a National Institute for Standards and Technology summit here Thursday.
Karen Evans, the e-government chief at the White House Office of Management and Budget said: "What we have today is utter chaos. We're not very secure."
She said the goal of the so-called Security Content Automation Protocol is for the Agriculture Department to use the same IT configuration as the Justice Department, for example, and for federal entities to be able to verify security claims made by vendors.
"If a vendor has chosen not to do this, you are not supposed to buy that software," Evans said. But she said she realized there would be a transition period and there would need to be a way to grant deviations by completing waivers.
Evans said federal information security officers need to know the baselines of current systems and constantly evaluate them so that when new hardware or software arrives, they know whether it works. She said another goal is to force IT departments to methodically ask whether it is necessary to run each software package or whether it is just convenient.
Evans said part of the reason federal computer systems are so vulnerable is that they have "allowed 1,000 flowers to bloom." "We've drawn a line in the sand," Evans said, adding that if the Defense Department can make changes anyone can.
She denied that the new security requirements are geared toward cutting anyone out of any business or requiring all departments to convert to Microsoft operating systems.
Matt Barrett, a computer scientist at NIST, said there are 135 different configurations in federal IT systems now.
Evans said she has heard the argument that federal agencies would be more vulnerable to security attacks under just one system because everyone, including the bad guys, knows what the configuration is and OMB has been transparent about it. She said that argument and the one that systems would be more secure with one configuration are like "two religious camps."
She said her beliefs tend toward one system because with the chaos she sees in the current system, it is difficult for information security officers to easily know how many Internet access points they have. "Those are the vulnerabilities and the risks that when we're all interconnected we have to know," Evans said.
Evans said some people think mandating one system is an unfunded mandate from OMB and that the minute systems switch to meet the requirements, there will be breakdowns. She acknowledged both points.
But she further argued that because citizens have to give federal agencies lots of personal information, "we owe it to them" to get a better handle on security vulnerabilities.
She also offered an incentive, saying that departments will be able to keep any cost savings from greater efficiency to put into other programs like security or tracking the use of personally identifiable information.
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E-Commerce
Internet Progress Will Make Cars 'Smart,' Official Says
by Aliya Sternstein
When the world transitions to the next generation of the Internet within 15 years, cars will become "smart as heck," the head technology official at the Transportation Department said Thursday.
Vehicles will be alerting ambulances when cars are in accidents -- and alerting house thermostats to turn up the heat when passengers are two miles from home, Transportation Chief Technology Officer Tim Schmidt told an audience of information technology professionals who serve the federal government.
"Many, many planes will be talking to each other," and there will be fewer car crashes and less traffic with the future Internet, he added.
Federal agencies must have a backbone network capable of running on the new Internet by June 30, 2008. Known as Internet protocol version 6, or IPv6, the next-generation Internet is designed to be more secure and provide the world with far more Internet addresses. The existing system, which has 4 billion addresses, limits the number of devices that can connect to the Internet.
Peter Tseronis, co-chairman of the Federal CIO Council's IPv6 working group and the network services director at the Education Department, told the Association for Federal Information Resources Management that "in terms of making this real ... there's nothing tangible today" that illustrates the need for a new Internet. But there was nothing tangible 15 years ago that illustrated the need for today's Internet, he noted.
What IPv6 will mean is "more communication," Tseronis said. More devices will be connected wirelessly. Every moving vehicle and many of their internal parts will have embedded sensors that can talk to each other and to remote systems.
Vehicle global positioning systems, EZ-pass transponders, hands-free cellular telephones and satellite radios all will merge, Schmidt said.
Perishable cargo shuttled in trains underneath a tunnel will have sensors to tell the tunnel to adjust the temperature accordingly.
But such far-off innovations require federal and state governments to act now, Schmidt said. Recently, he called major tech companies to inquire about the status of their IPv6 transition plans. The reply he got: "Nothing."
The private sector -- always on the cutting edge of technology -- won't take long to modify its systems when devices start switching, he said. "The government, on the other hand, takes years to do anything," Schmidt said, likening the situation to the late 1990s, when the government needed to fix computers to deal with the year 2000 date change.
Tseronis cautioned that the adaptation will not be simultaneous throughout the public and private sectors. "For years, we're going to be splitting the Internet in two," he said.
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Television
India Bans Satellite Channel For Sting Operation
by Winter Casey
India's government has prohibited the transmission or re-transmission of a satellite television channel for airing "an admittedly doctored sting operation" that has been accused of inciting violence.
The nationwide ban targets the Hindi satellite channel Janmat, which is currently operating under the name Live India. The channel claimed in an expose that a school teacher was involved in an organized prostitution racket of school girls, The Times of India reported.
However, the country's Information and Broadcasting Ministry said Thursday in a statement that the telecast was "defamatory, deliberate, false; and contained suggestive innuendos and half-truths; incited violence; and contained content against maintenance of law and order."
The telecast additionally "criticized, maligned and slandered an individual in person, and it denigrated children and was irresponsibly aired by the channel without exercise of due diligence in preliminary verification of the facts of the case," the ministry said.
NewKerala.com reported that as a result of the broadcast, the teacher was assaulted by angry parents and residents and sent to jail. The teacher was later released when a police investigation revealed that the reporter who carried out the sting operation used an aspiring journalist to pose as a schoolgirl.
The government cited a section of a 1995 law regulating cable television networks as justification for the ban, which will last for one month. According to the Press Trust Of India, the government can ban a channel in the interest of public order, decency or morality.
The Times of India said "this is the first instance when a news channel conducting a sting operation has been banned." However, the Indian government has used the 1995 law to ban a satellite channel for showing programming that was deemed to be indecent.
In January, the ministry prohibited the network AXN from airing for a set period of time for allegedly showing programs that were "against good taste or decency and are likely to adversely affect public morality."
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Digitocracy Digest
The Risks Of Software Choice In E-Government
by Aliya Sternstein
Giving U.S. agencies a choice in file formats could be bad for record-keeping because down the road, records might be saved in different, non-compatible formats or agencies might be held hostage by one company's product line.
"One single standard is better," said Will Rodger, public policy director with the Computer and Communications Industry Association. "Converting from one format to another virtually guarantees incompatibilities and data loss."
The issue has been in the news because Massachusetts recently changed its computing policy to allow the use of multiple open-file formats -- including Microsoft-developed Office Open XML and the International Standards Organization-approved Open Document Format. Earlier this month, Microsoft's OOXML failed to gain ISO's backing, but Microsoft is still seeking approval, in part to gain traction in the e-government sector.
To qualify as "open," a format needs specifications for creating, exchanging and saving documents in a layout that is non-proprietary and can be read and reproduced by any software application, regardless of the software that created the original file. Because of their innate longevity, open formats are increasingly being endorsed by governments worldwide for preserving public records.
"[There are] vast storehouses of information that the government has to keep forever: births, deaths, health records kept long after people's death for research, criminal records," Rodger said. Being readable and accessible for 30 years, 50 years or "as long as you and I will be around -- that's not good enough," he added. "They have to be around forever. That means that the [file formats] have to be owned by all of us."
ODF was created as an alternative to proprietary formats, such as Microsoft's Word, Excel and PowerPoint, and many ODF advocates contend that OOXML is optimized for Microsoft applications only. They say the format is in effect owned by Microsoft, not by posterity.
The ideal outcome would be if OOXML and ODF were to "merge into a royalty-free format" that any machine could access, Rodger said.
But Microsoft and its supporters maintain that having a choice between any and all open file formats would be advantageous for governments. Tom Robertson, Microsoft's general manager of interoperability and standards, said, "In the U.S. there is a sense that the government ought to procure the best technology for a particular purpose."
Melanie Wyne, executive director of the Initiative for Software Choice, an industry group backed by Microsoft, said: "Having a choice of open file-format standards, whether that is two or more standards, will help adoption of open file formats by governments."
Federal and state archivists will have more tools to choose from, suiting more diverse needs, and thus guaranteeing long-term data retention, she added.
Robertson's notion of the ideal outcome would let users define what they want to achieve in terms of compatibility and then be able to choose among the technologies that best meet those needs. The information technology community will respond to users' changing needs and -- where it makes sense -- evolve formats or create new formats.
Citing one example of that "healthy dynamic" already happening, he noted that Microsoft decided to make its Office products compatible with ODF last year via a free download. Similarly, Novell decided to provide an OOXML translator for its OpenOffice.org product, which is an ODF-based competitor to Microsoft's Office.
ODF backers say that translators can be problematic. "Experience [with translators] shows that multiple transformations of documents may lead to problems, including data loss," said Marino Marcich, managing director of ODF Alliance, a group of major software companies, industry associations, universities and others that promote ODF.
Marcich said having multiple open formats in the market will not be good for governments. Dueling formats that can't work together "will add to costs and complexity for IT managers, who are being called on to deal with the exponential growth in electronic records," he said.
"How do consumers benefit from two DVD formats if they've purchased equipment that supports one but not the other," Marcich said.
Rodgers observed: "It is hugely ironic that promoters of OOXML and critics of ODF say you need to look at what their technologies do. As far as we can tell, the greatest impetus for the development of OOXML is to create technologies that perpetuate the proprietary lock-in [that] governments were trying to eliminate in the first place."
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Today's Feature:
State Roundup
A string of controversies over the use of public e-mail accounts and computer systems broke out this week in several states.
Every Thursday, read the State Roundup by Michael Martinez.
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E-briefs
Security: Connecticut's top law enforcement official is taking legal action against Accenture over a data breach he claims compromised state bank account and taxpayer information. State Attorney General Richard Blumenthal on Wednesday announced plans to sue the company over the loss of a computer tape in Ohio that contained hundreds of state bank account numbers and confidential information on more than 50 taxpayers. According to Blumenthal, Accenture violated the terms of its $98 million consulting contract with the state by compromising the data. He is seeking undisclosed damages. "Accenture deserves censure -- to be held accountable for allowing valuable secret data to be stolen and putting at risk state taxpayers, bank accounts and purchasing cards," Blumenthal said in a news release. "Accenture acted unconscionably and illegally."
Intellectual Property: Thousands of small webcasters have rejected the most recent royalty rate proposal made earlier this week by digital music fee collector SoundExchange, the grassroots group SaveNetRadio said Wednesday. The move stems from outcry voiced by webcasters over a March decision from a panel of copyright judges that imposed higher royalties on all parties that stream music online. Under the latest offer, webcasters can stay online through 2010 with essentially the same terms they enjoyed under a now-defunct 2002 webcasting law, SoundExchange said. SaveNetRadio said the deal is "not feasible for anyone who wants to grow their business" due to a $1.25 million revenue cap and only covers copyright holders that are SoundExchange members. "We have asked for a reasonable, long-term solution, not one that is subject to increase at the whim of the record industry every five years," the group said.
Business: Apple Inc. CEO Steve Jobs has been subpoenaed by the U.S. Securities and Exchange Commission to give a deposition in a case about backdating of employee stock options, according to two sources. Bloomberg reports that Jobs has been asked to testify in the SEC's lawsuit against Nancy Heinen, Apple's former general counsel, who has been accused of illegal backdating. In other SEC news, Chairman Christopher Cox announced Thursday that the combined market capitalization of companies submitting interactive financial reports to the commission totals more than $2 trillion. More than 40 companies are now participating in the SEC's voluntary interactive data-filing program, the commission said. "The continued positive feedback from our enthusiastic group of test filers means that interactive disclosure is well on its way to becoming reality," Cox said in a statement.
Politics: The online activist group MoveOn.org has escalated its attack on the Iraq war with more attacks against officials who support it. MoveOn announced more television ads Thursday. The latest one accuses Senate Minority Leader Mitch McConnell, R-Ky., and Senate Republicans of a betrayal of trust for their vote yesterday against giving American soldiers on leave from Iraq more time at home with their families. At a news conference, meanwhile, President Bush condemned the MoveOn newspaper ad of last week that started the current brouhaha. Bush said the attack on Army Gen. David Petraeus was "disgusting," and he was disappointed that more Democratic leaders did not criticize it. Senate Republicans on Thursday forced more Democrats to take sides on the issue. The chamber adopted, by a vote of 72-25, a non-binding resolution condemning MoveOn's anti-Petraeus ad.
E-Commerce: New research suggests that at least one-third of unsolicited e-mail messages advertise offers for health products. Findings released Monday from researchers at the University of Toronto and University Health Network, Canada show that it is possible to purchase some of these products purported to be prescription drugs, across national boundaries. About one-third of the researchers' attempts to do so were successful. Co-authors Peter Gernburd and Alejandro Jadad write in the international medical journal PLoS Medicine that "the group of accounts we identified had a half life of around two weeks," which meant it took two weeks for half of the accounts to become inactive. "Buyers should be fully aware that it may not be possible for them to hold spammers accountable for any claims made in their messages, or to get protection from illegal activities resulting from disclosure of personal or financial information to spammers," the authors wrote.
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