A Commerce Dept. plan to merge NTIA, the Technology Administration (TA) and the e-commerce duties of the International Trade Administration (ITA), while delayed, still is headed to Capitol Hill. The proposal had been expected to be sent to Congress 45 days after Commerce Secy. Donald Evans unveiled plans Feb. 14 for the merger into a new agency headed by TA Undersecy. Phillip Bond, formerly Evans’s chief of staff. That would have put the proposal in congressional hands last Fri. But Connie Correll, a counselor to Bond, told us legislative language still was being drafted and could be ready as soon as the next week or 2: “We don’t have anything yet, but we are closer.”
Five years after a presidential directive ordering federal agencies to take explicit steps to protect the nation’s critical infrastructure, “the current situation remains unacceptable,” House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) said jointly Wed. “These agencies should have completed their tasks long ago,” they said, referring to the findings of a General Accounting Office (GAO) report they had commissioned that found mixed results by agencies.
Two former Enron executives responsible for aborted video- on-demand (VoD) venture with Blockbuster were indicted on securities and wire fraud charges for allegedly using accounting tricks to generate $111 million in fake earnings. Federal grand jury in Houston returned 19-count indictment against Kevin Howard and Michael Kurtz, charging them with securities fraud, wire fraud, conspiracy and lying to FBI. Howard, finance vp, and Kurtz, senior dir.-transactional accounting, at Enron Broadband Services, are accused of fraudulently recording earnings in 2000 and 2001. Transaction at center of charges involved 20-year exclusive agreement Enron signed with Blockbuster in April 2000 to stream movies to consumers’ home using proprietary broadband network. Companies began testing system in Dec. 2000, but quickly encountered problems including tendency of set-top boxes to catch fire, Dept. of Justice (DoJ) has said. In fall 2000, Howard and Kurtz created finance transaction code-named Braveheart that was designed to allow Enron to immediately recognize anticipated future earnings from agreement. Enron executives created joint venture to deploy Blockbuster contract with nCube, company that supplies VoD equipment to cable operators, and Thunderbird, investment fund controlled by Enron, DoJ said. Enron sold portion of joint venture to Canadian Imperial Bank of Commerce (CIBC), deal that enabled company to record $53 million in revenue in 4th quarter of 2000 and $58 million in first quarter of 2001. Howard and Kurtz were employed at Enron at time of their March 12 arrests, but they since have left company, spokeswoman said. Former executives, free on $500,000 bond each, have denied charges. Pretrial hearing is set for July 1.
Senate Commerce Committee Chmn. McCain (R-Ariz.) introduced legislation that would require the Defense Dept. (DoD) to give free phone service to military personnel in Iraq and Afghanistan in order to boost troop moral. McCain’s bill, the “Troops Phone Home Free Act” (S-178), would require the Defense Secy. to provide phone cards, or an equivalent method to supply service, and access to telephones to troops oversees. The program would end 60 days after the completion of Operation Iraqi Freedom. The cost to each troop couldn’t exceed $40 per month. The bill would instruct DoD to work with telecom providers to deploy additional telephones for calling the U.S. Sens. Allen (R-Va.), Graham (R-S.C.) and Chambliss (R-Ga.) co-sponsored the bill. The legislation comes after McCain sent letters to major telecom associations asking that families of troops not have their phone service disconnected for the duration of the Iraq war (CD March 26 p8).
Two former Enron executives responsible for aborted video- on-demand (VoD) venture with Blockbuster were indicted on securities and wire fraud charges for allegedly using accounting tricks to generate $111 million in fake earnings. Federal grand jury in Houston returned 19-count indictment against Kevin Howard and Michael Kurtz, charging them with securities fraud, wire fraud, conspiracy and lying to FBI. Howard, finance vp, and Kurtz, senior dir.-transactional accounting, at Enron Broadband Services, are accused of fraudulently recording earnings in 2000 and 2001. Transaction at center of charges involved 20-year exclusive agreement Enron signed with Blockbuster in April 2000 to stream movies to consumers’ home using proprietary broadband network. Companies began testing system in Dec. 2000, but quickly encountered problems including tendency of set-top boxes to catch fire, Dept. of Justice (DoJ) has said. In fall 2000, Howard and Kurtz created finance transaction code-named Braveheart that was designed to allow Enron to immediately recognize anticipated future earnings from agreement. Enron executives created joint venture to deploy Blockbuster contract with nCube, company that supplies VoD equipment to cable operators, and Thunderbird, investment fund controlled by Enron, DoJ said. Enron sold portion of joint venture to Canadian Imperial Bank of Commerce (CIBC), deal that enabled company to record $53 million in revenue in 4th quarter of 2000 and $58 million in first quarter of 2001. Howard and Kurtz were employed at Enron at time of their March 12 arrests, but they since have left company, spokeswoman said. Former executives, free on $500,000 bond each, have denied charges. Pretrial hearing is set for July 1.
Pentagon officials told the House Telecom Subcommittee that they had some concerns about the spectrum relocation trust fund legislation introduced by Chmn. Upton (R-Mich.). However, they stressed that their issues were specific and technical and that overall they supported the goal of the bill -- to make more commercial spectrum available more quickly. Stephen Price, deputy asst. secy. of defense for spectrum, said the timetables in Upton’s Commercial Spectrum Enhancement Act (HR-1320) would be very difficult for DoD to meet. NTIA Dir. Nancy Victory said DoD, the Administration and Upton would work to resolve differences between Upton’s plan and one by the Administration.
Democratic members of the House Telecom Subcommittee at a hearing today (March 25) are likely to stress the needs for cost controls on the proposed spectrum reallocation trust fund, a staffer of a Democratic member of the Commerce Committee said. The House Telecom Subcommittee hearing will be on the proposed Commercial Spectrum Enhancement Act (HR- 1320), which would create a fund to cover the costs of switching govt. spectrum users to different spectrum bands. The bill, by Subcommittee Chmn. Upton (R-Mich.) and supported by Commerce Committee Chmn. Tauzin (R-La.), would require all auctions conducted by the FCC to take in at least 110% of the costs of reallocating the govt. spectrum users. Senate Commerce Committee Chmn. McCain (R-Ariz.) has said he would introduce a similar bill. There were concerns among the Democrats that such a fund could lead to “gold-plating” of projects, particularly military reallocation projects, said the staffer. “We're conscious of the history of the $500 hammer,” the staffer said. Most govt. spectrum reallocations would involve the military. The staffer said the Defense Dept. (DoD) might tell members today that the 110% figure wasn’t enough. Senior Democrats were worried that without a cap on the fund and spending control measures, spending could get out of hand, the staffer said. Since there isn’t a cap on the size of the fund, auctions could bring in well more than the 110% required by the bill, all of which would go to the fund, the staffer said, and such a sizable fund would need cost overrun controls. The hearing, scheduled for 2 p.m., Rm. 2123, Rayburn Bldg., will include the following witnesses: Nancy Victory, NTIA dir.; Stephen Price, DoD Deputy Asst. Secy. for Spectrum; Steven Berry, CTIA Senior Vp-Govt. Affairs; Larry Grossman, Co-Chmn. Digital Promise Project. A spokesman for Upton said the bill would include several cost-control mechanisms, including scrutiny by the Office of Management & Budget (OMB). Before any money could be transferred from the fund, OMB would have to submit reports to both Senate and House Commerce and Appropriations committees, the spokesman said. Even then, money couldn’t be transferred for 30 days after the reports were issued, the spokesman said.
With a new year comes new lobbying contracts, and several telecom and mass media companies already have signed groups to lobby on their behalf on Capitol Hill and at regulatory agencies. Adelphia, AT&T, EarthLink, Motorola, Nextel and SBC all have added representation since Jan., according to disclosure records held by the Secy. of the Senate, with broadband and spectrum issues looming large.
Commerce Secy. Donald Evans faced questions from Senate Appropriations Committee members Thurs. about the elimination of the Advanced Technology Program (ATP) and the Manufacturing Extension Partnership (MEP). Sen. Kohl (D- Wis.), a member of the Senate Appropriations Commerce Subcommittee, questioned why it was necessary to reduce spending on the MEP. Evans said both MEP and ATP were good programs, but not good enough. “It’s a matter of priorities,” he said of the programs. “At some point, you have to draw the line. There’s just a difference of opinion on this,” Evans told Kohl. Evans said one problem with ATP was that despite the fact it worked like a venture capital program, the govt. didn’t get any return on its investment. Senate Appropriations Commerce Subcommittee Chmn. Gregg (R- N.H.) asked Evans whether he had developed any legislative language that would create such a return, to which Evans replied he wasn’t interested in moving in that direction on the program. On another topic, Gregg asked Evans how he intended to handle the backlog of 400,000 patent applications and expressed concern that Evans’ plan was vague. The Bush Administration’s 2004 budget requests an additional $70 million for the U.S. Patent & Trademark Office (PTO) for a total of $1.4 billion. Evans told Gregg the additional money for PTO would help with the backlog, as well as a transition to a “paperless” electronic patent filing system. “Many of my constituents have expressed concern about how long it is taking,” Gregg said of the patent backlog. “Some have gotten frustrated and pulled out of the process.” Evans said the govt. was “moving aggressively” toward a more global patent system, citing the need to work more closely with the European Union and Japan. Appropriations Commerce Subcommittee ranking Democrat Hollings (S.C.) expressed concern about the U.S. trade deficit in certain products, including semiconductors. Evans also told the subcommittee that the transition of the Critical Infrastructure Assurance Office (CIAO) from Commerce to the Dept. of Homeland Security had gone smoothly. In a sign of the times, Hollings said he was less worried about programs such as MEP and ATP and asked Evans whether he would do more to help bring countries such as Canada and Mexico into the Iraq war effort.
Saying there was an “incredibly powerful connection between economic development and peace,” Commerce Secy. Donald Evans Wed. kicked off a program aimed at creating a global set of uniform standards for key industry sectors. With 80% of the commodity trade out of the U.S. covered by some kind of standard, the U.S.’s objective is to get the world headed toward this country’s standards system, which is industry- rather than govt.-.driven, Evans said at a news briefing. The Dept. of Commerce will: (1) Charge the Technology Administration (TA), through the National Institute of Standards & Technology, with conducting a standards activity assessment of all existing Commerce programs as well as efforts to reduce standards-related trade barriers. (2) Create a best practices database. (3) Expand Commerce’s “early warning system” for market intelligence on standards development in key priority markets in Europe, Latin America and Asia. (4) Partner with the President’s Export Council on Standards Leadership for increased dialog on standards issues. (5) Hold a series of industry-specific roundtables on the most pressing issues and priority foreign markets. (6) Appoint a liaison at the International Trade Administration to liaise with U.S. industry on standards issues. The first roundtable, in late April, will be held with Information Technology Industry Council members, TA Deputy Undersecy. Benjamin Wu said. The initiative will create a cadre of well-trained standards personnel to train others, said Grant Aldonas, undersecy.-international trade. Europe will be part of that focus, he said, because the European Commission is racing to harmonize standards in order to lock out U.S. standards. The program also will home in on China, Aldonas said, to make sure its govt. understands the importance of uniform standards to its marketplace. Asked about industry complaints that U.S. regulatory agencies were blocking common standards, Aldonas said the govt. and Congress needed a “sea change” in their thinking. The U.S. competes on a global level, he said, and the Commerce initiative will help other agencies recognize that.