People and Appointments

8/4. The Senate Commerce Committee (SCC) approved the nomination of Jay Cohen to be Under Secretary for Science and Technology at the Department of Homeland Security (DHS). See, SCC release.

8/4. The Senate Commerce Committee (SCC) approved the nomination of Nathaniel Wienecke to be an Assistant Secretary of Commerce. See, SCC release.

8/4. Mary Jo Graves was named Chief Assistant Attorney General for the Criminal Law Division of the state of California's Department of Justice. She replaces Robert Anderson, who was named Chief Deputy Attorney General for Legal Affairs. Anderson replaces Richard Frank, who will take a position as head of the California Center for Environmental Law and Policy at UC Berkeley's Boalt Hall School of Law. See, release.

More News

8/4. The American Intellectual Property Law Association (AIPLA) will relocate its offices on Friday, August 11. Effective August 12, its new address will be 241 18th Street, South Suite 700, Arlington, VA, 22202. Its main telephone number will remain 703-715-0780.

8/4. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register that announces, recites, describes, and sets the effective date (August 4, 2006) for, its final rule that revises the rules of practice relating to the filing date requirements for ex parte and inter partes reexamination proceedings for consistency with the provisions of the patent statute governing ex parte and inter partes reexamination proceedings, and to permit the USPTO to have the full statutory three months to address a request for reexamination that is complete. See, Federal Register, August 4, 2006, Vol. 71, No. 150, at Pages 44219-44223.

CDT Argues That Internet Filtering and Web Site Labeling Bills Threaten Free Speech

8/3. The Center for Democracy & Technology (CDT) held a news briefing on the Senate Appropriations Committee's (SCC) web site labeling mandate in HR  5672 (an appropriations bill), HR 5319, the "Deleting Online Predators Act of 2006", and other topics.

It argued that these bills threaten freedom of speech online. The speakers were Leslie Harris and John Morris of the CDT.

Harris said that "we have enjoyed about ten good years since the Supreme Court struck down the Communications Decency Act" in 1996 in a 9-0 opinion. However, "we see a growing threat to online free speech".

Harris and Morris stated that in addition to the two pending Congressional bills, there is the long running litigation over the Constitutionality of the COPA,  the "Child Online Protection Act". They noted that the Supreme Court's most recent opinion was merely a 5-4 opinion, and two new Justices have been appointed since.

They also stated that there are threats to online speech in various pending state legislative proposals. They named Utah House Bill 260.

They also stated that the convergence of media now places threats on online free speech. They argued that as media converge, the different standards that govern different media platforms will collide. Harris argued that broadcast should end up eventually under the internet free speech standard. And, the CDT may get involved in broadcast indecency matters. The CDT does not want to see the internet end up under the FCC's current broadcast indecency standard.

Harris added that "this is the silly season", when legislators push bills for the purpose of election campaigning.

Mandatory Web Site Labeling. Morris argued that the mandatory labeling bill is both bad policy and unconstitutional. He said that the definition of sexually explicit material is extraordinarily broad, and would affect some PG-13 movies and textual material. He said that it also constitutes compelled speech.

He also argued that this is "a fairly clunky and overbroad" government mandate that will "interfere with voluntary labeling schemes that are already underway".

He argued that the Motion Picture Association of America's (MPAA) rating of movies is voluntary, and that if the government were to mandate such a scheme, it would probably be held unconstitutional.

Harris also argued that the government is making inconsistent arguments. The mandatory labeling bill is based on the assumption that the warning labels will enable filters to block access to content. It rests upon the assumption that filtering works. However, in the COPA litigation, the DOJ is arguing that the requirements contained in the COPA are necessary because filtering does not work.

DOPA. Morris and Harris argued that the DOPA is also unconstitutional. They said that while it has some similarities to the Children's Internet Protection Act (CIPA), which has been upheld, it has several Constitutionally significant differences.

For example, the CIPA only regulates access to speech that is appropriate to block -- obscenity, CP, and material that is harmful to minors. In contrast, most of what is on social networking sites and in chat rooms is legal.

Also, the CIPA does not regulate speakers. It only blocks certain person's access to certain speech. In contrast, the DOPA not only blocks access to speech, but also regulates speakers. Students in school, and library users, will be prevented from engaging in speech.

They also argued that the bill is bad policy because it would exacerbate the digital divide. That is, rich kids with broadband access at home would not be affected in their home use of social networking sites, while students whose only access is at school or in libraries would not be able to participate in any social networking sites or chat rooms.

Other groups have also recently expressed views on HR 5319. For example, William Archey, head of the American Electronics Association (AeA), sent a letter on August 2, 2006, to Sen. Bill Frist (R-TN) and others regarding HR 5319, the DOPA.

He wrote that the "AeA is concerned that H.R. 5319 takes the wrong approach to safeguarding the Internet for our children by restricting minors’ use of certain Web sites in libraries and schools that receive e-rate funds. The bill would ultimately cause the blocking of any 'social networking' or 'chat' sites, whether they contained inappropriate material or not. These same technologies that are being targeted are changing and influencing the Web in new and exciting and perfectly legitimate ways. AeA believes that a more productive way to address this issue would be to further educate consumers on how to use these beneficial sites in a safe and appropriate way.  Just as parents teach their kids how to stay safe in public parks, the same approach should be taken within the online environment."

The American Library Association (ALA) wrote a letter to House members on July 26, 2006, regarding HR 5319, the DOPA.

It wrote that the "DOPA would restrict access to technology in the communities that need public access most. H.R. 5319 still, as presently drafted, would require libraries and schools receiving E-rate discounts through the Universal Service Program to block computer users from accessing Interactive Web applications of all kinds, thereby limiting opportunities for those who do not have Internet access at home. This unfairly denies the students and library users in schools and libraries in the poorest communities from accessing appropriate content and from learning how best to safely manage their own Internet access in consultation with librarians and teachers." This letter is also in the Congressional Record, July 26, 2006, at Pages H5885-6. See also, ALA release.

Also, Adam Thierer of the Progress and Freedom Foundation (PFF) has written in opposition to HR 5319, the DOPA. See, May piece and June piece.

Senate Ratifies Convention on Cybercrime

8/3. The Senate ratified by unanimous consent without amendment Treaty 108-11, which is titled "Council of Europe Convention on Cybercrime". This convention requires the nations that are parties to it to enact laws criminalizing certain activity in the nature of computer hacking, and other cyber crimes.

However, the convention also requires the parties to enact numerous laws related to criminal procedure, search and seizure, electronic intercepts, and data retention, that will broadly increase governmental powers.

Also, the use of these powers is not limited to investigation and prosecution in cyber crime cases. The procedural provisions apply not only to cyber crime matters, but also to any "criminal offences committed by means of a computer system", and to the "collection of evidence in electronic form of a criminal offence".

Two other characteristics of the convention are that it requires mutual assistance, and has no dual criminality provision. Thus, the U.S. is obligated to compel search and seizure, data retention, and intercept assistance from U.S. service providers, in order to surveil a person in the U.S., at the demand of a foreign government, when the person's activity is a crime in that foreign country, but legal conduct in the U.S.

See, full story.

Bush Extends Export Control Regime

8/3. President Bush signed and released a notice titled "Continuation of Emergency Regarding Export Control Regulations". He issues a similar notice every year at about this time to maintain in effect the export regulations of the Bureau of Industry and Security (BIS).

There was once a statute titled the Export Administration Act. It expired in 2001. Some members of the House and Senate worked on enacting replacement legislation several years ago. However, no replacement bill was enacted, and there is little legislative activity now on this subject.

Meanwhile, the BIS, which was formerly named the Bureau of Export Administration (BXA), continues to revise and enforce implementing regulations. These regulations pertain to, among other things, exports and "deemed exports" of dual use items, such as computers, software, and encryption products. These regulations also regulate employment in some situations.

The just released notice states that "On August 17, 2001, consistent with the authority provided me under the International Emergency Economic Powers Act (50 U.S.C. 170l et seq.), I issued Executive Order 13222. In that order, I declared a national emergency with respect to the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States in light of the expiration of the Export Administration Act of 1979, as amended (50 U.S.C. App. 2401 et seq.). Because the Export Administration Act has not been renewed by the Congress, the national emergency declared on August 17, 2001, must continue in effect beyond August 17, 2006. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency declared in Executive Order 13222."

See also, President Bush's letter to the Speaker of the House and the President of the Senate.

FCC Adopts MOO Regarding BPL Systems

8/3. The Federal Communications Commission (FCC) adopted, but did not release, a Memorandum Opinion and Order (MOO) that responds to petitions for reconsideration of the rules applicable to broadband over power line (BPL) systems.

The FCC released only a short release [PDF] describing this MOO. Also, four of the FCC's Commissioners wrote statements.

The FCC promulgated its original BPL rules in its Report and Order [86 pages in PDF] adopted on October 14, 2004, and released on October 28, 2004. That R&O is FCC 04-245 in ET Docket No. 04-37 and ET Docket No. 03-104. See also, story titled "FCC Adopts BPL Report and Order" in TLJ Daily E-Mail Alert No. 997, October 15, 2004, and story titled "FCC Adopts Broadband Over Powerline NPRM" in TLJ Daily E-Mail Alert No. 836, February 13, 2004. The FCC released the text [38 pages in PDF] of the NPRM on February 23, 2004.

The FCC release states that this MOO "Affirms its rules regarding emission limits for BPL, including its determination that the reduction of emissions to 20 dB below the normal Part 15 emissions limits will constitute adequate interference protection for mobile operations", "Denies the request by the amateur radio community to prohibit BPL operations pending further study and to exclude BPL from frequencies used for amateur radio operations", and "Denies the request by the television industry to exclude BPL from frequencies above 50 MHz".

The FCC release adds, however, that this MOO "Adopts changes regarding protection of radio astronomy stations by requiring a new exclusion zone and amending consultation requirements for these stations" and "Adopts changes to provide for continuing protection for aeronautical stations that are relocated."

The FCC release also states that this MOO "Denies the request by the aeronautical industry to exclude BPL operating on low-voltage lines from frequencies reserved for certain aeronautical operations".

FCC Chairman Kevin Martin wrote in his statement [PDF] that "we build upon our previous efforts to facilitate deployment of broadband over power line (BPL) systems while protecting existing spectrum users from harmful interference. It is my hope that our rules will allow BPL systems to flourish. This technology holds great promise as a ubiquitous broadband solution that would offer a viable alternative to cable, digital subscriber line, fiber, and wireless broadband solutions. Moreover, BPL has unique advantages for home networking because consumers can simply plug a device into their existing electrical outlets to achieve broadband connectivity."

FCC Commissioner Michael Copps wrote in his statement [PDF] that "We all have high hopes for Broadband over Power Line and I think we would all like to see some non-duopoly pipes bringing broadband access to, particularly, hard-to-reach Americans."

See also statement [PDF] of Commissioner Deborah Tate, and statement [PDF] of Commissioner Robert McDowell.

The just adopted MOO is FCC 06-113 in ET Docket Nos. 04-37 and 03-104.

FCC Concludes 700 MHz Band Licensees Are Subject to 911/E911 Rules

8/3. The Federal Communications Commission (FCC) adopted, but did not release, a Notice of Proposed Rulemaking (NPRM) regarding changes to its rules governing wireless licenses in the 698-746, 747-762, and 777-792 MHz Bands. This item also contains a tentative conclusion that wireless services licensed in this 700 MHz band, including broadband internet access services, as well as other wireless services covered by Part 27 of the FCC's rules, are subject to 911/E911 regulation.

The Digital Television Transition and Public Safety Act of 2005 established a hard deadline of February 17, 2009, for the cessation of analog broadcasting in the 700 MHz band. It also established a deadline of January 28, 2008, for the FCC to begin the auction for the licenses associated with the recovered analog spectrum.

This NPRM proposes service rules for the 700 MHz commercial band. See, full story.

Sen. Hagel Bill Ties Foreign Assistance to Anti-Counterfeiting Measures

8/3. Sen. Chuck Hagel (R-NE) introduced S 3800, the "Stop Assistance to Counterfeiters Act", a bill that would condition foreign assistance on certification that the recipient will not use the assistance to traffic in goods or services that contain counterfeit trademarks.

Sen. Hagel (at left) stated in a release that "It is outrageous that U.S. foreign assistance are being provided to individuals or organizations that engage in counterfeiting practices. This common sense bill will help U.S. companies, like Gallup, compete fairly to provide goods and services abroad". Gallup USA is based in Nebraska.

This bill is similar, but not identical, to HR 5249, introduced by Rep. Lee Terry (R-NE) on April 27, 2006.

S 3800 would amend the Foreign Assistance Act of 1961 to provide that "assistance may not be provided to a person seeking United States assistance for a fiscal year until such person submits to the President a certification" that "such assistance will not be used to intentionally traffic in goods or services that contain counterfeit marks", that "such assistance will not be used by any person that has had an administrative or judicial determination issued against the person for infringement, counterfeiting, or piracy of intellectual property in the United States or a foreign country", and that "any material or product, including a material or product in electronic form, that was developed, in whole or in part, using such assistance will not be imported into the United States" in violation of 18 U.S.C. § 2320 (regarding trafficking in counterfeit goods or services) or 19 U.S.C. § 1526(a).

HR 5249 is limited in scope to "Assistance to a nongovernmental organization". S 3800 elaborates that the "certification requirement ... shall not be applied to assistance provided under this Act or any other Act directly to the government of a foreign country or an entity of such government or to an international organization that is an association of representatives of national governments, including the United Nations." It further provides that a "person seeking United States assistance" means "a person, including an international or domestic organization that is not an association of national governments ..."

While HR 5249 has 60 cosponsors, the House has taken no action on it.

S 3800 was referred to the Senate Foreign Relations Committee.

People and Appointments

8/3. President Bush announced his intent to nominate John Veroneau to be Deputy U.S. Trade Representative. He is currently a partner in the law firm of DLA Piper Rudnick Gray Cary. He was previously General Counsel in the Office of the USTR. He has also worked for former Sen. Bill Cohen (R-ME), former Secretary of Defense Cohen, Sen. Susan Collins (R-ME), and Sen. Bill Frist (R-TN). See, White House release.

8/3. President Bush announced his intent to nominate Cynthia Glassman (at right) to be Undersecretary of Commerce for Economic Affairs. She was until recently a Commissioner of the Securities and Exchange Commission (SEC). She has also worked at Ernst and Young and the Federal Reserve System. See, White House release.

8/3. John Grant will join the staff of the Senate Committee on Homeland Security and Governmental Affairs, which is chaired by Sen. Susan Collins (R-ME). He is currently FCC Commissioner Deborah Tate's Special Advisor for Policy. See, FCC release.

8/3. Chris Robbins was "detailed" to the office of FCC Commission Deborah Tate to handle media issues. He is currently an Attorney Advisor in the FCC's Media Bureau's (MB) Audio Division. He was previously an attorney in the media practice group at the law firm of Wiley Rein & Fielding. See, FCC release.

8/3. The Senate confirmed Troy Eid to be the U.S. Attorney for the District of Colorado for the term of four years.

8/3. The Senate confirmed Alexander Acosta to be the U.S. Attorney for the Southern District of Florida fo the term of four years.

8/3. The Senate confirmed Karl Hess, Thomas Taylor, Richard Thompson, Mark Abbott, John Bruer, Patricia Galloway, and Jose-Marie Griffiths to be members of the National Science Board, National Science Foundation. Hess was confirmed for a term that ends on May 10, 2008. The others' terms expire on May 10, 2012.

More News

8/3. The Senate Judiciary Committee held an executive business meeting. It once again did not take up many items on its agenda, including consideration of S 2453, the "National Security Surveillance Act of 2006", S 2455, the "Terrorist Surveillance Act of 2006", S 2468, a bill to provide standing for civil actions for declaratory and injunctive relief to persons who refrain from electronic communications through fear of being subject to warrantless electronic surveillance for foreign intelligence purposes, S 3001, the "Foreign Intelligence Surveillance Improvement and Enhancement Act of 2006", S 2831, the "Free Flow of Information Act of 2006", and S 1845, the "Circuit Court of Appeals Restructuring and Modernization Act of 2005".

8/3. Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT) introduced S 3818, the "Patent Reform Act of 2006". See, Sen. Leahy's release, floor statement, and bill summary. Sen. Hatch's floor statement is published in the Congressional Record, August 3, 2006, at Pages S8829-31.

8/3. Sen. Richard Durbin (D-IL) introduced S 3820. the "Broadband for Rural America Act of 2006". It was referred to the Senate Commerce Committee.

SEC and EU's CESR to Discuss Interactive Data and Other IT Related Financial Reporting Issues

8/2. The Securities and Exchange Commission (SEC) and the Committee of European Securities Regulators (CESR) released document [6 pages in PDF] titled "CESR-SEC Work Plan". Part II of the plan is titled "Modernisation of financial reporting and disclosure". It pertains to the use of information technologies, including interactive data.

Chris Cox (at left), Chairman of the SEC, stated in a release that "As our markets grow more sophisticated, so must the relationships among regulators. The work plan demonstrates the intention of the SEC and CESR to have a forward-looking dialogue on key emerging issues, as well as take practical steps to encourage high-quality and consistent application of IFRS. The result will be greater protection and better disclosure for investors, particularly as they seek investment opportunities across the Atlantic."

Fabrice Demarigny, Secretary General of CESR, stated in this same release that "This work plan creates a constructive and practical cooperation framework between the EU and US securities supervisors in the enforcement of financial reporting. I believe it will significantly contribute towards decisions on the use of IFRS in the US and US GAAP in Europe."

The plan states that one of its goals is "Evaluation and identification of Information Technology (IT) solutions for disclosure and electronic storage of corporate information (including financial information)." (Parentheses in original.)

It states that the SEC and CESR "will exchange views on policies favoring the use of technology and IT networks in disclosure/storage of financial information, including the use of interactive data."

The plan then identifies four areas of discussion.

"Information sharing regarding current IT developments: In the 2nd half of 2006 and continuing as appropriate, the SEC staff and the relevant CESR expert groups will schedule additional videoconferences in which the relevant experts will update each other on regulatory developments in relation to IT projects related to electronic disclosure/storage of financial information."

"Use of interactive data software: In the 2nd half of 2006 and quarterly thereafter, SEC staff and the relevant CESR expert group will meet via videoconference to exchange views and, where relevant, compare experiences with interactive data software, and potentially to coordinate feedback to those responsible for writing interactive data taxonomies and to software developers."

"Joint incentives to issuers to use interactive data software: In the 2nd half of 2006 and quarterly thereafter, SEC staff and the relevant CESR expert group will explore the possibility of developing common incentives to offer to issuers that voluntarily file reports using interactive data."

"Future possible discussion: Once fundamental strategic choices have been made in the US and in the EU on general architectures for storage of corporate information, one topic of future discussion will be possible forms of linkages between the SEC’s EDGAR and European storage mechanisms."

See also, short essay titled "XBRL: Give Them the Tools and They Will Finish the Job", by Peter Wallison of the American Enterprise Institute (AEI), and TLJ story titled "AEI Paper Urges Quicker SEC Development of XBRL for GAAP" in TLJ Daily E-Mail Alert No. 1,324, March 7, 2006.

Wallison argued that the SEC's efforts to incorporate XBRL for Generally Accepted Accounting Procedures (GAAP) into the SEC's financial reporting process is a good thing. The problem, wrote Wallison, is that the EU is moving more quickly to develop XBRL for their competing International Financial Reporting Standards (IFRS). He stated that "in the globalized capital market of today, capital will flow to the companies whose financial statements are most easily analyzed and understood, giving the companies that state their financials in IFRS an important competitive advantage over those that use US-GAAP".

Chairman Cox and other SEC Commissioners have frequently spoken about the XBRL program. See for example, speech of November 7, 2005, in Tokyo, Japan, and speech of November 11, 2005, in Boca Raton, Florida. See also, story titled "SEC Chairman Cox Discusses Use of Interactive Data in Corporate Reporting" in TLJ Daily E-Mail Alert No. 1,250, November 9, 2005.

FTC Holds That Rambus Unlawfully Monopolized Markets

8/2. The Federal Trade Commission (FTC) released its opinion [120 pages in PDF] in its administrative proceeding titled "In the Matter of Rambus, Inc.". It concludes that Rambus unlawfully monopolized the markets for four computer memory technologies that have been incorporated into industry standards for dynamic random access memory (DRAM) chips.

This reverses the February 17, 2004, order of Stephen McGuire, Chief Administrative Law Judge, dismissing the FTC's complaint. See, story titled "ALJ Dismisses FTC Complaint Against Rambus" in TLJ Daily E-Mail Alert No. 839, February 18, 2004.

The FTC also issued an order [2 pages in PDF] on August 2, 2006, titled "Order Reversing and Vacating Initial Decision and Accompanying Supplemental Briefing on Issues of Remedy, and Denying Complaint Counsel's Motion for Sanctions".

See also, FTC Docket No. 9302 for hyperlinks to pleadings in this proceeding.

See, full story.

Sen. Bond Introduces Crime Bill That Would Affect Unauthorized Disclosures of Certain Surveillance Programs

8/2. Sen. Kit Bond (R-MO) and eleven other Republican Senators introduced S  3774, an untitled bill that would amend Title 18 to prohibit the unauthorized disclosure of classified information.

It provides, in part, that "Whoever, being an officer or employee of the United States, a former or retired officer or employee of the United States, any other person with authorized access to classified information, or any other person formerly with authorized access to classified information, knowingly and willfully discloses, or attempts to disclose, any classified information to a person (other than an officer or employee of the United States with authorized access to classified information) who is not authorized access to such classified information, knowing that the person is not authorized access to such classified information, shall be fined under this title, imprisoned not more than 3 years, or both." (Parentheses in original.)

Sen. Bond stated in the Senate that "Over the past year, there has arisen an apparent absence of fear of punishment in regard to arbitrary divulging of classified information. These are individuals who took solemn vows to protect our Nation. In taking a vow to protect classified information, one should acknowledge that being privy to it establishes a solemn trust."

Sen. Bond did not identify any leaks with specificity. However, he made vague reference to the disclosures of the National Security Agency (NSA) programs involving electronic surveillance and databasing of telephone call records.

He added that "Time and time again, we have witnessed leaks that told our enemies not only that we were watching them and listening to them but how and whom we are cooperating with and how we are getting the information."

He noted that this bill "only affects Government employees and contractors who have signed a nondisclosure agreement. It doesn't affect the media, businesses, or private citizens."

This bill was referred to the Senate Judiciary Committee (SJC). Sen. Orrin Hatch (R-UT), Sen. Jon Cornyn (R-TX), and Sen. Saxby Chambliss (R-GA), who are members of the SJC, are cosponsors.

People and Appointments

8/2. President Bush nominated Roslynn Mauskopf to be a Judge of the U.S. District Court for the Eastern District of New York. See, White House release.

8/2. President Bush nominated Liam O'Grady to be a Judge of the U.S. District Court for the Eastern District of Virginia. O'Grady is currently a Magistrate Judge in the Alexandria Division. See, White House release.

8/2. President Bush nominated Lawrence O'Neill to be a Judge of the U.S. District Court for the Eastern District of California. See, White House release.

More News

8/2. The Federal Communications Commission (FCC) deleted one item for the agenda for its August 3 meeting that it released on July 27. It announced that it will not consider adoption of a Memorandum Opinion and Order (MOO) concerning the regulatory classification of broadband over power line (BPL) internet access service. On December 23, 2005, the United Power Line Council (UPLC) filed a Petition for Declaratory Ruling [16 pages in PDF] with the FCC requesting that the FCC "declare that BPL-enabled Internet access service is an interstate information service, consistent with the Cable Modem Declaratory Ruling and the DSL Order." This proceeding is WC Docket No. 06-10. See, FCC release [PDF].

Paulson Advocates Free Trade

8/1. Henry Paulson, the new Secretary of the Treasury, gave a speech at the Columbia Business School in New York City. He said that the U.S. economy is strong, but faces several challenges in the long run, including the pursuit of freer trade, control over spending on entitlement programs, energy security, and more even income distribution.

Paulson (at right) said that "We also need to expand opportunities for American workers and businesses to compete in the global economy. The goods we export -- from corn to computers -- create high-paying jobs for millions of Americans. And foreign investments in our country are responsible for more than five million U.S. jobs. Simply put, we need to continue working to open markets abroad, and to keep our own markets open."

He said that "As Treasury Secretary I will be a strong advocate for free trade and will encourage other countries to open their markets to American goods, services, and capital. When I travel to Asia early this fall trade will be a top agenda item. The world is a competitive place. And if we are to retain our competitive advantage, we need to welcome competition, and not run away from it."

He continued that "I am very concerned about the anti-trade rhetoric I hear coming from some quarters here and around the world. I have spent my career advising clients on international matters, working in U.S. and foreign capital markets, and investing in countries around the globe -- ranging from developing countries like China, to highly-developed economies, such as those in Japan and Germany. If this experience has taught me anything it is that nations that reform their economies, and open themselves to trade and competition, benefit their own citizens greatly."

He said that "there is a disturbing wave of protectionism", and that some "countries are increasingly viewing market access as something that should apply to someone else's home market and not their own."

Regarding the suspended Doha round of global trade negotiations, he said that "we will continue to try to find a way to move forward with the global negotiations". He added that "we will continue to press for liberalization through important regional and bilateral agreements".

GAO Reports on Financial Restatements, Sarbanes Oxley, and Section 404

8/1. The Government Accountability Office (GAO) released a report [198 pages in PDF] titled "Financial Restatements: Update of Public Company Trends, Market Impacts, and Regulatory Enforcement Activities".

The report finds that "While the number of public companies announcing financial restatements from 2002 through September 2005 rose from 3.7 percent to 6.8 percent, restatement announcements identified grew about 67 percent over this period."

It concludes that "A variety of factors appear to have contributed to the increased trend in restatements, including increased accountability requirements on the part of company executives; increased focus on ensuring internal controls for financial reporting; increased auditor and regulatory scrutiny (including clarifying guidance); and a general unwillingness on the part of public companies to risk failing to restate, regardless of the significance of the event."

It adds that "Given the new regulatory and oversight structure, and the current operating environment, it is unclear if and when the current trend toward increasing restatements will subside. The number of restatements may continue to increase in the immediate future, as new areas of scrutiny (for example, small public company implementation of the Sarbanes-Oxley Act internal control requirements and hedge accounting rules), by SEC and others, may trigger future restatements similar to the trends experienced after the focus on accounting for leases or income taxes in early 2005. Currently, approximately 60 percent of public companies -- generally smaller public companies -- have yet to fully implement the internal control requirements of the Sarbanes-Oxley Act, which could also impact the number of restatements. In recent years, the larger public companies’ implementation of Section 404 requirements resulted in many companies announcing financial restatements. Alternatively, the number of restatement announcements could subside after the regulatory and firm changes called for in the Sarbanes-Oxley Act have been fully implemented and allowed to play through."

The report includes a chronological listing of financial restatement announcements from July 1, 2002 through September 30, 2005.

More News

8/1. The Progress and Freedom Foundation (PFF) released a short paper titled "Saving Online Free Speech: A Voluntary Code of Conduct for Internet Operators". The author is Adam Thierer.

8/1. The National Institute of Standards and Technology's (NIST) Computer Security Division released a draft [ZIP] of Special Publication (SP) 800-69, titled "Guidance for Securing Microsoft Windows XP Home Edition: A NIST Security Configuration Checklist. See also, summary. This document provides guidance to telecommuting employees and those who maintain home offices and use Windows XP Home Edition. The deadline to submit comments is August 31, 2006.

Go to News from July 26-31, 2006.