Good morning tech

Good morning!

White House Cybersecurity Coordinator Howard Schmidt is hosting a meeting today with DHS Secretary Janet Napolitano and Commerce Secretary Gary Locke, at which he's expected to discuss how the administration can push the private sector to improve its cybersecurity using economic incentives. 

According to the White House, the meeting is to discuss administration efforts since the release of last year's Cyber Space Policy Review, not a response to any specific piece of legislation on cybersecurity.

The powwow is a sign of the Obama administration's recognition that cybersecurity is no longer merely an operational or technical issue. 

Launching an attack on private-sector companies is currently cheap, easy and relatively risk-free, but the administration and industry hope to change that dynamic by offering companies tax, insurance and liability incentives when they invest in securing their own networks.

INTEL LIFTS TECH SECTOR, POSTS STRONGEST QTRLY RESULTS IN ITS HISTORY ... Good news for the chipmaker ... and others in the tech sector. "The Silicon Valley giant swung to a second-quarter profit of nearly $3 billion — compared with a loss in the year-earlier period because of an antitrust fine — on a 34% revenue jump that easily topped projections by the company and Wall Street analysts," the Wall Street Journal reports. The news caused U.S. stock-index futures and technology shares to rally around the world, according to Bloomberg.

TWELFTH SPY CAUGHT AT MICROSOFT ... Federal authorities said Tuesday that they detained and deported a 12th individual in their widely reported investigation of a Russian spy ring in the U.S. Alexey Karetnikov entered the country in October and has been living in the Seattle area, where he worked at Microsoft as a software tester, according to federal officials and the company. Karetnikov, a Russian citizen in his early to mid-20s, was held on immigration violations because there wasn't enough evidence to charge him with a crime. He was sent back to Russia on Tuesday.

Who, where.

Former President BILL CLINTON will speak at Microsoft's Worldwide Partner Conference in Washington D.C. today. Microsoft COO KEVIN TURNER also speaks today.

AOL co-founder STEVE CASE and Yahoo co-founder JERRY YANG were named to Commerce Secretary GARY LOCKE's National Advisory Council on Innovation and Entrepreneurship.

ANEESH CHOPRA is on Capitol Hill today for a hearing on the National Manufacturing Strategy Act (2 p.m., 2322 Rayburn House Office Building). 

Chopra will also be at a Brookings Institution event on the smart grid in the morning, along with PHIL WEISER, senior adviser to the director of technology and innovation at the White House's National Economic Council.

VA chief technology officer PETER LEVIN is on Capitol Hill today to for a hearing on how veterans' claims are processed (9:30 a.m., 418 Russell Senate Office Building). 

SCOTT WALLSTEN of the Technology Policy Institute, MIKE ROLLINS of Citigroup, analyst HAL SINGER of Navigant Economics and ESC Company president EVERETT EHRLICH will be at a forum at New York Law School on broadband investment. CHARLES DAVIDSON of New York Law School and BRET SWANSON of Entropy Economics will present a new report predicting that the Democratic FCC's proposal to change how broadband is regulated could cost the U.S. economy 500,000 jobs and $80 billion per year.

Secretary of State HILLARY CLINTON will speak at a dinner tonight for participants in the USAID Conference on transforming development through science, technology and innovation.

Can't-Miss News.

Hill Notes

Hoyer: Congress has broadband power. House Majority Leader Steny Hoyer (D-Md.) supports a legislative process to clarify the rules surrounding broadband services after an appeals court decision in April thrust the former regulatory framework into uncertainty, his office said on Tuesday. Hoyer believes lawmakers “have the authority on this critical matter,” Hoyer’s spokeswoman Katie Grant told The Hill.

Court Notes

Appeals court tosses FCC's indecency rule. A federal appeals court struck down the Federal Communications Commission’s indecency policy on Tuesday, calling it a violation of the First Amendment. An appeals court ruled that the FCC’s policy of fining broadcasters for expletives on live television is vague and leads to self-censorship.The broadcast industry, which joined together to file the original lawsuit, cheered the announcement. FCC Chairman Julius Genachowski said the agency is reviewing the decision.

Industry Notes

New Coalition to battle broadcasters on transmission rules. Tech Daily Dose reports that a new group, the American Television Alliance, wants reform on rules that require cable companies to have an OK from TV stations before distributing their shows. "The alliance members say these rules end up favoring broadcasters in fee negotiations because a dispute can result in the broadcaster pulling its content from a cable operator," the outlet reports. Coalition members include cable companies, consumer groups, independent broadcasters, satellite providers and telecommunications firms. 

Executive Notes

VA ends financial system overhaul. The Department of Veterans Affairs announced Tueday that it has terminated most of a $400 million project to update the system the agency uses to process financial transactions. VA chief information officer Roger Baker blamed the project's high risk of failure and a shortage of resources for the decision, which comes after the Obama administration issued a sweeping order halting all similar system updates across the government last month. Financial systems at federal agencies are notoriously complex and difficult to integrate; the administration is hoping to cut down the size and scope of these projects, a factor that contributed to VA's decision. Baker said the department will focus on smaller projects instead with more immediate deliverables.

Comcast-NBCU forum weighted toward those with grievances. An FCC forum in Chicago on Tuesday about the Comcast-NBC Universal merger was weighted toward those with criticisms of the proposed joint venture, Broadcasting & Cable reports. "Small cable operators, an independent programmer and a former FCC commissioner led the afternoon prodding."

New HHS rule rewards healthcare providers for using electronic medical records. The Department of Health and Human Services released new rules Tuesday that would reward doctors and hospitals for making use of electronic medical records while scaling back proposed requirements that the industry had deemed unrealistic. HHS said it has set aside $27 billion over the next 10 years to encourage the adoption of electronic medical records. Doctors will be eligible to receive up to $44,000 under Medicare and up to $63,750 under Medicaid, while hospitals will be eligible for millions depending on their size. Providers that don't use electronic records will be subject to fines under Medicare starting in 2015.

Notes from abroad

China seeks to reduce Internet users' anonymity. The AP reports that a leading Chinese Internet regulator has "vowed to reduce anonymity in China's portion of cyberspace, calling for requirements that people use their real names when buying a mobile phone or going online." The report cites a human rights group.

SCHEDULED.

8 a.m. onward … The White House Office of Science and Technology Policy (OSTP) holds a workshop on updating U.S. National Nanotechnology Initiative (NNI) Strategic Plan (which is under development and scheduled for completion by December 2010). Hotel Palomar Arlington, 1121 North 19th Street, Arlington, Va.

9 a.m. onward … Brookings Institution forum on the smart grid. Brookings Institution, 1775 Massachusetts Avenue NW, Falk Auditorium, Washington, D.C.

10 a.m. … American Council for Technology sponsors a speech on cybersecurity by Sean Donelan of Homeland Security's National Protection and Programs Directorate Cybersecurity and Communications Program. 

1 p.m. ...  Commodity Futures Trading Commission has a meeting meeting of the Technology Advisory Committee Meeting. Topics include technological trading, high frequency trading, and managing the risk of direct access trading. (CTFC, 1155 21st Street NW, Washington)

2 p.m. ... House Energy and Commerce Hearing on the National Manufacturing Strategy Act. 2322 Rayburn House Office Building.

NUMBER PUNCH.

$700 million. The size of Google's acquisition of ITA Software, a travel technology company. The FT reported yesterday that the purchase has added to concerns about whether Google will use its power to organize search listings in a way that buries competitors from sight. 

SAID.

"We think it's the company's responsibility to provide the fix — at no extra cost to consumers." 

- Consumers Reports, in response to Apple's suggestion that iPhone 4 owners address a reception issue by holding their phones differently or purchasing a case.

WATERCOOLER.

LAUGH TRACK ... A blogger at Recording Industry vs. The People starts a blog post with "ha ha ha ha ha" before reporting that "the RIAA paid Holmes Roberts & Owen $9,364,901 in 2008, Jenner & Block more than $7,000,000, and Cravath Swain & Moore $1.25 million, to pursue its 'copyright infringement' claims, in order to recover a mere $391,000."