Free Information Market

Requests for government documents filed under the Freedom of Information Act (FOIA) have increased significantly in recent years, forcing federal employees to manage a flood of public demands for everything from inquiries about the hiring of airline passenger screeners to internal CIA memos about how the agency has handled alleged UFO sightings.

The federal government received more than 2.4 million FOIA requests in fiscal 2002, a 7 percent increase over the previous year, according to a Justice Department report. That crush creates a management challenge for agencies-and a business opportunity for software companies that make programs to manage FOIA requests.

AINS Inc., a document management company in Rockville, Md., is marketing its FOIAXpress to federal agencies. The software lets agencies' FOIA officers track requests-which are now frequently sent over the Internet-and also redact bits of classified information, said Wayne Jewell, the company's vice president of business solutions. In the past, employees relied on Exacto knives and black markers to strip out or shield sensitive information from documents.

The 1996 Electronic Freedom of Information Act, which requires agencies to accept online requests and track them annually, is helping drive the FOIA management market, said Virginia Gavin, president of Appligent Inc., a Lansdowne, Penn., company that licensed its redaction software to AINS. Also, with the proliferation of online and 24-hour news media, the public has become more curious about the internal workings of government, fueling the requests increase, Gavin said.

The government's numbers appear to corroborate that assertion. Fiscal 2002 marked the third year in a row in which FOIA requests topped the 2 million mark, according to Justice's report. By far, the Veteran Affairs Department revived the most requests among Cabinet departments, with almost 1.5 million.

Agencies are making headway reducing FOIA request backlogs, Justice reported. There were about 148,000 requests pending at the end of fiscal 2002, a 16.5 percent decrease over the previous year. A study by the National Security Archive at The George Washington University found that the oldest pending FOIA requests date back to the late 1980s.

A San Francisco Chonicle reporter filed the oldest pending request in 1987, the study found. Seth Rosenfeld asked for information on FBI activities at the University of California at Berkeley in connection with a series of pieces he wrote about government surveillance in the 1960s. So far, Rosenfeld has received more than 200,000 pages of FBI records, the study's authors noted.

There's certainly money to be made helping agencies comply with FOIA requirements. In fiscal 2002, agencies spent just over $300 million complying with all aspects of the law, Justice said.

Satellite Positioning

As the federal government, particularly the Defense Department, becomes a bigger user of communications satellites, companies are positioning themselves to go after the emerging market.

Government demand for satellite bandwidth has never been higher. The military bought 10 times more communications capacity in the recent Gulf War than it did in the first conflict, and Homeland Security agencies are expected to be big future customers.

One satellite operator, PanAmSat of Wilton, Conn., has been on an aggressive market hunt lately, completing a number of acquisitions it hopes will make it more competitive. This month the company acquired Sonic Telecom Ltd., a multimedia data transmission company based in Chantilly, Va. The purchase will give PanAmSat a fiber optic network to expand its already impressive global reach, and will help the company cater to military clients that require massive amounts of capacity for transmitting real-time video from the battlefield.

PanAmSat owns or manages more than two dozen satellites, and holds contracts with the government through the General Services Administration, the Defense Department and the National Security Agency, said Tom Eaton, president of G2 Satellite Solutions, the division of the company created to focus solely on federal customers.

To compete in the government, a company must have wide enough coverage to move a satellite over a particular region on a moment's notice. In the recent Iraq War, the military bought most of its bandwidth on short notice, and the Pentagon paid a premium to have some satellites redirected to positions over the Middle East.

PanAmSat/G2's latest acquisition will put it in line to compete more directly with the dominant force in the market, Intelsat of Washington, D.C. For nearly four decades, Intelsat was an intergovernmental organization, run by signatories from different countries. It became a private company in 2001, and some of its rivals say it has a significant advantage because of the close business contacts it maintains in its former member countries.

Just in Time for the Holidays

As the holiday shopping season gears up for its unofficial start following Thanksgiving, the Federal Trade Commission is putting some online retailers on notice, warning them not to violate consumer protection regulations regarding claims about speedy shipping.

As part of an annual survey, the FTC reviewed 51 web retailers' Web sites this month and discovered that 44 claimed to ship products quickly (between one and three days of receiving an order). The FTS requires companies to ship products within the amount of time promised or face civil penalties.

The agency sent letters to 37 companies reminding them that online sales are governed by many of the FTC-enforced rules that apply to other forms of marketing and advertising. "We want to be certain [customers] get what they expect, when they expect it," said Howard Beales, director of the FTC's Bureau of Consumer Protection. "Online shoppers should have as much knowledge of the product, warranties and rebates as they would if they shopped in a brick and mortar store."

In 1999, many online retailers made claims about rapid holiday shipping that they failed to make good on, the FTC noted. The agency brought civil actions against seven companies. Those "well-known" firms, the FTC said-declining to name them-paid more than $1.5 million in fines.