--High-speed-trading technology cited as among reasons for
changing delivery of key jobs data
--Labor department concerned with data security
--Labor official says changes in jobs-data release may not
happen in July as planned
--Labor department meeting with media to address their concerns
over changes in release
(Updates throughout.)
By Geoffrey Rogow
A Department of Labor official said planned changes in the
release of the U.S. jobs report are aimed at addressing
complications that have arisen as media companies have jockeyed to
deliver the data to high-speed traders.
"It has become increasingly challenging to ensure that the
technical work performed on behalf of news organizations complies
with our data-security policy," said Carl Fillichio, senior adviser
for communications and public affairs at the Department of Labor,
in remarks before a House panel Wednesday.
Mr. Fillichio also said the Labor Department might rethink when
the proposed changes take effect, now scheduled for July, as the
department continues meetings with media companies to address their
concerns.
The hearing by the House Committee on Oversight and Government
Reform was called to examine the Labor Department's planned
changes. Starting next month, the department has said it will no
longer allow news agencies to use customized computer networks to
send market-moving employment data to a range of clients, including
traders. Currently, a number of news agencies, including Dow Jones
& Co., publisher of this newswire, maintain specialized
hardware and software on government premises, which allow them to
transmit the data to subscribers as soon as figures are
released.
Mr. Fillichio's remarks shed more light on why the Labor
Department will change procedures for how the data are distributed.
Previously, the Labor Department had only said the decision was
geared at "leveling the playing field" among news
organizations.
The push by news providers to serve the more technologically
savvy of its customers, Mr. Fillichio said, has led to roughly
seven instances where issues arose tied to security or the release
of data ahead of the permissible time.
"The competition now extends to providing the raw data to
subscribers trading on it through algorithms, which is not the
purpose of the lockups," said Mr. Fillichio. "Lockups" is the term
used for the media gatherings on government facilities as news
outlets prepare for the data releases.
Rob Doherty, a general manager for the Thomson Reuters Corp.'s
(TRI, TRI.T) news service, was among the witnesses representing the
media. He told the panel there have been two instances where
technological issues caused Reuters to inadvertently release data
early. Both instances took place more than three years ago, and Mr.
Doherty cited a "hardware reconfiguration" for the unintended early
releases. He said Reuters has been working with the Labor
Department in the time since to ensure such incidents don't happen
again.
At the hearing, where witnesses included representatives from
news organizations as well as former and current government
officials, Mr. Fillichio expressed hope an agreement between the
Labor Department and news organizations could be reached. While
being questioned by Committee Chairman Darrell Issa (R., Calif.),
Mr. Fillichio said the Labor Department might delay the July
deadline.
"We are exploring with media organizations fudging the time line
a little bit," Mr. Fillichio said.
The Labor Department releases some of the most-sensitive
economic data in the world, including monthly reports on inflation
and nonfarm payrolls, as well as the weekly payrolls report.
The media representatives present on Wednesday, as well as
others not involved in the hearing, have expressed concerns about
the planned changes, suggesting they may introduce errors in
reporting and threaten smooth distribution of the news.
Reuters's Mr. Doherty told the panel that some organizations
have recently held "a series of constructive meetings with Labor
Department officials and staff." Mr. Doherty added he is optimistic
those meetings will lead to a workable compromise for all parties,
in a sentiment echoed by Rep. Elijah Cummings (D., Md.), a
committee member.
"Over the past month ... the department has worked with press
outlets to accommodate their concerns while enhancing security. We
anticipate that there will be additional announcements regarding
these ongoing discussions," said Rep. Cummings.
A spokeswoman for Dow Jones & Co., which didn't have a
representative at the hearing, said the company has "been working
closely with the Labor Department and other media organizations to
ensure that the Department's concerns for the safety and integrity
of the data are met, while at the same time ensuring the press can
continue to freely report on this critical information."
News Corp. (NWSA) owns Dow Jones, publisher of this newswire,
and The Wall Street Journal.
In one potential resolution being discussed, news organizations
would be allowed to use their own equipment, but the Department of
Labor would oversee its installation and would monitor that
equipment, said Daniel Moss, an executive editor at Bloomberg News,
in testimony before the panel.
As of now, "there is no formal comprehensive agreement," said
Mr. Moss, adding he believes the participants are close to an
agreement on "technical issues," though he hasn't heard back from
the Labor Department on other parts of a potential new
arrangement.
-Write to Geoffrey Rogow at geoffrey.rogow@dowjones.com