Free Internet Access to Firms’ Filings to End
WASHINGTON — A nonprofit group’s experiment that offered free Internet access to valuable corporate records will end Oct. 1, officials said Friday.
The Internet Multicasting Service in Washington said it’s unclear whether the government will step in to fund the popular project that distributes corporate filings to the Securities and Exchange Commission and the Patent and Trademark Office.
But Rep. Daniel Frisa, a New York Republican in charge of reviewing the SEC, said he generally supports the idea of distributing SEC corporate filings over the Internet but hasn’t figured out how to pay for such a service.
“I think some distribution on the Internet would disperse the information to a far greater potential audience, which is what we would like to see,” Frisa said in a telephone interview. “The bottom line is, how do you pay for it?”
The SEC’s electronic database, known as “Edgar,” contains records ranging from quarterly earnings reports to notices of corporate takeovers to shareholder proxy statements.
Private companies, such as Mead Data Central and Disclosure Inc., resell the records the same day they are filed. But buying a full document is vastly more expensive than examining the raw information, which is available a day later on the Internet through Edgar.
Since January, 1994, Internet Multicasting Service said, it sent out 3.1 million SEC filings to individuals, Wall Street firms and college students. That’s an average of 16,700 documents a day.
Carl Malamud, president of the Internet Multicasting Service, said another 1.59 million patent documents were distributed during the same period. The group researches new technologies for the Internet.
Grant money supporting the project from the National Science Foundation is about to run out. Malamud also received support from private companies, such as commercial printers R.R. Donnelley & Sons Inc. of Chicago and New York University, but Malamud said he wants the government to take the service over.
He contends that the newly passed Paperwork Reduction Act, a part of the GOP’s Contract With America, compels the SEC and Patent and Trademark Office to launch a similar distribution project on the Internet.
The law says agencies with public records stored electronically have to provide “timely and equitable access” in an “efficient, effective and economical manner.”
SEC spokesman John Heine said it is too early to tell whether the SEC itself will distribute Edgar documents over the Internet. Such issues are expected to be discussed Monday at a public seminar in Washington, he said.
