2HRS2GO: TV gets disclosure status

COMMENTARY--Has CNBC turned into Wall Street's version of the Congressional Record?

Evidently CNBC has become the news provider of record for the financial markets, or at least Applied Micro Circuits (Nasdaq: AMCC) shareholders may think so. The maker of networking chips yesterday warned of lower-than-expected earnings, and did so by mentioning it during a CNBC interview.

Forget news releases. Just call the producers of "Power Lunch" or "Market Wrap" and set up a few minutes with anchor Bill Griffeth.

The U.S. Securities and Exchange Commission's Regulation FD (Fair Disclosure) requires publicly traded firms to widely reveal important data that affects reported financial results. In its description of the rule, the SEC gives companies a wide degree of latitude:

"The regulation does not require use of a particular method, or establish a one-size-fits-all standard for disclosure; rather, it leaves the decision to the issuer to choose methods that are reasonably calculated to make effective, broad and non-exclusionary public disclosure, given the particular circumstances of that issuer.

"Indeed, we have modified the language of the regulation to note that the issuer may use a method 'or combination of methods' of disclosure, in recognition of the fact that it may not always be possible or desirable for an issuer to rely on a single method of disclosure as reasonably designed to effect broad public disclosure."

This morning an Applied Micro spokeswoman said, "Things didn't go exactly as planned yesterday. The interview was pre-recorded and wasn't supposed to air until after market close today. It kind of threw things a little out of whack."

If you missed the interview with Applied Micro CEO David Rickey, you'll just have to read the news stories based on the TV report. The company hasn't issued a formal news release.

"We're still debating that," the spokeswoman said. "I don't think we will, since it already seems to be broadly disseminated."

CNBC must love that kind of recognition. In barely more than a decade, NBC's financial outlet has risen from a two-bit cable channel to overtake its partner, The Wall Street Journal, as the preeminent investor news source in the United States.

(Speaking of fair disclosure: CNBC carries TV programs of CNET, the parent of ZD Inter@ctive Investor.)

Maybe we should turn CNBC into an independent agency. It's part of the General Electric (NYSE: GE) conglomerate, but if it's going to be some kind of formal news distribution agency, sell it to a venture jointly operated by the New York Stock Exchange, Nasdaq, Chicago Board of Trade and the Pacific Exchange. A Wall Street C-SPAN, if you will, without the boring parts.

Ok, I'm kidding. Such an outright endorsement sounds ridiculous, not to mention unfair to Bloomberg TV, CNNfn, Yahoo FinanceVision, ON24 and other financial broadcast outlets.

But the combined audience of those channels would barely fill a section in CNBC's stadium. No one trembles before "Moneyline" anchors, but when "Squawk Box" host Mark Haines gets on your case, you squirm.

Nonetheless, it raises the point of what would qualify as broad disclosure. A press release distributed online through PR Newswire or Business Wire usually suffices, but if you think about it, there are probably more investors with cable TV than Internet access.

So maybe talking to CNBC would do. Applied Micro really doesn't have much reason to complain, since AMCC shares rose following the CNBC broadcast. But Applied Micro doesn't plan to make a habit of using television as a means of disclosure.

"I wouldn't think so," the company spokeswoman said. "In hindsight, we probably should have had the news release ready before the interview." 22GO>