A report requested by Congress urged the federal government to take steps to boost airline competition but failed to endorse Transportation Department guidelines aimed at curbing predatory behavior. A Transportation Research Board committee said in a study issued yesterday that the government should increase airport and air traffic control capacity to remove barriers to competitive entry into the airline market.

The FCC has broad authority to decide how to fund and administer the E-rate program, the U.S. Fifth Circuit Court of Appeals ruled. The popular program helps establish Internet connections for schools and libraries through long-distance telephone charges. The court also ruled that the FCC could not bar states from setting their own eligibility requirements for the program and that the FCC could not collect fees from local telephone services.

Gerber is dropping suppliers who use genetic engineering in their corn and soybean products. The move by the baby food maker's parent, Novartis, follows a request from the environmental group Greenpeace for information on the Swiss company's use of bioengineered products.

LOCAL BUSINESS

A lawsuit against the Patent and Trademark Office filed by the agency's landlord, developer Charles E. Smith Cos., has been dismissed by the U.S. District Court in Alexandria. The company contended that the agency's procurement process in its search for new quarters was stacked against existing buildings and favored new construction. The dismissal puts the agency one step closer to moving its 7,000 employees to new headquarters in Alexandria. The workers now are housed in 18 buildings in Crystal City.

EARNINGS

Kaiser Foundation Health Plan of the Mid-Atlantic States lost $20.7 million during the second quarter, compared with a loss of $1.4 million during the second quarter of 1998. Kaiser, which serves the Washington area, blamed the loss in part on an unexpectedly large number of admissions to hospitals where it lacks a concentration of its own doctors, pharmacists and others to manage care.

Corporate Executive Board, the District-based company that provides research and educational services to corporations, reported second-quarter earnings of $2.4 million, up from earnings of $1.3 million in the same period last year.

Environmental Elements of Baltimore reported net income of $221,000 for the first quarter, compared with earnings of $207,000 in the same period last year.

John Vazzana, chief financial officer of Dunn Computer in Dulles, resigned yesterday. Vazzana also has served as executive vice president of the company since 1994. A spokesman said Vazzana had considered retiring or trying something new. Kevin Murphy, Dunn's chief accounting officer, will replace Vazzana. Vazzana will remain an employee until the end of August and then serve on the board of directors.

Betsy Burton, former chief executive of Columbia-based Cosmetic Center, has been named a director of Sports Authority of Fort Lauderdale, Fla. Burton had struggled to improve the finances of Cosmetic Center, but it filed for bankruptcy protection in the spring and recently announced plans to liquidate. Burton, 47, is chief executive of BB Capital, a financial company she founded that invests in retail businesses.

RECALL

Shopko Stores agreed to recall about 68,000 infant "creepers" because they have defective snaps that may detach and choke children. The clothing, in solid and striped fabrics, was sold from last December to June in sizes newborn to 24 months. No injuries have been reported, but the creepers should be returned to the store for a refund.