Lobbyists detail top tech policy items

Proposals designed to stimulate the economy, foster the deployment of high-speed Internet access, prevent digital piracy and protect online privacy promise to be among the top policy items for the high-tech sector in the 108th Congress, according to industry lobbyists.

Other issues on the agenda likely will include cybersecurity, education policy, export-control reform, federal procurement and appropriations, H-1B visas for highly skilled foreign workers, the disposal of high-tech equipment, Internet taxation, employee stock options and trade.

"We will be aggressive on the issues important to the tech community, and we think we can have the same success in the 108th Congress as we did in the 107th Congress," said Ralph Hellmann, senior vice president at the Information Technology Industry Council (ITI). The group ranks economic stimulus, broadband deployment and the debate over whether to mandate anti-piracy technology as its most important policy items next year.

Attentions Turn To Economic Jumpstart

An economic stimulus package is most likely to be the first issue to demand high-tech lobbyists' attention, as President Bush is planning to introduce a package of tax cuts aimed at boosting business investment and getting more money into consumers' hands. Early this year, a coalition of high-tech companies helped win enactment of an economic stimulus bill that lets firms take tax write-offs for an additional 30 percent of assets when they purchase them. But the economy has remained sluggish, and many businesses have been calling for another round of tax cuts.

Hellmann said many observers believe that the 30-percent depreciation figure in the 2002 stimulus package was not enough to encourage businesses to invest in information technology. He said high-tech lobbyists are working with the Bush administration and lawmakers on extending or expanding the depreciation measure, in conjunction with a tax incentive that would give consumers and businesses more money to purchase technology and other business products.

ITI companies also are considering other tax measures, such as reforming international tax law to encourage U.S. businesses with international offices to invest more of their capital at home. Some tech companies also may push for a permanent research and development tax credit. The credit is set to expire in June 2004.

"We are encouraged by anything the White House can do to stimulate the economy," said Brian Kelly, senior vice president at the Electronic Industries Alliance. Kelly said the administration has sought advice from the high-tech sector on a stimulus package.

The broadband debate is now centered at the FCC, which in January is expected to decide whether to change the rules governing how competing firms share the networks of the Bell telephone companies and how those rules affect the rollout of high-speed facilities and investment in technology innovation.

High-tech companies have argued that the FCC should deregulate the Bell companies' new investments in broadband. If the FCC does not act in a way that satisfies high-tech companies, they are likely to begin lobbying for legislation.

Regardless, incoming Senate Commerce Committee Chairman John McCain, R-Ariz., already has declared that broadband will be on the agenda in his committee next year. Some companies also may continue to lobby Congress to pass a tax credit designed to encourage the deployment of broadband infrastructure in rural areas.

"Across the board our industry views the widespread availability of broadband as critical," said Jonathan Zuck, president of the Association for Competitive Technology.

Intellectual Property A Priority

A number of high-tech companies also have formed a coalition to educate lawmakers on the industry's efforts to combat piracy on the Internet. In addition, they plan to fight any legislation that would impose a technology mandate in an effort to stymie such piracy.

Ernest (Fritz) Hollings of South Carolina, who will be the Senate Commerce Committee's ranking Democrat, introduced a bill last year that would have imposed such a mandate. The Motion Picture Association of America has been lobbying Congress heavily to impose a legislative solution to Internet piracy.

The anti-piracy effort also will be discussed in the context of the transition to digital television. House Energy and Commerce Committee Chairman W.J. (Billy) Tauzin, R-La., has promised to hold hearings on how to protect digitally broadcasted content.

After lying dormant for the past year, meanwhile, privacy is expected to resurface as a key lobbying issue, reflecting the rise of Alabaman Richard Shelby as chairman of the Senate Banking Committee after Republicans won control of the Senate last November. Shelby has said that privacy is of intense interest to him and that he may examine the issue if Congress modifies the Fair Credit Reporting Act (FCRA), parts of which face reauthorization.

Computer security, federal procurement and appropriations to the new Homeland Security Department will be an important issue for some high-tech firms, as they seek new markets within government. Firms also plan to encourage the government to invest in building an efficient department and to bolster computer security at federal agencies.

Further, they plan to monitor the development of the White House cybersecurity strategy. The plan does not require much action from Congress but could if it fails to convince the private sector that it needs to protect its computer networks.

Business Software Alliance President Robert Holleyman also said his group will be lobbying to make sure the Homeland Security Department does not choose one technology standard.

Renewed Focus On Stock Options, Exports

The handling of stock options remains a worry for some high-tech companies because McCain last year introduced a bill to require them to record those options as expenses and vowed to have a debate on the issue in the Senate. Additionally, the nation's accounting oversight body, the Financial Accounting Standards Board, plans to decide in the first quarter whether to change rules that allow U.S. companies to avoid treating stock options as a compensation expense.

Computer companies also plan to lobby for renewal and reform of the 1979 Export Administration Act (EAA) and an end to the standard that restricts computer exports based on the millions of theoretical operations per second (MTOPS) that computers perform. And on trade, EIA's Kelly said his association will work with the Office of the U.S. Trade Representative to ensure that high-tech interests are addressed in new treaties.

Here is a summary of other issues likely to be on the high-tech agenda:

  • Electronic waste: EIA is watching state and local and international regulations governing the disposal of high-tech equipment. The issue also may surface in Congress, as some lawmakers push for a national effort to pre-empt multiple and competing laws in the states.
  • Internet taxes: Harris Miller, president of the Information Technology Association of America (ITAA), said states may try to increase pressure on Congress to allow them to tax both access to the Internet and e-commerce, but ITAA will lobby to continue the current moratorium on access taxes, as well as to prevent online sales taxes, an issue separate from the moratorium.
  • Education: AeA plans to continue work with the states to help them implement the education bill that Bush signed in 2002.
  • H-1B visas: High-tech companies may lobby to increase the level of visas that enable highly skilled foreign workers into the United States for six years. The cap on those visas is scheduled to drop to 65,000 from 195,000 at the end of fiscal 2003.