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Tech Industry Sees Change On The Horizon Tech Industry Sees Change On The Horizon

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ONLINE EXCLUSIVE

Tech Industry Sees Change On The Horizon

Sector Is Optimistic About Incoming Administration Despite Tightening On Antitrust, Free Trade

There's little question that the technology community in Washington is excited by what they expect to be the elevated embrace of technology by President-elect Obama's administration. "He gets it," tech insiders say.

Insiders say they're looking forward to having a more tech-savvy team in the White House and hope that the administration's use of technology will help usher in an era of greater transparency in government. An Obama reign is expected to channel more federal resources toward technology initiatives and spur pro-tech changes in trade and tax policy. Obama has also said he supports network neutrality "to preserve the benefits of open competition on the Internet," but it remains to be seen what will happen on this policy front.

 

Business Software Alliance president Robert Holleyman said that "Obama sees a central role for technology and technology policy" in his administration. Obama seems to "look at tech sector as a unique driver of growth and solutions" and not just as another industry sector, agreed Ralph Hellmann of the Information Technology Industry Council.

Robert Atkinson, president of the Information Technology and Innovation Foundation, called Obama "ambitious on the spending side," which could mean "more serious federal resources going behind e-government" initiatives, health IT, broadband and education.

With all of the other issues Obama is facing, it remains to be seen how much increased spending for technology will actually take place. But Obama has promised, to appoint the nation's first chief technology officer, who would head up tech efforts across federal agencies, and he is said to be considering a number of Google's top guns for senior positions within his administration. Google executive Sonal Shah is currently serving on Obama's transition team along with Julius Genachowski, a venture capitalist who previously worked for IAC/InterActiveCorp.

 

Another issue for the tech sector will be how receptive new members of Congress are to their concerns. Gary Fazzino, vice president of governmental affairs for Hewlett-Packard and a Democrat, said that the Democratic freshmen he has met with have shown a "great interest in technology issues" such as the research and development tax credit, placing larger emphasis on education and health IT. Virginia's new Democratic senator, Mark Warner, made his money in the telecommunications sector, and Hellmann hopes that Warner could help the Democrats "deliver a cohesive tech message."

Hellmann said his group will be pushing for tax incentives for energy-efficient projects and health IT equipment.

On the issue of trade, which is particularly important to the export-heavy tech industry, Holleyman said that he expected "some changes in terms of what the U.S. will seek for future trade agreements," and that new trade negotiation objectives could be added. "I definitely expect more aggressive merger enforcement, reflecting in part more skepticism that markets almost always self-correct," said Leon Greenfield, a partner in WilmerHale's regulatory and government affairs department in Washington.

That skepticism could also manifest itself in greater antitrust scrutiny of mergers -- an ambiguous trend for large tech companies, especially given that troubled economic times often bring more mergers. "I do think that there will probably be more antitrust enforcement than there has been in the past," said American Electronics Association president Christopher Hansen. "Some of the kinds of mergers that have gone through in the last few years will undergo a lot more scrutiny. It won't be as free as it has been."

 

Albert Foer, president of the American Antitrust Institute, said that the Justice Department has not vigorously pursued antitrust enforcement in recent years. "I think that the positions that the Obama administration is likely to take in amicus briefs will be more even-handed as between plaintiffs and defendants," he said. Particularly in cases that have a major policy direction, where the Supreme Court may look for DOJ's guidance on an interpretation, the Obama administration's views in favor of greater liability could tip the matter in the plaintiffs' favor more often than the Bush Justice Department did, added a former member of the U.S. Antitrust Modernization Commission.

Greenfield expects more aggressive merger enforcement at DOJ than at the Federal Trade Commission. Foer, who is a Democrat, said he expects his group will "have a more receptive audience in the new administration" and noted that the positions his group takes on antitrust issues tend to be more in line with the Democratic Party.

Hellman also expects to see a "significant breakthrough" on the immigration and education front, particularly regarding the movement of high-skilled workers. "Our goal will be to get that debate out of the illegal immigration debate," he said. Looking ahead even further, after the economic recovery has been has been addressed, "we think that patent reform will be addressed by the next Congress," said Fazzino.

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