Cyberterrorism
Cox And Computers
A highly anticipated report detailing Chinese efforts to obtain U.S. technology argues that ineffective end-use controls have allowed the Chinese to divert high-performance computers for military uses that could aid the country's nuclear weapons programs. The 700-page declassified version of the report, conducted by a select House committee led by Rep. Christopher Cox, R-CA, spends more than 70 pages on high-performance computing, including discussing the ways in which computers can aid the Chinese in testing, designing, modeling and maintenance of nuclear weapons. The committee attempts to make the case that the U.S. government's 1996 decision to loosen controls on the export of high-performance computers without instituting effective end user checks has led to the use of high-performance computers for nuclear weapons applications. Cox said that some of the recommendations made in the report may be offered as amendments to the House defense authorization bill. Additionally, he also said this week that he still favors admitting China into the World Trade Organization.

Cyberterrorism
The Administration Acts And Reacts
The White House released a detailed response to the report from the special House committee chaired by Cox, largely agreeing with the committee's recommendations but rejecting in some cases the panel's call for new legislation. The report reiterates White House contentions that the security breaches extend back to Republican administrations and that there is no connection between campaign contributions and Clinton Administration national security policies. It details steps taken at the Energy Department to beef up security at the nation's nuclear research labs. The Clinton Administration is implementing all of the panel's recommendations concerning satellite launches, including the transfer of licensing for communications satellite exports to the State Department and the development of new, timely review procedures. And, as recommended, the Defense Department has established a new division to monitor space launch and satellite technology exports.

Export
Cox: Controls Won't Help
Export controls on sensitive technologies will do little to help national security and only hurt U.S. businesses if other countries are unwilling to along with such restrictions, Cox said during a hearing before the House International Relations Committee's Asia and the Pacific Subcommittee on the report. It calls for the Clinton Administration to push other countries to strengthen the Wassenaar Arrangement, an international regime that coordinates policies on the export of products with commercial and military value. "If we deny ourselves the opportunity to make a commercial sale only to watch Italy, Germany, France or one of our allies... make the same sale than we are injuring U.S. workers and doing nothing for national security," Cox said.

Cyberterrorism
Lott Proposes Cox-Related Amendment
Senate Majority Leader Trent Lott, R-MS, proposed an amendment to the Senate's defense authorization bill aimed at addressing some of the concerns about the nation's export control system raised the Cox Report. Lott's amendment to the Senate defense bill, S. 1059, is generally aimed at tightening restrictions on the export of satellite technology. But the amendment also would require the director of Central Intelligence to conduct a report on the efforts of foreign governments to obtain sensitive U.S. technology and technical information and include an analysis of the export licenses submitted by U.S. companies each year.

Encryption
SAFE Debate Criss-Crosses Cox
As a House special committee released a controversial report revealing the theft of U.S. technological secrets by China, a House subcommittee heard testimony about legislation that would further relax U.S. export controls on encryption designed to protect some of that same confidential information. Rep. Michael Oxley, R-OH, pointed out the irony at the hearing's commencement, noting that while he heartily supports free trade, the Security and Freedom Through Encryption (SAFE) Act, H.R. 850, is an unnecessary piece of legislation because the administration designs adequate export policies. The SAFE Act, which has garnered 254 bipartisan co-sponsors, would loosen encryption controls and allow algorithms of any strength to be sold.

Export
Bill Will Offer Breathing Room
A draft Senate plan on export controls would provide the administration with significant flexibility in deciding whether to relax restrictions on the sale of dual-use products to respond to market forces. Sen. Mike Enzi, R-WY, chairman of the Senate Banking Committee's International Trade and Finance Subcommittee, released details of some of the provisions he plans to include in legislation to reauthorize the Export Administration Act, which expired in 1994. He is aiming to introduce legislation in early June.

Y2K
A Letter Seeking Clinton's Signature
High tech industry leaders called on the White House to reconsider its veto threat and support the Senate's stalled Y2K liability bill, S. 96. The letter's signers include the Information Technology Association of America, the Business Software Alliance and the Information Technology Industry Council. The bill had sputtered in the Senate as lawmakers tried to drum up the 60 votes needed to proceed with it. However, Majority Leader Trent Lott, R-MS, announced that there is likely to be a cloture vote June 10, according to his spokesman. The scheduling was prompted by a May 20 letter to Lott sent by 13 Democrats, who requested a debate on the merits of the legislation.

Y2K
Minding Their Own Business?
The high tech industry should bolt from a business coalition that has pushed for Y2K liability legislation and work on its own deal — or risk having no protection from a potential flood of Y2K-related lawsuits next year, Rep. Rick Boucher, D-VA, said at a Computer and Communications Industry Association conference. Boucher was pushing a Y2K liability alternative, spearheaded by Rep. Zoe Lofgren, D-CA, that he supports. He said the alternative is worth the high tech industry "breaking ranks" with the U.S. Chamber of Commerce and the National Association of Manufacturers, groups that have pushed for more extensive liability reform. "The time has come," he said in an interview. "They run the risk of getting nothing." The White House endorsed the Lofgren alternative, but the business coalition and its technology members have said it doesn't go far enough.

Telecom
Senators: See You Later, FCC
Three powerful senators dropped a bill Wednesday that would seriously reduce the role of the Federal Communications Commission in handling telecommunications company mergers. The Telecom Merger Review Act, introduced by Sens. John McCain, R-AZ, Orrin Hatch, R-UT, and John Ashcroft, R-MO, would essentially prohibit the FCC from interfering in mergers unless another government agency has indicated a problem.

Taxes
Party Line Vote Parlays E-rate
The Federal Communications Commission approved a nearly $1 billion increase for the e-rate Internet subsidy, despite a continuing partisan battle over whether the program constitutes an unauthorized tax on long distance phone bills. The commissioners as expected split down party lines, but voted 3-2 to support the program that provides technology discounts to schools and libraries. In response to the vote, the House Commerce Committee's Republican staff held a briefing to bolster the claims of some opponents of the program that a majority of states don't receive a fair share of certain telephone taxes. The staff determined that the FCC gives more e-rate money to 12 states, plus Puerto Rico and the Virgin Islands, than the agency collects from those jurisdictions taxes levied in part to pay for the e-rate program.

Education
Reps Introduce A Class Act
With the recent support of House Republican Conference Chairman J.C. Watts, R-OK, a bill to increase tax incentives for companies donating computer equipment to schools is on its way to the House Ways and Means Committee.

Intellectual Property
House Cleans Up Database Protection
The House Judiciary Committee passed a raft of intellectual property bills, including a major patent overhaul and database protection legislation. The committee approved the American Investors Protection Act, H.R. 1907, which would streamline the patent application process and give companies a new tool for defending the use of a manufacturing technique in patent lawsuits. The bill was bipartisan and co-sponsored by House Judiciary Courts and Intellectual Property subcommittee Chairman Howard Coble, R-NC, and ten others. Another bill, the Collections of Information Antipiracy Act, H.R. 354, also passed by voice vote. The bill, co-sponsored by Coble and Reps. Howard Berman, D-CA, and William Delahunt, D-MA, is a substitute to earlier and more controversial database legislation. A third bill, the Copyright Damages Improvement Act of 1999, H.R. 1761, increases the penalties for violations of copyright laws and a fourth, the Trademark Amendments Act of 1999, H.R. 1565, to prevent the dilution of trademarks.

Privacy
Banking On Modernization Plan
In an attempt to defuse a potentially explosive Democratic privacy amendment to financial services modernization legislation, Republican leaders on the House Commerce Committee are crafting an alternative they hope will draw bipartisan support. Commerce Finance and Hazardous Materials Subcommittee Chairman Michael Oxley, R-OH, with the blessing of Commerce Chairman Tom Bliley, R-VA, is drawing up a plan that would focus on providing customers with "conspicuous" disclosure of an institution's privacy policies, but that apparently would not attempt to dictate what such policies must include. The proposal would give the FTC authority to establish uniform standards for this obligation.

E-commerce
Defining A Digital Economy
Vice President Al Gore wants the Internet to remain tax-free and wants to keep the government away from regulating it. "It is best to leave the supervision of the Internet not to the government but to the people that know the Internet best," Gore said via video feed to attendees of the Commerce Department's Digital Economy conference. At the same time, Gore also said the government has a role in pursuing policies that make the Internet a global trade zone that protects children and that fosters online privacy.

Privacy
Inslee Privacy Bill Returns
Framing his bill as a measure for increasing consumer confidence in e-commerce, Rep. Jay Inslee, D-WA, introduced legislation Tuesday that would protect consumers' financial records from being shared with outside parties without their knowledge. "This will help increase e-commerce... this is going to give consumers protection on the Internet," Inslee said at a news conference. The Banking Privacy Act would require banks and financial institutions disclose their privacy policies and allow consumers to opt-out of information sharing plans, including transaction and experience information. In the Senate, a similar version has been introduced by Sen. Paul Sarbanes, D-MD, ranking member of the Senate Banking Committee, Inslee said.

Cyberterrorism
Criticizing Chemical Info Online
State and local officials were critical of legislation that would restrict Internet dissemination of information about the consequences of accidents or attacks at chemical facilities. The bill, H.R. 1790, is backed by the White House and was introduced by Commerce Committee Chairman Tom Bliley, R-VA, after concerns were raised about the Environmental Protection Agency's plan to post "worst case scenario" information on the Internet. Witnesses at a hearing on the bill said Bliley's legislation would unreasonably restrict their ability to get essential public information about chemical facilities.

Contributions
Conflict Over Contributions
The Federal Election Commission again has delayed a final decision on the use of credit cards for campaign donations after it was unable to resolve a disagreement over details of the plan. FEC commissioners continue to signal that they want to pass the regulations, which would allow candidates to qualify for matching funds when they raise campaign donations over the Internet. But the commissioners could not resolve the issue of what kinds of information campaigns will be required to obtain from donors when they make credit card donations over the phone, rather than online.

White House
Technology's Deep Impact
A White House report on technology's impact in the everyday world is expected to be unveiled in July, according to staff members of the Office of Science and Technology Policy. The report was requested by Vice President Al Gore. Separately, former Hewlett-Packard CEO John Young, who is now co-chair of the President's Committee of Advisors on Science and Technology, told members that the Department of Defense has commissioned an outside firm to produce a report by July 15 on how to construct a research lab that would be focused on analyzing national computer security threats and methods of protecting the nation's computer networks from cyberterrorism.

On The Hill
Republicans Reach Out
Senate Majority Leader Trent Lott, R-MS, announced a Republican high-tech outreach team to be led by Sen. Robert Bennett, R-UT. Bennett is chairman of the Senate Special Committee on the Year 2000 Technology Problem. The task force will be co-chaired by Sen. Spencer Abraham, R-MI, who has sponsored a digital signatures bill, and Sen. Bill Frist, R-TN, who chairs his own forum on technology with Sen. Jay Rockefeller, D-WV. Lott said the task force would be helpful in consideration of issues such as encryption, the research and development tax credit and capital gains relief.

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