Encryption
Crypto Hearing Doors Unsealed
The House Intelligence Committee, skeptical of encryption legislation in the past, is tentatively scheduled to hold a rare open hearing June 9 on a bill that would loosen export controls on encryption. The panel is expected to hear from only one government witness, Commerce Department Undersecretary for Export Administration William Reinsch, the Clinton Administration's chief spokesman on the issue. The committee also has invited several officials from companies active in efforts to persuade Congress to loosen controls on encryption. Among the companies that have been asked to testify include Microsoft, IBM and Cisco, according to a congressional aide. Chris Caine, IBM's vice president for governmental programs, and Elizabeth Kaufman, Cisco's director and general manager for security, are expected to testify. Reinsch is also set to testify at the Senate Commerce Committee's hearing on encryption legislation sponsored by the panel's chairman, rescheduled for June 10. The hearing will provide the administration with the opportunity to provide its position on encryption legislation, S. 798, sponsored by Senate Commerce Committee Chairman John McCain, R-AZ. S. 798 is substantially different from a bill McCain cosponsored in the 105th Congress, which leaned more closely toward the administration's position of trying to promote the use of encryption products that would enable third parties to gain access to the "key" needed to unscramble encrypted communications. Such a feature is opposed by most high-tech industry companies. The panel had originally scheduled the hearing for May 25 but had to postpone it because of scheduling conflicts.

Budget
Sensenbrenner Sells R&D In Valley
House Science Committee Chairman F. James Sensenbrenner Jr., R-WI, was in Silicon Valley this week to rally high-tech executives to push Congress to support his five-year information technology bill. "If we want to continue to have a prosperous America... we've got to invest in information technology," Sensenbrenner said during a news conference at Nortel Networks. Sensenbrenner's visit was arranged by Technology Network, the region's bipartisan lobbying group. Sensenbrenner plans to introduce his legislation shortly after the recess, but he began circulating a draft of the bill late last week and went to the high-tech heartland to get feedback from those who are most likely to benefit. The bill is a blueprint, or an authorization bill, that suggests to appropriators how much should be spent on R&D.

Antitrust
Seems Like Old Times
After a six-week interval, the Justice Department's antitrust trial against Microsoft re-opened this week in Washington like the most spirited of family reunions. As the government's main witness for antitrust economics attempted to spell out all the ways the software giant had blocked competition, Microsoft lawyers returned to their bungling ways. Additionally, the presence of technology association executives in the packed courtroom was a sign of the importance many in the technology industry attach to the outcome of the case. Calling the Microsoft case the issue "closest to his heart," Computer and Communications Industry Association President Ed Black was hopeful that a judgment against Microsoft would be a boon for the industry. Meanwhile, conservative taxpayers group Citizens Against Government Waste blasted the Department of Justice in a letter for what it alleges is concealment of the cost of the Microsoft antitrust case.

Antitrust
Investigations Rapped In Papers
Free-market advocates, backed in part by Microsoft, are broadening their attack on the Clinton Administration's investigations of technology companies, hoping to stiffen the resolve of Republicans who may be wavering about the appropriateness of such antitrust prosecutions. In a full-page advertisement in Wednesday's editions of The New York Times and The Washington Post, some 240 economists, many of whom defend the use of antitrust laws in instances of anti-competitive business practices, urged President Clinton in an open letter to avoid "antitrust protectionism." Many the advertisement's signers attended a joint press conference this week with representatives from groups such as Citizens for a Sound Economy, the National Taxpayers Union and Americans for Tax Reform; groups that have been active in calling for a halt to the government's pursuit of Microsoft for alleged antitrust violations. The Justice Department lawsuit against the company, now more than a year old, resumed in federal district court early this week after a six-week recess.

Antitrust
Cisco Case Rides Off Into Sunset
The Federal Trade Commission confirmed that it had closed its antitrust inquiry into Cisco Systems. The inquiry had focused on separate business discussions that the premier maker of computer networking gear had in late 1997 and early 1998 with two of its leading rivals, Lucent Technologies and Canada's Northern Telecom, said a Cisco spokesman.

Privacy
Privacy Prospects Plummet
Prospects of meeting a late-June deadline set by European Union and U.S. officials in talks over the EU's privacy directive are dimming after both sides failed to clinch a deal late last week aimed at averting any major disruptions in the flow of personal data between Europe and United States. Commerce Department Undersecretary David Aaron and his European counterpart, John Mogg, met Friday in Brussels in hopes of resolving remaining differences in their talks over the EU's privacy directive, which calls for banning the flow of personal data to third countries without adequate privacy protections. The officials have been negotiating over privacy principles that would provide U.S. companies that agree to abide by them with a "safe harbor" from the privacy directive. They had set a target deadline for concluding talks in time for the June 21 EU/U.S. summit in Berlin.

Telecom
I Want My ISP-TV
A small California Internet service provider is asking the Federal Communications Commission to give it and others access to high-speed cable networks by using television channels to provide Internet services. Internet Ventures hopes to convince FCC regulators to use cable regulations to force competition onto cable networks by allowing them to lease cable channels. The law originally was intended to allow TV networks that weren't affiliated with the local cable company access to the system. Internet Ventures already has 1,600 broadband subscribers based on agreements with local cable companies in four cities. Internet content is sent via cable to a customer's PC, while communication from the customer is relayed over phone lines.

Trade
NAM Cool To Idea Of New Cold War
The National Association of Manufacturers encouraged U.S. policymakers this week not to sour on relations with China in the wake of the Cox Report. NAM said policymakers should consider the impact on trade, and the potential benefits that improved economic relations with China may have for the United States, before moving to address national security concerns raised by the report released last week by a select House committee headed by Rep. Christopher Cox, R-CA. The panel's report alleged that China has used legal means and espionage to obtain U.S. technology in an effort to boost its nuclear weapons program. "Even as we address national security concerns, ignoring economic and commercial relationships reduces our leverage and leadership position with respect to China," said NAM President Jerry Jasinowski. NAM officials are trying to counter any efforts to impose new controls on technology exports or deny China extension of normal trade relations. President Clinton asked Congress this week to provide a one-year extension of China's normal trading status.

Cyberterrorism
NIPC Attacks Hackers, Defends Infowar
The head of the government agency charged with defending computer networks against unauthorized access said that hackers who deface government Web sites have committed a serious crime, not a harmless prank. "We don't say that attacks on Web sites are a form of cyberterrorism," said Michael Vatis, chief of the National Infrastructure Protection Center at the FBI. "They are illegal just like spray painting on the White House walls are illegal." Vatis said. His remarks come during a week when an array of government Web sites, including sites operating by the FBI and the White House, have been altered by malicious computer users.

E-commerce
Setting A Definition Deadline
The Commerce Department wants to complete its process of defining what constitutes retail e-commerce sales by summer's end, so it can begin collecting data for the government to report in 2000, according to Fred Knickerbocker, associate director for economic programs at Commerce's Bureau of the Census. Commerce already has started asking companies to break down how much they sell over the Internet and how much they sell through mail catalogue orders, as opposed to sales through traditional walk-in stores. But it does not have a clear definition as of yet on what constitutes an Internet sale. The definition is essential so that the government can provide accurate statistics on the state of the economy, according to Rob Shapiro, undersecretary of economic affairs.

Culture
Is Mayhem Marketed Toward Minors?
A study on the possible marketing of violence to children ordered this week by President Clinton is expected to be headed by the chief of the Federal Trade Commission's advertising practices division, and follow a pattern similar to that of the agency's examination of Internet privacy policies. The idea of such a study gained momentum in the wake of revelations that student-assassins in recent school shootings might have been influenced by violent media content. But some within the FTC are worried that agency's independent nature is being compromised. They point to the charges by Republicans, who first promoted the idea in a 98-0 amendment to last month's juvenile justice bill, that the administration is injecting a political tone into the issue of youth violence. Sens. Sam Brownback, R-KS, and Orrin Hatch, R-UT, sponsors of the amendment calling for the study and for an antitrust exemption for the entertainment industry to develop stronger anti-violence codes of conduct, were lukewarm in their praise.

Internet Access
McCurry, Molinari Become Bandleaders
Ex-White House press secretary Mike McCurry and former Rep. Susan Molinari, R-NY, have been hired to co-chair a coalition of local phone companies and trade associations charged with lobbying Congress on broadband access and other issues. "Within the next few weeks there will be an announcement that Mike McCurry and I are chairs of a coalition that includes some of the local phone companies... to deal with issues related to the Internet," Molinari said. The coalition also will include trade groups and others, though Molinari declined to specify. She said the coalition will lobby on broadband issues, but declined to reveal any other lobbying plans.

Business
Executive Session
Congress' Joint Economic Committee plans a high-tech summit the week of June 14, to be kicked off with testimony by Federal Reserve Board Chairman Alan Greenspan, who will be followed by well-known industry executives. On June 15, Microsoft Chairman Bill Gates will discuss his view of the U.S. economy and what impact he sees technology having in the 21st century. Other executives who are tentatively scheduled to testify include Roberta Katz, the new president of Silicon Valley's bipartisan lobbying group Technology Network; John Chambers, CEO of Cisco Systems; John Warnock, CEO of Adobe Systems; and Art Levinson, CEO of Genentech. On the tertiary day, a policy issue discussion is scheduled Congress, such as capital gains tax cuts, equipment expensing, Y2K, Internet taxes, research and development, education, the Financial Accounting Standards Board and e-commerce.

Internet Access
Free Engine Keeps Running For Now
A controversial new Web site that provides a powerful search engine for government information still remains free while officials finalize a decision on whether to charge for the service as originally planned. Last month, the Commerce Department agreed to provide the gov.search service for no fee through this past Tuesday after the agency came under fire for charging a subscription fee for the site. It is a joint project between the Cambridge, MA-based Northern Light and the Commerce Department's National Technical Information Service. The site provides access to full-text documents on more than 20,000 government Web sites and was expected to cost $15 for a one-day pass to use the site or $30 a month.

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