Export
Trying To Work Together
     Despite raising some similar concerns voiced by the Clinton Administration about draft legislation to reauthorize the Export Administration Act, a range of industry officials told the Senate Banking Committee they are still interested in working on a more acceptable bill. "We think we're in striking distance of getting something good for our country," said Aerospace Industries Association President John Douglass, who offered the most optimistic assessment of the draft bill. The committee held the second hearing Thursday since releasing a draft Export Administration Act bill last week. Given concerns over the draft, Senate Banking Committee Chairman Phil Gramm, R-TX, said Wednesday that he would postpone a markup on the bill that was tentatively set for next week until after the July 4 congressional break. The draft bill, among other things, sets up a mechanism for determining whether an item is a mass-market product as a way of determining if it should be controlled or not. It also significantly increases penalties for those who violate export control laws. One of the key concerns voiced by Commerce Department Undersecretary for Export Administration William Reinsch during a hearing Wednesday, related to a provision in the draft bill that would require each federal department involved in providing input on dual-use product export requests to reach total consensus at each level of review before an export license would be granted.

Encryption
Two Down, Three More To Go
     Legislation that would lift most controls on the export of generally available encryption cleared the second of five committee hurdles this week, when the House Commerce Committee approved the bill after adopting weakened versions of amendments offered last week in the subcommittee. The committee approved the so-called SAFE bill, H.R. 850, by voice vote after a lengthy markup session during which critics tried to make the bill more palatable to law enforcement and national security officials. The panel adopted reworked versions of two amendments by Rep. Clifford Stearns, R-FL, that were rejected by the committee's telecommunications subcommittee during a markup of the bill last week. One of the amendments approved by the full committee would establish criminal penalties of up to five years for those who "knowingly and willfully" transfer an encryption product with a strength level of more than 56 bits to the Chinese army or Chinese companies operated by the army. The amendment he offered last week that was rejected in the subcommittee was much broader, applying to any entity in China, Hong Kong or Macau. Rep. Billy Tauzin, R-LA, argued that even the reworked amendment would do little to keep such products out of the hands of the Chinese military and instead would create another barrier for U.S. industry. But Stearns' narrower approach won over such members as Rep. Christopher Cox, R-CA, who headed a select House committee that investigated technology transfers to China, and opposed Stearns' original amendment.

Encryption
Nine Out Of Ten Recommend It
     The information technology industry notched another encryption victory this week, when the Senate Commerce Committee approved a bill that would loosen export restrictions on data scrambling technology. Nine of the 10 senators who addressed the issue during a markup session said they have moved closer to the position of the industry, and away from the harder-line stance favored by national security and law enforcement agencies. Sen. Ted Stevens, R-AK, was the lone holdout on a voice vote endorsing Sen. John McCain, R-AZ's, Promote Reliable On-Line Transactions to Encourage Commerce and Trade (PROTECT) Act, S. 798. Stevens insisted he be recorded as voting "no." The other Republicans and Democrats who supported McCain's legislation, which would expand the key length of products exportable without license to 64-bits in key length, described their changes in view in almost conversion-like terms. "The White House and others have tried to shape the marketplace, but the problem is that the public policy is way behind the marketplace," said Sen. John Kerry, D-MA.

On The Hill
E-contract Gains An Army Of Support
     The high-tech industry is rallying behind House Majority Leader Dick Armey's new "e-Contract," which compiles already-introduced Republican legislation into one position declaration. Armey, R-TX, admits there is no new piece of legislation in the contract and many observers say that the policies — most of which advocate industry regulation to promote the growth of e-commerce — little from Democrats' positions. But industry leaders say they are pleased to have one package of policies. Democrats saw the unveiling of the e-Contract, which Armey initially announced after a meeting he had with Microsoft Chairman Bill Gates during the Joint Economic Committee summit last week, as a political ploy. "The fact that the JEC conference was being produced by the [National Republican Congressional Committee] says it all. It's all about money and sticking their hands into the pockets of high-tech," said Eric London, spokesman for House Minority Leader Richard Gephardt, D-MO. The e-Contract includes supporting the loosening of encryption export controls, accepting the validity of digital signatures, placing more government information online, allowing high-speed Internet access to flourish, and extending the research and development tax credit.

E-rate
Filter First, Then Connect
     The Senate Commerce Committee approved a bill requiring filtering software for schools and libraries connecting to the Internet with e-rate funds – but not adopting an amendment barring recipients from spending e-rate funds to buy any other software. We need to ask as fast as we can to preserve the sanctity of childhood," said Committee Chairman, Sen. John McCain, R-AZ, as he opened the markup on his bill, the Children's Internet Protection Act, S. 97. "This bill represents one step we can take." With little disagreement on the substance of the bill, a lengthy debate immediately ensued on an amendment drafted Tuesday night by staff for McCain, Sen. Olympia Snowe, R-ME, and Sen. John D. Rockefeller, R-WV. The first part of the two-part amendment limited the use of universal service funds, of which e-rate funds are a subset, to "services covered by [Federal Communications] Commission regulations on priorities for funding telecommunications services, Internet access, and internal connections that assign priority for available funds for the poorest schools." The second part explicitly barred e-rate monies from paying for software other than the filtering software required by the act. That's the opposite approach from that recommended last week by Sun Microsystems CEO Scott McNealy, who told the Joint Economic Committee that federal funds would be better spent providing schools with educational software instead.

Internet Access
Keep It To Yourself, Please
     House Telecommunications, Trade and Consumer Protection Subcommittee Chairman Billy Tauzin, R-LA, held the first of several hearings on promoting access to high-speed Internet service by asking committee members and witnesses from all sides of the issue to refrain from advancing specific remedies to the issue. Regardless, several members did. Subcommittee ranking member Ed Markey, D-MA, said cable companies that carry Internet traffic should be treated as phone companies and required to open their lines to competing Internet providers. But Rep. Cliff Stearns, R-FL, said regulating cable companies is "not the right way to go." He also criticized proposals to encourage the Bell phone companies to enter the market by allowing them to carry traffic across long distance boundaries. Stearns said he fears that allowing the Bells to carry long distance data traffic could lead the companies to avoid the traditional voice long distance market. Meanwhile, Rep. Barbara Cubin, R-WY, asked the witnesses: "What incentives can the federal government give companies to encourage deployment of high-speed services in rural area?" She added that "I do not want rural areas to be left out." Tauzin plans to hold a hearing on specific proposals the last week in June.

Telecom
Judiciary Hangs Up On Telecom Merger Bill Again
     The Senate Judiciary Committee postponed a vote on a telecommunications merger bill for the second time in two weeks to give the authors of competing bills time to incorporate an agreement into the bill. Judiciary Chairman Orrin Hatch, R-UT, said he has reached an agreement with Judiciary Antitrust, Business Rights and Competition Subcommittee Chairman Mike DeWine, R-OH, and ranking member Herb Kohl, D-WI, to move their bill next Thursday. According to a Hatch spokesman, DeWine and Kohl will accept language that will make it clear that the bill does not "give any role for antitrust review to the FCC." Hatch had held up previous markups because he was concerned that approving the DeWine-Kohl bill -- which requires the FCC to act on mergers within six months -- "might be interpreted to resolve the debate over the FCC's role in merger review," the spokeswoman said. Hatch and Commerce Chairman John McCain, R-AZ, favor a bill to remove the FCC entirely from the merger approval process.

Domains
Putting It To The Test
     A test for introducing competition into the Internet domain name registration business appears likely to be extended given that only one of the five participants in the process have actually begun registering top-level domain names. A Commerce Department official said the test-bed period, which was originally set to run from the end of April through the end of June, is "likely to be extended for a bit" to ensure there is a good test of the system. The official, however, did not say how much additional time may be given for the test. spokesman for Network Solutions Inc., which until recently had an exclusive agreement with the federal government to register top-level domain names, said discussions with Commerce Department officials are still underway on the issue of a test extension. NSI will continue to have exclusive control over the registry, the database of all registered domain names. The five organizations have been working with NSI to ensure that they can hook into the registry operated by the company. The five test-bed registrars are the Internet Council of Registrars, France Telecom's Oleane, Melbourne IT, America Online and Register.com, which was the first of the five to begin registering domain names. The NSI spokesman said Melbourne IT and Oleane are "ready to go."

Business
If You Pay Them, They Will Come
     Federal government entry-level salaries for computer professionals are almost 50 percent lower than the average private-sector entry-level job in the information technology field, according to a newly released report by the Chief Information Officers' Council Education and Training committee.

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