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Executive Summary
Week Of July 26, 1999
Rory J. O'Connor explains in his Politechs column why Network Solutions Inc. is way out of control. The Issue of the Week looks at the complex relationship between high-tech lobbyists and Congress. People reveals why after a tough week, one lobbyist on Capitol Hill was sporting a glittery, gold tiara, and uses its compass to find out just where Englund is located. States goes to Indianapolis to discover some state legislators find high-tech issues rather elusive.
In This Week's News:
Cyberterrorism
White House Stands By Cyberterrorism Strategy
As part of the Clinton Administration's developing strategy to bolster the nation's defenses against cyberterrorism, the White House has outlined a draft plan for the government to monitor all federal networks and guard against possible intruder attacks, the White House confirmed. The plan, which is scheduled to be released officially in the fall, also calls for private industry to work on a self-regulatory model to monitor its critical computer networks, such as the telecommunications, banking, financial, energy and transportation industries. Civil liberties groups said the plan smacked of nationalizing network security capabilities and placed them at the disposal of national security agencies. They also said the administration's proposed Federal Intrusion Detection Network bears similarity to Echelon, an international surveillance network about which Congress has demanded more information. The Hill lambasted the proposal. Rep. Duke Cunningham, R-CA, fired off a letter to Clinton decrying the proposal. Rep. Bob Goodlatte, R-VA, said strong encryption, such as the policy he has proposed, would protect information individuals send to the government without the need of such overreaching FBI oversight.
Domains
NSI In The Hot Seat
Network Solutions Inc. is under fire again for a product it plans to launch designed to provide information about businesses using disputed domain name data that government officials claim belongs to the public, and company officials say they own. NSI's new .com directory allows users to find free information about any business that has registered a domain name with NSI, which has registered more than 5 million names. Commerce Department General Counsel Andrew Pincus sent a letter to NSI CEO Jim Rutt saying while the department has "no objection to the new service," other companies should be able to offer the same service using information he claims belongs to the government, not NSI. A House Commerce Committee panel has questions about the database ownership issue and plans to seek answers from both the Commerce Department and NSI. The committee's top Democrat John Dingell of Michigan and Rep. Ron Klink, D-PA, sent a letter to Commerce Secretary William Daley expressing concern about NSI's move. Later in the week, NSI was grilled on the subject by the House Judiciary Committee's Courts and Intellectual Property Subcommittee
Internet Access
FCC's Ambiguity Frustrates Officials In Broadband Fight
The Federal Communications Commission's lack of a formal policy addressing Internet service providers' access to high speed cable networks, and whether localities have the authority to regulate that, is frustrating local officials at the front lines of the broadband fight. Ken Fellman, chairman of the FCC's local and state government advisory committee, said localities are practically begging for some guidance from the agency that has maintained a "hands-off" position regarding cable broadband networks. But the hands-off stance, which has never been formally adopted, is forcing localities into a territory in which they are not equipped. "Local governments are being lobbied like they never have been before," Fellman said. Meanwhile, Rep. Earl Bluemenauer, D-OR, introduced legislation that would reaffirm local rights to set conditions on high-speed cable networks and would ask the FCC to set technological standards for cable open access. Blumenauer represents Portland, where local officials approved a requirement that AT&T must open up its new high-speed network to competing ISPs. Portland prevailed in a federal court case, which is being appealed by AT&T.
Domains
Lawmakers Aim To Prevent Cybersquatting
The Senate Judiciary Committee passed a measure designed to guard against "cybersquatting" on someone else's trademark, after substituting a version this week that substantially rewrote the original bill by Sen. Spencer Abraham, R-MI. Abraham acceded to objections raised by Sen. Patrick Leahy, D-VT, about his "Anti-Cybersquatting Consumer Protection Act," S. 1255 and allowed a measure drafted by Leahy and Committee Chairman Orrin Hatch, R-UT, as well as Abraham, Sen. Robert Torricelli, D-NJ, and Sen. John McCain, R-AZ, to replace the text of his own bill. Largely to clarify differences between the two versions, Leahy and Hatch also formally introduced the "Domain Name Piracy Prevention Act of 1999". However, the Abraham bill name and number, completely modified by the substitute, will be the legislative vehicle proceeding to the Senate floor.
Internet Access
Broadband Rears Head In House Committee
The debate over how best to deploy high-speed Internet services reared its head in a House Small Business Empowerment Subcommittee on the digital divide Tuesday, as lawmakers discussed how to bridge the gap between technology haves and have nots. Witnesses made clear their positions on what Congress should do to increase the deployment of broadband services—ranging from calls from the Bells to relieve them of parts of the 1996 Telecommunications Act to a tech industry group calling for a hands-off policy— saying that access to high-speed services is critical.
Internet Access
FCC Says Policy Doesn't Equal Regulation
The Federal Communications Commission's hands-off stance toward Internet regulation was implicitly stated through commissioners' votes approving the AT&T-TCI merger and in a report to Congress evaluating the state of broadband deployment, an FCC official said. Although there have been no specific FCC rulings regarding whether high-speed cable networks should be open to competing Internet service providers, and whether localities have the authority to impose such a condition on cable franchises, the official said that this year's earlier actions define the agency's broadband policy. "There are cases where the commission decides not to impose regulations, but it doesn't mean it's not doing anything," the official said. "The policy is not to regulate a new service."
Net Governance
Internet Companies Unite To Filter
More than three dozen Internet companies and trade groups unveiled GetNetWise, a resource tool designed to help parents determine how to shield their kids from Web sites deemed inappropriate. Companies have agreed to either incorporate the ideas of GetNetWise in their sites, or point their sites to the official GetNetWise site. Politicos clamored to be a part of the more than hour-and-a-half unveiling at the National Press Club. Vice President Al Gore, Commerce Secretary William Daley, and House Speaker Dennis Hastert, R-IL, were just a few who applauded the initiative, which was spearheaded by Jerry Berman, executive director of the Center for Democracy and Technology and president of the Internet Education Foundation. It also was attended by dozens of administration officials, including Commerce's special adviser on e-commerce, Eliot Maxwell, and four members of Congress from both sides of the aisle.
Taxes
Hollings Offers Internet Tax Plan
Sen. Fritz Hollings, D-SC, thinks he has the answer to state and local officials concerns about sales taxes for goods sold online: collect the sales tax federally and parcel it out to the states. In S. 1433, Hollings calls for a 5 percent national sales tax collected by businesses selling goods online or through mail order catalogs. The money would be collected by the Treasury and kept in a "Sales Tax Safety Net Trust Fund." That money would then be redistributed to states, based on a set formula, to be used for elementary and secondary education programs. States would have to continue their current education funding levels to receive grants from the federal trust fund. State and local officials have argued that because sales taxes are not collected on all remote sales—through the Internet and the mail—their tax revenue to support education and other local programs is slowly eroding.
Exports
Lofgren Attempts To Shorten Review Period
Keeping with the Clinton Administration's request this month to slash the export review days on high-performance computers, Rep. Zoe Lofgren, D-CA, introduced a bill to shorten the congressional review period from 180 days to 30. Earlier this month, the administration announced it was increasing the performance level on computers that are subject to government review before they can be exported to some countries. The policy change would allow more powerful computers to be exported to some countries, a change the industry said was necessary to keep up with advances in computer power. Lofgren said H.R. 2623 would speed up what she said is a currently sluggish process that does not keep pace with the rate at which high-tech products are made. White House Chief of Staff John Podesta has said the administration would ask Congress to reduce the review period for future changes to one month.
Encryption
Bill Offers Tax Credit To Certain Encryption Companies
The chairman of the House Intelligence Committee has introduced legislation that would provide a tax credit to companies that make encryption products that include a feature that would enable law enforcement officials to gain access to an unscrambled version of the information. After determining that there was little support for efforts to require companies to build such a feature into their encryption products, Rep. Porter Goss, R-FL, introduced H.R. 2617 to provide companies with an incentive to ensure that law enforcement officials can obtain a readable version of encrypted communications or data they obtain through a court ordered search warrant or wiretap. The bill would allow encryption makers to receive a 15 percent tax credit toward the costs of developing and manufacturing recoverable products. Goss also introduced a bill, H.R. 2616, this week incorporating changes the Intelligence Committee made to legislation, H.R. 850, that would lift most controls on generally available encryption products.
Business
Bill Would Boost H-1B Visas
Sen. Phil Gramm, R-TX, introduced legislation that would significantly increase the number of temporary visas available for high-skilled foreign workers, reigniting the debate less than one year after Congress gave in to high-tech industry demands on the issue. The legislation would boost the number of temporary visas, known as H-1B visas, to 200,000 for fiscal years 2000-2002 and eliminate a reduction in Social Security benefits imposed on workers aged 65-69 who work past retirement and make more than $15,000 a year. The legislation was co-sponsored by Senate Majority Leader Trent Lott, R-MS. Gramm's bill also includes language added to the spending bill in 1998 aimed at preventing U.S. workers from being replaced with foreigners brought into the country on an H-1B visa.
Privacy
Online Privacy Looks Dim For Senate
The chances that on-line privacy protections will pass the Senate this year diminished this week, in the face of organized opposition and a lack of support from key GOP leaders. At a Senate Commerce subcommittee hearing, all four Federal Trade Commission members repeated the stances they took two weeks ago before a House Commerce subcommittee — three in favor of holding off on legislation, one in favor of acting now. Sen Ron Wyden, D-OR, attacked a hectored FTC Commissioner Robert Pitofsky, contrasting polls demonstrating a mounting public concern about privacy against Pitofsky's words last year that additional government action would be needed if the industry didn't implement self-regulatory systems. "I think it would be a great mistake to wait for an Exxon Valdez-type invasion of privacy before action is taken," said Wyden, co-sponsor of the Online Privacy Protection Act of 1999, S. 809, which would require Web site operators to permit consumers to "opt-out" of data-sharing arrangements.
On the Hill
E-Sign, E-database Bills Pass Subcommittee
Laws authorizing the use of digital signatures and offering protections for electronic databases were favorably reported out of the House Commerce Telecommunications, Trade, and Consumer Protection Subcommittee after the most controversial features of both bills were blunted by a chairman's amendments. Sponsored by Commerce Committee Chairman Tom Bliley, R-VA, both the Electronic Signatures in Global and National Commerce Act, or "E-Sign," H.R. 1714 , and the Consumer and Investor Access to Information Act of 1999, H.R. 1858, passed the subcommittee on a voice vote. Amendments by Subcommittee Chairman Billy Tauzin, R-LA, increased the amount of time states have to write their own digital signature laws on the E-Sign bill, and in the case of databases, excluded court decisions from the scope of information that can be granted protection. Rep. Anna Eshoo, D-CA, who had sponsored her own version of electronic signature legislation, said it was important to give states enough time to comply with an alternative statute, the National Conference of Commissioners on State Law'sUniform Electronic Transaction Act, or pass their own law.
Telecom
Bill Would Boost Minority Telecom Business
In an effort to boost minority ownership of telecommunications businesses, Senate Commerce Committee leaders plan to introduce legislation to give tax breaks to companies that sell to new minority owners. Committee Chairman John McCain, R-AZ, and Sen. Conrad Burns, MT, say the effort is an "entrepreneurial approach" to opening business opportunities to minorities. The bill would give owners of telecom companies—including Internet service providers—a break on capital gains taxes if they sell their business to a minority businessperson. There would be limits on the size of companies that would be able to qualify for the tax break.
On The Hill
Bill Would Double Funds For R&D
The Senate passed legislation that would authorize a doubling of funding for federal civilian research and development over the next 11 years. The measure, S. 296, passed by voice vote would authorize a 2.5 percent per year increase over inflation in research and development funding from fiscal years 2000-2010. It also would require the president to submit a detailed strategy for prioritizing federal R&D spending with his annual budget. In addition, it would require that a study be done to come up with ways to measure the effectiveness of federal research and development funding. While senators were voting to authorize a boost in R&D funding, the Appropriations Committee's Veterans Affairs-Housing and Urban Development subcommittee approved a $94 billion fiscal 2000 spending bill on Monday that did not go as far as the Clinton Administration requested in providing funding for the president's "Information Technology for the 21st Century" initiative."
Campaigns
Back To The Drawing Board For Bush
Saying the plan lacked sufficient details, the Federal Election Commission returned a proposal for Internet campaign rules to the George W. Bush campaign. But during a 90-minute open meeting, the agency agreed that some Internet-specific guidelines for the upcoming presidential race must be created, or at least clarified. In the 16-page document, Bush's committee asked the Commission to declare its position on when campaigns must report the activities and finances of Web sites and links that name candidates, whether established by volunteers or paid staff; how to account for the marketing of items supporting a candidate via the Internet; online polling; and the rules for solicitation of contributions through e-mail.
Lobbying
High-Tech Hits Top Ten Spender List
High-tech jumped into the top ten list of largest lobbying spenders during 1998, joining the insurance, drug, tobacco and oil and gas industries, the Center for Responsive Politics said in a newly released study on lobbying trends.
Privacy
Study Finds People Confused By Privacy Seals
Consumers looking at Web sites that post the on-line seals of TRUSTe and WebTrust are unable to determine the level of privacy protection offered because the seal programs have raised their standards over the past year, according to a study on "Privacy Practices on the Web" issued Tuesday by the Center for Democracy and Technology.
We welcome your feedback; please e-mail comments to Managing Editor Sharon McLoone at smcloone@nationaljournal.com.
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