Internet Access
Hatch Says You Can't Believe Everything You Hear
     Senate Judiciary Committee Chairman Orrin Hatch, R-UT, and his colleagues pushed the top executives of America Online and Time Warner on whether a promise to provide competing Internet service providers access to their proposed cable network actually would come to fruition. "Some of what I have heard sounds good, but I believe a degree of healthy skepticism is in order given what is at stake here," Hatch said. But some analysts said the companies' plan would make the merger review a whole lot easier. Time Warner executive Gerald Levin and his counterpart at AOL, Steve Case, were witnesses at two days of hearings over the companies' pending merger.

Privacy
CESA Ceases To Be At Center Of Debate
     Senate Judiciary Committee Chairman Orrin Hatch, R-UT, and ranking member Sen. Patrick Leahy, D-VT, are collaborating on a proposal that would help law enforcement officials fight computer hackers in exchange for added privacy restraints. Their collaboration — and the failing momentum of a Clinton administration proposal designed to enhance government authority over electronic communications — could signal the beginning of a deal for legislation that ends up satisfying law enforcement officials and privacy advocates. Although recent attacks on computer networks have spawned many legislative proposals against computer intruders, the administration's Cyberspace Electronic Security Act has been absent from the debate.

Crime
Private Sector Should Show Some Muscle On Cyber Crime
     Although the federal government and the U.S. economy is "astonishingly" vulnerable to Internet crime, Deputy Attorney General Eric Holder told a joint hearing of the House and Senate Judiciary Subcommittee on Crime that the private sector must take the lead in addressing Internet security threats. Michael Vatis, director of the FBI's National Infrastructure Protection Center, said it was imperative for law enforcement officials to build greater trust with the technology industry.

Crime
Nothing's Gonna Stop Me Now
     Notorious hacker Kevin Mitnick told a Senate Governmental Affairs Committee considering legislation to protect federal computers from cyberattacks that checking human weaknesses is as important as plugging holes in information technology systems. His message was that more training was needed to ensure that government and private sector employees do not inadvertently reveal information that could be used in computer attacks. That was met a receptive ear from Committee Chairman Fred Thompson, R-TN, and the senators considering his Government Information Security Act, S. 1993.

Privacy
DoubleClick Backs Down From Database Linking
     DoubleClick backed down from a controversial plan to link its database of names and addresses with information about Web users' surfing habits, and committed not to do so unless there are clear on-line privacy rules. The move by the besieged Internet advertiser pleased privacy advocates who had criticized the company's plan to merge Web browsing information with the catalog mail-order information owned by its Abacus subsidiary. The change also could shift the landscape for online privacy legislation by putting a leading opponent of government regulation on record in defense of privacy rules. CEO Kevin O'Connor said that he "made a mistake by planning to merge names with anonymous user activity across Web sites in the absence of government and industry privacy standards," and committed not to do so without an "agreement between government and industry."

Education
Digital Divide Moves To Head Of The Class
     The Senate backed legislation, S. 542, that would expand tax benefits to businesses that donate computer equipment to schools. The New Millennium Classrooms Act, chiefly sponsored by Sen. Spencer Abraham, R-MI, passed by a vote of 96 to 2. The bill is aimed at helping to bridge the digital divide and address the high-tech industry's chronic worker shortage. It passed as an amendment to the Education Savings Account bill, S.1134, which is expanded to pass in Congress but is unlikely to be signed by the president, analysts said. "We must do more in the area of closing the digital divide," Abraham said.

Trade
Clinton Beats Drum Over China Trade Deal
     President Clinton visited the heart of Northern Virginia's high-tech corridor to drum up support for congressional passage of permanent normal trade relations (PNTR) status with China by emphasizing that the trade deal will help the industry's bottom line. Clinton toured the headquarters of UUNet, a provider of backbone services for the Internet, to make the case that if UUNet and other high tech companies expect to continue to expand, they must help convince Congress to accept China's entrance to the World Trade Organization and pass PNTR. Also this week, House Minority Whip David Bonior, D-MI, who is leading the effort to deny permanent normal trade relations status to China, told reporters that 30 House Democrats who had supported annual NTR for China in the past now say that they will vote against PNTR.

Exports
Duo Urge Action On Export Act
     Two lawmakers aligned with the high-tech industry are urging Senate leaders to bring up for consideration on the Senate floor legislation to reauthorize the Export Administration Act, saying it would address a key concern of computer companies. The bill, S. 1712, has been tied up in a dispute between supporters of the bill, led by its sponsor Senate Banking Committee Chairman Phil Gramm, R-TX, and four Senate committee chairmen who say the measure does not go far enough to protect national security. Sens. Spencer Abraham, R-MI, and Robert Bennett, R-UT, who has been tapped to head a Senate working group on cyber security, said S. 1712 fixes a concern of the computer industry by reducing from 180 days to 60 days the amount of time Congress has to review some changes to computer export controls.

On The Hill
Lawmaker Offers Measure To Lift Visa Limit
     Rep. Lamar Smith, R-TX, chairman of the House Judiciary Committee's immigration panel, introduced legislation that would increase the cap on H-1B visas, which allow foreigners to stay in the United States for up to six years, from 115,000 this year to 160,000. The bill would retain the level of 107,500 visas set by Congress in 1998 when it last addressed the issue in response to the pleas of industry. It also would increase the fee for each visa from $500 to $1,000, which would continue to pay for scholarships for students who major in high-tech fields. But the bill includes new provisions aimed at ensuring that U.S. companies are not abusing the visas. The measure would shift to the State Department responsibility for tracking how many H-1B visas have been used. Meanwhile, the Immigration and Naturalization Service has released figures that appear to show the agency is close to hitting the cap on the number of H-1B visas available this year, which would come several months before a new batch of the visas will be available.

E-commerce
Senate Judiciary Stomps On Internet Alcohol Sales
     The Senate Judiciary Committee quickly approved legislation that would prohibit most Internet alcohol sales while protecting Internet service providers from Web sites that participate in the illegal practice. Committee Chairman Orrin Hatch, R-UT, offered a revised version of S. 577 that included provisions favorable to ISPs that the House adopted last summer in H.R. 2031. The Senate bill, which passed by a voice vote, would give legal protection to ISPs that hosted an illegal alcohol site on their network and would permit alcohol advertising online. S. 577 would allow state attorneys general to enforce their alcohol sales laws in federal court by seeking injunctions against offending out-of-state businesses.

E-Commerce
Just The Stats, Ma'am
     Commerce Secretary William Daley used the unveiling of the government's first e-commerce sales measure to warn businesses to strengthen online privacy protections or face government regulation. Although Daley noted that industry has progressed with self-regulation programs such as BBBOnline and TRUSTe, he said more needs to be done. "Unfortunately, business is not keeping up with the demand for real privacy protection," he said, noting that privacy concerns are deterring consumers from shopping online. Daley called for more companies to implement clearly visible privacy policies on their Web sites. "The business community must understand that its action, or lack of action, will determine how this issue is ultimately resolved," he said. Online retail sales totaled $5.3 billion between October and December of 1999, accounting for 64 percent of all retail sales.

Business
Senate Banking Tells FASB To Apply Brakes
     "Go slow" was the general message the Senate Banking Committee sent to the Financial Accounting Standards Board, which is considering eliminating an accounting rule that could have a negative impact on the high-tech and financial industries. At a hearing, committee members said while they don't want Congress to legislate accounting policy, they want to caution FASB Chairman Edmund Jenkins to be 100 percent certain that the changes FASB proposes will benefit investors. At issue is FASB's proposed elimination of the "pooling of interests" accounting method. Pooling is one of two current accounting methods used in mergers and acquisitions, and it enables the two companies' balance sheets and income statements to be combined as if they had always been one company. The other method is called "purchase" accounting, in which the difference between the price paid and the book value of the acquired company's net assets is written off over time as an annual expense.

Business
Fixing What Labor Started
     The Labor Department acknowledged Thursday that legislation is necessary to fix current labor law to ensure employers will not be required to include stock option profits in workers' base pay when calculating overtime, which critics say will keep companies from offering stock benefits to those employees. "Given the wide variety and complexity of programs, we believe that the best solution would be to address this matter legislatively," said T. Michael Kerr, administrator of the Labor Department's Wage and Hour division, during a hearing on the issue before the House Education and the Workforce Committee's workforce protections panel.
- by Sharon McLoone