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April 6, 2001
Executive Summary
Week of April 2, 2001
By Sharon McLoone
Exports
Enzi Expects Floor Debate On Export Bill In April
A leader in the effort to reauthorize the Export Administration Act (EAA) said this week that he anticipates floor debate on the bill to begin by the end of the month. Speaking to a conference hosted by the Washington International Trade Association, Sen. Michael Enzi, R-Wyo., said President Bush's public endorsement of the EAA bill, which would relieve the president from having to use millions of theoretical operations per second (MTOPS) as a measure of computer power, and his recommendation that the measure be approved quickly, bode well for its enactment. In related news, a study being developed by the Center for Strategic and International Studies found that placing export controls on computer hardware for national security reasons no longer makes sense. The report stops short of specific recommendations for identifying the next approach. The draft was circulated to government and private-sector officials for comments during the past week.
Cyber Security
U.S. In Grave Danger Of Cyber Attack, Officials Warn
U.S. computer systems are under constant attack and are frequently penetrated, top Bush administration officials said at a hearing of the House Energy and Commerce Oversight and Investigations Subcommittee. The Federal Computer Incident Response Center documented 586 incidents affecting government systems in 2000, testified Sallie McDonald, assistant commissioner of the Office of Information Assurance and Critical Infrastructure. In 155 of the cases, reported from 32 agencies, intruders were able to gain full control over the system. And there are probably many more intrusions that go undetected, officials said. Meanwhile, FBI Director Louis Freeh said this week that his agency suffers from a high turnover of experts in cyber crime but continues to get quality people.
Privacy
Experts Back Piecemeal Approach To Privacy Legislation
Appearing before a House Energy and Commerce subcommittee holding its third privacy hearing this session, a panel of private-sector witnesses cautioned lawmakers that omnibus privacy legislation should not replace dozens of existing federal laws dealing with the subject. "I do not think that we could have an omnibus [privacy] bill" because of intrinsic differences between the sensitivity of information in different sorts of industries, said Rick Fischer, a partner at Morrison and Foerster. He analyzed the scope of the 1999 Gramm-Leach-Bliley Act's privacy provision set to take effect July 1, which soon will cause the average American to receive 20 privacy notices from an array of financial and non-financial businesses. In his opening statement, House Energy and Commerce Committee Chairman W.J. (Billy) Tauzin, R-La., said the U.S. approach to privacy has been piecemeal but added that "piecemeal is not necessarily a bad thing."
Intellectual Property
Lawmakers Ponder Napster's Call For Music Licenses
Senate Judiciary Committee Chairman Orrin Hatch, R-Utah, and other members of the committee appeared tempted by a proposal that Congress create a compulsory license for Web sites that offer digital music. But ultimately they said they hope to a find a less drastic solution to complaints about the lack of legally available online music. Napster CEO Hank Barry pitched the idea at a committee hearing featuring recording stars Don Henley and Alanis Morissette, as well as representatives from technology companies and major record labels. Barry urged Congress to create a statutory license similar to those that allow radio and cable-system operators to rebroadcast music for a fee, without having to negotiate individual license terms with each copyright holder.
Taxes
Senators Scold IRS For Proliferation Of Tax Cheats
Tax fraud has long been a problem, but the Internet elevated the problem to an entirely new level, costing the U.S. treasury several billion dollars per year — and the Internal Revenue Service is not doing enough to stop it, the Senate Finance Committee was told in a hearing. IRS Commissioner Charles Rossotti estimated the annual tax revenue loss to the U.S. treasury due to tax scams, many of which originate over the Internet, at $70 billion. The government could afford a larger tax cut, deal with Medicaid funding issues and tackle other issues if the IRS could better address the problem, Sen. Max Baucus, D-Mont., said of the revenue loss. But panelists said the ubiquitous nature of the Internet, the ability to transfer funds without being tracked and the ability for Web-site operators to appear and disappear without a trace all make Web-based tax scams in particular hard to combat.
On The Hill
Democrats Push Education, R&D In Tech Agenda
Senate Minority Leader Thomas Daschle, D-S.D., and House Minority Leader Richard Gephardt, D-Mo., unveiled their high-tech economic strategy, offering10 policy recommendations, including making broadband available to every American by the end of the decade, funding the e-rate and other programs aimed at closing the "digital divide," promoting the deployment of wireless services, increasing federal research and development support, and providing strong intellectual property protection. In addition, they want to improve math and science education and ensure computer literacy of students, and encourage companies to invest more in training and to help workers develop information technology skills.
Education
Education Department Mishandled Funds, Inspector General Says
The Education Department mishandled $450 million over the past three fiscal years and could have lost taxpayers as much as $200 million, Lorraine Lewis, the inspector general at the department, told the House Education and the Workforce Select Education Subcommittee. Lewis' conclusions were the result of a three-year audit Congress required the department to undertake to examine accounting practices within the agency. This week's hearing was the fourth on the issue, and at each hearing, evidence has been presented to Congress that the department is failing to properly manage its accounting.
Education
Think Tank Eyes Spectrum Funds For Education Initiative
A coalition of educators, high-tech executives and library, museum and science officials requested access to a portion of funds from spectrum auctions in an effort to promise a digital future for education. The Century Foundation released a report recommending that the $18 billion reaped in the recent Federal Communications Commission spectrum auction be used to create a Digital Opportunity Investment Trust (DO IT). The fund would be used for "electronic land grants" to educational institutions, a concept based on funds once reserved for land-grant colleges established under the Morill Act of 1862.
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