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October 24, 2003
Executive Summary
Week Of October 20, 2003
by Sharon McLoone

Taxes
Obstacles Slow Internet Tax Ban
     The optimism for speedy passage of legislation to permanently extend the current ban on Internet access taxes has turned to despair as concerns over the bill prompted lawmakers to employ procedural tactics to slow its progress. The Senate turned its attention to a bill that would fund the Transportation and Treasury departments in fiscal 2004. That bill passed and now the schedule for floor action on the Internet tax bill, S. 150, is unclear. Observers estimate that four senators are using a procedure to prevent debate, and during floor debate on an unrelated measure earlier in the week, Lamar Alexander, R-Tenn., objected to action on the Internet tax legislation, calling it "the worst kind of unfunded mandate" on states. The current ban on access taxes includes an exemption for 10 states, but the bill would phase out that exemption over three years. That language would cost state and local governments $80 million to $120 million, according to a report from the Congressional Budget Office.

E-Commerce
House Unlikely To Act On Anti-Spam Bill This Year
     The House is unlikely to pass anti-spam legislation this year in spite of this week's unanimous Senate approval of a sweeping bill to curb unsolicited commercial e-mail, a spokesman for the Energy and Commerce Committee chairman said. "Passing anti-spam legislation remains a high priority for us, but the simple fact of the matter is that most of our time and resources are now focused on completing work on the energy and Medicare bills," a spokesman for Chairman W.J. (Billy) Tauzin, R-La., said. "We're hopeful of moving an [anti-spam] bill early next year." Energy and Commerce had planned to debate anti-spam legislation in July, but Tauzin postponed the meeting in hopes of resolving major differences between two competing House proposals. Meanwhile, the Federal Trade Commission remains staunchly opposed to the creation of a "do-not-spam" list as called for in a Senate bill.

E-Commerce
Rep. Frank: Opponents Of E-Gambling Do Not Have Votes
     It is "very unlikely" that Congress will pass legislation against Internet gambling this year, Democratic Rep. Barney Frank of Massachusetts said. "They will not be able to get a bill through this year; I don't know about next year," Frank said at an e-gambling forum sponsored by the Cato Institute. He said the numerous exceptions to gambling regulation being applied to a Senate bill are derailing the issue's momentum. "There aren't the votes to do a complete vote, and once you start making exceptions, I think ... it does start to unravel." Frank opposes a ban on e-gambling because of such complexities, and he said other people's opposition to gambling in general is "based solely on dislike" of the practice.

Security
New Visa Policies Trouble U.S. Travel Industry
     Lawmakers questioned government officials about new visa policies crafted to prevent terrorists from entering the country and their economic impact on the U.S. travel industry. "We're deeply worried about our economy," Senate Foreign Relations Committee Chairman Richard Lugar, R-Ind., said during a hearing on visa reforms and new technology initiatives at various departments before the International Operations and Terrorism Subcommittee. He said the question is balancing the new policies "in terms of cost effectiveness and American security." Lugar said that while the new reforms "make sense," many foreign visitors have experienced an expensive and cumbersome process to apply for visas. It has translated into a loss for U.S. national income and scholarships for foreign students, and has negatively impacted foreign countries' perception of the United States, he said.

Cyber Security
Security Committee To Focus On Cyber World
     The House Homeland Security Committee plans to focus on Homeland Security Department cyber-security initiatives in the coming months, committee Chairman Christopher Cox, R-Calif., said Thursday. "Our work is far from over," Cox said. Initiatives include defining a national framework for cyber standards and best practices and evaluation of the best model for an industry partnership with government, he said. The committee also wants to ensure consistency in measuring costs of cyber attacks and work with the administration and the private sector to develop an economic cost model. Robert Liscouski, Homeland Security assistant secretary for infrastructure protection, said the department is working to make it standard for software patches and updates to be made. The department's cyber-security czar, Amit Yoran, took office Monday, and a public-private summit in December will focus on development of cyber-security standards, Liscouski said.

Security
Data-Mining Backers Fan Momentum After Anti-Terror Project
     Congress last month halted funding for the Terrorism Information Awareness (TIA) project, an effort to create technology to search massive amounts of data for clues about terrorists, out of concern for citizens' privacy, but supporters of the research project see the defeat only as the result of bad public-relations handling of a good idea. While privacy advocates to some degree have targeted other matters, TIA supporters are speaking publicly about the need for data-mining technologies like those proposed in TIA to protect the nation from terrorists. Former Defense Department spokeswoman Victoria Clarke, Brandon Milhorn, a majority counsel on the Senate Intelligence Committee, and representatives from several former contractors to TIA are among those who have offered praise for data mining in recent weeks. Clarke said, "TIA was a good idea, a good objective, but had lousy execution." Milhorn said at another conference that the intelligence community needs the capability to catch terrorists.

Security
Small-Business Owners Complain Of Contract Neglect
     Small-business owners told lawmakers that they have had little success winning contracts from the Homeland Security Department even though department officials said they currently are exceeding federal requirements for awarding small-business contracts. Marian Sabety, president of a small security-consulting firm, noted before a House Small Business Subcommittee on Rural Enterprises, Agriculture and Technology that Homeland Security has a $29.4 billion budget but that "with huge corporations taking on massive responsibilities ... small business is being forgotten." A Homeland Security official, however, said procurement data recently compiled from the department's first four months in existence found that more contracts have been awarded to small-business owners than required. "As of today, we're slightly exceeding the overall goal of 23 percent," said Kevin Boshears, director of the department's small-business utilization office. In an interview after the hearing, a small-business executive called the department's estimates inaccurate. "It's more like 6 percent," she said.

Lobbying
California Tech Community Giddy Over Governor-Elect
     California Gov.-elect Arnold Schwarzenegger had a coming out party of sorts to key players in Silicon Valley, discussing taxes, regulatory policy and education with 80 tech executives in an informal question-and-answer session that attendees characterized as "upbeat" and "hopeful." Schwarzenegger appeared during TechNet's annual board meeting, held at the Sunnyvale, Calif., headquarters of the semiconductor design software company Synopsis. Schwarzenegger enjoyed the support of top Silicon Valley executives from the start of his campaign, sources said, including endorsements and financial support from Cisco Systems CEO John Chambers and Ray Lane of the venture-capital firm Kleiner Perkins Caufield & Byers. Hewlett-Packard CEO Carly Fiorina is on Schwarzenegger's transition team, which is led by Republican Rep. David Dreier, a tech industry supporter. "I think the outcome was extraordinarily positive," TechNet CEO Rick White said. "It was an interesting meeting of the entertainment and technology worlds. There was this outpouring of hope."




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