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February 13, 2004
Executive Summary
Week Of February 9, 2004
by Sharon McLoone

Taxes
Senators Offer New Bill To Allay Internet Tax Concerns
     Armed with reports of potential state and local revenue losses from a proposal to ban taxes on Internet access, several senators this week offered a bill that would restore a temporary ban on the taxes and give policymakers two years to study the impact of technology changes to telecommunications services. "Our position is a temporary solution; the other position is permanent confusion," Sen. Lamar Alexander, R-Tenn., said of the competing bill, S. 150. That measure would permanently ban taxes on Internet access and alter the definition of "Internet access" in an effort to ensure that it applies to high-speed, wireless and other connections. That proposal is too broad and unclear, said Tom Carper, D-Del., a co-sponsor of the alternative bill. The bill, a two-year extension of the previous moratorium, would change the definition of access to note that "it does not include telecommunications services except to the extent such services are purchased, used or sold by an Internet access provider to connect" subscribers to the provider.

Telecom
FCC Begins Debate On Internet Telephony, Other Issues
     The FCC voted to begin defining regulations for several new technologies that are impacting the nation's communications sector, including Internet telephony, high-speed Internet service over power lines and new wireless requirements. The commission voted to clarify regulations for voice-over-Internet protocol (VoIP) and declared that a peer-to-peer, free dial-up service should remain unregulated. Commissioner Michael Copps qualified his support for the VoIP inquiry, warning that the commission is "leaping without looking" by seeking to classify the Internet services without first addressing the consequences, such as the technologies' potential impact on law enforcement access to data and consumers' ability to contact emergency services over the Internet. The commissioners also voted to require wireless, cable and satellite providers to report significant disruptions with their services.

Telecom
FCC Chairman Pushes For 'Internet Freedoms'
     FCC Chairman Michael Powell pushed four "Internet freedoms" that he said are necessary to preserve high-speed Internet use. First, consumers should have access to their choice of legal content, he said in Boulder, Colo., at a Silicon Flatirons Symposium on digital broadband migration. They also should be able to run applications of their own choice. In addition, consumers should be able to attach any devices they choose to the connections in their homes because that choice is "critical to the future of broadband," he said. Finally, consumers should receive meaningful information on their service plans "to ensure the market is working."

Budget
Lawmakers Vow To Remedy 'First Responder' Aid Backlog
     A multibillion-dollar backlog in federal funding to the nation's "first responders" to emergencies is unacceptable, and new legislation should correct the problem, top lawmakers on the House Homeland Security Committee said. Committee Chairman Christopher Cox, R-Calif., and ranking Democrat Jim Turner of Texas told members of the National Emergency Management Association that while there have been many accomplishments since the creation of the Homeland Security Department, urgent needs of emergency medical personnel, firefighters and others remain unmet. Cox noted that since 2001, Congress has appropriated $11 billion toward first responders, and the administration called for an additional $3.6 billion in fiscal 2005. However, nearly $5.5 billion remains to be allocated, a backlog that Cox called "unacceptable." Jim Morhard, majority staff director with the Senate Appropriations Committee, said the committee believes the administration's budget request for emergency management is inadequate and urged first responders to work with Congress to correct the problem.

Privacy
Report Renews Questions About Passenger-Screening System
     Privacy advocates hailed a General Accounting Office (GAO) report that criticizes an airline passenger-screening system, but the lawmaker who authored language delaying the system's implementation said the report will not necessarily end the program. GAO's report concluded that the Homeland Security Department "has not completely addressed seven of the eight issues" that Congress set as conditions for the deployment of the new Computer-Assisted Passenger Prescreening System (CAPPS II). The homeland security appropriations act for fiscal 2004 put funding for deployment or implementation on hold until GAO certifies that the system included protections for privacy, due process, data accuracy and more. "All the privacy, accuracy, security and due-process concerns I had about CAPPS II last year still stand," said Martin Sabo, D-Minn., who sponsored the appropriations language. But in a conference call organized by the American Civil Liberties Union, Sabo added: "I don't think [the report] ends the program. They can continue the planning process. I would also expect that they do that."

Lobbying
GOP Moderates Offer Agenda, Including Tech Initiatives
     The moderate Republican Main Street Partnership released its legislative agenda for this year's congressional session, including support for five technology initiatives. It called for passage of legislation on employee stock options, the tax credit for research and development, corporate taxes, patents, and the high-speed Internet. On stock options, the partnership supports a bill, H.R. 1372, that would direct the Securities and Exchange Commission to study for three years rules proposed by the nation's accounting-standards body on reporting stock options as business expenses, but Main Street Republicans also support compromise legislation. That measure would require companies to expense options for their top five executives but not the options for rank-and-file employees. The group plans to push hard on a bill to create a long-term extension for the R&D tax credit. The group also called for a vote on measures, H.R. 2896 and S. 1637, that would phase out a tax break for U.S. exporters cited by the World Trade Organization as a violation of trade law. The group also supports legislation, H.R. 1561, calling for reforms to the Patent and Trademark Office. And it backs a measure, H.R. 768, that would create tax credits for companies deploying high-speed Internet service to underserved parts of the country.

Science
Standards Body Faces Loss Of Director And Budget Cuts
     Arden Bement, the low-key veteran scientist and engineer who the White House has named as interim director of the National Science Foundation (NSF), is thrilled about his latest appointment. But he also acknowledges being a bit awed by the post and does not plan to make waves while there, he said in an interview. Bement will replace outgoing NSF director Rita Colwell on Feb. 21. "Between now and Feb. 21, I will be spending some quality time with Dr. Colwell and her staff to find out how I can provide continuity" for the programs they implemented, Bement said, adding that he does not plan to implement any changes.




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