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Fritz Hollings: Tech Friend Or Foe?
by Bara Vaida
High-tech lobbyists knew that Sen. Ernest Hollings, D-S.C., was not going to be the industry's best friend when he became chairman of the Senate Commerce Committee in June. In the past four years, Hollings has voted against top high-tech policy priorities. He also said that he would rather have BMW jobs than Microsoft jobs in his district, reflecting the higher hourly wage paid by the automaker and Microsoft's high concentration of temporary workers.
But before Hollings took the gavel from former Chairman John McCain, R-Ariz., his votes against high-tech issues could be dismissed because most of his Democratic colleagues and the Senate Republican leadership generally supported the industry's policy objectives. Now high-tech lobbyists have to work directly with Hollings, which is proving to be one of the prickliest jobs in the high-tech sector.
"Hollings is a thorn in our side. It's a very uneasy relationship," said one high-tech lobbyist who declined to be named over fear that his organization would have trouble getting face time with Senate Commerce Committee staff if he went on the record.
Fighting Over Copyright Protection And Privacy
For now, the uncomfortable relationship between techies and Hollings means more heartburn for industry lobbyists than substantive problems for the industry's agenda. Currently, industry is trying to push only one policy item -- Internet taxation -- through the committee. But the lobbyists are trying to stop the committee from passing two bills -- one on copyright and one on privacy -- that are dear to Hollings.
Within a month of taking the chairman's seat, Hollings started pushing a measure to protect copyrighted material distributed over the Internet. That has infuriated high-tech lobbyists.
The initial draft of the bill, which has not been introduced, would require companies to include government-sanctioned copyright-protection technologies in digital devices. Industry lobbyists argue that the draft measure largely would benefit digital content companies, like Walt Disney and News Corp., while raising costs on technology firms.
Disney Chairman Michael Eisner personally has been pushing the policy espoused in Hollings draft measure. In exchange for Hollings' support, Eisner also has agreed to publicly support Hollings' effort to impose strict rules on protecting consumers' privacy online.
"What Hollings is trying to do is pit portions of the technology community against one or the other," said one frustrated high-tech lobbyist.
High-tech lobbyists said they have expressed their concerns to Hollings' staff but have not seen evidence of any changes to the bill. Early this month, a group of lobbyists from tech associations and companies started building a loose coalition with the telecom sector to lobby other members of the Senate Commerce Committee to try to block the measure, if it is introduced.
"Not only would the Hollings approach undercut voluntary industry negotiations now underway, but it also contravenes the 1984 Supreme Court decision [that] established that free, over-the-air broadcasting is recordable by consumers," said Michael Petricone, vice president of technology policy at the Consumer Electronics Association.
Engaging A Powerful Chairman
In the past, the high-tech sector has worked with lawmakers to thwart legislation that the industry believes would hurt its bottom line. Privacy legislation, for example, has been discussed for two years, but thanks in part to forceful lobbying, Congress has not cleared a bill. Yet in Hollings' case, said those close to the senator, opposition from the tech industry has strengthened his resolve to move a copyright-protection measure.
"The tech folks are overreacting because they are used to getting everything they want all the time, and they aren't used to any pushback," said one person close to Hollings. "Pushback is a normal part of the political process."
A person close to the bill-drafting process also said Hollings' bill is being rewritten to consider critics' comments, and the tech community "hasn't been willing to help us. When we've asked for their specific suggestions, some have said it is easier to just oppose the legislation than offer suggestions, and that doesn't represent a good-faith dialogue."
Perhaps sensing that they had pushed Hollings too far, some high-tech lobbyists attended a luncheon fundraiser for him last Wednesday. VeriSign, AT&T, AOL Time Warner, Travelocity and CapNet, a lobbying group that represents Washington-area companies, attended the fundraiser, where they discussed Internet taxes and airport security. The copyright-protection measure and privacy, however, were not discussed.
"Senator Hollings does want to hear what we have to say. There are some things that he does agree with us on," said Tim Hugo, executive director of CapNet. He noted that Hollings opposes a bill, H.R. 1542, that its supporters say would make it easier for regional Bell telephone companies to offer high-speed data services, a bill that CapNet opposes.
AT&T, AOL Time Warner and Disney are among Hollings' top 20 corporate donors, but NCR Corp. was the only computer-related firm to donate to his campaign, according to the Center for Responsive Politics. Unions and trial lawyers also are big donors -- no surprise given the heavy concentration of manufacturing in South Carolina and Hollings' history as a trial lawyer.
Those who are close to Hollings say it is best to engage him directly, not to bypass him and thus anger him. One former aide recalled that a local phone company tried to bypass Hollings during negotiations on the 1996 Telecommunications Act and Hollings never forgot. Five years later, the phone company failed to get a meeting with Hollings to discuss the merits of H.R. 1542.
"The worst thing you can do is ignore Hollings," said a former staffer. "He might disagree with you and you might not get what you want, but he wants to hear from you."
A Liability For Democrats?
But that message is difficult for some in the high-tech sector to hear, and some have suggested that Hollings may be a liability for Senate Democrats. Hollings' positions on high-tech provide Senate Republicans with an argument for the high-tech sector supporting their efforts to retake control of the Senate.
A Senate Democratic source said the leadership is aware of the tech sector's concerns with Hollings' proposals on copyright protection and privacy. "Any time when the alarm goes off and so many folks in the IT community panic, it's a good idea to reevaluate what you are doing, and the leadership is making sure we are listening to everyone on this," the staffer said.
Other high-tech lobbyists said Hollings is no more of a liability for Democrats than McCain was for Republicans. McCain is also a maverick and did not always back the high-tech sector.
Hollings' defenders also have noted that he is tough on all business sectors, not just the high-tech sector. His votes opposing top high-tech priorities -- like granting permanent normal trade relations to China, increasing the cap on visas for skilled worker visas and providing liability relief for the potential fallout from the Year 2000 computer bug -- were based on his 30 years of fighting for manufacturing jobs in South Carolina and for consumers as a trial lawyer.
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