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TechnologyDaily Mobile
The Year Tech Policy Turned Political
by Bara Vaida
As high-tech lobbyists look back on the industry's policy successes during 2001, some industry analysts said politics had a bigger impact than in previous years on their ability to get legislation through Congress.
While top industry priorities like an education reform bill and an extension of the Internet tax moratorium were signed into law and a bill to renew presidential trade-negotiating authority won House passage, other tech priorities failed. A permanent research and development tax credit, reform of the Export Administration Act (EAA) and an economic stimulus package that would provide corporations tax benefits for the purchase of high-tech equipment all stalled.
"It was a better year than we thought it would be, but it wasn't as good as it has been historically" for high tech, said Bill Archey, president of the electronics trade group AeA. "The big difference is that in previous years, we had a tremendous amount of success in arguing the substance of a policy, but this year, politics, in many cases, trumped the policy, and that made it much more difficult for us to lobby on the merits and substance."
As The Bubble Bursts
In particular, while the high-tech sector worked all year on the trade-negotiating bill, frustration between Democrats and Republicans on the approach to the legislation and the floor debate helped deter scores of traditionally trade-friendly Democrats from supporting the legislation. And on economic stimulus, although high-tech was on the verge of winning the 30 percent bonus tax write-off on the purchase of new assets and possibly a broadband tax credit, partisan finger-pointing derailed the legislation for this year.
"As far as getting legislation through Congress this year, I'd have to give a grade of C-plus," said Brian Kelly, senior vice president of government relations and communications at the Electronic Industries Alliance.
Adding to the difficult political environment, the high-tech sector was hurt by the economic decline. For most of the year, executives' collective attention became more focused on the bottom line than on policy, and the industry's image took a hit as numerous Internet companies went bankrupt and stock options became worthless, lobbyists said.
"Without question their bubble burst," said Scott Cleland, an industry analyst with the Precursor Group. "The reason why they had so much clout before was that they were masters of the universe during the bubble era. As their star has fallen, their clout has fallen."
Further raising the question of the industry's clout, the White House was slow to pull its tech policy team together, causing some to quietly question whether the new administration cared about high-tech, despite its extensive courting of the sector during the 2000 presidential campaign. Not until this December did the whole Bush administration team become complete, with the announcement of appointees to the President's Council of Advisers on Science and Technology (PCAST), a group of academics and private-sector advisers.
Victories To Cherish
Still, the industry can count some successes. Though many feared that the aftermath of the Sept. 11 terrorist attacks would bury tech issues for the remainder of the year, high-tech lobbyists became active participants in drafting the new anti-terrorism law, which boosted the ability of law enforcement to monitor e-mail and other communications. Computer security and biometrics also became hot topics, as both the White House and the tech sector reached out to one another to determine the role technology could play in protecting the nation.
"While we didn't get everything we wanted this year, we've been pleased with the level of outreach during these trying times" from Congress and the administration, said Mark Bohannon, general counsel and vice president for government affairs at the Software and Information Industry Association.
Earlier in the year, industry won Senate backing for an EAA bill, S. 149, that would eliminate the link between high-tech exports and the level of computing power, also known as MTOPS (millions of theoretical operations per second). The measure moved forward with the help of Bush administration officials, and although it stalled in the House due to jurisdictional hurdles, House Speaker Dennis Hastert, R-Ill. said he would like to bring up the legislation by April.
Industry also discouraged any further movement on privacy legislation. Though several observers had predicted that an online privacy bill could move through Congress in 2001, industry successfully convinced lawmakers that the issue is too complex to address that quickly. In addition, new FTC Chairman Timothy Muris said this fall that he does not think any new privacy legislation is necessary and that the FTC will focus on enforcement of current laws.
A proposal for managing digital copyrights floated by Senate Commerce Committee Chairman Ernest (Fritz) Hollings, D-S.C., also did not move. The draft of the legislation would require high-tech companies to incorporate technology to protect copyrighted digital works into their products. Several high-tech companies opposed such a policy.
"Sometimes a lot of our effort is focused on preventing bad things from happening" in Congress, said Harris Miller, president of the Information Technology Association of America.
Unfinished Business for 2002
One of the most controversial bills of the year, the Tauzin-Dingell broadband bill, divided the tech industry. Some people in industry wanted to stop the measure, H.R. 1542, and others wanted to move it forward.
The bill aims to speed the deployment of high-speed Internet services, but it quickly became mired in a debate over whether it would lead to the re-monopolization of the local telephone market and unfairly hurt long-distance firms and competitors of the regional Bell telephone companies. Tech companies not in the telecom sector mostly remained neutral on the bill or pushed for a broadband tax credit instead.
"We are very glad that we got the support that we did on the broadband tax credit," said Grant Seiffert, vice president of external affairs and global policy at the Telecommunications Industry Association.
The fight over Tauzin-Dingell -- which is named after House sponsors W.J. (Billy) Tauzin, R-La., John Dingell, D-Mich. -- will continue next year, with a House vote tentatively planned for March. But the only must-pass legislation in the eyes of the tech industry as a whole is the trade-negotiating bill, according to several lobbyists.
Industry sources also expect privacy, export reform, research and development funding, e-government, cyber security, implementation of the World Trade Organization agreement with China, and implementation of the education reform bill to be key issues next year. But most of the Washington lobbying action will be focused on the regulatory agencies.
"A lot of things in the coming year will be more regulatory than legislative," said AeA's Archey.
The mid-term elections also are expected to dominate the Hill's priorities after April. The control of the House and Senate are up for grabs, and with politics already playing a big role in the 107th Congress, it is expected to play an even bigger role in 2002.
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