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TechnologyDaily Mobile
More Of The Same In 2004
by Teri RuckerThe second half of the 108th Congress will not be altogether different from the first half for the technology industry, as lawmakers and lobbyists greet the new year with issues left unresolved at the end of 2003.
"It's half-time," said Ralph Hellmann, senior vice president at the Information Technology Industry Council (ITI). "There are a whole bunch of issues where we saw some progress and hope to score this year," and the biggest issues on the agenda include taxes, telecommunications, stock options and privacy.
The flurry of activity is expected early in the session because 2004 is a presidential election year, Hellmann said. If legislation is not enacted by October, "you have to start all over again" when the new Congress convenes in 2005, he added.
Taxing Issues At Hand
Banning taxes on Internet access and other Internet-only taxes likely will be one of the first issues when lawmakers return. The House passed its moratorium bill, H.R. 49, in the summer, but to the dismay of the technology industry and bill supporters, Senate legislation to permanently ban such taxes stalled amid concerns over the definition of Internet access and the long-term costs to states.
Sen. Ron Wyden, D-Ore., a co-author of the measure, S. 150, will "continue to work to see that Congress does the right thing in making the moratorium technology fair and the Internet tax free," said his spokeswoman, Carol Guthrie. The tech industry, meanwhile, will pressure Senate Majority Leader Bill Frist, R-Tenn., to schedule the bill for a vote, hoping that that senators will pass it if forced to vote on the legislation, sources said.
Negotiations were underway in the Senate at the end of 2003, with talk of temporarily banning Internet taxes until the definitional concerns can be addressed. But that proposal is not good enough for Rep. Bob Goodlatte, R-Va., who wants to see the moratorium made permanent. "Getting a permanent extension of the moratorium is a high priority early in the year," he said, noting that he hopes the Senate can act soon and produce something the House can accept, and that does not include a temporary ban.
Goodlatte said he also will push for hearings on his legislation, H.R. 3220, to simplify rules that require companies to have physical presences in given states at the time the taxes on business activity are imposed. He hopes that the bill will move independently of the moratorium measure and legislation to simplify state sales-tax systems.
The sales-tax bill, H.R. 3184, and its Senate companion, S. 1736, would approve state efforts to harmonize their tax systems and in return for that work grant those states the right to require companies to collect and remit sales tax on remote sales, including online sales. Neal Osten, director of the National Conference of State Legislatures' Communications, Technology and Interstate Commerce Committee, is optimistic of Senate action on the issue early in the year.
Calling All Telecom Lobbyists
The battle to deregulate the telecommunications industry also is expected to resume on Capitol Hill, with the U.S. Telecom Association (USTA) and the regional Bell telephone companies pushing for broad reforms tantamount to rewriting the 1996 Telecommunications Act and their competitors, represented by the CompTel/ASCENT Alliance and the Association for Local Telecommunications Services, fighting such efforts.
"The year 2004 is going to be a year where there are going to be broad questions asked and real policy developments and diverse interests ... coming together and calling upon the administration and the Congress to move this 21st-century technology into a 21st-century environment," said Walter McCormick, the president and CEO of USTA.
At the same time, the courts will consider challenges to new telecom rules that the FCC issued in 2003. A decision is expected from the U.S. Circuit Court of Appeals for the District of Columbia in early spring.
The Senate also must contend with the nomination of two key players in the telecom industry. Currently pending before the Senate is the nomination of Michael Gallagher to be assistant secretary of Commerce and head the National Telecommunications and Information Administration. Gallagher is the acting director of the agency, but his permanent confirmation has been delayed by a procedural move of Sen. Trent Lott, R-Miss., over an unrelated matter.
The future of FCC Commissioner Jonathan Adelstein, meanwhile, lies in the hands of the Bush administration. His term as commissioner expired June 30, 2003, six months after he was sworn in at the agency. If the Democrat gets a second nod from President Bush, he will face Senate confirmation again. Last time, his nomination was delayed from July 2002 to November 2002 in a fight over the progress on unrelated judicial nominations.
The Rest Of The Agenda
Another top priority for the tech industry is enacting legislation that would preclude the Financial Accounting Standards Board from requiring companies to count employee stock options as expenses on their balance sheets.
"Stock options is priority number one," according to an aide to John Ensign, the Nevada Republican who heads the Senate Republican High-Tech Task Force. Based on conversations that the lawmaker had with executives, the tech industry will vigorously seek support for legislation, S. 1890, that would require the expensing of options granted to firms' top five executives but allow employee options to be recorded only in the footnotes of balance sheets.
Scott Corley, manager of government relations at ITI, expects to spend a good amount of time lobbying for the stock-option reform, but he also has his eye on legislation designed to tackle the problem of "spyware" bundled on consumers' computers without adequate notice.
"The sleeper issue that is going to be a big deal for e-commerce is spyware," Corley said. Reps. Mary Bono, R-Calif., and Edolphus Towns, D-N.Y., offered a bill, H.R. 2929, that would bar companies from bundling software that tracks individual users without obtaining their consent. Ensign is considering offering a similar bill, his aide said.
"The industry is not put off by the idea of making sure something is done about it," Corley said, "but we want to make sure that it won't hurt legitimate uses" of the technology.
Combating unsolicited commercial e-mail will remain a priority for Wyden, his spokeswoman said, noting that the senator will focus on "making sure the FTC is using the tools they were given." At the end of 2003, Congress cleared a bill to curb spam, but she said the law will only be as good as its enforcement.
Wyden also will remain vigilant to ensure the proper balance between security and civil liberties. The lawmaker led the charge to kill a technology research program that sparked a furor over rights to citizens' personal information. The funding for the program was struck from the Defense Department appropriations bill.
"Sen. Wyden will continue to take a look at the balance that must be struck between privacy and civil liberties, particularly concerning the use of technology," his spokeswoman said.
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