Lobbying Industry Calls For More Work On Competitiveness by Heather Greenfield      With just weeks to go in the legislative calendar, technology industry advocates are reminding members of Congress that half the competitiveness initiatives they have been seeking this year remain undone.      The research and development tax credit once again is set to expire at the end of the year, for instance. This week, the R&D Credit Coalition sent a letter to House and Senate leaders that said innovation is the key to competing in the global marketplace and the R&D credit helps companies invest in future innovations.      The letter said delays in passing the credit -- as happened last year -- create uncertainty and make it more difficult for companies to locate high-risk R&D investments in the United States and the high-paying jobs that go with them. "We respectfully urge you to pass legislation that strengthens and extends the R&D credit as soon as possible," they wrote.      The coalition wanted an extension included in the competitiveness bill, H.R. 2272, that President Bush signed in August. The legislation authorizes funding for mathematics and science education programs, scholarships and graduate fellowships. It also seeks to double basic research funding the federal government is doing.      Congress has yet to appropriate the money for those programs, which cover two of the four items that both Bush and House Speaker Nancy Pelosi, D-Calif., mentioned in their innovation agendas.      In addition to the R&D tax credit, the other item typically mentioned as a competitiveness issue is more H-1B visas and green cards for highly skilled workers. This week, the Information Technology Industry Council sent a press release urging Congress to boost the number of visas and green cards this year.      "This is absolutely urgent this year," said Kara Calvert, director of government relations for ITI. She said that while ITI tried to help a broader coalition push for comprehensive immigration reform, it now will look for any legislative vehicle to add to the number of visas and green cards. The H-1B visas are now capped at 65,000 a year, down from 195,000 nearly a decade ago.      Legislation in immigration bills that stalled this year and last would have nearly doubled H-1B visas to 115,000 and allowed foreign students with science, technology, engineering and math degrees from U.S. universities to stay in the country.      "We won't see the results of STEM education for while," said Josh Ackil, a lobbyist for ITI. "Why would we let the next Einstein leave [a U.S. university] and go to South Korea?"      Some people in industry also consider patent reform a competitiveness issue, but there is wider disagreement among tech companies about what changes they want to see.      This week, the Coalition for Patent Fairness sent a letter from 128 companies and associations to Senate leaders, asking them to support the reforms in a pending bill, S. 1145.      "Some critical aspects of the system have not been updated in more than 50 years and are discouraging investment in innovation and growth," the coalition wrote. The signers included Apple Inc., Cisco Systems, Dell, Google, Hewlett-Packard, Intel, Microsoft, Oracle and more.

Taxes Techies Prefer Senate's Longer Net Tax Prohibition by K. Daniel Glover      Officials in the technology and telecommunications industries are lauding Thursday's Senate vote to extend the moratorium on taxing Internet access while at the same time urging a final deal before the prohibition expires in six days.    Tallying opinions on Net taxes For more on the debate, see our topic page or our blog, Tech Daily Dose.      "The home stretch is near but the November 1 expiration date looms," said Tim McKone, AT&T's executive vice president of federal relations. "We urge the leaders of the House and Senate to promptly meet so a bill can be presented to the president for signature next week."      The Direct Marketing Association said that "acting in advance of the expiration date remains in the best interests of the American economy."      The Senate opted for a seven-year extension of the moratorium when it considered the House-passed bill, H.R. 3678; the original House language calls for only a four-year extension.      A spokesman for Delaware Democrat Thomas Carper, an opponent of a permanent ban who helped achieve the Senate compromise, said he expects the differing lengths of the moratorium to be the key sticking point in House negotiations.      An industry source said a short House-Senate conference looks likely early next week. The source added that Senate Democratic leaders are eager to claim passage of the longest Internet tax moratorium and that while they might accept six years, "I don't see a four-year extension passing."      House Minority Leader John Boehner, R-Ohio, said in a statement Friday that the Senate bill is "far superior" to the House-passed measure.      "We urge swift consensus in Congress on a seven-year extension before it is too late," said Phil Bond, president and CEO of the Information Technology Association of America. "While a permanent ban can be the only ultimate goal, we commend senators for passing a more significant extension than did the House."      Roger Cochetti, the head of public policy for the Computing Technology Industry Association, said the seven-year ban is preferable. "Recognizing that a permanent ban on these nefarious Internet taxes will not occur in this round, we commend the Senate's leadership and ask that an expeditious, Senate-oriented extension bill be agreed to," he said in a statement.      The tech group AeA, TechNet and the U.S. Telecom Association also praised the Senate's action.      The National Association of Manufacturers issued a statement that lauds the Senate for moving to prevent "stealth tax increases," and the group addressed the issue in its video podcast this week. The vodcast included an interview with Rep. Anna Eshoo, D-Calif.      Eshoo reiterated her view that the House-passed four-year extension "falls short." She said, "My deep disappointment is that the House did not adopt a permanent moratorium."      Sen. John McCain, R-Ariz., took some credit for getting the upper chamber to add three years to the House's timeframe. The Republican presidential candidate, a sponsor of legislation to enact a permanent ban, said in a statement that he worked with bill co-sponsors John Sununu, R-N.H., and Ron Wyden, D-Ore., to get backing for the seven-year extension.      "Excessive taxes dampen innovation and hit the most vulnerable customers the hardest," McCain said. "A tax on Internet services would be especially difficult on the millions of middle-income Americans who use the Internet."

Budget Chertoff: Tough Times Explain Security Grant Levels by Chris Strohm      Homeland Security Secretary Michael Chertoff on Friday defended how much funding the Bush administration provides firefighters and other "first responders" across the country. He also said the response to wildfires in California shows that improvements have been made to help those emergency personnel communicate across jurisdictions.      "We live in tough budget times," Chertoff told a conference of the International Association of Fire Chiefs in Washington. He was responding to a question from the former chief of the association, John Buckman, who asked why the administration has not increased firefighter assistance grants in recent years.      Chertoff said fire departments can tap money from other federal sources, such as the state homeland security fund. He said the administration also is getting ready to release $1 billion in new grants to help first responders buy interoperable radio systems.      "While I understand that sometimes these grant levels aren't even, what I encourage fire departments to do is to look at the whole range of grants," Chertoff said. "Don't assume that you're only eligible for or limited to the assistance for firefighter grants, although those are obviously dedicated. There are a wide range of grants."      Buckman told Technology Daily that fire grants are the only direct grants that fire departments can use to buy safety equipment and firefighting apparatus. "The homeland security grants are highly restrictive in what you can buy," he said.      Chertoff recently returned from California, where he viewed the federal, state and local response to the fires. He witnessed "an unbelievable act of coordination" between first responders and public officials and said police and fire officials told him they have improved interoperable communications. And he said they were especially pleased with the capabilities of the "reverse 911" system, which allows public-safety agencies to call homeowners with emergency warnings.      The Bush administration and Congress have fought a pitched battle for years over funding for firefighter assistance grants.      The administration requested $300 million for the grant program in its fiscal 2008 budget. Congress is poised to increase that, as the House voted to allocate $800 million for the program and the Senate version of the bill would provide $700 million. But Bush has threatened to veto either bill, saying overall spending levels are too high.      Chertoff said the federal government has provided about $2.4 billion to first responders, including fire departments, since 2000.      He said officials need to be prepared to respond to all types of hazards, adding that the department recently issued a draft national response framework to give public officials "a unified command system and incident management system" to deal with 15 different crises scenarios.      "Unfortunately, in the world we live in, it's not just fire we have to be prepared for. It's public health emergencies. It's the possibility of terrorist attack," Chertoff said. "We have to have the ability to adjust, adapt, prepare, and train and exercise for any one of the whole hosts of incidents."

Intellectual Property McCain Team, Fox News Clash Over Debate Clip by Andrew Noyes      The campaign of Republican presidential hopeful John McCain is claiming that the "fair use" principle of copyright law entitles it to use a video clip of the Arizona senator from last week's Fox News-sponsored debate in a new television advertisement.      The News Corp.-owned network ordered McCain's team to nix the 30-second spot because the company's policy forbids candidates from using debate clips in political ads. The snippet bears a Fox News logo in the corner of the screen.    McCain's commerical      The commercial has an excerpt of the GOP debate in which McCain slams Democratic Sen. Hillary Clinton of New York for backing a $1 million set-aside for a museum to commemorate the 1969 Woodstock festival. McCain joked that he was "tied up" as a prisoner of war in North Vietnam while the concert was held.      "The law is very clear," a campaign aide told Technology Daily. "We have the right under the fair-use doctrine to air a small fragment, in this case about 18 seconds of Senator McCain's own comments in a 90-minute public broadcast."      The campaign got a cease-and-desist letter from Fox, but it will continue to air the spot, which began running Wednesday. It also was broadcast before the World Series pre-game Thursday, which was carried by Fox stations, and it is running statewide in New Hampshire, the aide said.      "We're considering filing a lawsuit, but that would give McCain's campaign the oxygen it desperately needs since it's obvious they're running out of money," a Fox spokeswoman said.      "The senator has the greatest respect for IP rights and he expects that his campaign and Fox News comply with the law," the staffer said. "We feel that our legal argument is sound." Campaign lawyers responded to Fox's letter and negotiations are continuing.      Jason Schultz, an attorney with the Electronic Frontier Foundation, believes the senator has the better argument. Copyright claims "can be trumped when you're using a clip to make some kind of commentary or get a message out," he said. "Here, it seems like [McCain] is trying to make a greater comment about Hillary and his campaign."      McCain's case also is helped by the fact that the spot uses his own words. "The harm to Fox is pretty minor compared to the benefit of furthering public debate," Schultz added.      The ad appears on McCain's Web site, which could provide Fox with another line of attack, Schultz said. Under U.S. copyright law, the network could issue a take-down notice, but then it runs the risk of court sanctions and a countersuit from McCain, he said.      Computer and Communications Industry Association President Ed Black said the Fox flap "shows once again how far the credibility of big content has fallen." "This cease-and-desist letter strikes at the heart of political discourse itself and shows just how extreme the agenda of copyright maximalism has become," he said.      He called on Fox News to "show how fair and balanced it can be" by withdrawing its demand and apologizing to the McCain campaign and American voters.

Intellectual Property 'Fair Use' Advocate Proposes Copyright Reforms by Andrew Noyes      Public Knowledge, a leading voice for "fair use" of copyrighted content, unveiled a blueprint for copyright reform on Friday that the group believes will be more responsive to innovations. The announcement naturally riled intellectual property hawks.      Current copyright law is "out of touch with our technological reality to the detriment of creators and the public," the organization's president, Gigi Sohn, said in a speech. "Pre-VCR copyright policies must be transformed to embrace our new user-generated culture."      In the 110th Congress, lawmakers thus far have focused their intellectual property efforts on overhauling the nation's patent system. Copyright reform efforts in the House and Senate were more perceptible in the previous session.      Nevertheless, California Democrat Howard Berman, who chairs the House Judiciary Courts, the Internet and Intellectual Property Subcommittee, has said several times this year that copyright is on his agenda. Now it is officially on Public Knowledge's plate, too.      Sohn, who spoke at a new media summit at Boston University, proposed a half-dozen "modest" changes to the system. She said the existing four-part legal test for fair use should be broadened to include "incidental, transformative and non-commercial personal uses of content," and Congress should allow digital copies of works for indexing searches.      The landmark Betamax ruling of the Supreme Court from more than two decades ago, which protects technology makers from liability as long as their products have "substantial non-infringing uses," should be codified, she said.      Sohn also called for legislative changes to deter copyright holders from filing "frivolous requests that material be taken down from a Web site" and argued that broadcasters should join satellite and Internet radio in paying performance royalties to musicians.      On the topic of "orphan works" -- content whose owners cannot be easily identified -- Sohn said Congress should limit damages after potential users of the content conduct good-faith searches.      Copyright holders also should have to provide clear and simple notice to consumers of technological or contractual limitations on a consumer's ability to make fair use or other lawful use of a product, she said.      "For the past 35 years, the trend has been nearly unmitigated expansion of the scope and duration of copyright, resulting in a clear mismatch between the technology and the law," Sohn said. Groups like hers have "stopped the pendulum from swinging even farther away from digital reality," she added.      But Patrick Ross, executive director of the Copyright Alliance, said "artists should be cautious when an organization that has crusaded to dilute their rights announces a new campaign." His members include Microsoft, NBC Universal, News Corp., Time Warner and more than 20 others.      "What is important is that the principles of copyright -- which have worked for centuries in the physical world to the benefit of both creators and consumers -- are preserved in the digital world," he said. "These protections have enabled the ideas-based economy America enjoys today and should be embraced, not eroded."

Health Heath IT Problems May Be Short-Lived by Aliya Sternstein      Legislation aimed at creating so-called health data banks could overcome many of the current obstacles in transitioning to a digital healthcare system, according to a report from the Information Technology and Innovation Foundation issued Friday.      The report was released during a forum sponsored by ITIF and the Health IT Now Coalition to examine the benefits of electronic health records, or EHRs.      Under the model discussed in the report, multiple data banks compete to manage e-health records for patients, who have full control and ownership of their health information. They can add their own data but cannot alter data submitted by other authorized users, like doctors.      "Health-record data banks are one of several strategies to overcome many of the current barriers in EHR adoption, including cost, interoperability and privacy concerns," the report said. "Congress should act now to help accelerate the digital transformation of the American healthcare system."      With data banks, doctors would have a financial incentive to use health IT because they would get money from fees that patients and insurers pay banks to manage the information, the report said.      To solve concerns about the compatibility of records and systems, the bank could be responsible for digitizing and standardizing the data. Under current law, patients can request paper copies of their records from providers. They then would submit the records to their preferred data banks.      Competition among multiple banks would ensure the highest levels of security and privacy, the report added. Rep. Dennis Moore, D-Kan., has introduced legislation, H.R. 2991, that would establish federally regulated health-record data banks.      Data banks operate similar to the core function of Microsoft's new HealthVault program, said Daniel Castro, the report's author. HealthVault lets consumers combine and make sense of information from doctors, pharmacies, medical instruments and other health organizations. But Microsoft's problem, he said, is that "it's hard to get the data in there."      According to the foundation, any legislation should let patients grant third-party software access to their information.      Dr. Alan Lotvin, the senior vice president for oncology at ICORE Magellan Health Services, said, "Physicians have this reputation of being technology averse and it's not true." Doctors quickly took to CT scans once they saw the performance benefits, he noted.      Dr. Edna DeVries, a medical director for Marshfield Clinic in Wisconsin, said Marshfield's patients immediately began to see the benefits when they were able to get their test results online and view graphs charting the status of their progress.      Former Rep. Nancy Johnson, R-Conn., co-chairwoman of Health IT Now, said, "You can't do preventive health if the patient doesn't want to be involved." She added, "If they see the data, they'll want to get involved."      But first, she said, health IT "must have standards for compatibility. That's why the interstate highway system was built. It's not that we didn't have roads. ... We needed it for times of emergency."

On The Hill Senators Aim To Bolster Fight Against Cyber Crimes by Theresa Poulson      A new Senate measure aims to close the gaps in current federal laws to address cyber crimes, including hacking, the theft of confidential information, and the transmission of computer worms and viruses. The measure was one of several technology-related bills filed this week.      The legislation, S. 2213, would make it illegal to threaten to reveal confidential information illegally obtained from computers and to creation "botnets" -- networks of computers that are used to remotely intrude on other machines.      "Botnets have the ability to grow exponentially, and the potential damage from these networks grows accordingly," said bill sponsor Orrin Hatch, R-Utah.      The bill also would change felony requirements so hackers could be charged for damaging 10 or more computers. Current rules force investigators to prove at least $5,000 worth of harm to file felony charges.      Under the measure, investigators could seize equipment used in computer crimes. The bill also would authorize funds for local and federal authorities to investigate and prosecute such crimes.      "Although these crimes are virtual, their impact is measured in real dollars and occasionally in physical injury or death," said lead co-sponsor Joseph Biden, D-Del. "Our laws must keep pace with the changes in Internet technologies."      Biden, who chairs the Senate Judiciary Crime and Drugs Subcommittee, also introduced broad crime legislation that seeks to combat child exploitation, computer crimes and violations of intellectual property rights.      The bill, S. 2237, would authorize $350 million per year for police departments to acquire technology and equipment to track and fight crime. The measure further targets Internet pharmacies that illegally provide prescription drugs.      Other tech-related bills introduced this week were:      -- H.R. 3914, which aims to prevent the granting of regulatory telecommunications "forbearance" by default; (see separate brief)      -- H.R. 3920, which would reauthorize and expand the Trade Adjustment Assistance program that funds retraining for people who lose jobs as a result of trade deals. A House panel approved the measure this week. A separate new measure, H.R. 3943, also would reauthorize TAA.      -- S. 2222, which would require the International Trade Commission to review the impact of trade agreements;      -- H.R. 3916, which would expand border and maritime security technologies, including unmanned aerial vehicles, tunnel detection and anti-counterfeit tools;      -- S. 2215, which would establish an office to coordinate preparedness for a terrorist attack or natural disaster;      -- H.R. 3950, which would approve a rule that requires employers to respond to letters notifying them that employee Social Security numbers do not match those in a verification database;      -- H.R. 3919, which would provide for a nationwide inventory of existing high-speed Internet service;      -- H.R. 3957, which aims to increase research, development, education and technology transfer activities related to water-use efficiency and conservation technologies, and practices at the Environmental Protection Agency;      -- And H.R. 3979, which aims to better measure student achievement and give states greater flexibility.

Today's Feature: Executive Summary The Senate this week passed by voice vote to extend by seven years the federal moratorium on taxing Internet access. Every Friday, read the Executive Summary by K. Daniel Glover.

E-briefs Education:   Nearly 61,000 U.S. students benefited this year from a new grant program aimed at encouraging Americans to pursue mathematics and science majors. Education Secretary Margaret Spellings announced Friday that data results show that in the first year, some $195.5 million in National Science and Mathematics Access to Retain Talent grants, known as SMART grants, were awarded. "Math, science and critical foreign-language skills are the new currencies in our global economy, and we must continue to work hard to inform students about the money available for them if they take classes in these fields," Spellings said. SMART grants are for third- and fourth-year Pell Grant-eligible college students who have maintained 3.0 grade-point averages and major in math, science or critical foreign languages. Current Senate legislation would increase access to the grants. Spellings' department wants to double the number of students receiving the grants by 2010-11. Lobbying:   Just eight groups are on record as lobbying the CIA during the first six months of the year, and the online auction firm eBay is among them, according to the Senate's public records office. But eBay spokesman Hani Durzy told AP the listing is not accurate. He said eBay did meet with CIA officials in the second half of 2006 to discuss amendments to the Communications Assistance for Law Enforcement Act. The law requires Internet telephone companies to ensure that their equipment can accommodate wiretaps, and eBay owns the Internet phone company Skype. Altogether eBay spent $2 million lobbying the federal government on issues including patent reform and copyright enforcement, according to the Senate records. Others lobbying the CIA included the Alliance for Responsible Atmospheric Policy, Lockheed Martin and Sybase.

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