Technology Industry Strengthens State-Level Lobbying

Technology Industry Strengthens State-Level Lobbying

By Neil Munro
Staff Writer

Information technology companies are beefing up their lobbying clout in the 50 states as state legislatures consider a variety of laws that will shape the future of the high-tech industry.

In Sacramento, Calif., the American Electronics Association has doubled its lobbying strength to three full-time lobbyists, while several high-tech companies may soon hire local lobbyists, said Teresa Casazza, the AEA's director of state-level issues and manager of the AEA's Sacramento office.

Ten of the largest high-tech companies, including California-based Intel Corp., Apple Computer Corp. and Oracle Corp., already have Sacramento-based lobbyists. Despite their marketplace rivalry, these companies often cooperate on common policy issues, such as the taxation of online commerce, said Casazza.

In addition, executives from smaller companies are taking a larger role in meeting with legislators and regulators, said Casazza. "We're seeing much more of that happening. Executives are interested and are willing to spend the time on state public policy issues," she said.

State-level lobbying is being bolstered by the Washington-based U.S. Internet Council, which organized a November meeting in Colorado Springs, Colo., for 58 legislators from 30 states and 60 industry officials. During the session, they discussed high-tech policy issues including encryption, privacy, online taxation and communications capacity.

"There is precious little of a positive agenda to advance the Internet in the states," said Bill Myers, the council's chief executive officer. The council has support from 400 state legislators and will likely receive $1 million in industry funding during 1998, he said.

"To the extent they are successful, [the council] gives us a direct entree into the legislatures," said Harris Miller, executive director of the Arlington, Va.-based Information Technology Association of America. Because of growing concern by its members, including Microsoft Corp., Redmond, Wash., and IBM Corp., Armonk, N.Y., Miller said the ITAA would try to increase its state-level lobbying.

ITAA photo

"The primary reason is the growth of the Inter-net, and the danger that if individual states take individual action, it could lead to a Balkanization of the Internet." -Harris Miller Information Technology Association of America

"The primary reason is the growth of the Internet, and the danger that if individual states take individual action, it could lead to a Balkanization of the Internet," said Miller.

Casazza identified her top three lobbying priorities during 1998 as education reform, promotion of electronic commerce and legal reform.

One of the hottest issues in electronic commerce concerns the taxation of online commerce, she said. Already, the AEA is backing a draft bill that would sharply restrict taxation of online commerce by the states' 58 counties, even as industry executives back a weaker, nationwide bill being drafted in Congress, she said.

The federal lobbying effort is bolstered by the state lobbying campaigns, said Josh Tenuta, the AEA's Washington-based director of technology policy. Every state tax board, legislature and governor that votes against taxing online commerce helps persuade Congress to vote against such taxation, he said.

Cooperation between state and federal lobbying efforts is exemplified in the long-running battle over so-called "strike suits," in which lawyers sue companies for economic damages when their stock value lurches downward.

After the information-technology spending of $40 million during 1995 and 1996 trying to defeat statewide ballot initiatives that would have eased such lawsuits, the industry is now backing a congressional law that would restrict such lawsuits in state courts, said Tenuta.

That federal lobbying effort is matched by defensive tactics in California, where AEA lobbyists helped kill off a draft bill that would have eased such lawsuits in California's courts, said Casazza.

"This is a critical period ... when governments, whether federal, state or international institutions, are looking at how they will deal with the Internet," said Miller.