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Industry's Stalking Horses: Rep. Chris Cox , R-Calif., and Sen. Ron Wyden, D-Ore., have teamed up again, this time with a plan to suppress taxation of electronic commerce by states, cities and localities. The last time Cox and Wyden got together, they had an industry-backed plan to derail retired Sen. James Exon's controversial Internet smut measure.

Cox and Wyden will propose legislation in February that would freeze all new tax plans and ask the White House to study online taxation.

It is a good strategy for the online industry, partly because a congressionally imposed tax freeze would be very hard to lift - even if a reasonable tax scheme was agreed on by the states, cities, the White House and some members of Congress. "You'd have to get a blowtorch" to melt the freeze, said Kevin McCarty, a lobbyist for the Washington-based U.S. Conference of Mayors.

Crypto: The Clinton administration transferred oversight of commercial encryption exports to the Commerce Department from the State Department Dec. 30. Although criticized by industry representatives as inadequate, the move marks a success for the infotech industry, which is calling for easy export of extremely strong encryption technology. The policy change, which pushes companies to develop encryption that can be cracked open by court-approved wiretap order, "confirms industry's worst fears ... [and] will continue to hamstring the U.S. software industry in the global marketplace," according to the Washington-based Business Software Alliance.

New Crypto Standards Launched: The government has formally launched an effort to replace the widely used Data Encryption Standard approved in 1977. The Advanced Encryption Standard will become a Federal Information Processing Standard, allowing it to be bought by the federal government. Once purchased by the government, the standard would likely be widely used in the commercial sector. The National Institute of Standards and Technology in Gaithersburg, Md., is heading the development effort.

Wiretaps: The Telecommunication Industry Association is trying to persuade the FBI that faster telephone switches are not always upgraded phone switches. FBI officials want the industry to add government-funded wiretap capabilities to new and upgraded switches, but industry officials fear that the routine addition of extra capacity to phone switches - without the addition of the wiretap technology - would force them to pay the subsequent cost of adding the wiretap technology.

- Neil Munro

©1997, Washington Technology. All rights reserved.