Congress Faces Full Plate of Tech Issues

Congress Faces Full Plate of Tech Issues

By Nick Wakeman
Staff Writer

Technology issues vying for attention in the second session of the 105th Congress include legislation to create a moratorium on new taxes on Internet commerce and a measure to raise the cap of visas for foreign high-tech workers.

Also, a bill that strengthens international copyright protection - a boon to software companies - is likely to reach a vote in the House and Senate soon, according to industry and congressional officials.

But issues such as encryption are much too complex and nettlesome for serious consideration in an election-year session where lawmakers are poised for a fight over tobacco legislation, further debate on campaign finance reform and possible action on a forthcoming report from independent counsel Kenneth Starr into activities of President Clinton.

Lawmakers returned this week from their Easter recess for a session that is expected to last until the end of July with weeklong breaks around Memorial Day and July 4. After their August recess, members of Congress are expected to return in September and work through the first week of October.

Rep. Christopher Cox

"Many of the issues surrounding the Internet have now bubbled up to the policy level," said David Leduc, legislative policy and grass-roots coordinator for the Washington-based Software Publishers Association, whose 1,200 members develop and sell software in the government, commercial and retail markets. Its members include software giants Microsoft Corp. of Redmond, Wash., and Oracle Corp. of Redwood Shores, Calif.

"Already there's been one hearing on competition in the software industry; we're likely to see more. Other hot-button issues include privacy protection, encryption and tariff," he said.

Members of the Senate Judiciary Committee, chaired by Sen. Orrin Hatch, R-Utah, grilled Microsoft President Bill Gates on the company's competitive practices in early March. Other hearings on anti-trust issues in the digital age will be scheduled during the summer, said Geanne Lopatto, committee spokeswoman.

The Internet's growing popularity may signal a spate of legislation and regulation for the worldwide network, according to staffers with the Software Publishers Association.

Mark Nebergall, association vice president, noted several wrinkles have been added to the Internet Tax Freedom Act. The proposed legislation would impose a moratorium on new taxes on Internet service providers and only would apply to new state and local taxes, not taxes already in place.

Rep. Christopher Cox, R-Calif., introduced the bill in March 1997. This March, Ohio Republican Rep. Steven Chabot introduced a version that calls for a three-year moratorium with a much narrower grandfather clause than Cox's proposal.

The Senate version - the Net Fair Act, or S 1888 - was introduced by Sens. Judd Gregg, R-N.H., and Joseph Lieberman, D-Conn., March 31.

Both the Senate bill and Chabot's version call for the establishment of the Commission on Electronic Commerce. The commission would propose legislation to the president and Congress after looking at how to define what should be taxed and how to tax electronic commerce.

Sen. Orrin Hatch

"We are quite optimistic that the Internet Tax Freedom Act will make it to a vote," said Jon Englund, vice president of the Arlington, Va.-based Information Technology Association of America, an industry trade group.

Another critical issue facing the technology industry concerns raising the cap on the number of visas for foreign high-tech workers.

Currently, only 65,000 visas are available to foreign workers as a whole. About 40 percent of those go to high-tech workers, said Allen Kay, communications director for Rep. Lamar Smith, R-Texas.

Smith, who chairs the House Immigration Subcommittee, held hearings on the issue this week and will introduce legislation to raise the cap to 90,000, Kay said.

"It likely will move quickly," Kay said. A markup session is expected next week, with a vote by the House Judiciary Committee by early May.

A vote in the full House could come by late May, he said.

On the Senate side, a bill introduced by Sen. Spencer Abraham, R-Mich., would raise the cap to 95,000 visas. Abraham's bill cleared the Senate Judiciary Committee April 2 on a 12-6 vote. No floor vote has been scheduled yet, said Stephen Hessler, Abraham's assistant press secretary.

Another hot issue is the World Intellectual Property Organization (WIPO) Treaties Implementation Act (HR 2281 and S 1121), which the House Judiciary Committee reported on favorably April 1. A floor vote has not been scheduled yet. A hearing before the Senate Judiciary Committee had been scheduled for April 23.

Most, if not all, of the Software Publishers Association member companies will be affected by the WIPO treaties. The association supports both versions of the bill to strengthen international copyright law and assure effective copyright protection on the Internet.

As the association notes, the ease of duplicating copyrighted works in digital form helps to lower barriers to electronic commerce.

Yet it also makes software piracy, which costs companies over $11.2 billion a year worldwide, easier and more damaging.

The WIPO Copyright Treaty would make the United States and other countries provide legal tools to fight "unauthorized circumvention of effective technical measures for protecting copyrighted works."

Meanwhile, the debate continues over whether products that include strong encryption can be exported freely. Presently, only encryption below the 56-bit key length can be sold abroad. The law requires products above that to offer some type of trapdoor so law enforcement personnel can access encrypted data.

Encryption likely will go nowhere this session, said Mark Rosenker, vice president of public affairs for the Electronics Industries Alliance, formerly the Electronics Industries Association. The Arlington, Va.-based group represents U.S. electronics manufacturers.

Industry and Congress and the Clinton administration are miles apart, he said. "This is not going to be an easy one to resolve."

Senior writer John Makulowich contributed to this report.


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