Small Business Seeks Big Help from New Congress

Small Business Seeks Big Help from New Congress

Rep. Billy Tauzin

By Kerry Gildea, Contributing Writer

While the 106th Congress took some steps late in 2000 to help small high-tech firms gain a competitive edge, many advocates for the smaller guys are banking on more promising initiatives emerging from the new Congress and White House.

Small-business leaders are looking for tax reductions, regulations that promote competition among Internet service providers and economic support targeting small high-tech companies in the 107th Congress, which was to begin Jan. 3.

"The big issue right now is the cloud that is moving over the sunny economy ? the economic slow down, and what this means for all sectors and the high-tech sector," said Karen Kerrigan, chair of the Washington-based Small Business Survival Committee.

Kerrigan predicted that early in the new year, there will a push on Capitol Hill and from business to rally support for President-Elect Bush's tax relief and trade proposals to assist the high-tech and other businesses weather any potential shift in the economy.

"Right now, there is a dire need to get more resources to many of these technology firms ... there needs to be a lot of thought given to what Congress can do to make capital more abundant," she said. "We believe the best way to do that on a broad scale is through across the board tax cuts and tax relief packages."

For example, 95 percent of U.S. businesses, the bulk of which are small businesses, pay personal rather than corporate taxes, Kerrigan said. It is important for many of these high-tech companies to get relief on personal taxes to thrive and remain competitive, she said.

Before adjourning Dec. 15, the House and Senate passed a consolidated appropriations package that contains a provision establishing a new Federal and State Technology partnership program to foster economic and development among small high-tech firms.

In the appropriations conference report, lawmakers expressed concern that programs to foster economic development among small high-tech firms vary widely among the states. States that do not aggressively support the development of small high-tech firms are competing at a disadvantage with other states, lawmakers said in the conference report.

"Building stronger national, state and local support for science and technology research in disadvantaged states will expand economic opportunities in the United States, create jobs and increase the competitiveness of the United States in the world market," the conference report stated.

Small high-tech firms also hope the Bush administration will help small Internet service providers remain competitive, said Sue Ashdown, executive director of the American Internet Service Providers Association.

There are more than 7,000 small business ISPs across the country, Ashdown said. These ISPs are concerned whether legislation stalled in the last Congress to allow the larger Bell companies into the long-distance market will get a new push in the 107th Congress in 2001, Ashdown said.

Rep. Billy Tauzin, R-La., sponsor of the Internet Freedom and Broadband Deployment Act of 1999 (H.R. 2420), is expected to revive the legislation in the new Congress. The bill would allow the Regional Bell Operating Companies to offer high-speed Internet data and backbone hub services in competition with cable companies and current backbone providers.

While Tauzin and other congressional supporters claim the bill would allow for broader Internet access in rural areas, some small ISPs are concerned they will be knocked out of the market by the Bell companies.

In addition, the small ISPs hope the Bush administration will be a better advocate for the smaller players than was the Clinton administration, Ashdown said.

"I've been very disappointed in the Clinton administration with the Federal Trade Commission approval of the AOL-Time Warner merger," Ashdown said. "That does absolutely nothing for small businesses. I am looking forward to working with the Bush administration, which seems to be a more receptive to small-business concerns."

One goal for the small high-tech firms, she said, is to convince the White House of the need for true competition of numerous players in the ISP world, rather than just a handful.

"To me and the other 7,000 ISPs, there it is no comfort to have competition defined as three or four big players," Ashdown said.

Small high-tech firms also will push for the federal government to practice restraint in establishing new regulatory laws, such as privacy laws, that would affect e-commerce, Kerrigan said.

"There's got to be a more thoughtful way to look at the regulatory process so it is not so haphazard and voluminous," she said.

Congress should conduct a comprehensive review to determine what regulations exist governing the new economy in areas such as Internet taxation and privacy controls, Kerrigan said.

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