Tech groups hope for a do-nothing Congress

From...

by Kate Miller

(IDG) -- Lobbyists in Washington hope that the technology sector, which has been battered in the markets recently, won't take a similar beating from the 107th Congress.

A number of technology trade associations are hoping the dot-com deathwatch and the weakening of many of the Nasdaq's tech stalwarts will help convince lawmakers to hold the line against regulation as the 107th Congress opens this week.

"Our first priority is the Internet Hippocratic oath: 'First, do no harm,'" said Harris Miller, president of the Information Technology Association of America, which represents 460 companies, including Amazon.com, AOL Time Warner and EDS. "Unlike most lobbyists or industries in this town, we don't come to town with a long to-do list, but with a long don't-do list."

Despite recent evidence in the market that much tech glitter isn't gold, lawmakers' attraction to the field is unlikely to change. Given the maturation of the Internet industry, the hands-off policy lawmakers have adopted may face its greatest challenges this year. Tech lobbyists will find it difficult to hold the line against regulation in such areas as online privacy and Internet taxation.

IDG.net INFOCENTER The Standard's Main Page The Standard's Commerce News Sign up for daily news from The Standard The Standard's Company Research Related IDG.net Stories Dot-com alternatives pull the plug What to expect when going global online Hi-tech group gives advice to president and Congress Features How to get discovered on the Web What broadband revolution? Napster won't remain the same Visit an IDG site Choose a site: IDG.net CIO Computerworld Darwin Dummies.com GamePro.com The Industry Standard ITWorld.com InfoWorld.com JavaWorld LinuxWorld Macworld Online Network World Fusion PC World Publish.com SunWorld IDG.net search

Congress has yet to pass legislation supporting Internet privacy, but many in the industry fear that their luck will not last. A series of high-profile controversies involving leading technology companies such as Microsoft, Amazon and a few online toy sellers may have given privacy advocates enough ammunition to convince lawmakers on both sides of the aisle to propose new laws. A flurry of bills has already been introduced so far this year.

While IT trade groups continue to press for industry-led privacy efforts, some groups have resigned themselves to what they see as the inevitable.

"We just view it as something that is going to be inflicted upon us," said Jason Mahler, VP and general counsel to the Computer and Communications Industry Association. "We're not going to be sitting on the sidelines."

Perhaps the most proactive group is AeA, formerly the American Electronics Association. The 3,600-member group has published its suggested guidelines for federal privacy regulation that would require Web sites to post a notice when they gather information about consumers. The group believes this will ultimately benefit the industry by boosting consumer confidence, but it also sees a federal law as a way to pre-empt the enactment of contradictory state laws.

AeA communications director Marc Brailov said, "We could have a situation where, like with digital signatures, we have 50 sets of rules that could just be chaotic for business and consumers to deal with."

Congress will have to address Internet taxation this session. The three-year moratorium on taxing Internet service and commerce will end this fall, and industry groups are pushing for an extension. Twenty-six states have already agreed to simplify and coordinate their sales tax laws to more easily collect sales taxes from out-of-state Internet and catalog retailers.

As the tech sector continues to nosedive, some industry lobbyists think that the vulnerability of online retailers will help persuade Congress to extend the ban on Internet taxes.

"There's more understanding that this is not an industry that is the source of all funding," said James Gattuso, VP for policy at the Competitive Enterprise Institute. "People know there is a limit to what you can do to the tech sector without there being real harm to growth, real harm to consumers."

Unlike the areas above, the telecommunications sector may actually see federal government loosen the reins.

Those favoring further deregulation have a powerful new champion in the newly appointed chairman of the House Energy and Commerce Committee, Rep. W.J. "Billy" Tauzin. Tauzin, who co-sponsored a bill last year that would have allowed the Baby Bells to compete in the consumer long-distance market, has promised to reopen the 1996 Telecommunications Act and restructure the Federal Communications Committee to encourage more competition.

The direction Congress moves on all of these issues could depend on what happens to the economy in the coming months, according to Robert Cohen, a visiting fellow at the Economic Strategy Institute, a think tank in Washington. Cohen argues that if the economy continues downward, the IT industry could move to the forefront of economic stimulation packages, including various tax credits, as well as encourage Congress to shy away from further regulating the industry.

"The reality is that if these guys get their hands tied too much, it's going to slow their recovery," he said.

Group to draft guidelines on cross-border e-commerce taxation
January 12, 2001
States seek sales-tax simplification
December 12, 2000
EU postpones decision on online taxation
November 29, 2000
Analyst: Corporations could improve e-government
November 8, 2000
California governor vetoes Internet tax
September 27, 2000
California may pass state Internet sales tax
September 1, 2000

Dot-com alternatives pull the plug
(The Industry Standard)
What to expect when going global online
(Computerworld)
Hi-tech group gives advice to president and Congress
(IDG.net)
Debate opens on making e-commerce law consistent
(PCWorld.com)
Privacy bills emerging at federal and state levels
(Computerworld)
New Commerce Committee chairman to influence range of IT policies
(InfoWorld.com)
Congress to tackle Net taxes, privacy
(Computerworld)

AeA

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.