01-22-2000

TECHNOLOGY: Lawmakers have a hefty High-Tech Agenda

As the Information Revolution fuels the largest sustained economic boom in
U.S. history, members of Congress will push an "e-agenda" to
further promote electronic commerce and bridge the gap between the
technology haves and have-nots. Meanwhile, this year's elections will
highlight the increased political clout of the barons of the
high-technology industry.


Among the divisive topics confronting lawmakers are the rules for digital
contracts, data security, high-speed Internet service, and a proposed ban
on Internet taxes. The goal will be to remove roadblocks to information
access and the growth of e-commerce, without undermining consumer
protections or stifling industry competition.


"This Congress, many Democrats, as well as the Republican leadership,
intend to see to it that the first year of the 21st century is a banner
year for technology and for our economy," Rep. Christopher Cox,
R-Calif., chairman of the House Republican Policy Committee, said
recently. Cox said one of the top GOP priorities would be the enactment of
so-called "e-sign" legislation to establish a national standard
for giving online "digital signatures" the same legal
recognition as signatures on paper.


The House and Senate approved digital signatures legislation last year,
but lawmakers must resolve several differences between the two versions.
The Senate bill (S. 761) would pertain only to electronic contracts, but
the House version (H.R. 1714) would apply to contracts as well as
electronic records, such as monthly billing notices.


Members of both parties support legislative action on electronic
signatures, but the House bill has drawn criticism from the Clinton
Administration and many Democrats, who maintain that it is too broad and
inadequately protects consumers. Nevertheless, House GOP sources said
recently that a bipartisan consensus seems to be emerging in favor of the
House version. Its chief sponsor, House Commerce Committee Chairman Tom
Bliley, R-Va., has predicted that the legislation would bring about an
"explosion in the growth of e-commerce."


The continued growth of electronic commerce will also push the debate over
Internet taxation to the forefront this year, particularly after the
congressionally appointed Advisory Commission on Electronic Commerce
releases its long-awaited recommendations in April.


In 1998, Congress placed a three-year moratorium on state sales taxes for
purchases made over the Internet. Sen. John McCain, R-Ariz., and Rep. John
R. Kasich, R-Ohio, have both introduced legislation to make the ban
permanent.


Virginia Republican Gov. James Gilmore, who chairs the 19-member advisory
commission and whose state is home to several leading high-tech companies,
including America Online, supports a permanent moratorium.


But many other governors from both political parties oppose such a policy,
saying it would place "Main Street businesses" at a disadvantage
and violate states' rights to collect taxes on sales within their borders.
"It's a matter of all businesses being treated the same way from a
tax policy perspective," said Terrell Halaska, spokeswoman for the
National Governors' Association.


The Clinton Administration opposes a permanent ban on Internet taxes and
has expressed support for an alternative plan offered by Utah Republican
Gov. Michael O. Leavitt, the NGA chairman. Leavitt would simplify state
tax systems and allow online businesses to collect taxes
voluntarily.


Meanwhile, Congress will also consider whether the federal government has
a role in protecting competition and consumer choice in light of impending
mega-mergers between Internet giants and media conglomerates.


"The great promise of the Internet has been to allow people a wide
range of information sources and choices," Sen. Patrick Leahy, D-Vt.,
the Senate Judiciary Committee's ranking Democrat, said recently.
"What we should do is make sure that all information does not become
funneled and controlled by just two or three sources."


Some members of Congress are also touting legislation to maximize consumer
access and industry competition in the race to roll out high-speed
Internet pipelines, including broadband cable technology and local
telephone companies' "direct subscriber line" (DSL) services.
"I think it's the No. 1 issue in terms of importance for the future
of electronic commerce and the whole digital divide issue," said Rep.
Bob Goodlatte, R-Va.


Goodlatte, who co-chairs the Congressional Internet Caucus, said in an
interview that the "digital divide" is not only about income
levels and the ability to afford a home computer and Internet service.
"There is also a digital divide between areas that will get
high-speed Internet access and those that won't," Goodlatte said.
"Rural areas and some inner cities will not get high-speed access
under current trends."


Goodlatte and Rep. Rick Boucher, D-Va., have co-authored comprehensive
legislation (H.R. 1686) to make it easier for high-speed access providers
to expand their service to those underserved regions by freeing them from
certain federal regulations.


Rep. W.J. "Billy" Tauzin, R-La., who chairs the House Commerce
subcommittee that oversees telecommunications, and Rep. John D. Dingell,
D-Mich., the Commerce Committee's ranking Democrat, have sponsored a bill
(H.R. 2420) to free local telephone companies from some regulations that
now hamper their ability to offer high-speed data transmission services
and thus to compete with broadband cable companies. "We just want to
make certain that consumers have a sufficient number of competitors to
choose from," said Tauzin spokesman Ken Johnson.


But those bills have not gotten a warm response from Bliley, who,
according to GOP aides, views recent mega-merger proposals as evidence
that the 1996 telecommunications law is successfully promoting competition
and expanded services. He does not see the need for additional
legislation.


Bliley has instead touted various bills to promote the growth of
electronic commerce, such as the digital signatures bill and a bipartisan
proposal (H.R. 1858) to protect the publishers of specialized electronic
databases-such as those that provide stock quotes-from hackers and data
pirates.


The threat of hackers has also prompted President Clinton to declare war
on "cyberterrorism" this year. Clinton has called for a 17
percent increase in federal spending to defend the nation's critical
computer systems, which would bring the total spent in this area to $2
billion in fiscal 2001.


Meanwhile, the Clinton Administration also unveiled a plan this month to
help U.S. manufacturers better compete with foreign companies by relaxing
export restrictions on strong encryption products designed to block
unauthorized access to private computer data.


Many members of Congress have advocated such a policy, and were ready to
push legislation such as Goodlatte's Security and Freedom Through
Encryption (SAFE) Act (H.R. 850). House leaders were prepared to send the
SAFE Act to the House floor early this session, but Goodlatte said they
would hold off in light of the new Administration regulations.


"The regulations are very, very close to what the legislation
provides for," Goodlatte said, adding that "if the
Administration follows through and properly implements the regulations,
there may not be a need for legislation."


At A Glance: Technology Issues


The Issue: Lawmakers will look for ways to promote electronic commerce and
expanded Internet access, while maximizing consumer choice and industry
competition.


Key Players:


Rep. Tom Bliley, R-Va, chairman of the House Commerce Committee


Sen. John McCain, R-Ariz., chairman of the Senate Commerce, Science, and
Transportation Committee


Recent Action: Last year, the House and Senate each passed a version of
"digital signatures" legislation, and lawmakers now must iron
out the differences.


What to Watch: The congressionally appointed Advisory Commission on
Electronic Commerce is set to release its recommendations on Internet
taxes in April.


Molly M. Peterson

National Journal