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Document 8 of 27.

January 22, 2000

SECTION: TECHNOLOGY; Pg. 246; Vol. 32, No. 4

LENGTH: 1413 words

HEADLINE: Lawmakers have a hefty High-Tech Agenda

BYLINE: Molly M. Peterson

BODY:

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.

LOAD-DATE: January 25, 2000

Document 8 of 27.


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