Friday, 6/9/00

Computer CEOs Encouraged by Meeting At White House on Easing Export Controls

Bureau of National Affairs

The chief executive officers of several leading U.S. computer manufacturers met with Clinton administration officials June 8 to urge the administration to further relax controls on computers and emerged from the meeting saying they were "very encouraged."

The CEOs, who included Louis V. Gerstner Jr., chairman and CEO of IBM Corp., Lawrence A. Weinbach, chairman and CEO of Unisys Corp., Carleton S. Fiorina, president and CEO of Hewlett-Packard Co., and Lars Nyberg, chairman and CEO of NCR Corp., briefed reporters at a forum organized by the Computer Systems Policy Project (CSPP).

"We were at the White House today asking the administration to move from 12,500 MTOPS to 27,000 MTOPS and we asked them to come forward by July 1 so that by Jan. 1, 2001" the new level would be in place, Weinbach said. "We were very encouraged" by the discussions, he added.

Weinbach is head the Computer Coalition for Responsible Exports, a group of advanced technology companies that favor loosening export controls for computers.

The industry officials said they expect the administration to make an announcement on July 1.

However, a White House official declined to discuss specific computer levels affected by export control changes, but said a decision would come soon.

"The administration is committed to continue its policy of not attempting to control widely available business computers and to make a final decision before July 4," National Economic Council staff member Thomas Kalil said.

"The administration has worked closely with the industry to eliminate unnecessary controls on America`s high tech exports while still controlling technology that poses a
risk to our national security interests."

Information technology companies are seeking to raise above a level of 27,000 million theoretical operations per second (MTOPS) the level of computer speeds that would require export licenses.

This level would apply to so-called Tier III countries, which include India, Pakistan, all Middle East countries, the Maghreb, the former Soviet Union, China, Vietnam, and Central Europe.

That level would go into effect in six months under current law, and industry is seeking a subsequent increase to the 32,000 MTOP level, the official said. Currently, computers of 6,500 MTOPS and below do not need export licenses as of May 30, and computers with 12,500 MTOPS and below are not due to require licenses as of this summer.

For Tier II countries, considered less of a potential security threat to the United States, computer and chip makers want levels to increase to 52,000 MTOPS from the current level of 33,000 MTOPS, the industry official said. The new level would go into effect immediately. Industry is seeking an increase to 106,000 MTOPS by January, the official added.

Sen. Fred Thompson (R-Tenn.), chairman of the Senate Governmental Affairs Committee, said May 30 he believes that in July the administration will relax computer export controls at the level sought by industry. Meanwhile, Congress is considering legislation that would shorten the delay between the announcement of relaxed export controls to Tier III countries and its implementation.

Last February, President Clinton raised the licensing threshold for computers shipped to so-called Tier III countries to 12,500 million theoretical operations per second (MTOPS). Tier III countries include Russia, China, and India. Under current U.S. law, the February changes will not take effect until 180 days after the announcement.

The industry has been urging a relaxation of computer export controls because of the pending release of new generation microprocessors. Businesses would have to obtain export licenses to sell computers incorporating the microprocessors overseas. Since foreign companies do not face these restrictions, they would be able to bring their products to the market faster.

Computer manufacturers want Congress to shorten the six month review period, Weinbach said. "Technology is changing about every 60 to 90 days and we have a requirement of six months," he commented. The House recently approved legislation to shorten the review period from 180 days to 60 days as an amendment to the defense appropriations bill for fiscal year 2001 (H.R. 4205). A measure reducing the review period to 30 days has been introduced in the Senate (S. 2539).

"We`d love 30 days. We`re comfortable with 60 days," Weinbach said.

President Clinton last took action to raise the threshold for export licenses Feb. 1. At the time, the administration pledged another review by April, but decided against making a proposal for further restrictions, according to William A. Reinsch, undersecretary of Commerce for export administration. The administration aims to make an announcement some time in July and again in January, Reinsch said May 30.

The CSPP is a public policy advocacy group currently focusing on export controls, trade, Internet taxation, and electronic commerce. The group is comprised of the chairmen and chief executive officers of the nation`s leading information technology companies.

The CSPP also unveiled a new report, Living in the Networked World. The report urges industry, non-governmental organizations, and government to work together to address areas such as privacy protection, network security, and infrastructure availability.