Export Controls in the Networked World - The current export control system is outdated and ineffective…

The U.S. Information Technology Industry is the World`s Leader

-- A prosperous U.S. economy and a strong U.S. military depend on the leadership of America’s IT industry. To continue leading the way in technological advances, U.S. companies need to be competitive in a global market where everything and everyone is connected at all times through technology – the emerging “Networked World.”

The U.S. Export Control System Threatens America’s Technological Leadership

-- U.S. computer exports regulations are the most stringent in the world, and give foreign competitors a headstart to market.

-- Over 60-percent of the market for multiprocessor systems is outside the U.S. (GartnerGroup report)

-- The U.S. industry faces a competitive disadvantage as foreign governments allow greater export flexibility.

The Current Export Control System Interferes With Legitimate U.S. Exports

-- The existing system of export controls is based on a metric known as MTOPS (millions of theoretical operations per second), which measure how many processes a computer can make in one second.

-- MTOPS are an invalid and outdated measure because trends in Networked World technology are allowing computer users to access higher and higher levels of computer power over the Internet or by linking two or more computers together.

-- Also, because the pace of technology is advancing so rapidly, U.S. policies cannot keep up. For instance, the MTOPS level of microprocessors increased nearly 5-fold from 1998 – 99, and today’s levels will more than double when the Intel Pentium is introduced in 2001.

Current Export Controls Do Not Protect U.S. National Security

-- Our system of export controls must be modernized and made more effective. Controls on IT building blocks like commercial chips have also become unrealistic, given the massive production and worldwide distribution of these components. Pretending that the existing policies work is an illusionary strategy that hurts both U.S. national security and economic interests, a conclusion recently supported by the Pentagon.

-- U.S. continued military superiority relies increasingly on our ability to stay on the cutting edge of technology and to integrate those technologies into our military strategies.

-- Rather than fruitlessly trying to contain ubiquitous technologies already available to other nations through technological advances and foreign competitors, we must refocus our resources from trying to restrict access to commercially available computer hardware to a “run faster strategy.”

The System Needs Reform - Both Short and Long Term

-- America’s computer industry needs consistent short-term relief. The Administration and Congress must agree to continually raise the MTOPS levels for exports until long-term reform can be achieved.

-- The export controls system needs long-term reform given the realities of the Networked World. We must craft a system that will keep pace with technology, maintain America’s competitive edge, and ensure U.S. national security.