High-Tech Industry,Long Shy, Is Now Belle of Ball

Michael Pugliese debsian at pacbell.net
Sun Dec 26 11:31:45 PST 1999


From today's NY Times, the favorite mouthpiece of the ruling class, I see Tom Daschle, Senate Democratic Minority Leader poobah, has read(?) Thomas Kuhn, "The Structure of Scientific Revolutions." Nah, probably just picked it up from business/marketing lobbyists. Just like empowerment, synergy and diversity and other corporate cliches some with their now ironic origins on the left.

And remember re: e-commerce, privacy, etc. as Ed Markey of the V-Chip says, " It's not the Contras vs. the Sandanistas." Gee thanks, at least the bills that get passed (or run around by Executive branch covert ops/NSC/CIA agencies) on this issue won't kill Nicaraguans!

Michael Pugliese

December 26, 1999

High-Tech Industry,

Long Shy, Is Now

Belle of Ball

By LIZETTE ALVAREZ

ASHINGTON, Dec. 25 -- At

a time when Congress is bitterly

divided and unable to reach

consensus on issues like gun

control and health care,

Democrats and Republicans are

happily reaching across party

lines to pass legislation backed by

high-tech companies.

The

high-tech

industry, at

the same

moment, is

lavishing

new attention

on

Washington

and changing

its once-aloof

posture

toward the

federal

government.

Republicans

and Democrats are both eager to

win the loyalties of high-tech

companies and executives,

knowing that they represent

untold jobs, wealth and,

ultimately, votes and campaign

contributions.

For its part, the industry has

realized that the federal

government can do its members

as much harm as good. Microsoft,

and its battle with the Justice

Department, along with a spate of

other threatened legal problems,

drilled this point home.

"Microsoft was a poster child for

our industry," said Connie

Correll, director of

communications for the

Information Technology Industry

Council, a trade organization that

represents America Online, Dell

and I.B.M., among others.

Now, the city the industry once

eschewed -- along with

standard-issue,

inside-the-Beltway practices like

lobbying and writing campaign

checks -- is full of visiting

high-technology barons and

marquee lobbyists who are

working long hours to press the

industry's agenda.

When representatives of Silicon

Valley arrive in Washington they

often receive the kind of

red-carpet treatment once

reserved for Hollywood stars. In

September, Meg Whitman, the

founder of the auction site eBay,

made her third trip to Washington

this year. In a single day, she met

with more than 20 senators and

House members, dividing her

attentions carefully between the

political parties. She was feted by

Republicans at lunch and

Democrats at dinner.

"They are stars," said

Representative W. J. (Billy)

Tauzin, the Louisiana Republican

who heads the

telecommunications

subcommittee that oversees many

Internet start-ups. "People want to

know them, touch them," added

his colleague Representative

James P. Moran, Democrat of

Virginia.

Like suitors cooling their heels on

the front porch, Republicans and

Democrats on Capitol Hill have

spent the last year doting on the

high-technology industry and its

kingpins, often working in rare

harmony on issues dear to the

heart of high-tech companies.

"We've been able to get stuff

through Congress at a time that it

is hard to do that," said Marc

Andreessen, the co-founder of

Netscape Communications who

has now started his own

company. It is tough, he said, for

members "to be anti-high tech."

Last year, Congress granted the

industry a three-year moratorium

on e-commerce sales taxes,

increased the number of job visas

for high-tech workers and

tightened restrictions on

class-action lawsuits against

high-tech companies whose stock

prices plummet. This year,

Congress extended a tax credit for

research and development to five

years and limited lawsuits arising

from Year 2000 computer

failures, among other things.

More complicated issues await

Congress next year, including

new bouts on visas and taxation

and a debate over expanding

access to Internet lines.

"A few years ago you had a

handful of bills that affected the

industry," said John Scheibel, the

point person for Yahoo in

Washington. "This year you have

literally hundreds of bills."

And both Republicans and

Democrats are unrelenting in

their devotion to the industry.

Congressional Republicans point

proudly to their "e-contract,"

Democrats promote their

"e-genda." But the two packages

of bills have one thing in common

-- they greatly benefit the

high-technology industry. In fact,

high-tech issues are so popular,

the House and Senate both

formed high-tech working groups

this year, and members virtually

stampeded to sign up.

"The level of interest is as high or

higher than any other set of issues

I'm aware of," said Senator Tom

Daschle, the Democratic leader

from South Dakota.

"It's a new paradigm."

The most important victory for

the industry this year was passage

of a bill that will limit lawsuits

arising from Year 2000 computer

failures. The measure, one of the

few high-technology issues of the

year with partisan overtones,

pitted big business, which

aggressively pushed for the

measure along with the industry,

against trial lawyers. The

matchup put Democrats in an

uncomfortable position, because

trial lawyers are an important

Democratic cash constituency.

Still, such is the power of the

high-tech industry that enough

Democrats banded together to

pass the bill.

Then just before the recess came

another victory. Mr. Moran and

other moderate New Democrats

bucked their Democratic leaders

to help salvage a digital signature

bill, which would give cyber

signatures the legal weight of

ink-and-paper signatures. That

measure must still be reconciled

with the Senate version next year.

Lawmakers also extended a

crucial research and development

tax credit to five years from one

year.

The battle over the digital

signatures bill is a textbook

example of how the new politics

of high-tech has changed the

workings, and the old alliances,

in Congress. Just before Congress

went home for the holidays, 30

lobbyists piled into Mr. Moran's

office to try to resurrect the bill

before the end of the session.

"They knew they needed our

votes," Mr. Moran said. "They

realized we understood the issue,

and that we wanted to be helpful

and that we had the largest

caucus in Congress -- 64

members."

The New Democrats, a collection

of moderate House members who

bill themselves as

high-technology's sweethearts,

then banded with Republicans to

defeat the Democratic leadership

bill, which included consumer

protections the industry deemed

objectionable.

Republicans looked on that

Democratic battle with glee --

along with the fight over Y2K

lawsuits -- convinced many more

would follow, including next

year's possible vote on China's

trade status.

Unlike the titans of the old

economy, like the oil companies

and farmers, the high-tech sector

has no particular home in

Congress, no single committee to

fight its battles, like energy or

agriculture. Instead, it has a

plethora of benefactors, working

across party lines to get things

done on issues they consider

nonpartisan and nonideological.

"You have to work hard to make

technology issues Democrat or

Republican, liberal or

conservative," said

Representative Edward J.

Markey, Democrat of

Massachusetts. "It's not the

contras versus the Sandinistas."

That is an important change. In

1996, when Congress passed a

bill that would make it a crime to

distribute indecent material on the

Internet, there was a partisan

free-for-all in which social

conservatives rallied against

pro-business Republicans and

Democrats. It was one of the first

efforts Congress had made to

grapple with the Internet. The

United States Supreme Court

found the law unconstitutional.

Nowadays, on many high-tech

issues, it is not unusual to find a

liberal Democrat, like Senator

Patrick J. Leahy of Vermont,

working closely with

conservative Republican

colleagues, like Senators John

Ashcroft of Missouri and Orrin

G. Hatch of Utah, on encryption

legislation. Representative

Christopher Cox, a conservative

Republican from California,

bonded with Senator Ron Wyden,

Democrat of Oregon, in battling

efforts to tax sales on the Internet.

Typically, these coalitions hew to

their constituents -- I.B.M. is

Vermont's largest employer and

Novell has its headquarters in

Utah.

In the House, Representative

David Dreier, Republican of

California, Robert W. Goodlatte,

Republican of Virginia, and

Thomas M. Davis III, a Virginia

Republican whose district

includes a growing number of

high-tech companies, among

others, are viewed as industry

experts.

The New Democrats are often

willing to buck their own

leadership to live up to the label

as technology boosters.

In the past two years, their

numbers have grown, to 64 this

year from 41 in 1997.

These New Democrats have

breakfast with high-tech

executives every week and visit

Silicon Valley routinely. "I think

they are trying to create a mini

high-tech party in a way," said

Wade Randlett, a co-founder of

TechNet and now an executive at

Red Gorilla, an Internet

company. "It's a smart political

approach."

The bulging docket of high-tech

issues had led to dramatic growth

in the industry's lobbying on

Capitol Hill. Internet and

software companies have snagged

some of Capitol Hill's best talent

this year -- former Congressional

aides whose expertise blends

technology and politics. While

Microsoft built a large battery of

lobbyists, beginning two years

ago, few other high-tech

companies had Washington

lobbying operations. Suddenly,

companies, including Yahoo and

Gateway, are busily opening

Washington outposts, hiring

lobbyists and starting trade

associations. And in yet another

coming-of-age gesture, executives

are beginning to dip into their

coffers.

"It's so critical that Silicon Valley

be involved in Washington right

now," said Chris Larsen, the

39-year-old founder of E-Loan

who has made six trips here this

year to meet with members. "The

stakes are really high."

High-tech lobbying has become

so profitable that some

high-powered lobbyists are

carving out specialty niches and

crossing party lines to do it.

Edward W. Gillespie, a former

policy and communications

director for Representative Dick

Armey of Texas, the House

majority leader, and Jack Quinn,

Vice President Al Gore's former

chief of staff, have teamed up to

start a firm. The two have worked

together on legislation to ease

encryption export restrictions, a

high priority for the high-tech

industry. Tony Podesta, the

brother of John D. Podesta, White

House chief of staff, has also

taken on a number of high-tech

clients and even renamed his firm

Podesta.com.

Other notable Washington names

have been recruited. Michael D.

McCurry, the former White

House press secretary, and Susan

Molinari, a former Republican

Congresswoman, are working in

tandem for iAdvance, a recently

formed coalition that seeks to

widen access to broadband

Internet lines. Various high-tech

companies on the West and East

coasts have banded together on

various legislative issues.

Silicon Valley, meanwhile, has

become a favorite destination for

lawmakers during the

Congressional recess. Members of

both parties have embarked on

fact-finding missions to stay

abreast of new technology and the

issues they may spawn, and, to

mine for campaign cash.

Two weeks ago, Senator Trent

Lott of Mississippi, the majority

leader, still weary from budget

wranglings on Capitol Hill, led

five colleagues, including his No.

2 man, Senator Don Nickles of

Oklahoma, to the West Coast.

They attended tutorials with

executives from Autoweb.com

and Flextronics International,

among others, and came home

with a bushel of campaign

money.

Not to be outdone, Mr. Daschle

of South Dakota, the minority

leader, touched down in Silicon

Valley the next week with 12

colleagues. The delegation raised

even more money than the

Republicans. Others visited as

well: Mr. Hatch, a Republican

presidential candidate and

Microsoft nemesis, attended a

glitzy fund-raiser; Senator John

Kerry, Democrat of

Massachusetts also visited.

For now, though, industry

campaign contributions have not

kept pace with the rapid growth

of the high-tech sector and are

nowhere near the size of other

corporate giants like AT&T, or

labor unions or ideological

groups like the National Rifle

Association.

As of Dec. 1, the computer

industry, including Internet

companies, gave more than $4.4

million through individual

contributions, political action

committees and unregulated, soft

money. It gave double the

amount for the first six months of

this year than in the

corresponding period in 1998.

Fifty-four percent went to

Republicans, according to the

Center for Responsible Politics, a

nonpartisan research group.

So far, the high-tech industry has

promised itself to no one.

"We're the prettiest girl at the

dance right now," said Ms.

Correll of the Information

Technology Industry Council.

"Everyone wants to curry favor

with the high-tech industry."



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