New Congress has tech marketing agenda

March 26, 2001

BY MICHAEL KRAUSS

Since the Justice Department vs. Microsoft Corp. antitrust case began, stories about high-tech companies taking an interest in Washington have run regularly. Now, Washington is taking an interest in high-tech.

Under the bipartisan leadership of Republican Rep. Jerry Weller of Illinois and Democratic Rep. Jim Moran of Virginia, the 107th Congress is looking at technology policy and some critical issues.

Recently, these Congressional leaders met witha group of industry executives in a session pulled together by Techissues.net and the organizers of the COMDEX trade shows.

Among the legislators’ concerns are:

• Broadband wireless penetration: Is this technology reaching enough Americans? Is the Telecommunications Act of 1996 effective in spreading innovative technology? Should the Federal Communications Commission be reorganized?
  
• Taxing Internet commerce: It’s not a question of if commerce should be taxed on the Internet, but when and how.
  
• Privacy and intellectual property: Congressional leaders see these issues as intertwined, and while they want to protect individuals’ rights to privacy, they also want to make sure content creators are rewarded for their efforts.
  
• Security and national defense: Congressional leaders are concerned about cyberterrorism.
  
• Digital divide and education: Congress sees that technology improves educational development and wants to share it fairly.
  
• Economic development: Lawmakers worry that unrealistic exuberance has turned to excessive pessimism.
  Understanding the technology: Congress respects the power of new technology, and members want to learn more about it.
  

What does all this mean for marketers? Plenty. Take broadband penetration: Republican Rep. Billy Tauzin of Louisiana, Chairman of the House Energy and Commerce Committee, laments that broadband service is only available to about 5% of the population.

"If we brought penetration up to 25%, just think what the impact would be on the stock market," he says. And he’s right.

Meanwhile, don’t expect the Internet to remain a tax-free haven. But, says Ellen Fishbein,director of taxation at AOL who spoke on one of the day’s panels, there are some issues to be ironed out first.

"We’ll need uniform product definitions across state lines; you can’t collect tax on the sale of a package of peanuts if it’s classified as a commodity in one state, a snack food in another state and an ingredient in another state. You need a central point of registration—a clearinghouse, so to speak. You need one tax rate across each state ... and you need a third party that would oversee the entire process."

The privacy and intellectual property planks seem to be coming together quickly. If the courts don’t put Napster out of business, my guess is the 107th Congress will. Rep. Tauzin and his colleagues have the power to stimulate marketplace reforms and assure what he describes as "fair use and protection of creativity."

All the members of Congress who met with us seemed concernedabout technology’s economic benefits. Rep. Weller was quick to point out that America has more than 100 million people online, more than 5 million Americans work in high-tech industries, and that technology is now the country’s No. 1 export. At a time when recession seems to be looming, he reminded us that there’s room for 1.6 million new high-tech service jobs in the economy, and yet 800,000 of them will go unfilled.

On the digital divide front, Democrat Rep. Silvestre Reyas of Texas, Chairman of the Congressional Hispanic Caucus, wants access and regulation to "assure that our new technology is inclusive and available to all people across the country."

I thought the members of the 107th Congress were off to a good start with a range of reasonable ideas and a spirit of open-mindedness. Toward the end of the week, I happened to hear the chairman and CEO of Qwest Communications, Joe Nacchio, speak at a technology conference at Wharton. Nacchio, one of the telecom industry’s leaders in deploying fiber optic-based technology, said the problem with government regulation is that "by the time the laws are passed, the issues have passed them by."

I hope Rep. Weller and his colleagues have on their Nikes.

Michael Krauss is a partner with DiamondCluster International in Chicago.
He can be reached at news@ama.org.