Congress passes slew of high-tech bills

The high-tech industry has been flooding Capitol Hill with money and lobbyists, and the effort is starting to pay off.

Last session the industry won unprecedented protections for digital works and secured a three-year moratorium on Net taxes. But it still took hits in the content regulation arena with the passage of the Child Online Protection Act, which made it a crime for commercial Web sites to give minors adult-oriented material that could be considered "harmful."

During the first half of the 106th Congress, however, the high-tech lobby was more established and proactive, as proven by legislation that has gained ground or won approval. Overall, the scorecard is stacked on the side of business interests, while Net users find they have to follow new rules of conduct on various fronts.

"We had a good year," said Michael Maibach, vice president of government affairs at Intel's Washington office. "Maybe because the things that were asked for were not things politicians would be too embarrassed to support. All the stuff we ask for helps the business environment."

The high-tech industry's victories include passage of legislation that aims to limit lawsuits arising from the Year 2000 computer bug; patent reforms; an extension of a research and development tax credit; and a measure that extended trade relations with China.

"This was a 'do-something Congress' when it came to information technology issues," Rhett Dawson, president of the Information Technology Industry Council, said in a statement.

The most contested piece of legislation that won passage favors corporations and places new restrictions on so-called cybersquatting.

The provision was buried in a huge federal spending bill. It protects businesses from those who register company trademarks as Internet addresses in "bad faith" and then later try to sell them for a profit. The provision would outlaw registering "famous" Net addresses such as celebrities' names. Violators could face between $1,000 and $100,000 in fines per domain name.

The Clinton administration has said that it opposes the cybersquatting legislation. The White House instead would like to see fights over Net names solved through a dispute resolution process put in place by the Internet Corporation for Assigned Names and Numbers (ICANN), which the administration tapped to oversee the domain name system.

But bills such as the cybersquatting measure and patent reform bill--which were pushed by entrenched industries as well as the high-tech sector--have downsides for the everyday Net user. Consumer lobbyists also worry about measures that Congress didn't pass, such as a slew of bills that would establish better safeguards for computer users' privacy.

"Congress isn't being stupid about technology in general or about information-age economic issues," said Stanton McCandlish of the Electronic Frontier Foundation in San Francisco. "But when it comes to civil liberties issues, they are dropping the ball, and they have been doing that for years. I sum up this year's session as anti-consumer, anti-public and pro-business."

The cybersquatting bill serves as a good snapshot of whose interests are being served by Congress when it comes to the Net, consumer advocates say.

Business groups favored the legislation because it helps them protect their real estate on the Net. But civil libertarians objected to the bill on the grounds that it could be used to tread on free speech by allowing powerful companies to cite trademark infringement when they want to silence critics who register Net names such as "aolsucks.com."

"This allows large corporations to steal domain names from smaller companies," McCandlish said. "It also benefits people who don't want their names used for criticisms. The law is clear that people have a right to criticize."

On the other hand, attorney Jonathan Band, a partner at Morrison & Foerster in Washington, D.C., sees the measure as a way to curb what he describes as "blackmailers who seek ransom from companies for domain names."

Another bill that was seen as a double-edged sword for consumers would recognize various forms of digital signatures as a legal way to sign documents. The House and Senate still have to reconcile their versions of the bill.

Consumer groups worry that the House version of the digital signatures bill will override state and federal laws that require companies to send paper notices or records to customers. A change in the laws could be unfair to consumers who change email accounts, for example, but who are still held accountable for receiving an electronic notice.

The version passed by the Senate is more watered down. It gives contracts signed in a digital format the same legal standing as those signed on paper but doesn't address electronic records.

The digital signatures bill and other Net-related measures will be taken up when Congress returns after its winter break. But consumer advocates say the tide will continue to favor corporate interests.

"This is not unlike what happens in other industries; companies are constantly using Congress as another battleground to play out the competitive wars they are engaged in," said Alan Davidson, staff counsel for the Center for Democracy and Technology.

"Congress is very interested in doing things for the high-tech community, but there is still this love-hate relationship with the Net to get rid of certain things: gambling, gun sales, liquor sales and sites that sell drug paraphernalia," Davidson added. "The old message was, 'Don't regulate because the Net is different,' but we're eroding this concession, and it's a dangerous dynamic if this continues."

Companies driving the New Economy have landed many victories so far this session.

One fight that showed the Net industry's growing strength pitted the likes of America Online against the Motion Picture Association of America. Net companies won the removal of anti-Webcasting language from new satellite TV provisions that would have prohibited Net access services from obtaining licenses to carry traditional broadcasts.

Yet another bill gaining ground favors established industries such as the Nevada casino lobby and National Football League. The Internet Gambling Prohibition Act, passed by the Senate, outlaws most forms of Net gambling, hitting cybercasinos with fines up to $20,000 and penalties of four years in prison for violating the act.

The big high-tech industry breakthrough, lobbyists said, was passage of an extension on the Research and Development tax credit. High-tech companies will now get a tax break on new research over a five-year period, providing an incentive for new technology developments. Before, the credit applied only on a yearly basis.

A patent bill that is expected to expedite patent requests and protect inventors also was applauded. Some critics, however, fear that small inventors will suffer from the legislation. Nonetheless, the win was the result of a hard-fought, four-year effort, Band said.

"Getting the bills passed was a major accomplishment," Band said. "How good they all are remains to be seen."

News.com's Patricia Jacobus contributed to this report.