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High tech gets Clinton payback

The president provides a high-profile return on the technology industry's eager political investments.

SAN FRANCISCO--Pulling rank on Al Gore, President Clinton did some major economic stumping in California today when he provided a high-profile return on the technology industry's eager political investments.

As expected during his keynote at the BancAmerica Robertson Stephens technology conference here, the president endorsed federal legislation that would bar states and localities from imposing new Net-specific taxes for six years.

Speaking of the Internet, Clinton told the crowd, "The next big step in our economic transformation is the full development of this remarkable device and the electronic commerce it makes possible."

But he made clear that if the government maintains a hands-off approach toward the Net to encourage its economic development, then high-tech companies must give back through education, jobs, and support of the "new economy."

That's not a bad trade-off for the White House, or for the industry. Long the stepchildren on Capitol Hill, PC makers and Netrepreneurs have finally secured a place on the A-lists inside the Beltway.

E. David Ellington, president and CEO of NetNoir, said that having the executive branch in support of e-commerce and taxation issues is half the battle. "We just have one more to go with Congress," he said.

Gore and Clinton double-teamed the industry today, with the vice president cheering on the Digital Age at a the conference in Washington called "Connecting all Americans for the 21st Century." These days it's getting hard to tell the difference between a speech by Bill Clinton and one by Silicon Valley venture capitalist John Doerr.

Of course, high-tech offers a great bipartisan political platform: computers in every classroom, more jobs, and Net connections for all.

The Republicans are hard at work drafting pro-technology polices and dining with industry heavyweights too. Last month House Speaker Newt Gingrich (R-Georgia) rubbed elbows with Microsoft CEO Bill Gates and other high-tech executives.

The union of the technology industry and politicians seems like a natural fit. Combined, the computer, software, and information technologies sectors make up the country's largest export market. Techonology stocks also are leading the bull market on Wall Street.

This week, for example, Microsoft joined General Electric as the only other U.S. company with a market value exceeding $200 billion, surpassing corporate stalwarts such as Coca-Cola (See related story).

And it doesn't hurt that the industry also is kicking in more campaign donations and scheduling political power lunches with high-tech CEOs and powerbrokers, including Apple Computer's Steve Jobs, Hambrecht & Quist cofounder Bill Hambrecht, and Oracle CEO Larry Ellison.

Throwing $10,000-per-plate fundraising dinners for bipartisan leaders, however, doesn't replace the need to educate legislators about the industry's needs. A group called the Technology Network is trying to do both.

Led by Doerr, the lobbying group is, for example, successfully pushing forward legislation that would impose "uniform standards" regarding shareholder lawsuits filed in state courts against high-tech companies.

The high-tech industry may have been slow to wake up to politics, but lawmakers have been receptive to its tardy overtures for obvious economic reasons. The leader of the pack may get it best.

"If you look at the role of high technology in the American economy, it's much bigger than the American people, media, or Congress understand," Rep. Zoe Lofgren (D-California), said today.

"Are high tech industries listened to in Washington? Not nearly as much as they should be," adds Lofgren. "But the administration understands that the economic growth we've experienced is connected to this industry."

But that doesn't mean the industry is home free.

Witness the contentious encryption debate, in which U.S. software makers say their ability to compete with foreign manufacturers of the privacy technology has been stifled by a government policy. Although a new coalition has raised about $15 million to combat the White House's current crypto policy, the chances of its success are far from clear--the same players have been fighting for export relief for years. (See related story)

"Are high-tech industries listened to in Washington? Not nearly as much as they should be," said Lofgren, whose district lies in the heart of Silicon Valley.

The nature of the industry may be helping, though. "They are not a powerhouse on the scale of traditional influence groups, but they are rising fast," a Republican leadership aide said. "If there is any industry on Earth that is well suited to making quick changes, it is the technology industry. It helps that almost every member wants to be associated with emerging technologies."

Some high-tech veterans have a different take on why the industry has solidified its place on the national policy agenda. Companies weren't asleep at the wheel--they just didn't need to be in the legislative driver's seat before, says Roger Cochetti, program directory at IBM, who spoke before Gore at the East Coast conference today.

"For large elements of the high-tech industry, there has for a long time been no reason to devote resources to government matters. For the most part there was no regulation, and for the most part the industry didn't rely on government contracts," he said.

"That has begun to change with the growth and central role of the Internet. From a government point of view, it's not clear what the Net is," he added. "That uncertainty is driving this new political mobilization."

Senior editor Dawn Yoshitake contributed to this report.