Senate bill includes PC export limits

The 1998 Defense Department authorization bill, which requires the Commerce Department to license and monitor for compliance the export of certain classses machines, yesterday passed the House by a vote of 286 to 123. The bill was taken up by the Senate after consideration of pending nominations to the Federal Communications Commission. (See related story)

According to a provision originally attached as an amendment by Reps. Floyd Spense (R-South Carolina) and Ron Dellums (D-California), computer makers shipping machines that can perform 2,000 million theoretical operations per second (MTOPS) to some 50 countries, including Russia, China, and India, must apply to the Commerce Department for an export license.

So far, however, the export provisions have largely escaped the notice of most lawmakers. Controversy over the legislation has focused instead on objections by senators from California and Texas to provisions regarding the scheduled post-Cold War closing of defense bases in those states. If passed, only a presidential veto would stop the export controls from going into effect, but President Clinton has indeed threatened a veto because of opposition regarding the base closings issue.

The standard may include machines that will reach the general market in 1998. Current 300-MHz Pentium II computers can perform at 1,000 MTOPS, estimated Nathan Brookwood, semiconductor analyst at Dataquest. Next year, a machine with the 450-MHz version of the Intel processor will in theory exceed 2,000 MTOPS, he said. Chips from other manufacturers, including Digital Equipment, will also top the mark.

Leaking chipmaker Intel disagrees, however, saying a 300-MHz Pentium II runs at 350 MTOPS. According to a spokesman, PCs equipped with current Intel processors and likely next year's chips would not be affected by the provision.

A Commerce Department spokesperson also suggested that desktop-class machines were unlikely to top the 2,000 mark.

Even if single-processor machiness fall below the 2,000-MTOP mark, many manufacturers plan to come out with Intel-based multiprocessor machines that use two, four, or more chips, a compounding effect that will certainly push many computers over the limit. Four-processor Pentium II machines are scheduled for release next year.

Next-generation NT servers from IBM will pass the hurdle and Unix machines from Sun, SGI, and Digital already exceed it, said Paul Freedenberg, a Commerce Department undersecretary in the Reagan administration.

The 2,000-MTOP standard was adopted in October 1995, following to a government-wide study that included Pentagon input on military use of high-performance computers. A study looking into revising the standard, one of several export control parameters, is currently under way at Stanford, according to various sources. It's expected to wind up by the end of the year.

The defense bill changes the U.S. export control regime by rolling back trade liberalization effected by the Clinton administration in 1995. Under the current regime, PC manufacturers and resellers can export without a license to "Tier 3" countries machines capable of more than 2,000 MTOPs but less than 7,000 MTOPs, provided the machines are intended for non-military, non-weapons research use. The exporters are not required to investigate the machines' end uses but cannot ignore red flags that suggest the machines would be misappropriated for military ends.

In the future, vendors would submit export notifications to the Commerce Department identifying the country of destination and ultimate end user. The Department would then circulate the petition to a number of agencies, including the Defense Department. If the federal government fails to act within ten days, the vendor can export the computers without restrictions.

If an objection arises, the Commerce Department can then demand a license for export, which can take up to 90 days to obtain, according to Jason Mahler, legislative assistant for Rep. Zoe Lofgren (D-California). (Lofgren brought concerns over the 2,000-MTOP standard to light earlier this week.) The license can also be denied. Further, the bill requires the Commerce Department to perform compliance verification.

"In many ways the [Spense amendment] is a vote of no confidence in the export control regime," said Jay Kraemer, who practices trade law at Fried, Frank, Harris, Shriver & Jacobson in Washington, D.C., and teaches at the Georgetown University Law School. "It's an unfortunate example of micromanaging the export control process."

The Spense amendment was spurred by the recent discovery that supercomputers shipped to Russia and China were appropriated for non-civilian use.