Power in politics, 12/27/99

It's happy hour in Sacramento, the California capital, and Vice President Al Gore is ensconced in a private, back-office meeting with 25 high-tech movers and shakers. Among them: John Doerr, partner with Kleiner Perkins Caufield & Byers (KPCB), the venture capital powerhouse; Mark Andreesen, Netscape founder; and Steve Westly, vice president of business development for fast-growing eBay.

Over pizza and beer, they're talking politics, Silicon Valley style: education reform, encryption controls and research and development.

"Al Gore has been coming out here nearly every month for the past three years to meet informally with people he calls Gore techs," Westly says. "He sets aside pomp and circumstance and talks about issues that matter to us."

Things they are a changin'

Politics come to high technology

Like it or not, Silicon Valley executives have started to realize there is something to what's going on inside state capitals and in the Beltway.

"The demographic of the typical technology executive is the Libertarian. They tend not to get involved in politics because they're more driven to create - it's their day and night job. But that's changing," says Becca Gould, vice president of public policy for the Business Software Alliance (BSA) and former counsel to the House Commerce Committee. "Tech executives are becoming more political because software and high tech is driving the U.S. and the world economy."

According to a July report by the Department of Commerce, technology growth accounted for one-third of economic growth in the U.S. between 1995 and 1998.

"In less than five years, look what's happened. It's an entirely new economy with new forces driving that economy and impacting change throughout the world. Whenever that happens, Congress starts to get more involved," says Bill Calder, spokesman for Intel, which has had lobbyists in Washington for the past 15 years.

A handful of pioneering groups - the BSA, the IEEE-USA and the Semiconductor Industry Association among them - have been on Capital Hill for more than five years. But the true techno-political renaissance began only two years ago when tech businesses galvanized in California to defeat Proposition 211 (known as the frivolous lawsuit proposition). Proposition 211 had been put on the ballot by shareholders and trial attorneys to make it easier to sue high-tech start-ups with poor stock performance.

"Like a sleeping giant, Silicon Valley awoke and said, 'This is not good for research and development. High tech is the driver of our national economy," says Steve Westly, vice president of business development for eBay and a member of the Democratic National Committee.

Proposition 211 gave birth to the highly political, Silicon Valley-based Technology Network, a membership group representing more than 140 high-tech firms. It offers financial and advisory support for bipartisan politicians.
- Deborah Radcliff

Gore is not the only candidate meeting with high-tech minds. George W. Bush and Bill Bradley are all over the Bay Area and other high-tech pockets around the country. As for John McCain, well, let's just say he's had an ear open to the tech community ever since his January 1997 nomination as chair of the Senate Committee on Commerce, Science and Transportation.

The high-tech industry is growing up politically. And nowhere is the rising political influence of the tech community more evident than in election 2000. Just take a look at the leading candidates' Web pages. Right under education and social security reforms, the presidential candidates have posted a number of technology policy issues on everything from Internet taxation to encryption and the workforce shortage.

But of the candidates who claim counsel among high-tech leaders, Bush, the Republican Texas governor, has been the only one to install a formal technology advisory committee. He did so in June.

Meanwhile, three other leading bipartisan candidates - McCain, a Republican senator from Arizona, and Democrats Gore and former New Jersey Senator Bill Bradley - have no formal technology policy advisory committees. But all have their own ways of gleaning advice from the industry's power elite.Powering Bush's tech campaign Bush's list of top advisors reads like a high-tech who's who: Michael Dell, chairman, Dell Computer; Tom Engibous, president, Texas Instruments; Robert Herbold, executive vice president, Microsoft; John Chambers, president and CEO, Cisco; Ray Lane, president, Oracle; Carol Batz, CEO, Autodesk; Richard Egan, founder, EMC; James Barksdale, managing partner, Barksdale Group; and Steve Papermaster, CEO, Agillon.

Bush caught the technology wave relatively early. In 1996, his administration formed the Texas Science and Technology Counsel. And around the same time, he passed a research and development tax credit in Texas that has helped his state draw high-tech companies to areas around Austin, Dallas and Houston.

"Bush sees the difference between the things the government can help with and things the government shouldn't get involved with at all," says Floyd Kvamme, a KPCB partner, a Bush technology policy advisor and a member of the board for the Technology Network in Silicon Valley.

Internet taxation is a particular hot button for Bush and other candidates this election season because the three-year moratorium on it is set to expire in October 2001. Bush and his e-business-minded tech advisors realize Internet taxation is inevitable, and they want to make sure it's done fairly, Kvamme says. But other candidates favor extending the moratorium while issues of interstate and foreign taxation are ironed out. And McCain favors a permanent ban on Internet taxation altogether.

"Conservatives tend to favor extending the moratorium, perhaps indefinitely. But state and local governments are deeply concerned that they will lose a vital source of revenue as sales migrate to the Internet," explains Christopher Yukins, a partner with Holland and Knight, a Falls Church, Va., firm specializing in tax law. "Businesses and politicians are caught in the middle. Many business people would accept taxes on Internet transactions so long as the system was fair and reasonably 'administerable.'"

Another barrier to e-commerce is encryption export regulations. This is where Bush makes a strong statement in favor of easing export controls.

In a written statement on his Web site, Bush says the current export control system is broken. His solution: "Set a common-sense export policy that places priority on safeguarding our national security while allowing American companies to sell products in the international marketplace."

Kvamme doesn't say how Bush will reconcile the two opposing forces: business interests vs. law enforcement's antithesis of hard-to-crack encryption. But he does say that lifting encryption export rules would actually help law enforcement because weak encryption makes it easier for bad guys to intercept and decrypt private messages.

"I don't really see a president being able to reconcile this," says Harris Swartz, director of information security at Road Runner, an ISP in Herndon, Va., and board member of the recently formed Digital Privacy and Security task force. DPS, a political steering committee under the Center for Democracy and Technology in Washington, D.C., will make recommendations to the new administration.

Referring to the Clinton administration's September announcement that it would release details on plans for relaxing export controls after Congress' winter break, Swartz says: "The whole issue and recent legislation raising export restrictions is great for those who sell encryption. It's also great for protecting sensitive information over the Internet. But when you look at the criminal side, you get into trouble." Gore's private power meetsWhile Swartz is cautionary, the Business Software Alliance (BSA) in Washington, D.C., hails Gore for leading this legislative effort. "I put this all under the banner of promoting e-commerce. Encryption controls are an inhibitor to the Internet developing further and puts those using the Internet at risk," says Becca Gould, vice president of public policy for the BSA.

Through his informal dialogs, the vice president has had an earful from the tech community. And one of the other things his tech advisors are telling him to support is permanent R&D funding for technology development. "In Silicon Valley, funding basic research at the universities is what led to the semiconductor. It's what gave us the technology for the Internet," eBay's Westly says.

And so, on his Web page, Gore takes a position in favor of R&D investments and tax credits to foster high-tech growth. His support for permanent tax incentives makes one influential tech group, the IEEE-USA, particularly happy. Without tax incentives (which all candidates actually favor), technology companies would not be able to withstand the losses often involved with research, says Paul Kostak, IEEE-USA's president.

"Until now, the R&D tax credits come up every year. Members of Congress have told me point blank that it's an image thing for them. If they pass a tax credit every year, it makes them look good," Kostak explains.McCain feels industry's painWhile the IEEE-USA will not directly advise a presidential candidate because it looks like an endorsement, it is trying to assert some authority on an issue near and dear to it: the H-1B visa foreign worker program. Obtaining an H-1B visa is a cumbersome, red-tape-wrapped process in which many a temporary worker gets lost, Kostak says in explaining why the IEEE-USA sent an open letter to President Clinton requesting that the program be fixed.

As chair of the Commerce Committee, McCain helped raise the number of H-1B visas from 65,000 to 115,000 as a temporary fix to the labor shortage. But while McCain and the other candidates support raising the bar on H-1B visas, the 225,000-member IEEE-USA would rather see foreign technology workers enter the U.S. under America's permanent employment visa program because half of those permanent employment visas - around 60,000 - go unused each year.

John Raidt, McCain's policy director, says the senator would address this problem by offering an unlimited number of H-1B visas until the year 2006, and use the money raised in visa fees to improve technology education domestically. McCain touches on one of the biggest work force issues among the tech community, which for the most part favors training and education over importation. But changing the educational system would be a monumental task.

According to the Department of Education's National Center for Educational Statistics in Washington, D.C., some 24,768 technology-related bachelor's degrees were awarded in the 1996-1997 school year. This number is up slightly from previous years, but actually lower than the 1990-1991 school year, in which 25,083 such degrees were awarded. In the meantime, the Bureau of Labor Statistics estimates that more than one million technical jobs will need filling by 2005.

Because women made up only about one-third of those graduates (6,731 in 1996-1997), Washington-based Women in Technology International would like the candidates also to address training and education of women and minorities, says Carolyn Leighton, WITI's president. But this is lacking in all presidential candidates' campaign statements. Like the IEEE and the BSA, WITI does not directly advise candidates, although it does provide candidates with its wish list.Bradley does StanfordWhile Bill Bradley campaigns for education improvements, he doesn't focus on the technology training issue. Rather, his entire technology platform, such that it is, centers on the Internet.

"I spent a lot of time educating Bill Bradley on his Internet strategy - how he can use it in his campaign by bringing people to his Web site," says Ted Schlein, advisor and friend to Bradley, and a KPCB partner. "Last time he came to San Jose, he must have said 'www.billbradley.com' about 15 times. I smiled."

Although Bradley states no technology policy platforms beyond Internet deregulation, consumer rights and limiting media ownership, Schlein maintains that Bradley has gained strong support in the tech community. He points out that Bradley lived among the Valley's power elite while guest lecturing at Stanford University in Palo Alto in 1997.

And surprise, surprise, tech leaders aren't necessarily interested in technology platforms. Many agree that technology policy issues are only a small part of what the high-tech community will vote on.

"It's often written in the press that debate on H-1B visas will get the support of Silicon Valley. That can't be farther from the truth," eBay's Westly says. "The issues Silicon Valley look at are a lot broader - pro-choice, pro-education, pro-environment and responsible financial aid, to name a few."

As such, Westly continues, technically savvy voters will ultimately judge candidates on their other positions and affiliations. He adds: "If candidates are close to the National Rifle Association, big tobacco or the extreme religious right, those are the political philosophies that would make a candidate an anathema in the Valley."

But because of their contributions to the network revolution of the '90s, those in the tech community must flex their political muscle responsibly in election 2000. Westly adds: "The people who have developed world-class technology have a responsibility to develop world-class standards to regulate this."Radcliff is a freelance writer in northern California.

Related links

Arizona democrats plan first online election
IDG News Service, 12/17/99

Commission tackles e-commerce tax issue
Network World, 12/15/99

H-1B visa program
How it can help you recruit long-term workers. Network World, 12/13/99

Bush takes to the Web
The Republican candidate for president uses videoconferencing to talk with NH fourth graders. Network World, 12/09/99

Gore's Internet Problem
Is his site too dull to visit? The Industry Standard, 11/05/99

More on Al Gore's high-tech agenda
From the Gore campaign.

More on George W. Bush's high-tech agenda
From the Bush campaign.

Bill Bradley's campaign Web site

Al Gore's campaign Web site

George W. Bush's campaign Web site

John McCain's campaign Web site

Steve Forbe's campaign Web site

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