'Net Execs Debate Tech Policy

The candidates in this week's presidential debate didn't mention a single technology-related issue, but Internet industry executives say whoever is elected will have to chart governmental policy in several important areas, including Internet taxation, consumer privacy, online copyright protection, antitrust issues and cable access.

That was the consensus of the speakers and attendees at the Wall Street Journal's annual summit on public policy and the Internet held here this week.

Washington insiders speaking at the conference identified few differences between the two candidates when it comes to Internet policy. Vice President Al Gore is a lover of all things high-tech and would be intimately involved with his administration's technology policy, they predicted. Yet Texas Gov. George W. Bush is no neophyte when it comes to the `Net and has appointed activist telecommunications regulators in the state of Texas.

Internet issues also will loom large in the next Congress, with legislation expected in the next two years to levy sales taxes over the 'Net and to protect online personal information.

The reason technology isn't playing a big role in this year's election is that the Republicans and Democrats have yet to stake out positions on many Internet-related issues, insiders say.

"There are new fault lines in the economy, and the parties have not stepped up to the plate," says Rep. Tom Davis (R-Va.). Davis points out that although technology companies are contributing more money to candidates, they are outspent 20-to-1 by labor unions and 5-to-1 by trial lawyers.

One clear distinction between the parties is in free trade, which is a hallmark of the Republican Party. Heavily backed by labor unions, many Democratic legislators have voted against technology industry causes such as normalized trade with China and free trade across North America. Similarly, the antitrust arm of a Republican administration is likely to be less aggressive than that of a Democratic administration, especially given the recent inquiries into Microsoft and Intel.

How the Republicans and the Democrats will split on other Internet-related issues -- such as cable access, online copyright protection and intellectual property -- is unclear.

Regardless of the outcome of the election, Internet executives urge government to tread carefully before setting policies that will slow innovation. But they also recommend that outdated laws be updated to reflect the realities of an Internet-driven economy.

"Companies can't legislate success in the New Economy," says David Peterschmidt, CEO of Inktomi, who urges old-line companies to find a way to benefit from the Internet, not try to stop it with brute force through the courts or legislatures. "Public and private partnerships are mandatory."

"There's so much innovation and change going on right now that the thing government has to be most careful about is not intervening and affecting the rate of change," says Scott Kriens, CEO of Juniper Networks. "I strongly support letting [the economic shake-up caused by the Internet] happen on its own, and letting the regulation follow."

Nonetheless, conference speakers and attendees predicted that:

The next Congress will pass online privacy regulation. The current Congress already passed laws to protect consumer's medical and financial information stored in corporate databases. The big debate next year will be over opt-in policies, which require companies to get permission from consumers before collecting information about them, versus opt-out policies, which require companies to notify consumers about their information-gathering plans and offer a way to get out of the system.

The next Congress will develop a strategy for collecting sales tax over the Internet. A big part of that effort will be harmonizing state sales taxes to provide a more uniform system nationwide, observers said. Congress will be under pressure to pass this kind of legislation from interest groups that benefit from state sales taxes, including teachers, firemen and others.

"The fact that the [candidates] aren't focused on technology policy doesn't bother me much," says Andrew Lombard, CEO of airBand Communications, a wireless startup. "The Internet economy requires speed and time to market, which is counter to the philosophy in Washington."

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