The Politics of Technology

As the Republicans and Democrats duke it out to try and win the hearts and minds of voters before the November election, they at least agree on one thing:

The high-tech industry is important -- really important.

Technology has affected this election as never before. Aside from the displays of high-tech wizardry at their recent conventions, both parties have realized that, with technology fueling the U.S. economy having impressive high-tech credentials has become synonymous with having impressive economic credentials.

For this reason, each party has staked its claim on what it perceives as the burning question of the day.

Not surprisingly, the issues that each party has chosen to champion reflect the broader focus of that party. Republican candidate George W. Bush, for example, has come at issues facing the technology industry from the economic corner.

More than anything he has emphasized his support for a permanent ban on Internet tax and corporate tax credits for technology innovation. For his part, Democratic candidate Al Gore has been concerned with more social issues: His main message has centered on consumer-oriented questions such as Internet privacy and education to bridge the "digital divide."

Even less surprising, each party is scathing about the other's understanding of what the main issues are. Ask the Bush campaign about that alleged underrepresentation of privacy in the Texas governor's "Technology and the New Economy" platform, and you're likely to get an answer that cuts instead to the issue of future taxation of the Internet.

"The Democratic platform is silent on Internet tax," says Tucker Eskew, a senior communications advisor for the Bush campaign who specializes in technology issues. "And we view that as our opponent's lack of commitment to coming down against new taxes."

And the Democrats are quick to flog Bush for not sounding off on the hot-button issue of Internet privacy as well as a host of other issues.

"They haven't delved deeply into high tech at all," says Dagoberto Vega, a Gore campaign spokesman, about Bush's campaign. "They have not addressed any of the 'digital divide' issues, such as connecting those in disadvantaged areas to the information highway."

Gore: Pushing privacy

Gore's high-tech platform is built on key themes that include preserving the healthy economy in a way that spurs jobs as well as research and development efforts; building an "e-government" to offer services online; and creating "a more accountable government."

The platform also spells out Gore's ideas on protecting Internet users' privacy, mainly through an Electronic Bill of Rights. And although Gore pushes online privacy as a social issue, the Tennessee Democrat wants to see the private sector step up to the plate there. However, he believes the government should get involved when the issue turns to children, Vega says.

"The vice president has worked extensively with the private sector and supports industry-led efforts to protect privacy," Vega says. "When it comes to children, though, we need laws to protect them."

Hoping to maintain his party's high-tech momentum, Gore also is touting the specifics that have fueled that favorable climate the Democrats have created for the tech economy to thrive. Vega points to Gore's proposals to offer R&D tax credits and double IT research, recommendations recently made by the president's Information Technology Advisory Committee.

Many Democrats also point to the inroads in the technology industry President Clinton was able to make.

Harris Miller, president of the Arlington, Va.-based Information Technology Association of America (ITAA) -- a Democrat who says he is satisfied with both candidates on tech issues -- says the Republicans in 1992 and 1996 were unable to see the importance of capitalizing on the emerging Internet economy.

Clinton, on the other hand, was very much in tune with it.

Bill Coleman, CEO of San Jose, Calif.-based BEA Software Inc., has been involved with the Republicans' strategy and concedes Miller's point.

"Clinton, with the selection of FCC [Federal Communications Commission] Chairman Reed Hunt and others, set a clear set of objectives designed to deregulate and empower the tech industry," Coleman says.

But Coleman is quick to add that the GOP's economic stance will keep that economy thriving.

The Republicans are at pains to emphasize that although they are concentrating on other technology issues, Bush also has a position on those that Gore has targeted. On privacy, for example, Eskew says that Bush is a "strong supporter of protecting peoples' privacy and supports individuals having control over their personal information." He pointed to the Bush Web site (www.georgewbush.com) which has an opt-in feature in its stated privacy policy to support that claim.

Bush: Economic arguments

The Bush campaign argues that the Texas governor's platform is ripe with details designed to build on the current momentum in the technology industry, the main one being his commitment to not tax Internet-based commerce.

But just as the Republicans dispute the fact that Gore has claimed the privacy issue as his own, the Democrats feel that they have a stake in the e-commerce tax-ban question. Indeed, Gore's stated position is that he wants to keep the current moratorium on new Internet taxes for at least two more years. In 1998, Congress temporarily barred state and local governments from lobbing any new or special taxes at Internet-based commerce transactions. Because the issue is highly sensitive politically, Congress is now stalled on how to proceed.

But the moratorium is not enough, Eskew says: Gore should voice his opinion on a permanent effort to keep government from taxing the Internet. Bush has pledged support for making that moratorium permanent, although on his Web site he pledges a five-year extension of the current ban. Bush also favors a ban on Internet access fees, Eskew says.

Other credentials waved by the Bush camp include the GOP candidate's support for significantly boosting the caps on the number of specialized foreign workers allowed to use temporary H1-B visas to allay the employee shortage.

Bush fans also try to drive home the candidate's support for the R&D tax credit, although Vega pointed out that Gore also supports boosting H1-B visa amounts and backs R&D tax credits for small businesses and start-ups.

To win tech leaders' support, Bush also touts his record in Texas where he created a climate unfriendly to "frivolous lawsuits."

"The Gore campaign enjoys overwhelming support of the plaintiff attorneys," Eskew says. "Governor Bush recognizes that that litigation can chill innovation in the technology community."

The tech campaign

But to find out who's really winning the Silicon Valley vote, one might have to look at how Gore and Bush have gone about wooing the hottest sector of the U.S. economy. In fact, each party has solicited the high-tech vote in a way that reflects its position on technology issues: Bush has gunned for CEO-level support whereas Gore pushes more populist stands.

Specifically, Gore has relied on his record of involvement on high-tech issues and his long-standing, grassroots activity with the technology communities' leaders whereas Bush has targeted leading industry figures, ITAA's Miller says.

"Governor Bush is a much newer figure on the political scene, so for many months he has been trying to organize key leaders," Miller says, noting Bush's efforts to reach out to the likes of fellow Texan Michael Dell, CEO of Dell Computer Corp., and Cisco Systems Inc. CEO John Chambers.

BEA's Coleman was one of those wooed by Bush and believes that Bush's tactics have resulted in a platform built on consensus views.

"What happened as Bush built the 'Technology and the New Economy' platform is that we would get an almost daily e-mail updating us on the issue. Anytime there was an issue that needed to be broadened or deepened, we'd get a direct request," Coleman says.

Coleman says he is one of hundreds of high-tech leaders Bush has courted for months (the Bush campaign puts that number at 350). Coleman acknowledged that his inclusion in the Bush efforts was in part extended in return for financial contributions. And to verify Bush's solid showing in tech fund-raising, Coleman pointed to an event, hosted by Cisco's Chambers, where the Bush camp brought home about US$6 million in a single evening.

"The vast majority of technology executives are in the Bush camp. There are certain people active on the other side: [Novell CEO] Eric Schmidt, [Apple CEO] Steve Jobs, and [eBay CEO] Meg Whitman. But I can't think of any other major CEOs," Coleman says.

Other high-tech bigwigs advising Gore include 3Com Chairman Eric Benhamou and Erlich Ev, of Embarcadero Systems, an Alameda, Calif.-based marine terminals solution provider, Vega says.

But Eskew took a swing at the lack of inclusion in the Democrat's high-tech platform.

"The high-tech community did not get involved in the drafting of that platform.

Governor Bush brings together leaders on technology issues. Al Gore goes it alone, because he thinks he knows best," Eskew says.

Again, Vega disputed that charge, saying Gore has worked with the high-tech industry for far longer than the six years Bush has governed Texas.

The others

It's not hard to find observers who claim that both sides' platforms and campaigning amount to much talk and little action.

"The Clinton/Gore administration has proposed no [privacy] regulations. And there's an unending move to deregulation in the private sector while [the Democrats] whore around for big bucks in Silicon Valley. The privacy policy of this administration has been appalling," says James Love, director of the Consumer Project on Technology, an organization founded by Green Party presidential candidate Ralph Nader.

"Meanwhile, telling billionaires they don't have to pay taxes on the Internet is something Republicans are very comfortable with," says Love, who is not affiliated with Nader's campaign.

Of the other candidates running in the November election as an alternative to Bush or Gore, Green Party nominee Nader has the clearest record on high tech.

He has cheered on the Department of Justice's antitrust case against Microsoft, and he is vocal about Internet privacy and utilizing technology to empower citizens, such as putting all of Congress's voting records on the Web.

"There has to be a way to impose standards and government regulations [on privacy]," Love says. "The market ain't going to do it. That's a myth pushed by both Republican and Democrats, and as a result we're getting pushed in the direction of no privacy at all."

Meanwhile, the Reform Party, bogged down in chaos as Pat Buchanan and John Hagelin fight over the party's nomination, has not been vocal about high-tech issues.

High-tech industry flexes its political musclesRegardless of the results of the national elections, the IT industry has shown itself to be a political heavyweight this campaign season, with enough influence in Washington and in state capitols across the country to make sure its views are known. The elevation of the high-tech industry to political powerhouse is a natural outgrowth of its enormous success, experts note.

"The impact on the economy of the information-technology industry is dramatic," says Harris Miller, president of the Arlington, Va.-based Information Technology Association of America. "Clearly, the industry's productivity has helped keep inflation and unemployment down, alongside a high level of productivity."

By 2006, almost half of the U.S. workforce will be employed by producers or users of information-technology products or services, according to the Department of Commerce. The industry accounted for about 8 percent of America's gross national product from 1995 to 1998, and contributed an average of 35 percent of real economic growth, according to the Department of Commerce.

The industry's influence is not just in the nation's capitol and in a few well-known regions such as Silicon Valley, Harris says.

"You have high-tech corridors around the country; in Utah, Austin [Texas], Chicago, Seattle, Boston, Northern Virginia, and in the Raleigh-Durham, N.C.

Research Triangle," Harris says.

As the high-tech industry has grown, its leaders have learned how to spend money to gain access to halls of power, experts say.

High-tech companies and their political action committees have parceled out significant campaign contributions to both Republicans and Democrats in this election cycle, says Sheila Krumholz, research director of the Washington-based Center for Responsive Politics.

"The most interesting aspect of high tech is how quickly they saw the light and got a presence in Washington," Krumholz says.

Thus far in the campaign season, the industry has contributed $20.4 million to all candidates and parties across the country, up from $10 million in the 1997-1998 cycle, according to U.S. Federal Election Commission data summarized by the Center for Responsive Politics. The industry gave just $4.8 million to campaigns in the 1991-1992 election cycle.

This election season, Democratic candidates have received $10.6 million, or 52 .1 percent, and the Republicans garnered $9.5 million, or 46.8 percent.

In the race for president, the high-tech industry seems to favor George W.

Bush, giving his campaign $879,299 and handing out $412,196 to Al Gore, according to the FEC records cited by the Center for Responsive Politics.

"[The high-tech industry] went from zero to 60 [miles per hour] in just a few short election cycles to set up lobbying firms and associations tracking what's going on . ... It mirrors the growth of the industry overall, the economic boom, and the [donors'] disposable income," Krumholz says.

Times are changing in the Net age

The rise of the Internet industry will bring about fundamental changes to the political landscape, making ultimate winners out of the party or candidates best able to reflect that change, many political and IT industry observers predicted.

At a technology policy gathering held last week by the Progress & Freedom Foundation in Aspen, Colo., voices on both sides of the political aisle said they foresee a "paradigm shift" not only in the way that politicians are elected but also in the way that those elected officials will run government in the interactive age.

Both Democrats and Republicans predicted less tolerance for the Byzantine way in which Congress and the executive branch are set up and run.

Additionally, the public will be less tolerant of partisan infighting and will expect more in the way of government services being deployed online, says John Gage, chief researcher and director of the science office at Sun Microsystems, in Palo Alto, Calif.

"There will be a sorting-out process," Gage said during the panel. "And a core group will have to assess the impact of technology and its ability to deliver government service and change the lives of Americans."

Politicians on both sides are realizing that it is important to reflect that change.

Republicans on last week's panel, such as Rep. Tom Davis (R-Va.), both recognize and play up the fact that it can be a liability for Democrats to be associated with the traditional constituencies that have long supported that party.

"The Republican party does not have to worry about the allegiance it owes to base constituencies that the other party does; those are the labor groups, trial attorneys, and the entitlement groups," Davis says.

Democrats countered by challenging Republicans to stop partisan politics and instead work hand-in-hand, especially with the middle-ground "New Democrats" being elected to Congress.

"In the past, it has often been better to make the other guy look bad than actually do something about a problem," says Jane Harmon, a California Democrat and former member of the House of Representative who is again running for office.

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