IP: High-tech executives walking a fine line

[David Farber <farber () cis upenn edu>]

High-tech executives walking a fine line
 Industry wants Washington's help but not its handcuffs BY RORY J. O'CONNOR
Mercury News Washington Bureau
WASHINGTON -- Nine top computer industry executives took their wish list to
the capital on Wednesday and received a considerably warmer reception than
some remembered from days past.
 Yet even as the industry enjoys status as a Washington darling, its
leaders are walking a fine line in their lobbying efforts: They want
government to act on national issues that directly affect their businesses
but hope to keep Washington at arm's-length on everything else. Many retain
the industry's trademark concern about meddling by a government that, in
Intel Corp. CEO Andrew Grove's words, operates ``under different natural
laws'' than Silicon Valley.
 In their highly publicized pilgrimage, the executives called on the
government to ease export rules on software encryption technology, press
forward with international agreements on intellectual property protection
and continue efforts to rein in shareholder lawsuits against high-tech
companies.
 The officials -- including Microsoft Corp. Chairman Bill Gates, Grove and
Novell Inc. chief executive Eric Schmidt -- declared the administration's
policy restricting export of most high-powered data-scrambling technology a
failure. At a midday press conference, they urged Congress to swiftly pass
two bills liberalizing the overseas sale of so-called encryption technology
or risk putting U.S. companies at a permanent competitive disadvantage.
 ``The cat is already out of the bag,'' Schmidt said, noting that foreign
companies offer powerful data-scrambling software for sale in countries
where U.S. companies are barred. ``We have a race between the (electronic)
lock makers and the lock pickers, and the race is being dominated by people
outside the United States.''
 The executives spent the morning with congressional leaders and held an
afternoon meeting with Vice President Al Gore and Commerce Secretary
William Daley. They came to Washington in a rare group appearance,
fortified by a study they commissioned showing the importance of the
industry to the nation's economy.
 ``The companies here represent 9 percent of the (research and development)
spending in the United States,'' said Gates, who has been a frequent
visitor to Washington in the past year.
 Though they came to push their agenda, the executives also suggested
strongly that the government keep its distance and rely largely on the
marketplace to handle most else, from developing electronic payment
mechanisms to ensuring consumer protection on the Internet.
 ``Our core principle with respect to the government is, first, do no
harm,'' said Schmidt, borrowing from the Hippocratic oath administered to
physicians.
 In recent months, the industry has been successful in its balancing act.
It has gotten changes it sought in laws covering securities lawsuits, been
accommodated in technical specifications for digital television and ducked
proposals to tax activity on the Internet. The Clinton administration has
pushed for a vast expansion of computer technology in the nation's
classrooms and backed the Federal Communications Commission's recent
decision to create a $2.25 billion annual fund to subsidize Internet access
in schools. And a White House white paper on Internet commerce generally
proposes a ``hands-off'' approach in favor of market-driven development.
 In short, the industry is a Washington favorite and has the ear of
powerful political leaders, a dramatic change from the mid-1980s when,
Grove said, ``we had to explain what we were and fight for shelf space,
recognition space in people's minds.''
 Today, the industry has ``audiences and attention as much as we are able
to take advantage of.''
 But the industry has an abiding fear of government interference if
relations get too cozy. Grove calculates that the computer industry's
``Internet time'' operates about nine times as fast as government time.
Too much entanglement with government, executives fear, could slow the
industry down to a pace at which innovation is stymied.
 Where the executives want the government to play an active role is in
combating software piracy and counterfeiting in certain overseas nations,
including China. The industry claims it loses $13 billion a year to bogus
or stolen programs, most of it overseas, although critics say the figure is
significantly inflated. The executives said they will press the
administration to continue working with Chinese authorities to stamp out
piracy there, and called on Congress to approve treaties protecting
intellectual property on line.
 ``The way I look at the Internet is as the world's largest home
shoplifting network,'' said Carol Bartz, chief executive of Autodesk Inc.
``We need to extend copyright laws to the Web, to the Net.''




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