WASHINGTON-While the 107th Congress will not be remembered for major telecom and high-tech legislative achievements, there is a potential silver lining that could become gold for industry when lawmakers return early next year. It comes in the form of a new homeland security department, which will include billions of dollars worth of contracts for government communications and cybersecurity; the ascension of San Francisco congresswoman Nancy Pelosi, a friend of Silicon Valley, to House Democratic leader; and the post-election power shift that puts Congress in the hands of pro-business, anti-regulatory Republicans.
“Nancy Pelosi’s willingness to listen and her knowledge of the Bay Area, including Silicon Valley, presents a great opportunity for all of us,” said John Doerr, a partner at Kleiner Perkins Caufield & Byers and co-founder of TechNet, a politically potent industry group.
Pelosi, under fire by critics who believe her liberal leanings will undercut her ability to lead House Democrats, has championed high-tech issues such as patent protection, employee stock options, securities litigation reform, research and development tax credit extension and Internet tax freedom. However, her loud and persistent voice on human rights could run afoul of industry interest on trade policy.
Pelosi’s rise in the Democratic Party will mean less to the mobile-phone sector than to an emerging unlicensed wireless business that Silicon Valley has embraced in technology labs and promoted in power corridors of official Washington.
To some extent, the same is true of homeland security and the immense business opportunity it offers to high tech. The wireless industry was largely shut out on the homeland security front, as Congress left town without approving $73 million sought by President Bush for wireless priority access service or the $3.5 billion requested by the White House for first-responder needs, including interoperable wireless communications. Both programs offer government contracts to wireless vendors at a time of slowing consumer demand for mobile phones.
As homeland security legislation neared passage, local leaders demanded action on first-responder spending. “Cities have stretched their very limited resources to meet the multiple new challenges of terrorism. The longer we go without federal investments-planning, training, staffing and equipment needs continue to go unmet,” said Karen Anderson, mayor of Minnetonka, Minn., in a Nov. 14 letter to senators on behalf of the National League of Cities.
Meanwhile, tech firms have begun to line up at a homeland security department that does not exist yet. For tech firms, there is only an upside: federal contracts. Congress dealt with the one big potential downside-liability-by indemnifying certain critical infrastructure vendors against lawsuits.
The homeland security department offers a venue for critical infrastructure sectors-energy and water utilities and railroads-to pursue their quests for private wireless spectrum.
Privacy advocates, loud critics of the FBI digital wiretap policy, took aim at the new homeland security measure.
“Powerful intelligence agencies require powerful checks and balances,” said Jerry Berman, director of the Center for Democracy and Technology.
The creation of a sprawling homeland security regime, combined with broader domestic and foreign intelligence surveillance powers, mean mobile-phone carriers will be accommodating law enforcement on wiretaps around the clock.
That Congress wrapped up its business for the year by passing a bill to create a new Department of Homeland Security was only fitting. The issue, in one form or another, dominated lawmakers’ attention to the exclusion of most everything else-including federal funding-in the aftermath of the Sept. 11, 2001, terrorist attacks. The only issue that rivaled homeland security was corporate corruption-a good deal of it having to do with telecom firms, their accountants and boards, and the Wall Street analysts who tracked them.
As such, the 107th Congress did not approve major telecom or high-tech legislation. But that is somewhat misleading. In bits and pieces, lawmakers pushed the ball forward on several key policy fronts-like spectrum reform and broadband access-and even scored now and then.
Congress passed fast-track trade legislation, a change highly beneficial to telecom and high-tech firms that want entry into high-growth, emerging markets to offset lagging demand for products and services in the United States. Lawmakers also pushed through a measure to enable swifter depreciation of telecom and information technology purchases by businesses during the next three years. Next year, the Telecommunications Industry Association, which represents telecom and tech manufacturers, will press to make the change permanent.
When there was doubt about whether the 700 MHz auction would be delayed or whether the Federal Communications Commission would return $16 billion in auction bids entangled in the NextWave Telecom Inc. legal morass, Congress took action and got results.
Before leaving town, House lawmakers also introduced legislation to create a fund that would underwrite the costs of relocating military radio systems to other frequencies to free up globally allocated spectrum for third-generation wireless systems. The bill could prove key to the successful implementation of the Bush 3G spectrum plan.
