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A Busy Year for IT in DC

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Lawmakers and U.S. regulatory officials wrestled with a packed IT agenda this year, setting a policy course on a number of important and complex issues.

Voice over IP , online fraud, spam and
international trade are just a few of the hot topics that flashed across their
plates this year. Here is a look at some of
them as the 109th Congress prepares to convene in January.

The Congressional Touch

A year ago, Voice over IP barely registered on Washington’s
tech radar. In 2004, though, it became the star of the show.

As the year began, Congress and the FCC effusively praised Internet
telephone service as the Holy Grail for mass-market consumer broadband
adoption, much as e-mail was for the dial-up generation. Both lawmakers and
regulators vowed to clear the path for IP-based services.

The FCC took initial possession of VoIP regulatory issues, launching a
regulatory review that has already yielded a
ruling, classifying
Internet telephone calls as interstate commerce and not subject to
traditional state telephone regulations and tariffs.

Congress’ enthusiasm for VoIP, though, began to wane when states started to
complain that proposed VoIP legislation held the potential for enormous
revenue losses to cities and counties. The VoIP debate — what it is and what
it isn’t — even spilled over into bills that were not VoIP-specific.

Concerned over the scope of IP services contained in legislation designed to
extent a tax moratorium on Internet connections, the Senate let the ban
expire for more than a year before a compromise could be reached.

Beyond its brief flirtation with VoIP, Congress in 2004 turned its attention
to Internet taxes, content (online pornography and gambling, in particular),
peer-to-peer (P2P) piracy and spyware. In the end, Congress decided on tax
breaks and left the rest to the 109th Congress.

While Congress maintained the status quo on most technology policy issues,
President Bush announced his intention to provide
universal access to broadband connectivity
for all Americans in the next two years. The White House was short on the
specifics of this issue, but addressed its commitment to tax cuts, deregulation
and more free trade.

After passing the CAN-SPAM Act as its 2003 centerpiece technology
legislation, the election-year Congress delivered
tax breaks for both Internet consumers and high-tech multinationals.

But on more contentious issues, Congress managed to buy itself an additional two years.
Lawmakers kept Internet connections tax-free for the next three years to
maintain a six-year-old policy aimed at improving U.S. broadband penetration
rates, which remain among the poorest of leading industrialized nations. For
corporate tech, Congress threw in a handsome one-year reduction on foreign

And siding with Silicon Valley contentions that technology is neutral, lawmakers
rejected, at least for the time being, Hollywood’s efforts to criminalize
P2P file sharing.

FCC: More Platforms for Broadband Deployment

Though the FCC was knee-deep in VoIP, the
powerful agency also managed to move forward on expanding broadband delivery platforms
and maintaining holding actions in various challenges to its rulings —
including a controversial spectrum swap between Nextel and first responder

In the course of a yearlong review of all IP-based services, the FCC
ruled Internet telephone services must comply with
national wiretapping laws. Emergency 911 calling, handicap access and
connection fees with the traditional copper-based networks are still to be
determined for the fledgling industry.

To foster additional broadband competition for the Bells and the cable
companies, the agency cleared
the way for commercial deployment of broadband over power lines (BPL),
classifying BPL as an unlicensed service and drafting rules primarily aimed
at limiting interference with licensed radio services. To spread wireless
broadband deployment across rural regions, the FCC voted to allow unlicensed
wireless devices to operate at higher power in the 3650 MHz band.

No year at the FCC is complete, however, without controversy, and the agency
dealt it up by approving in August Nextel’s spectrum license.
The company was granted 10 MHz of beachfront spectrum currently used by public safety
agencies and private wireless licensees.
Those users will be relocated to a portion of the band that Nextel will turn over.
Verizon objected, calling the deal a “multi-billion dollar windfall
for Nextel at taxpayer expense.”

The sides, however, have since
made up, with
Verizon agreeing to drop its objections if Nextel will relinquish trademark
rights to the phrase “push-to-talk,” “PTT,” and all related “push” names
in relation to walkie-talkie technology.

FTC: Battling Congress Over Spyware

Spam and spyware dominated the Federal Trade Commission’s agenda in 2004. In
addition to drafting the rules and regulations to fully implement the
provisions of the 2003 CAN-SPAM Act, the agency also spent the year telling
a trigger-happy House of Representatives that federal anti-spyware
legislation is not necessary.

The House passed two anti-spyware measures, but House Energy and Commerce
Chairman Joe Barton (R-Tex.) was unable to find the “go getters” in the Senate he said he

In the end, the FTC won another two
years to prove its premise that the problem is best dealt with by
enforcement of existing fraud laws, industry technology solutions and
intensive public education campaigns.

The new federal campaign against commercial spammers has had little time to
take full effect, but early indications are the landmark legislation is
showing promise in controlling content, if not volume. A recent report from
enterprise e-mail management firm Postini says spam continues unabated.
However, it also notes that sexually explicit e-mail has been reduced by 78
percent since January 2004.


The U.S. Trade Representative won two significant trade compliance issues with emerging
technology power China.

In July, Beijing
agreed to end China’s policy of giving rebates to domestic producers of
integrated circuits while levying a 17 percent Value Added Tax (VAT) on
imported semiconductors. U.S.-based chipmakers and manufacturers contended
that the policy resulted in a tariff designed to keep other competitors out
of China’s $19 billion market for such chips.

China will no longer certify any new semiconductor products or manufacturers
for VAT refunds. In addition, China will not offer VAT refunds that favor
semiconductors designed in China. And by April 1, China plans to
stop providing VAT refunds on Chinese-produced semiconductors to current

China also agreed to support a worldwide standards approach to third-generation
wireless by indefinitely
a deadline to impose a proprietary wireless LAN encryption
scheme within its borders.

At the conclusion of intense April trade talks in
Washington, China backed away from a plan to require all foreign
semiconductor manufacturers to use a little-known standard called the Wired
Authentication and Privacy Infrastructure (WAPI), which is incompatible with
the open global wireless security standard (IEEE 802.11 and 802.11b) used by
chipmakers and electronics manufacturers.

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