October 16, 1998 11:40 AM PDT

Tech bills in the budget

Congress is set to pass a $500 billion-plus federal spending bill that contains a handful of technology industry-backed provisions as well as controversial Net content regulations.

The House and Senate are planning to vote on the omnibus spending bill as late as Tuesday, some 18 days after fiscal year 1999 began. President Clinton is expected to sign the legislation.

A handful of bills pushed by the high-tech lobby are bundled into the appropriations package, such as the Workforce Improvement and Protection Act to increase the number of special H1-B visa for skilled foreign workers.

Sen. John McCain (R-Arizona) praised the Senate for including so much Net-related legislation.

"I am extremely pleased that Congress and the president have recognized the importance of establishing new principles for this vibrant technology," he said in a statement. "The Internet can now reach its full potential as the communications medium of the future."

Also on board is the Internet Tax Freedom Act. Seen as a boon to e-commerce, the bill would create a national three-year moratorium on "discriminatory" taxes on Net access and services. Taxes passed before October 1, 1998, are exempt.

Privacy protections for young Net surfers are in the package as well. Under Sen. Richard Bryan's (D-Nevada) Children's Online Privacy Protection Act, Web sites must get parental consent before collecting information from children aged 12 or younger.

"This shows Congress is ready to step in and establish strong privacy protections where the market fails to provide them," said Deirdre Mulligan, staff counsel for the Center for Democracy and Technology.

The Government Paperwork Elimination Act, by Sen. Spencer Abraham (R-Michigan), lays the framework for using electronic signatures for federal forms submitted via the Net, and mandates that more federal documents be posted online.

The tax moratorium, H1-B visa increase, child privacy bill, and paper reduction act are being touted as victories for the online industry and consumer groups.

But the spending bill is double-edged sword for civil libertarians, as it also includes the controversial Child Online Protection Act. Rep. Mike Oxley's (R-Ohio) requires commercial Web site operators who offer "harmful" material to check visitors' identifications or face up to $50,000 in fines and six months in prison each time a minor gains access to the content.

Civil liberties groups already plan to file a lawsuit once President Clinton signs the spending authorization into law.

Another provision that troubles free speech groups was tacked on to the Net tax act and exempts sites from the moratorium if they give minors unfettered access to "harmful material."

During a White House press conference yesterday to review the tech legislation passed this year, officials would not comment on the Child Online Protection Act but did tout an increase in research and development tax credits for high-tech companies and the expansion of the H1-B visa program.

"Vice President Gore supports these initiatives because by investing in an educated, skilled workforce and stimulating more investment in [research and development], we will grow the new economy," said Larry Haas, Vice President Gore's press secretary.

In addition to the tech bills tacked on to the spending package, President Clinton is expected to sign the following bills, which passed Congress this week:

  • The Digital Millennium Copyright Act, which cleared Monday, would impose new safeguards for software, music, and written works on the Net, and would outlaw technologies that can crack copyright protection devices. One provision would require Webcasters--such as the budding group of Net radio stations--to pay licensing fees to record companies, which could take a large chunk out of their gross revenues.

  • The Securities Litigation Uniform Standards Act, which passed Tuesday, would limit lawsuits against companies with volatile stock prices by requiring class-action shareholder suits brought against companies for failed earnings to be filed in federal court. Proponents say the statute will protect the slew of public high-tech start-ups from being sued in every state, arguing that such suits have the potential to stifle the growing computer industry.

  • The Child Protection and Sexual Predator Punishment Act applies stiff penalties for using the Net to sexually solicit minors or knowingly send "obscene" material to a person under 16. Violators could get up to five and ten years in prison, respectively, for the offenses.

    The bill also sticks Net access providers with new liabilities for failing to report child pornography once they are made aware of the illegal material. ISPs could be fined up to $50,000 the first time they fail to report the activity and up to $100,000 for each subsequent time they don't contact law enforcement authorities.

    Civil liberties groups say the ISP penalties could force providers to police their customers.

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