[Congressional Record Volume 140, Number 13 (Thursday, February 10, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 10, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                          TRIBUTE TO MICROSOFT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Washington [Ms. Cantwell] is recognized for 5 minutes.
  Ms. CANTWELL. Mr. Speaker, during the weeks that the House was out of 
session, our Nation received a substantial amount of economic good 
news. The economy is growing. Unemployment is declining. The budget 
deficit picture is improving.
  These trends are encouraging. But macro numbers don't tell the whole 
story. The new dynamism of our economy is best seen in the 
accomplishments of its individual companies and people.
  My colleagues from Washington State want to take a few minutes today 
in this special order to talk about the recent accomplishments of one 
company in our State that is one of the Nation's leading exporters, 
will play an integral role in the creation of the information 
superhighway and creating unique cultural and educational tools for our 
families.
  The House certainly is familiar with Microsoft. It is our Nation's 
leading software company; a jobs machine and small business generator; 
and a leader in helping the U.S. balance of payments.
  Now that's new news about Microsoft that demonstrates how vital it 
and the software industry are in reestablishing our world 
competitiveness and leading the U.S. economy into the next century.
  Here is what has happened just since we went home in November: 
Microsoft unveiled its new Microsoft Home software, an 
innovative package of programs aimed at better educating our children; 
Fortune magazine's December 13 issue named Microsoft the Nation's most 
innovative company, based on a poll of senior corporate executives; the 
Information Technology Association of America awarded 
Microsoft its 1993 Quality Award for outstanding customer 
support; Microsoft is the only U.S. software company to win this 
prestigious award, which is modeled after the Department of Commerce's 
Malcolm Baldrige Quality Awards; a Business Week poll selected 
Microsoft CEO Bill Gates as the corporate executive for whom 
respondents would most like to work; Fortune magazine, after surveying 
more than 10,000 business and financial leaders, in its February 7 
issue named Microsoft as the Nation's third-most admired corporation, 
and as the corporation rated highest for ability to attract, develop 
and keep talented people; and Nathan Myhrvold, Microsoft's senior vice 
president for advanced technology and business development, was 
appointed by Secretary of Commerce Ron Brown to the National 
Information Infrastructure Advisory Council.
  These are just the latest entries on a record in which Microsoft, 
Washington State and our Nation can take great pride. Certainly the 
people of my First District, the home of Microsoft, both take pride and 
reap benefits from this record.
  Mr. Speaker, at this time I would like to place into the Record 
several statements by my Washington State colleagues.
  Ms. DUNN. Mr. Speaker, will the gentlewoman yield?
  Ms. CANTWELL. I yield to the gentlewoman from Washington, my other 
colleague from the State who is a member of the Committee on Science, 
Space and Technology, to further comment on the accomplishments and 
successes of this industry.
  Ms. DUNN. Mr. Speaker, I thank the gentlewoman for yielding, and I 
would like to do a bit of bragging too about our leadership in high 
technology under the name of Microsoft in Washington State.
  Mr. Speaker, the reason that Microsoft and the software 
industry have grown so rapidly and continue to grow is because they are 
truly innovative.
  In some fields, probably most, new developments and new products 
enable us to do a task easier or enjoy something a little more. With 
the latest stereo system, for example, we can hear the symphony a 
little better and perhaps change the recording with less effort.
  But in software, new advances are enabling us to do things we 
previously couldn't do at all. The quantum leaps of software during the 
past two decades define innovation in the finest sense of the term.
  As a member of the Committee on Science, Space and Technology, I see 
many examples of the latest devices in one high-technology area or 
another. But as a former IBM programmer I can tell you that it is the 
software on the inside, not the shiny finish on the outside, that makes 
these products innovative. Without the software, most of them aren't 
anything more than a modern sculpture.
  Until the 1970's, software generally was developed for specific 
computers by the computer manufacturer. As a result, the distinction 
between hardware and software was not actively perceived.
  In the 1970's, however, the computer software industry came to be 
recognized as a separate industry from the hardware section. That is 
because software came to be developed by companies separate from the 
hardware manufacturers. A substantial amount of the software also 
became usable on various models of computers.
  Microsoft led that structural change by making its operating software 
open in two ways: First, it could be used on more than one brand of 
computer, thereby establishing itself as a leading industry presence; 
and second, applications software from developers other than Microsoft 
could be used in harmony with the Microsoft operating software.
  That open approach made it possible for thousands of other 
companies--most of them entrepreneurial startups--to compete 
in the dynamic software market. Microsoft, in fact, has spent millions 
of dollars over the years educating and urging other software companies 
to develop applications programs to run on Microsoft's MS-DOS and 
Windows operating software. In this fiscal year alone, Microsoft will 
spend $14 million in support of independent software vendors. Microsoft 
also brings these independent software vendors into the very early 
stages of its development of new operating systems. Feedback from the 
independents frequently has resulted in changes to products.
  This broadening of the intellectual resources for software 
development has been a major element creating the rapid pace of diverse 
innovation.
  Ms. CANTWELL. Mr. Speaker, I thank the gentlewoman for her comments.
  Mr. Speaker, I yield to the gentleman from Washington's Fourth 
District [Mr. Inslee] another member of the Committee on Science, Space 
and Technology.
  Mr. INSLEE. Mr. Speaker, I thank the gentlewoman for yielding.
  Mr. Speaker, as we are talking about innovation today, it is 
appropriate to talk about Microsoft. And I would like to just comment 
about why I think their case is demonstrative of why we have such 
bright spots in our national economy. There is a lot of talk about 
gloom, but I think there are still bright spots, and Microsoft is an 
example of that. And I would like to comment on some reasons for 
success in their industry and their particular participation.

                              {time}  1740

  I think those reasons are external and internal, and if I could just 
address three external reasons why the industry and Microsoft in 
particular has been successful.
  One is technical, if you will, and that is the expansion of microchip 
capacity, and that capacity has allowed expansion to meet the capacity 
of software. That has been an external reason Microsoft has been able 
to be successful in the industry.
  Second, ease of competition and ease of entry into the market: This 
particular industry has really shown the wisdom of having ease of entry 
and great competition, because no party has been able to stay on the 
pedestal long without reinventing their company.
  I would like to talk about their efforts in that regard in a minute. 
It has been constantly an evolving industry.
  Third, the industry has had market-driven standards. They have not 
had government-set standards. It has largely been driven by the market, 
and that shows the success for the industry.
  Let me comment on the internal, if I may. The internal reasons for a 
company like Microsoft's success, and I heard the CEO who gave some 
comments about the next decade of Microsoft. The thing that really 
struck me is their comment that Microsoft has to change every day. They 
reinvent their corporation every day, and they urge their employees to 
do that. That is something perhaps we need to follow in Government.
  That has been very successful. Microsoft has been rated by a survey 
by Fortune magazine of senior executives as the most innovative 
corporation. Another survey of 10,000 senior executives said it has 
been looked at as the most admired corporation for attracting and 
keeping talented personnel. That is because they have learned to 
reinvent their corporation every day. They have been successful, and it 
is a real bright spot that I hope the Government can come to emulate.
  Ms. CANTWELL. I thank the gentleman from Washington for his comments.
  Mr. Speaker, I want to thank my colleagues for sharing their 
thoughts.
  I am proud that my district plays such a central role in this 
industry as the home of its leading company, Microsoft.
  But I believe it is clear that every one of us and every one of our 
constituents benefits in many ways from the products of this industry. 
Let us do nothing to stifle any of the dynamism and innovation that 
mean so much for all of us.


                             general leave

  Ms. CANTWELL. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
on the subject of my special order.
  The SPEAKER pro tempore (Mr. Hinchey). Is there objection to the 
request of the gentlewoman from Washington?
  There was no objection.
  Mr. FOLEY. Mr. Speaker, jobs are the most important element of 
sustained growth in this economy, and the creation of high-technology 
jobs will help this President and this Congress achieve our economic 
goals. For that reason, I think it is particularly appropriate for me 
to commend Microsoft, one of Washington State's most important 
companies, and the entire software industry, for creating exactly the 
kind of jobs America needs to sustain growth and compete in the global 
economy.
  For a decade, the software industry has been the fastest growing 
industry in the Nation. Microsoft itself has grown from nothing to more 
than 9,000 jobs in the last 20 years, and the products it produces have 
sparked the rapid growth of the entire software industry, with 
entrepreneurs forming hundreds of new companies that, in turn, create 
more jobs. In world trade, these companies command their markets and 
produce an important balance-of-payments surplus that helps other areas 
of the U.S. trade deficit.
  But, beyond macroeconomic benefits, software industry products and 
technology have dramatically increased the ability of American 
industries to provide better products and services, while the industry 
itself has remained extraordinarily dynamic, extremely competitive, and 
able to produce better and more advanced products at lower prices. 
Every major governmental, academic, and industry study has concluded 
that continued advancements in software are critical to the 
technological leadership of this country.
  The benefits of this important industry to the American economy, and 
to the quality of American life, can be measured in its impact on every 
aspect of communication. In education, ever-improving software provides 
students and teachers with innovative tools for improving the ability 
of children to read, write, learn, and think.
  Certainly, the information superhighway envisioned by the President 
and the Vice President, will require every bit of skill and creativity 
that the software industry can muster. The challenges are great, but 
the American software industry is up to the task. In all, it has been a 
growing, productive, job-producing industry of which our country can be 
proud. We must continue to encourage its growth for the benefit of 
every American, and, indeed, for people throughout the world.
  Mrs. UNSOELD. Mr. Speaker, when we talk about software, most people 
think first of word processing and spreadsheets and the other kinds of 
programs typically used in business.
  As a member of the Committee on Education and Labor and its 
Subcommittee on Elementary, Secondary and Vocational Education, I want 
to talk just a bit about the increasing role played by software in 
educating our children.
  Computers have been coming into the classroom with growing frequency 
over the past decade. The early staples were simple word processing, 
math programs, and game-like exercises intended to hold the attention 
of younger pupils. But now educational software is really beginning to 
expand our children's horizons.
  One good example is the new Microsoft set of programs which help them 
develop writing skills and acquire an appreciation for the arts.
  These programs are designed for elementary school and middle school 
children. They seek to stimulate a child's creativity through 
integrated text, graphics, sound, and animation.
  Microsoft conducted more than 3,000 hours of research in the 
classroom to develop these programs, consulting at length with pupils 
and teachers. Developers found, for example, that children prefer to 
use formatting features differently from adults, so the programs were 
changed to conform. Children also said that getting started was the 
hardest part of writing, so the program added 8,000 story starters.
  To help introduce the programs to the classroom, the company is 
giving away 15,000 copies to teachers.
  My point is not to single out a particular product, but to illustrate 
the potential that evolving software gives us for stimulating and 
educating children.
  Our schools have tremendous problems. Tight budgets. Teacher burnout. 
Crime and security. Absence of strong home support for many children.
  We need to encourage any technological advance that can help counter 
these discouragements.
  Mr. KREIDLER. Mr. Speaker, there's an old expression that I think 
applies very well to the future of software: ``We ain't seen nothin' 
yet.''
  Both the administration and Congress have set forth a policy to 
encourage the development of an information highway, or national 
information infrastructure. The Committee on Energy and Commerce, on 
which I serve, is closely involved with these dynamic developments. The 
tremendous restructuring we see going on throughout the communications 
and computer industries is substantially based on the potential of that 
highway. Microsoft, for example, is spending $100 million a year on 
research and development that won't yield products for 5 years.
  The traffic of the information highway will be the digital 1's and 
0's of the computer. Pictures, words, and sounds all will be converted 
to bits and bytes for movement among computers, telephones, television, 
and other elements of the high-technology world.
  What's going to make the highway work is the software that will make 
the lightning-fast decisions on locating, directing and storing the 
information on the highway.
  Consider interactive television, likely to be one of the main 
components of the information highway. Interactive television has the 
potential to offer much more than just improved television. It's a 
technology that could allow people to obtain and generate information 
in ways they never thought possible. Consumers could use it to meet 
numerous needs, including information retrieval, deduction, 
communications, government services, and financial and business 
transactions.
  Instead of just watching a baseball game, for example, in the 
interactive world a viewer would be able to punch a handheld remote 
control and call up on screen the lineups, or the current statistics of 
the batter, or the latest scores. A viewer could also bring the 
season's schedule to the screen, and then order tickets electronically.
  In the interactive world, people would be able to conduct business 
with the Government such as renewing a driver's license, or attend and 
actively participate in educational seminars and classes from their 
home.
  Not surprisingly, competition is fierce among companies to produce 
software and other technologies for the information highway. However, 
most of these technologies are still in their infancy. No one really 
knows yet what will work or what consumers will want. Competition for 
customers will focus software and hardware developers toward products 
that will allow users to access the information and applications they 
want.
  In our quest to encourage the development of a nationwide information 
highway, we must ensure that the system is open and compatible with 
other products, or it is sure to fail. However, a seamless and 
compatible network must not be cultivated at the expense of innovation 
and creativity in the industry. Ironically, picking technologies 
prematurely with the goal of speeding the development of the 
information highway would, in fact, serve only to stifle that very 
development. I urge my colleagues to work carefully toward striking 
that critical balance.
  Mr. McDERMOTT. Mr. Speaker, as a member of the Committee on Ways and 
Means, I closely follow trade policy and developments. The software 
industry provides our Nation with plenty of good news in terms of 
exports and favorable balance of payments. However, there are problems 
in the intellectual property arena that must be solved if our software 
companies are to maximize their trade potential.
  Microsoft is our leading software exporter. In 1993, Microsoft sold 
more than $2 billion worth of software outside the United States. That 
is more than 55 percent of its total revenue. Microsoft markets 
products in 27 different languages, and its products are available in 
virtually every country.
  The Department of Commerce estimates that U.S. companies sell three-
quarters of the world's prepackaged software and earn half their 
revenues from foreign sales. Oddly enough, however, the Federal 
Government still does not specifically track software export data; 
those numbers are lumped together into a larger category.
  Despite this very strong world leadership, U.S. software companies 
face significant problems in the overseas markets. The most blatant 
problem is piracy.
  Software is easy to copy. For only the pocket-change price of a blank 
floppy disk, a pirate, in a minute or so, can copy a program that sells 
for several hundred dollars. And, unfortunately, there is absolutely no 
deterioration in quality when you copy software.
  Piracy is most rampant abroad, where it occurs on a mass level. It 
costs U.S. companies an estimated $10 billion in lost foreign revenues.
  Piracy is the illegal taking of our intellectual property. 
Unfortunately, Microsoft and other U.S. software companies also must 
contend with the legal taking of their intellectual property in 
countries that give such property inadequate protection under law.
  In this regard, I am concerned about recent developments in Japan 
which could lead to so-called reverse engineering of software. I 
strongly urge our trade negotiators to emphasize in all appropriate 
forums the necessity for strong protection of our companies' 
intellectual property so they can continue to lead in world markets.
  Mr. SWIFT. Mr. Speaker, as a member of the Committee on Energy and 
Commerce, and chairman of its subcommittee that has jurisdiction over 
the Federal Trade Commission, I have had longstanding concern with 
ensuring fair competition in the marketplace.
  Three standard questions that consumers can ask to evaluate whether a 
market is competitive are these:
  First, is there a variety of products; Second, are prices getting 
higher or lower?; and Third, is quality getting better or worse?
  By any of these measures, the computer software industry is 
remarkably competitive.
  Many thousands of software companies market applications programs 
ranging from a single, special-use entertainment product to a complete 
line of the core kinds of programs used in the office. I think it is 
important to note that many of these companies are well known names 
such as Lotus, WordPerfect, and Borland, as well as Microsoft. Others 
may market only a single, very specialized program. These programs 
typically can operate on Apple's computers, or on any number IBM PC's 
or PC clones running MS-DOS, IBM's, PC-DOS, Novell's DR-DOS, 
Microsoft's Windows, IBM's OS/2 or Unix. Many also have versions that 
run on workstations from vendors such as Sun Microsystems, Hewlett-
Packard, or DEC.
  The brainpower of a programmer and a modest amount of money for 
production and packaging is about all that is required to enter this 
industry. As a result, market leadership in program areas changes from 
time to time as leaders fail to innovate enough. Remember early leaders 
like Display Write and VisiCalc in word processing and spreadsheets? 
Today it's WordPerfect and Microsoft Word, Lotus 1-2-3 and Excel. 
Tomorrow? Who Knows? That's the nature of the competition in this 
industry.
  Competition and innovation push prices and performance in the favor 
of consumers. The rule of thumb for computer pricing is that 18 months 
from now, you can get today's computer power for half the price, or you 
can pay the same price and get twice the power. Software behaves 
similarly. Over fairly short periods of time, prices drop and quality 
continues to increase in terms of features, speed, ease of use and 
other ways.
  Frankly, I think this country would be better served if other 
industries displayed the same level of intense competition, product 
innovation, continuous quality improvement and creative dynamism.
  One other point. If you read any of the computer trade publications--
even those aimed primarily at the consumer market--you constantly find 
references being made to the amount of time a software product may be 
hot. Indeed this is often measured in weeks. The newest, best, market 
leading breakthrough product in the Fall is often out-dated, old 
fashioned, inadequate and superseded by Spring.
  Into that kind of a market, government needs to be very careful what 
regulation it brings. A lot of antitrust concepts that have served this 
Nation well for many decades just may not apply directly to a number of 
emerging technologies. It is not that we should abandon the principles, 
but we should be very, very cautious about blindly applying traditional 
analysis, process and remedies.
  The United States still leads the world in some major areas of 
commerce. Many of them in the high-tech arena. Care must be taken that, 
in order to protect consumers and foster competition--two still valid 
policies--we don't also hobble the very industries that offer our 
Nation its brightest opportunities of continued prosperity.
  Mr. DICKS. Mr. Speaker, in the State of Washington, we have had two 
principal sustaining industries over the past several decades: aircraft 
manufacturing and the forest products industry. Both are cyclical, and 
both have experienced recent substantial job losses that have affected 
our State's economy. Most of our colleagues are aware of the 
significant reductions in timber harvesting in the Pacific Northwest 
due to the listing of the Northern Spotted Owl. In addition to that 
impact, the world's leader in commercial aircraft sales, the Boeing 
Company, is riding out a major downturn in the airline industry, not 
just in the United States, but worldwide.
  With that as background, I am pleased to join my colleagues from 
Washington to note the significant positive impact that the computer 
software industry has had on our State, even though it is in its 
infancy. Nine years ago Microsoft--now an industry leader--had only 
1,000 employees in the State of Washington.
  Today, the company employs 9,000 workers, 80 percent of whom are in 
Washington State. That represents an enormous positive impact over a 
very short period of time, and it has also spurred the development and 
growth of many other smaller software companies that sprang up to 
create and market products that run on Microsoft's MS-DOS and Windows 
operating systems. All of these firms share what is an emerging base of 
technical talent in this industry.
  These thousands of jobs that have been generated by Microsoft and the 
software industry have been good jobs--high paying jobs for highly 
educated workers. More than one-third of Microsoft's American workers, 
for example, are computer programmers and other technical employees.
  Mr. Speaker, Microsoft represents a tremendous force in the American 
marketplace--one from which we benefit greatly in the Puget Sound area 
of Washington State, and one which is critically important as we 
develop the national information infrastructure.

                              {time}  1810

  The SPEAKER pro tempore (Mr. Chapman). Under a previous order of the 
House, the gentleman from California [Mr. Kim] is recognized for 5 
minutes.
  Mr. KIM. Mr. Speaker, I rise today to express my grave concerns about 
the devastating effect that the Clinton health care reform plan will 
have on the small businesses of this Nation.
  Two weeks ago, the Administrator of the Small Business 
Administration, Mr. Erskine Bowles, stated before the Committee on 
Small Business that:

       Small businessowners, when they examine the facts, will 
     realize the value of the Health Security Act. They will 
     realize that the act is good for small business.

  Well, Mr. Speaker, I recently put that statement to a test, and I am 
here to tell you that nothing could be farther from the truth:
  Several weeks ago, I held an open forum to discuss the effects of the 
Clinton plan on small business. After hearing the facts about the 
Clinton plan, not one--I repeat--not one of the small businessowners in 
attendance ``realized the value of the President's plan.'' Let me read 
you what several of these businessowners said when presented with the 
facts about the President's proposal.
  Mr. Chuck Keagle, a businessman who runs several small restaurants, 
testified that--

       If the Clinton plan were enacted as it stands now, my 
     problems as a small businessowner would go away because we 
     simply would not survive. We would have to close. There is no 
     question about it. Our margins are very thin now and adding 
     the additional cost of the health plan would simply put our 
     company out of business.

  Debbie Matthews, of Everitt Charles Technologies, testified that--

       We have about 300 employees located in seven different 
     locations. It's unbelievable to us that we may have a 
     reporting relationship with seven different entities or 
     health alliances. We would have to add a significant number 
     of staff just to handle the reporting requirements in this 
     new health care initiative.

  Barbara Price, owner of A-plus Mailing Systems, testified that--

       The effect that the Clinton plan will have on my business 
     is quite severe. We are already doing our best just to stay 
     in business going up against the big boys and added taxes, 
     added expense. The Clinton plan is going to mean one of two 
     things: We're going to close our doors entirely and go out of 
     business; or we're going to severely reduce the number of 
     people we have working for us. That's not good news.

  These comments were not unique. In fact, at that forum small 
businessowner after small businessowner told me that if the Clinton 
plan passes, they would have to either lay off employees or close 
entirely. One small businessowner, using a cost estimation worksheet 
sent out by the Small Business Administration, estimated that under the 
Clinton plan his health care costs would increase from a current level 
of $50,000 per year to $252,800 per year, an increase of over 400 
percent.
  When you listen to this kind of testimony--which comes from real 
people running real businesses--it becomes extremely clear that the 
Clinton plan poses a life-or-death threat to this Nation's small 
businesses.
  This threat stems, of course, from the employer mandate provisions of 
the Clinton plan. Requiring employers to pay 80 percent of their 
employees' health care premiums and subjecting these employers to 
payroll liabilities of between 3.5 and 7.9 percent will place a costly 
new financial burden on small businesses, many of whom do not--and 
cannot afford to--provide health care for their employees. This new 
financial burden will be enormous: Even with Federal subsidies, the 
Clinton plan will increase the health care costs of small businesses by 
more than $24 billion in the first year alone.
  Even more disturbingly, at the same time the President's plan targets 
small businesses, it gives big business a huge bailout. Large 
corporations, many of whom currently spend between 15 and 25 percent of 
payroll on health care for their employees, will enjoy an enormous 
financial windfall by having their health care premium liability capped 
at 7.9 percent of payroll. Big business is even more excited about the 
provisions in the President's plan which would force the Federal 
Government to pick up a large part of their costs of providing health 
coverage to early retirees. In short, the Clinton plan would not only 
place new costs on small business, but would shift a large part of 
already existing health care costs from big businesses to the owners 
and employees of small businesses.
  To me, this situation is absolutely unacceptable. What the Clinton 
administration is attempting to do with this plan is to require small 
businesses to shoulder most of the responsibility and cost of bringing 
millions of uninsured individuals into the health care system. In doing 
so, the President's plan would deliver a fatal blow to many of this 
Nation's small businesses. If anyone has any doubt about this fact, 
just go out and listen to real businessowners. They will tell you as 
they have told me that the Clinton plan will destroy small business in 
this country.
  For this reason, I urge my colleagues to oppose the Clinton plan and 
to support reasonable alternatives that do not contain an employer 
mandate. Doing so will be a matter of survival for American small 
businesses.

                          ____________________