[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.
____________________