[Congressional Record Volume 145, Number 100 (Thursday, July 15, 1999)]
[Senate]
[Pages S8693-S8695]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                          THE HIGH-TECH AGENDA

 Mr. ABRAHAM. Mr. President, I rise to address the importance 
of the high-tech industry for working families in America, and in my 
state in particular, and to set out what I believe should be the high-
tech agenda for this body in the coming months.
  Employment in our high-technology sector is vast and growing. 
According to the American Electronics Association, about 4,825,000 
Americans were employed in the high-tech sector during 1998. That 
reflects a net increase of 852,000 jobs since 1990. And these jobs pay 
very well. The average high-tech worker in 1997 made over $53,000 per 
year--a 19% increase over the levels of 1990.
  My state of Michigan is playing an important part in the expansion of 
high-tech industry in America. Ann Arbor has among the largest 
concentrations of high-technology firms and employees in the nation. 
The University of Michigan is a leader in this field, and we have 
integrated cutting edge technology throughout our manufacturing and 
services sectors.
  As of 1997, 96,000 Michiganians were employed in high-tech jobs. The 
total payroll for these Michigan workers reaches $4.5 billion annually, 
and the average employee makes an impressive $46,761 per year.
  High-tech is of critical importance to my state. In addition to those 
who are directly employed in this sector, thousands of others depend on 
the health of our high-tech industry for their livelihood. Just as an 
example, 21 percent of Michigan's total exports consist of high-tech 
goods. Clearly, whether in international trade, automobile 
manufacturing, mining, financial services, or communications, 
Michigan's workers depend on a healthy high-tech industry in our state.
  And the same goes for America, Mr. President. The internet is 
transforming the way we do business. Electronic or ``E'' commerce 
between businesses has grown to an estimated $64.8 billion for 1999. 10 
million customers shopped for some product using the internet in 1998 
alone. International Data Corporation estimates that $31 billion in 
products will be sold over the Internet in 1999. And 5.3 million 
households will have access to financial transactions like banking and 
stock trading by the end of 1999.
  All this means that our economy, and its ability to provide high 
paying jobs for American workers, is increasingly wrapped up in high-
tech. Indeed, our nation's competitive edge in the global marketplace 
rests squarely on our expertise in the high-tech sector. We must 
maintain a healthy high-tech sector if we are to maintain a healthy, 
growing economy.
  This is not special pleading for one industry, Mr. President. It is a 
simple recognition of the fact that computer technology is an integral 
part of numerous industries important to the workers of this country. 
That being the case, it is in my view critical that we secure the 
health and vitality of the high-tech sector through policies that 
encourage investment and competition. In my view it also is critical 
that we empower more Americans to take part in the economic 
improvements made possible by high-tech through proper training and 
education.
  Entrepreneurs and workers have made our high-tech sector a success 
already. That means that Washington's first duty is to do no harm. The 
federal government must maintain a hands-off policy, refusing to lay 
extra taxes and regulations on the people creating jobs and wealth 
through technology.
  But in one area in particular decisive action is required. We have 
all heard, Mr. President, about the impending year 2000 or ``Y2K'' 
computer problem. Because most computers have been programmed to 
recognize only the last two digits of a given year, for example 
assuming the number 69 to refer to 1969, the year 2000 will bring with 
it many potential problems. Computers that have not been re-programmed 
to register the new century may assume, come next January 1, that we 
have entered the year 1900. The results may be minor, or they may 
include computer malfunctions affecting manufacturing, transportation, 
water supplies and even medical care.
  Clearly such a result would be in no one's interest. Whether large or 
small, and whether producers or users of computer systems, all 
businesses have a stake in making the computer transition to the 21st 
century as smooth as possible. But, as in so many other areas of our 
lives, progress in dealing with the Y2K problem is being slowed because 
companies are afraid that acting at this time will simply expose them 
to big-budget lawsuits. After all, why get involved in a situation that 
might expose you to expensive litigation?
  It was to help prevent these problems that I joined a number of my 
colleagues to sponsor legislation providing incentives for solving 
technical issues before failures occur, and by encouraging effective 
resolution of Y2K problems when they do occur.
  This legislation, which the administration has finally signed into 
law, contains several provisions that would encourage parties to avoid 
litigation in dealing with the Y2K problem. In addition, Mr. President, 
this legislation contains provisions to prevent unwarranted, profit-
seeking lawsuits from exacerbating any Y2K problem, provisions making 
sure that only real damages are compensated and only truly responsible 
parties are made defendants in any Y2K lawsuit.
  Quick action is needed, in my view, to prevent the Y2K problem from 
becoming a disaster. It is a matter of simple common sense that we 
establish rational legal rules to encourage cooperation and repair 
rather than conflict and lawsuits in dealing with Y2K. Indeed, for my 
part, Mr. President, I have made no secret of my desire to apply common 
sense rules, encouraging cooperation rather than conflict, to our legal 
system as a whole. I would view our response to the Y2K problem as 
really an extension of the idea of common sense legal reform to the 
high-tech arena.
  High-technology related commerce, and commerce over the internet in 
particular, is subject to the same dangers as other forms of commerce. 
And that means government must make certain that the basic protections 
needed to make commerce possible are applied to the high-tech sector. 
In particular, we should keep in mind that commerce is possible only if 
all parties can be assured that their property will be respected and 
protected from theft.
  I have introduced the Anticybersquatting Consumer Protection Act to 
combat a new form of fraud that is increasing dangers and costs for 
people doing business on the internet. The culprit is 
``cybersquatting,'' a practice whereby individuals reserve internet 
domain names similar or identical to companies' trademark names. Some 
of these sites broadcast pornographic images. Others advertise 
merchandise and services unrelated to the trademarked name. Still 
others have been purchased solely for the purpose of forcing the 
trademark owners to purchase them at highly inflated prices. All of 
them pollute the internet, undermine consumer confidence and dilute the 
value of valid trademarks.
  Trademark law is based on the recognition that companies and 
individuals build a property right in brand names because of the 
reasonable expectations they raise among consumers. If you order a 
Compaq or a DEC computer, that should mean that you get a computer made 
by Compaq or DEC, not one built by a fly-by-night company pirating the 
name. The same goes for trademarks on the Internet. And if it doesn't, 
if anyone can just come along and take over a brand name, then commerce 
will suffer. If anyone who wants to steal your product can do so with 
impunity, then you won't be in business for long. If anyone who wants 
to steal company trademarks for use on the internet can do so with 
impunity, then the internet itself will lose its value as a marketplace 
and people will stop using it for e-commerce. It's really as simple as 
that.
  We must, in my view, extend the basic property rights protections so 
central to the purpose of government, to the realm of e-commerce.
  I have argued, Mr. President, that we must extend the basic, 
structural rules and protections of commerce to the high-tech arena. To 
be successful this

[[Page S8694]]

effort requires recognition of the need for reasoned innovation. If 
they are to continue fulfilling their vital function of protecting 
commerce, pre-existing rules must be modified at times to meet the 
challenges of new technologies. Nowhere is this more true than in the 
instance of electronic signatures.

  Secure electronic authentication methods, or electronic signatures,'' 
can allow organizations to enter into contracts without having to drive 
across town or fly thousands of miles for personal meetings--or wait 
for papers to make several trips through the mail. They can allow 
individuals to positively identify the person with whom they are 
transacting business and to ensure that shared information has not been 
tampered with.
  Electronic signatures are highly controlled and are far more secure 
than manual signatures. They cannot be forged in the same, relatively 
easy way as manual signatures. Electronic signatures are verifiable and 
become invalid if any of the data in the electronic document is altered 
or deleted. They can make e-commerce the safest as well as the most 
convenient commerce available.
  We made great strides in this Congress toward expanding the use of 
electronic signatures with the Abraham Government Paperwork Elimination 
Act. That legislation requires federal agencies to make versions of 
their forms available online and to allow people to submit those forms 
with electronic signatures instead of handwritten ones. It also set up 
a process by which commercially developed electronic signatures can be 
used in submitting forms to the government, and federal documents could 
be stored electronically.
  By providing individuals and companies with the option of electronic 
filing and storage, this legislation will reduce the paperwork burden 
imposed by government on the American people and the American economy. 
It also will spur electronic innovation. But more must be done, 
particularly in the area of electronic signatures, to establish a 
uniform framework within which innovation can be pursued.
  More than 40 states have adopted rules governing the use of 
electronic signatures. But no two states have adopted the same 
approach. This means that, at present, the greatest barrier to the use 
of electronic signatures is the lack of a consistent and predictable 
national framework of rules. Individuals and organizations are not 
willing to rely on electronic signatures when they cannot be sure that 
they will be held valid.
  I have joined with my colleagues, Senators McCain and Wyden, to 
author the Millennium Digital Commerce Act. This legislation, which was 
recently passed out of the Senate Commerce Committee, will ensure that 
individuals and organizations in different states are held to their 
agreements and obligations even if their respective states have 
different rules concerning electronically signed documents. It provides 
that electronic records produced in executing a digital contract shall 
not be denied legal effect solely because they were entered into over 
the Internet or any other computer network. This will provide uniform 
treatment of electronic signatures in all the states until such time as 
they enact uniform legislation on their own.
  Our bill also lets the parties who enter into a contract determine, 
through that contract, what technologies and business methods they will 
use to execute it. This will give those involved in the transaction the 
power to decide for themselves how to allocate liability and fees as 
well as registration and certification requirements. In essence, this 
legislation empowers individuals and companies involved in e-commerce 
to decide for themselves whether and how to use the new technology of 
electronic signatures. It will encourage further growth in this area by 
extending the power of the contracting parties to define the terms of 
their own agreements.
  And another piece of legislation, the Electronic Securities 
Transaction Act will remove a specific barrier in the law that is 
slowing the growth of online commerce in the area of securities 
trading. As the law now stands, Mr. President, anyone wishing to do 
business with an online trading company must request or download 
application materials and physically sign them, then wait for some form 
of surface mail system to deliver the forms before conducting any 
trading. Such rules cause unneeded delays and will be eliminated by 
this legislation.
  Control over their agreements is crucial to allowing companies and 
individuals to conduct commerce in and through the means of high-
technology. But we must do more to ensure the continued growth of high-
tech commerce. Perhaps most important, we must make certain that 
companies involved in high-tech can find properly trained people to 
work for them.
  During the last session of Congress I sponsored the American 
Competitiveness Act. This legislation, since signed into law, provides 
for a limited increase in the number of highly skilled foreign-born 
workers who can come to this country on temporary worker visas. It also 
provides for scholarships to students who elect to study in areas 
important for the high-tech industry, including computers, math and 
science.
  In my view we should build on the American Competitiveness Act by 
extending training and educational assistance to the millions of 
elementary and secondary school children who can and should become the 
high-tech workers of tomorrow.
  It is projected that 60 percent of all jobs will require high-tech 
computer skills by the year 2000. But 32 percent of our public schools 
have only one classroom with access to the Internet. The Educational 
Testing Service reports that, on average, in 1997 there was only one 
multi-media computer for every 24 students in America. That makes the 
line to use a school computer five times longer than the Education 
Department says it should be.
  Not only do our classrooms have too few computers, the few computers 
they do have are so old and outdated that they cannot run the most 
basic of today's software programs and cannot even access the Internet. 
One of the more common computers in our schools today is the Apple IIc, 
a model so archaic it is now on display at the Smithsonian.
  The federal government recently attempted to rectify this situation, 
with little success. The 21st Century Classrooms Act of 1997 allows 
businesses to take a deduction for donating computer technology, 
equipment and software. Unfortunately, that deduction was small and 
businesses had difficulty qualifying for it. Thus the Detwiler 
Foundation, a leading clearinghouse for computer-to-school donations, 
reports that they have not witnessed the anticipated increase in 
donation activity'' since its enactment.
  I strongly believe that we must change that. That is why I have 
joined with Senator Ron Wyden (D-Ore.) to offer the New Millennium 
Classrooms Act. This legislation will increase the amount of computer 
technology donated to schools, helping our kids prepare for the high-
tech jobs of the future.
  The earlier tax deduction failed to produce donations because it was 
too narrowly drawn. It allowed only a limited deduction (one half the 
fair market value of the computer). It also applied this deduction only 
to computers less than two years old. And only the original user of the 
computer could donate it to the school.
  Under the New Millennium Classrooms Act, however, businesses will be 
able to choose either the old deduction or a tax credit of up to 30 
percent of the computer's fair market value, whichever reduces their 
taxes most. Businesses donating computers to schools located in 
empowerment zones, enterprise communities and Indian reservations would 
be eligible for a 50 percent tax credit because they are bringing 
computers to those who need them most.
  In addition, the New Millennium Classrooms Act would eliminate the 
two year age limit. After all, many computers more than two years old 
today have Pentium-chip technology and can run programs advanced enough 
to be extremely useful in the classroom. Finally, the new legislation 
would let companies that lease computers to other users donate those 
computers once they are handed in.
  These provisions will expand the availability of useful computers to 
our schools. They will allow our classrooms to become real places of 
high-tech learning, preparing our children for the

[[Page S8695]]

challenges of the future and providing our economy with the skilled 
workers we need to keep us prosperous and moving ahead. They are an 
important part of an overall high-tech agenda that emphasizes expanding 
opportunities for all Americans.
  Of course we must do more. We must extend the Research and 
Development tax credit so important to high-tech innovation. We must 
extend the 3 year moratorium on any taxing of the internet. We must 
update our encryption laws so that American companies can compete 
overseas and provide consumers with state-of-the-art protection for 
their e-commerce. We must increase high-speed internet access. I will 
work to support each and every one of these reforms.
  Mr. President, these are some of the legislative initiatives a number 
of my colleagues and I are working on to ensure the future of high-tech 
growth in this country. It is an important agenda because high-tech is 
an important sector of our economy. I hope members of both houses of 
Congress and the Administration will recognize the need to support this 
agenda so that American workers can continue to prosper.

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