[Congressional Record Volume 145, Number 113 (Wednesday, August 4, 1999)]
[Senate]
[Pages S10235-S10238]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Mr. Rockefeller, Ms. Snowe, and Ms. 
        Mikulski):
  S. 1494. A bill to ensure that small businesses throughout the United 
States participate fully in the unfolding electronic commerce 
revolution through the establishment of an electronic commerce 
extension program at the National Institutes of Standards and 
Technology; to the Committee on Commerce, Science, and Transportation.


        ELECTRONIC COMMERCE EXTENSION ESTABLISHMENT ACT OF 1999

  Mr. BINGAMAN. Mr. President, today I'm very pleased to be joined by 
Senators Rockefeller, Snowe, and Mikulski in introducing the 
``Electronic Commerce Extension Establishment Act of 1999.'' The 
purpose of this bill is

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simple--to ensure that small businesses in every corner of our nation 
fully participate in the electronic commerce revolution unfolding 
around us by helping them find and adopt the right e-commerce 
technology and techniques. It does this by authorizing an ``electronic 
commerce extension'' program at the National Institute of Standards and 
Technology modeled on NIST's existing, highly successful Manufacturing 
Extension Program.
  Everywhere you look today, e-commerce--the buying, selling, and even 
the delivery of goods and services via computer networks--is starting a 
revolution in American business. Being so new, precise e-commerce 
numbers are hard to come by, but by one estimate business to business 
and business to consumer e-commerce sales in 1998 were $100 billion. If 
you add in the hardware, software, and services making those sales 
possible, the number rises to $300 billion. That's comparable to adding 
another entire automobile industry to the economy in the last few 
years. Another estimate has business to business e-commerce growing to 
$1.3 trillion by 2003. Whatever the exact numbers, an amazing change in 
our economy has begun.
  But the shift to e-commerce is about more than new ways to sell 
things; it's about new ways to do things. It promises to transform how 
we do business--how we design products, manage supply chains and 
inventories, advertise and distribute goods, et cetera--and thereby 
boost productivity, the root of long term improvements in our standard 
of living. A recent Washington Post piece on Cisco Systems, a major 
supplier of Internet hardware, notes that Cisco saved $500 million last 
year by selling its products and buying its supplies online. On sales 
of $8.5 billion, that helped make for some nice profits. Imagine the 
productivity and economic growth spurred when more firms get 
efficiencies like that. And that's the point of this bill, to make sure 
that small businesses get those benefits too.
  Electronic commerce is a new use of information technology and the 
Internet. Many people, including Alan Greenspan, suspect information 
technology is the major driver behind the productivity and economic 
growth we've been enjoying. The crucial verb here is ``use.'' It is the 
widespread use of a more productive technology that sustains 
accelerated productivity growth. It was steam engine, not its sales, 
that powered the industrial revolution. In 1899, only about 5 percent 
of factory horsepower came from electric motors, even though the 
technologies had been around for two decades. But by 1920, when 
electric motors finally accounted for more than half of factory 
horsepower, they created a surge in industrial productivity as more 
efficient factory designs became common.
  Closer to today, in 1987, Nobel Prize winning economist Robert Solow 
quipped, ``We see the computer age everywhere but in the productivity 
statistics.'' Well, it looks like the computer has started to show up 
because more people are using them in more ways, like e-commerce. 
Information technology producers, companies like Cisco Systems who are, 
notably, some of the most sophisticated users of IT, are 8 percent of 
our economy; from 1995 to 1998 they contributed 35 percent of our 
economic growth. There are also some indications that IT is now 
improving productivity among companies that only use IT, though 
economists continue to debate that.
  But here's the real point. If we are going to sustain this 
productivity and economic growth, if this is to be more than a one time 
boost that dies out, we have to spread sophisticated uses of 
information technology like e-commerce beyond the high tech sector and 
companies like Cisco Systems and into every corner of the economy, 
including small businesses. Back in the 1980s we used to debate if it 
mattered if we made money selling ``potato chips or computer chips.'' 
But here's the real difference: consuming a lot of potato chips isn't 
good for you; consuming a lot of computer chips is.
  I emphasize all this because too often our discussions of government 
policy, technology, and economic growth dwell on the invention and sale 
of new technologies, which are crucial, but shortchange the all 
important, but not terribly glamorous topic of their adoption and use. 
Extension programs, like the electronic commerce extension program in 
this bill, are policy aimed at precisely spreading the adoption and use 
of more productive technology by small businesses.

  Now, with that in mind, the e-commerce revolution creates both 
opportunities and challenges for small businesses. On the one hand, it 
will open new markets to them and help them be more efficient. Many of 
us have seen that cartoon with a dog in front of a computer saying, 
``On the Internet no one knows you're a dog.'' Well, on the web, the 
garage shop can look as good as IBM or GM. On the other hand, the high 
fixed costs, low marginal costs, and technical sophistication that can 
sometimes characterize e-commerce, when coupled with a good brand name, 
may allow larger, more established e-commerce firms to quickly move 
from market to market. Amazon.com, perhaps the archetype e-commerce 
firm, has done such a wonderful job of making a huge variety of books 
widely available that it's been able to expand to CDs, to toys, to 
electronics, to auctions. Moreover, firms in more rural or isolated 
areas have suddenly found sophisticated, low cost, previously distant 
businesses entering their market, and competing with them. Thus, there 
is considerable risk that many small businesses be left behind in the 
shift to e-commerce. That would not be good for them, nor for the rest 
of us, because we all benefit when everyone is more productive and 
everyone competes.
  The root of this problem is the fact that many small firms have a 
hard time identifying and adopting new technology. They're hard pressed 
and hard working, but they just don't have the time, people, or money 
to understand all the different technologies they might use. And, they 
often don't even know where to turn for help. Thus, while small firms 
are very flexible, they can be slow to adopt new technology, because 
they don't know which to use or what to do about it. That's why we have 
extension programs. Extension programs give small businesses low cost, 
impartial advice on what technologies are out there and how to use 
them.
  Extension programs have a long, solid pedigree. They started in 1914, 
with the Department of Agriculture's Cooperative Extension Service to 
``extend'' the benefits of agricultural research to the farmer. That 
extension service has played no small part in making the American 
farmer the most productive in the world. More recently, the 
competitiveness crisis of the 1980's prompted the creation of the 
Manufacturing Extension Program, or MEP, at NIST to help small 
manufacturers find and use the technology they need. NIST has done a 
good job building and managing MEP's network of more than 70 non-profit 
centers, in all 50 states, with 2000 experts on call, that has helped 
over 60,000 manufacturers.
  Today, the United States is the international leader in e-commerce, 
but other nations are working to catch up, just like they did in 
manufacturing. Thus, the time is ripe to solidify our lead in e-
commerce and extend it to every part of our economy in every corner of 
the nation. An electronic commerce extension program will help us do 
that.
  So, what might such a program do? Imagine you're a small specialty 
foods retailer in rural New Mexico and you see e-commerce as a way to 
reach more customers. But your specialty is chiles, not computers; 
imagine all the questions you'd have. How do I sell over the web? Can I 
buy supplies that way too? How do I keep hackers out of my system? What 
privacy policies should I follow? How do I use encryption to collect 
credit card numbers and guarantee customers that I'm who I say I am? 
Can I electronically integrate my sales orders with instructions to 
shippers like Federal Express? How might I handle orders from Japan or 
Holland? Should I band together with other local producers to form a 
chile cybermall? What servers, software, and telecommunications will I 
need and how much will it cost? Can I do this via satellite links? Your 
local e-commerce extension center would answer those questions for you. 
And, you could trust their advice, because you'd know they were 
impartial and had no interest in selling you a particular product.
  This bill will lead to the creation of a high quality, nationwide 
network of non-profit organizations providing that kind of expert 
advice, analogous to the MEP network NIST runs today, but

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with a focus on e-commerce and on firms beyond manufacturers. NIST, as 
part of the Department of Commerce, is a logical choice to run an e-
commerce extension program because it's about promoting commerce via 
technology and standards; recall that the Internet is based on 
standards for how computers can talk to each other. But the best reason 
for NIST to do this is that MEP shows they can do it well; that 
expertise will prove invaluable in getting this new network up and 
running.
  Similarly, this bill is directly modeled on the MEP authorization. It 
retains the key features of MEP: a network of centers run by non-
profits; strict merit selection; cost sharing where the federal 
government's share decreases from one half to one third over time; and 
periodic independent review of each center. In addition, it emphasizes 
serving small businesses in rural or more isolated areas, so that those 
businesses can get a leg up on e-commerce too. In short, this 
legislation takes an approach that has already been proven to work.
  Practically speaking, if this bill becomes law, I assume NIST, 
together with its headquarters organization, the Technology 
Administration, would begin by leveraging their MEP management 
expertise to start a few e-commerce extension centers and then 
gradually build out a network separate from MEP. They could also use 
the study of e-commerce extension resulting from my amendment to the 
Commerce, State, Justice Appropriations bill the other week. I also 
want to note that this is a new, separate authorization for an e-
commerce extension program because it will have a different focus than 
MEP and because I do not want it to displace MEP in any way. MEP is a 
great program. Let's keep it going strong while we build this new e-
commerce extension system.
  Mr. President, I hope my colleagues will join me in supporting this 
important, timely, and practical piece of legislation. Just as a strong 
agricultural sector called for an agricultural extension service, and a 
strong industrial sector called for manufacturing extension, our shift 
to an information economy calls for electronic commerce extension.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no obection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1494

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Electronic Commerce 
     Extension Establishment Act of 1999''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The United States economy is in the early stages of a 
     revolution in electronic commerce--the ability to buy, sell, 
     and even deliver goods and services through computer 
     networks. Estimates are that electronic commerce sales in 
     1998 were around $100,000,000,000 and could rise to 
     $1,300,000,000,000 by 2003.
       (2) Electronic commerce promises to spur tremendously 
     United States productivity and economic growth--repeating a 
     historical pattern where the greatest impetus toward economic 
     growth lies not in the sale of new technologies but in their 
     widespread adoption and use.
       (3) Electronic commerce presents an enormous opportunity 
     and challenge for small businesses. Such commerce will give 
     such businesses new markets and new ways of doing businesses. 
     However, many such business will have difficulty in adopting 
     appropriate electronic commerce technologies and practices. 
     Moreover, such businesses in more rural areas will find 
     distant businesses entering their markets and competing with 
     them. Thus, there is considerable risk many small businesses 
     will be left behind in the shift to electronic commerce.
       (4) The United States has an interest in ensuring that 
     small businesses in all parts of the United States 
     participate fully in the electronic commerce revolution, both 
     for the sake of such businesses and in order to promote 
     productivity and economic growth throughout the entire United 
     States economy.
       (5) The Federal Government has a long history of 
     successfully helping small farmers with new agricultural 
     technologies through the Cooperative Extension System at the 
     Department of Agriculture, founded in 1914. More recently, 
     the National Institute of Standards and Technology has 
     successfully helped small manufacturers with manufacturing 
     technologies though its Manufacturing Extension Program, 
     established in 1988.
       (6) Similarly, now is the time to establish an electronic 
     commerce extension program to help small businesses 
     throughout the United States identify, adapt, and adopt 
     electronic commerce technologies and business practices, 
     thereby ensuring that such businesses fully participate in 
     the electronic commerce revolution.

     SEC. 3. PURPOSE.

       The purpose of this Act is to establish an electronic 
     commerce extension program focused on small businesses at the 
     National Institute of Standards and Technology.

     SEC. 4. ESTABLISHMENT OF ELECTRONIC COMMERCE EXTENSION 
                   PROGRAM AT NATIONAL INSTITUTES OF STANDARDS AND 
                   TECHNOLOGY.

       (a) Establishment.--The National Bureau of Standards Act 
     (15 U.S.C. 271 et seq.) is amended by inserting after section 
     25 (15 U.S.C. 278k) the following new section:


 ``regional centers for the transfer of electronic commerce technology

       ``Sec. 25A. (a)(1) The Secretary, through the 
     Undersecretary of Commerce for Technology and the Director 
     and in consultation with other appropriate officials, shall 
     provide assistance for the creation and support of Regional 
     Centers for the Transfer of Electronic Commerce Technology 
     (in this section referred to as `Centers').
       ``(2) The Centers shall be affiliated with any United 
     States-based nonprofit institution or organization, or group 
     thereof, that applies for and is awarded financial assistance 
     under this section in accordance with the program established 
     by the Secretary under subsection (c).
       ``(3) The objective of the Centers is to enhance 
     productivity and technological performance in United States 
     electronic commerce through--
       ``(A) the transfer of electronic commerce technology and 
     techniques developed at the Institute to Centers and, through 
     them, to companies throughout the United States;
       ``(B) the participation of individuals from industry, 
     institutions of higher education, State governments, other 
     Federal agencies, and, when appropriate, the Institute in 
     cooperative technology transfer activities;
       ``(C) efforts to make electronic commerce technology and 
     techniques usable by a wide range of United States-based 
     small companies;
       ``(D) the active dissemination of scientific, engineering, 
     technical, and management information about electronic 
     commerce to small companies, with a particular focus on 
     reaching those located in rural or isolated areas; and
       ``(E) the utilization, when appropriate, of the expertise 
     and capability that exists in State and local governments, 
     institutions of higher education, the private sector, and 
     Federal laboratories other than the Institute.
       ``(b) The activities of the Centers shall include--
       ``(1) the establishment of electronic commerce 
     demonstration systems, based on research by the Institute and 
     other organizations and entities, for the purpose of 
     technology transfer; and
       ``(2) the active transfer and dissemination of research 
     findings and Center expertise to a wide range of companies 
     and enterprises, particularly small companies.
       ``(c)(1) The Secretary may provide financial support to any 
     Center created under subsection (a) in accordance with a 
     program established by the Secretary for purposes of this 
     section.
       ``(2) The Secretary may not provide to a Center more than 
     50 percent of the capital and annual operating and 
     maintenance funds required to create and maintain the Center.
       ``(3)(A) Any nonprofit institution, or group thereof, or 
     consortia of nonprofit institutions may, in accordance with 
     the procedures established by the Secretary under the program 
     under paragraph (1), submit to the Secretary an application 
     for financial support for the creation and operation of a 
     Center under this section.
       ``(B) In order to receive financial assistance under this 
     section for a Center, an applicant shall provide adequate 
     assurances that it will contribute 50 percent or more of the 
     estimated capital and annual operating and maintenance costs 
     of the Center for the first three years of its operation and 
     an increasing share of such costs over the next three years 
     of its operation.
       ``(C) An applicant shall also submit a proposal for the 
     allocation of the legal rights associated with any invention 
     which may result from the activities of the Center proposed 
     by the applicant.
       ``(4)(A) The Secretary shall subject each application 
     submitted under this subsection to merit review.
       ``(B) In making a decision whether to approve an 
     application and provide financial support for a Center under 
     this section, the Secretary shall consider at a minimum--
       ``(i) the merits of the application, particularly the 
     portions of the application regarding technology transfer, 
     training and education, and adaptation of electronic commerce 
     technologies to the needs of particular industrial sectors;
       ``(ii) the quality of service to be provided;
       ``(iii) geographical diversity and extent of service area; 
     and
       ``(iv) the percentage of funding and amount of in-kind 
     commitment from other sources.
       ``(5)(A) Each Center receiving financial assistance under 
     this section shall be evaluated during the third year of its 
     operation by

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     an evaluation panel appointed by the Secretary.
       ``(B) Each evaluation panel under this paragraph shall be 
     composed of private experts, none of whom shall be connected 
     with the Center involved, and with appropriate Federal 
     officials. An official of the Institute shall chair each 
     evaluation panel.
       ``(C) Each evaluation panel under this paragraph shall 
     measure the performance of the Center involved against the 
     objectives specified in this section and under the 
     arrangement between the Center and the Institute.
       ``(6) The Secretary may not provide funding for a Center 
     under this section for the fourth through the sixth years of 
     its operation unless the evaluation regarding the Center 
     under paragraph (5) is positive. If such evaluation for a 
     Center is positive, the Secretary may provide continued 
     funding for the Center through the sixth year of its 
     operation at declining levels.
       ``(7)(A) After the sixth year of operation of a Center, the 
     Center may receive additional financial support under this 
     section if the Center has received a positive evaluation of 
     its operation through an independent review conducted under 
     procedures established by the Institute. Such independent 
     review shall be undertaken for a Center not less often than 
     every two years commencing after the sixth year of its 
     operation.
       ``(B) The amount of funding received by a Center under this 
     section for any fiscal year of the Center after the sixth 
     year of its operation may not exceed an amount equal to one-
     third of the capital and annual operating and maintenance 
     costs of the Center in such fiscal year under the program.
       ``(8) The provisions of chapter 18 of title 35, United 
     States Code, shall (to the extent not inconsistent with this 
     section) apply to the promotion of technology from research 
     by Centers under this section except for contracts for such 
     specific technology extension or transfer services as may be 
     specified by statute or by the Director.
       ``(d)(1) In addition to such sums as may be appropriated to 
     the Secretary and Director for purposes of the support of 
     Centers under this section, the Secretary and Director may 
     accept funds from other Federal departments and agencies for 
     such purposes.
       ``(2) The selection and operation of a Center under this 
     section shall be governed by the provisions of this section, 
     regardless of the Federal department or agency providing 
     funds for the operation of the Center.
       ``(e) In this section, the term `electronic commerce' means 
     the buying, selling, and delivery of goods and services, or 
     the coordination or conduct of economic activities within and 
     among organizations, through computer networks.''.
       (b) Description of Program.--(1) Not later than 90 days 
     after the date of the enactment of this Act, the Secretary of 
     Commerce shall publish in the Federal Register a proposal for 
     the program required by section 25A(c) of the National Bureau 
     of Standards Act, as added by subsection (a).
       (2) The proposal for the program under paragraph (1) shall 
     include--
       (A) a description of the program;
       (B) procedures to be followed by applicants for support 
     under the program;
       (C) criteria for determining qualified applicants under the 
     program;
       (D) criteria, including the criteria specified in paragraph 
     (4) of such section 25A(c), for choosing recipients of 
     financial assistance under the program from among qualified 
     applicants; and
       (E) maximum support levels expected to be available to 
     Centers for the Transfer of Electronic Commerce Technology 
     under the program in each year of assistance under the 
     program.
       (3) The Secretary shall provide a 30-day period of 
     opportunity for public comment on the proposal published 
     under paragraph (1).
       (4) Upon completion of the period referred to in paragraph 
     (3), the Secretary shall publish in the Federal Register a 
     final version of the program referred to in paragraph (1). 
     The final version of the program shall take into account 
     public comments received by the Secretary under paragraph 
     (3).
       (c) Authorization of Appropriations.--There is hereby 
     authorized to be appropriated for the Department of Commerce 
     each fiscal year such amounts as may be required during such 
     fiscal year for purposes of activities under section 25A of 
     the National Bureau of Standards Act, as added by subsection 
     (a).
                                 ______