Business Software Alliance Announces Agenda for 106th Congress

(February 8, 1999)  The Business Software Alliance held a press conference in Washington DC on Thursday, February 4, to announce its policy agenda for the 106th Congress.  Its leading issues are copyright protection and encryption rights. Other priorities include Y2K litigation reform, patent reform, digital signatures and authentication, extension of the R&D tax credit, privacy, and generally, freedom from government regulation.

Robert Holleyman, President of Business Software Alliance, addressed the luncheon at the National Press Club. Representatives of Lotus, Network Associates, Intuit, Novell, Autodesk, and Microsoft also spoke.

Cheryl Bruder, Senior Director for Government Affairs and Public Policy for Lotus Development Corp., stated that "1998 was a year of a lot of accomplishments and success for high technology. In the legislative arena, starting in 1997, we saw the passage of the NET Act, and it went on to a string of other accomplishments in legislation, through the WIPO copyright treaty implementation bill." She added that, "we were extremely pleased with those accomplishments, but we also were happy to see some changes that were outside of the legislative arena," through executive orders.

Members of the Business Software Alliance also used the gathering to show off some of their new applications. Microsoft demonstrated its Auto PC application, with speech recognition and generation capabilities. Autodesk demonstrated some of its design software. Intuit ran through the latest capabilities of its tax return software.

The Business Software Alliance's Becca Gould also stated that the BSA has taken no position on the Department of Justice's investigation of, and litigation against, Microsoft.

Almost all of the speakers stated that passing encryption legislation is a priority for the 106th Congress. For example, Cheryl Bruder wants "to ensure that we give consumers and businesses more security online by passing legislation such as the SAFE Act, which was in the House in the last session of Congress."

Dan Burton, Vice President for Government Affairs of Novell, explained why encryption legislation, which has never been passed in prior Congresses, might succeed in the 106th Congress.

"The people who were sponsoring those bills last year did not go away. The need for it is just as great, notwithstanding the fact that the administration did make some positive steps towards liberalization. You see changes in the international environment, such as France moving away from its very restrictive policy, saying we are going to open up the domestic market to 128 bit encryption. So I think the need is there. The interest is there. And if anything, there is probably going to be more momentum coming out of Congress this year than there was last year."

Robert Holleyman concurred:

"I think that we are optimistic because so much, people under the context of it now. And, there have been international developments that have really opened up the door for legislation. And having seen, you know, Bob Goodlatte yesterday, one of the original sponsors, absolutely committed to this. And so I expect that they will reintroduce this legislation, certainly into the House side, this month."

Holleyman also stated:

"There is a very committed group of champions on the Hill.  Having met with Bob Goodlatte yesterday, I can say that he is, sort of, at the forefront of people who continue to believe that we don't yet have the right answers, that, in terms of existing policy, legislation is needed. He intends to reintroduce legislation this month."

One journalist asked how supporters of encryption legislation would "overcome Speaker Hastert's opposition?"  Holleyman responded:

"I think it remains to be seen what position he will take in his role as Speaker. He has not issued any new statements on encryption thus -- to my knowledge. And, I think that there are people in the House leadership -- because, other than the Speaker, all of the House leadership very much supports the encryption legislation. And so, I think those members of the leadership have told me that they are reasonably optimistic that he will be more receptive to this in his role as Speaker."

Becca Gould, the BSA's Vice President for Public Policy, also weighed in:

"It is a dynamic debate, and if you look at the record towards the end of last year, and the beginning this year, also people changing their minds, like Sen. Bob Kerrey. That was pretty dramatic. So I think that -- and especially with Congressman Dreier as the head of the Rules Committee -- there is a lot of changes that make it very promising."

Jeff Harrold spoke on behalf of Network Associates, which produces network security and management applications, the McAffee line, and PGP encryption and digital signature products. He made the following recommendations:

"Treat encryption software the same way as software with non-encryption functionality. Treat it as mass market software. And mass market software controls should be eliminated completely. And then finally, eliminate all the reporting requirements that have been (inaudible) Wassenaar Agreement to kind of reduce the workload that has been required to sell these products."

Several speakers addressed problems associated with copyright protection. No one was more adamant than Charles Harris of Autodesk, which produces software used by design professionals. The vast majority of the users of its products worldwide have pirated copies. He explained:

"We have about three million legal users of our products around the world. Perhaps the true measure of the popularity of the software is, unfortunately, the number of illegal users. And we have about, through our eight years now, enforcement actions, literally thousands of enforcement actions that we have brought, prosecuted around the world. Our information shows that for every legal user, we have about five illegal users of our software. And for a company whose software sells for between three thousand and five thousand dollars for a legal copy, you can imagine the revenue loss that we are suffering.

Harris said that Autodesk's piracy problem is common to the industry.

"And unfortunately, our position is not unique at all in this industry. [It is] a major problem in this industry. And, in fact, intellectual property protection, effective enforcement of intellectual property rights at the most basic level, that is, the prohibition and prevention of illegal copying, distribution, and use of software, is perhaps the most critical issue facing the future of this industry. It is one that we care passionately about, and all the member companies care passionately about."

Harris said that more needs to be done by Congress legislatively, and by the administration in protecting intellectual property rights abroad. He continued:

"And we hope that this legislative session will see even more progress. Substantial progress has been made. More progress needs to be made. And we hope to see a lot of progress in this legislative session toward that end, both within the United States, and through the efforts of the U.S. government, outside the United States, around the world, to protect our rights."

Cheryl Bruder addressed Internet copyright protection. "One of the big problems we still experience,  though, is the bad which can quickly turn into the ugly. [It] is the problem of piracy on the Internet." Bruder said that "the Internet is a new challenge for us in terms of combating piracy."

"We need strong protection for creative work -- copyright protection." She concluded that "we want to make sure protecting copyrighted works online, through enforcement of things like the NET Act."

Eric Koenig, the head of Microsoft's federal policy issues team in Washington DC, expressed support for the research and development tax credit. So did Novell's Dan Burton. Burton explained the reason.

"R&D is the lifeblood of this industry. It is terribly important that the US has a vital robust R&D infrastructure, that is what makes all of these new developments, especially the new Internet economy. And so, we are very interested to see that things like the R&D tax credit be made permanent, things like the federal R&D funding for computer science and basic research remains strong, so there is going to be a lot of talk about federal R&D."

Lotus' Cheryl Bruder also said the BSA would be active on "the research and experimentation tax credit."

Cheryl Bruder also listed Year 2000 litigation legislation. "We want to make sure that we get some solutions passed quickly. Act quickly and encourage solutions to the situation that has developed." However, neither Bruder nor other speakers addressed any specific bills or proposals.

Sen. John McCain (R-AZ) introduced one such bill on January 19, the "Y2K Act." It will be the subject of a Senate Commerce Committee hearing on Tuesday, February 9.

Novell's Dan Burton also discussed his concerns regarding digital signatures and authentication. He stated:

"We had a piece of legislation last year. There is talk of another one this year. There is digital signature directive going on in Europe. And that then gets to the question of authentication. I am a digital identity when I am out there on the net, moving around. How to a make sure that who I am talking to is really authenticated as that person, and vice versa.  How do they know that I am Dan Burton from Novell? So digital signatures are going to be an important issue for us. We had a bill on that issue last year.  It is going to be a critical issue for us. The concern of industry is not to move to quickly here. The technology is still in flux. If you try to nail this down with a lot of extensive legislation, we can do ourselves a disservice."

Extended Excerpts from Address by Dan Burton
Vice President for Government Affairs, Novell

"The public policy issues that I think will be coming into, are pretty obvious, and I think the BSA and the software industry's perspective on those are pretty straight forward."

"The big one is encryption.  Why is encryption important? ... One of the keys to this digital identity is absolute security. Encryption is what gives you that. Therefore, government rules and regulations which prevent that level of security from being introduced into cyberspace are a big problem when it comes to creating and managing digital identities."

"The second issue is digital signatures. We had a piece of legislation last year. There is talk of another one this year. There is digital signature directive going on in Europe. And that then gets to the question of authentication. I am a digital identity when I am out there on the net, moving around. How to a make sure that who I am talking to is really authenticated as that person, and vice versa.  How do they know that I am Dan Burton from Novell? So digital signatures are going to be an important issue for us. We had a bill on that issue last year.  It is going to be a critical issue for us. The concern of industry is not to move to quickly here. The technology is still in flux. If you try to nail this down with a lot of extensive legislation, we can do ourselves a disservice."

"A third area, that you in the press write about constantly, is privacy. With this digital identity, what are your privacy rights? How are you going to guarantee that you have the privacy that you want, that you need for your children, et cetera. And again I think that the BSA's perspective here, the industry's perspective, is that the US has taken the right tact. We have not gone the route of Europe, which is much more heavy handed in terms of government regulations of privacy. But basically, government has said, 'Industry, we are going to hold your feet to the fire. You have said you want to be self-regulated. You have said you want to self certify. Now we are going to insist that you do, and that you do in a reasonable and rational way that protects the consumer.' So I think the big question is on our shoulders. Industry has said we will do it on our own. We don't need a lot of regulations. And now I think we need to step up to the plate."

"The last issue -- again an obvious one -- is R&D. R&D is the lifeblood of this industry. It is terribly important that the US has a vital robust R&D infrastructure, that is what makes all of these new developments, especially the new Internet economy. And so, we are very interested to see that things like the R&D tax credit be made permanent, things like the federal R&D funding for computer science and basic research remains strong, so there is going to be a lot of talk about federal R&D."