Techies Plug In

Democrats Offer Industry New Opportunities

Posted February 6, 2007 at 6:39pm

For its mastery of emerging technologies, Google Inc. displayed a less-than-perfect command of timing last year as it sought to ramp up its presence on Capitol Hill.

In early September, with a Democratic electoral wave mounting, the search engine giant made a series of moves designed to court Republicans — inking a lobbying deal with two former Senators, co-hosting its first-ever Washington, D.C., fundraiser for an endangered House GOPer, and hiring a Republican to advise a newly minted political action committee.

Then, of course, both chambers flipped, restoring Democratic control.

To veteran lobbyists, the gambit capped a year of missteps by the company as it took on phone and cable giants, both entrenched lobbying forces, in the debate over “net neutrality.”

“We’ve grown from a one-person operation in July 2005, to a seasoned 10-person D.C. team here in 2007,” said company spokesman — and former Democratic Hill staffer — Adam Kovacevich said. “It’s important for Google to be a voice in Washington for our users and that’s why you’ll see us be more and more engaged in how to best address policy challenges.”

But Google was not alone. It was joined in the net neutrality battle by several other high-tech powerhouses still relatively green in the ways of the Beltway influence game.

Now, as those companies shake off an uneven performance under Republican control, they are expressing optimism that Democratic majorities will be friendlier to their agenda.

For starters, tech interests are dusting off the innovation agenda crafted during the last Congress by then-Minority Leader Nancy Pelosi (D-Calif.). Through a series of field hearings in tech hubs across the country, Pelosi and other Democrats culled input from industry leaders.

The resulting package calls for making college tuition deductible for math and science students, a permanent extension of the research-and-development tax credit, and federal funding for broadband Internet access.

Several lobbyists said they expect the program to get showcased in an “innovation week” this spring, though Pelosi spokesman Drew Hammill said there are no plans to do so.

“The innovation agenda is a priority for her, and we’ll work to address pieces in that agenda as soon as we can,” he said. “She recognizes that innovation is key to the future of this country, and it’s something that’s not been addressed by past Congresses.”

The industry also is reviving hopes that, with Democrats in charge, a comprehensive immigration reform measure can make more progress than it did in the last Congress, when infighting between pro-business and anti-immigration factions of the Republican party scuttled hopes for a bill. Tech lobbyists said their companies are desperate to lift the 65,000-person annual cap on high-skilled workers — a measure that will likely hitch a ride on a broader immigration bill.

In the Senate, action should come soon, with Sen. Edward Kennedy (D-Mass.) expected to lead a bipartisan array of co-sponsors in introducing a comprehensive immigration reform proposal in the coming weeks, spokeswoman Laura Capps said. “There’s definitely a strong commitment to increasing the level of H-1B visas, and they are working toward that,” she said. The timeline for action in the House is less clear.

Tech interests are also reviving calls for a range of reforms to patent laws that ran into a wall of resistance in the previous Congress from the Republican-friendly pharmaceutical lobby. Technology companies are pushing for protection against patent litigation they say has become too onerous — legislation that drug companies said would impede their ability to go after rivals that infringe on their own patents. A bill to address tech concerns over patent lawsuits could come in the next several weeks.

Though some industry sources expressed anxiety that Democrats could go after the technology companies as a profit-rich sources of taxable funds to help fund other priorities under new budget constraints, many said leaders were making the right noises on tax issues. Senate Finance Chairman Max Baucus (D-Mont.) has already introduced a bill to make the R&D tax credit permanent, which, if successful, would lift the perennial end-of-year headache for business lobbyists rallying for a one-year extension.

A big question mark is the issue of net neutrality. The issue — which focuses on whether high-traffic Web sites should have to pay a premium to Internet service providers for faster service — emerged as a surprise flashpoint in debate over a broader telecommunications overhaul last spring. Tech forces, backed by a grass-roots groundswell, lobbied for guarantees that phone and cable companies would not try to level the fees — a move they said could lead to a two-tiered Internet.

While their campaign, by most accounts, sunk the prospects for the broader bill, it also failed to yield them the protections they sought. By winter, the debate had spilled over to the Federal Communications Commission as it struggled to reconcile it in deliberations over the merger between AT&T and BellSouth. Democrats at the agency took a hard line on the issue, extracting a number of consumer-friendly concessions from AT&T that tech lobbyists hope will shape future debate in Congress.

But several said the issue became too polarized during the 109th, and said they doubt it will take center stage again during this Congress.

Walter McCormick, who, as president of the United States Telecom Association, helped lead efforts to block the provision, agreed. “I think that Internet regulation is unlikely to proceed in this Congress,” he said.

“The numbers are simply not there to pass it.”

Democratic control won’t spell the end of tech’s troubles entirely. Several lobbyists pointed to trade agreements as a likely point of disagreement between the camps.