IT Industry Goes to Washington -- With Checkbooks in Hand.

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Oct. 1, 1998--

High-tech firms are finally becoming wise to the ways of Washington,

bringing in hired guns to push their political agendas.

As the IT industry grows economically it's growing politically as well - along with the amount of money it donates to politicians on Capital Hill, according to a recent report in Network World, the nation's leading newsweekly for enterprise network computing.

The IT industry for years had cavalierly blown off Washington and its political parties and lobbyists, branding them as inconsequential, sometimes irrelevant. Some said sarcastically -- and loudly -- that Washington's elite power brokers were a necessary evil, something to get around or avoid in any way possible. But now the tide is changing and the trend is clear: the IT industry is busy hiring lobbyists and establishing close relationships with those now very relevant politicians. Now, the name of the game is to influence politicians, the people who are making policy decisions on sweeping IT-related legislation, including Internet taxation, electronic commerce, encryption, privacy, software piracy, IT training, digital copyright, Internet pornography, the Y2K crisis and foreign IT worker visas.

"Is there more IT on the agenda here (in Washington) today than in the past?" Bruce Hahn, policy director of the Computing Technology Industry Association asked in Network World's report. "Yes. It's exploding. You've got the IT sector accounting for as much as 10 percent of the gross national product. It's obvious, If you just look at the substance of the legislation that's been offered, we're in the cross hairs of a lot of what's been going on in Washington. This industry has got to recognize that pretty quickly or we are going to be in bad shape."

Overall, republicans are grabbing the largest share of high-tech political donations these days, but democrats aren't far behind. In a fund-raising trip to Silicon Valley last week, President Clinton collected nearly $650,000 for Democrat Party coffers -- more money, according to The Washington Post, than high-tech executives from Silicon Valley had given Clinton in his two previous fund-raising trips to the region.

According to the Center for Responsive Politics (CRP), computer hardware and software firms conservatively spent nearly $20 million on lobbying efforts in 1995 and 1996 during the presidential campaign. And during the same period, they donated $7.3 million to individual political candidates. Sounds like pocket change, considering how much money flows into the American political system from industry, but the IT industry's political investments are up 50 percent from the early 1990s and shows no sign of abating. Just through the first half of 1997, IBM spent a whopping $3.2 million on lobbying, according to Network World. Other expenditures for that same period include $1.1 million from Electronic Data Systems, $400,000 from Oracle, $225,000 from Digital, $200,000 from Sun and $196,000 from Netscape. On the telecommunications side, AT&T dished out $4.1 million and MCI gave $1.3 million. More recently, Microsoft spent $660,000 on lobbying efforts through the first six months of 1997, according to the CRP.

"Network IS professionals now have yet another item to add to their to-do lists," said Paul Desmond, features editor at Network World. "Now they've got to keep an eye on the key technology votes in Washington to make sure their representatives and senators aren't in the pocket of some vendor."

All this money spent on Capital Hill lobbying is a growing trend in IT, especially for the younger firms like Netscape. Although a relatively small company, Netscape is a heavyweight in the lobbying business thanks to the company's CEO, Jim Barksdale, who learned the tools of the lobbying trade while CEO of AT&T Wireless Services. Barksdale is friends with U.S. Senate Majority Leader Trent Lott (R-Miss.) and has contributed personally to Lott's political action committee. Under Barksdale's reign at Netscape, the company has recruited top lobbying talent to pitch Netscape's view of encryption, privacy and copyright issues and to also further its interests in Washington by enlisting other power players in the game, including Sun Microsystems.

Under unrelenting pressure from the federal government with its anti-trust lawsuit, almost half of the U.S. attorneys general and a growing list of competitors, Microsoft has also dramatically increased its lobbying efforts in the nation's capital. Just three years ago, the company didn't have a government relations office in Washington, but now CEO Bill Gates spends almost as much time courting legislators as he does corporate customers, according to Network World. The company now has full-time lobbyists on the payroll and works with several industry trade associations, including Washington-based Business Software Alliance, and a number of lobbying and legal firms too.

Although more and more technology companies are investing in Capital Hill, some are still slow to join the game. Mark Pearl, vice president of government affairs for the Virginia-based Information Technology Association of America, told Network World that "not all industry CEOs, especially in the software and Internet fields, see involvement in policy as necessarily important to their bottom line. They come from an entrepreneurial milieu and view the government as a necessary evil."

About Network World

Network World (http://www.nwfusion.com) is the nation's only newsweekly shaping the future of network computing in the enterprise. Through its publishing, education, software and online products and services, Network World empowers Network IS professionals with the knowledge to deliver the open applications and infrastructure required to meet their evolving business needs.

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