Technology Administration Report On Offshoring Released

At the end of July, Democrats on the House Science Committee released portions of a previously unreleased official report on globalization by the Administration; specifically the globalization and offshoring of knowledge-based industries. The report drew some controversy earlier in the year because the Administration only released a shorter 12-page version. The longer version, of which the Democrats posted only an “executive summary,” goes into more depth about trends in globalization and offshoring in the semiconductor, pharmaceutical, and IT software and services industries. It attracted our attention because of many similar findings between this report and the ACM Globalization report released in February of this year.

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USACM Looks Back at FY2006

Each July ACM’s Policy Office staff and USACM’s leadership compile USACM’s annual report for the past fiscal year (which closes on July 31). In this year’s report you will find descriptions of our work on the two major policy-related studies we put out this year: the first on voter registration databases, the second on ACM’s report on the globalization and offshoring of the IT software industry. We also detail our two new policy statements on digital rights management and privacy, and discuss some of our activities to educate Congress about different technology policy issues.

August will be a slow month both in Washington and on the blog, so I encourage you to review the report when you get a chance.

USACM Warns Against Technology Mandates

Last year, a Federal Court struck down the Federal Communication Commission’s attempt to mandate a copy protection regime for digital television signals, called the “Broadcast Flag.” In the decision’s wake, the battle moved from the courts to Congress with several different proposals to enact the FCC’s flag proposal into law. At the same time, momentum has gathered behind a related concept, called the “audio flag.” USACM, drawing from the policy statement it adopted earlier this year on digital rights management (DRM), released a letter to Congress warning that DRM mandates can chill technology development and harm consumers. From the letter:

“Because the flag relies on the customer’s equipment to limit use, intentional infringers will not be deterred significantly. Experience to date shows that intentional infringers will either procure equipment that ignores the flag, change software to ignore the flag or simply operate in a jurisdiction that does not have such legislation.

As many members of USACM are copyright and patent holders, we support the goal of curbing copyright infringement and recognize the desire to continue the broadcast of unencrypted television. However, we also understand that technology can only do so much to curb infringement. By mandating a technical approach that may be foiled, consumers and innovation will suffer, while having little impact on infringement. USACM believes that reliance on the marketplace is the best approach for content providers, equipment producers and consumers.”

The FCC’s Broadcast Flag, would outlaw any receiver or downstream technology that does not comply with certain technical content protection measures spelled out in the order. Television sets, computers, Tivos, etc. would all have to be able to recognize a “flag” in a digital broadcast stream and abide by its redistribution and storage rules. The audio flag proposals are still being developed, but are similar in concept. The entertainment industry has stated their goal for the audio flag is to prevent users from creating permanent libraries of songs from over-the-air broadcasts and limiting redistribution of recorded songs. The electronics industry and consumers groups have argued that such actions are already protected under the Audio Home Recording Act.

In an effort to educate Congress about some of the technical issues associated with DRM, USACM’s letter discusses several issues: DRM Mandates and Innovation, Compatibility, Fair Use and Technology, and Intentional Infringement. Earlier this year, USACM released principles for policymakers to consider when setting DRM policy. Setting a video or audio flag into law could run contrary to the principles it adopted.

Chairman of the Senate Commerce Committee, Ted Steven’s (R-AK), is championing Senate legislation to reform the Telecommunications Act of 1996, which also contains proposals to enact the Broadcast Flag and an audio flag. The Senate Commerce Committee passed this legislation in June, but it immediately became mired down by numerous controversial provisions it contains. It isn’t clear when the full Senate might consider the legislation, but Chairman Stevens is targeting early fall. The House of Representatives has already passed their proposal to reform the Telecommunications Act, which did not contain either the video or audio flag.

Update: Thanks to the Chronical of Higher Ed. for noticing this; the final letter I linked to didn’t have a date on it. It went out on July 25. Sorry for missing that and for the delay in posting it to the blog, but vactions and voting hearings/posts got the way of getting this on the blog. The corrected letter is now posted to the website.

ACM Washington Update, Vol. 10.7 (August 4, 2006)


[1] Newsletter Highlights
[2] Electronic Voting Receives Attention on Numerous Fronts
[3] Administration and Congress Take Actions to Protect Privacy
[4] ACM President Interviewed for CNET
[5] Pieces of American Competitiveness Initiative Slowly Move Forward
[6] Scientists Find Congress’ Access to Scientific Advice Lacking
[7] About USACM
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