Newsletter Highlights
 USACM Warns Against Technology Mandates
 USACM Looks Back at FY 2006
 Technology Administration Report on Offshoring
 About USACM
 NEWSLETTER HIGHLIGHTS
August is a quiet month in Washington so there are only a few stories to report. Look for things to get busy again as Congress returns from its summer vacation and tries to wrap up business before the November elections. Below are highlights of the top stories for August. There is more detail on each below, as well as on our weblog at http://www.acm.org/usacm/weblog:
* USACM released a letter to Congress warning that mandates on Digital Rights Management have the potential to chill technology development while doing only so much to curb infringement.
* USACM released its Annual Report for the year July 1, 2005 – June 30, 2006.
* Democrats on the House Science Committee released portions of a Technology Administration report on offshoring in knowledge based industries.
 USACM Warns About Technology Mandates
In 2004 a Federal Court struck down the Federal Communication Commission’s regulatory attempt to mandate a copy protection regime for digital television signals, commonly called the “Broadcast Flag.” Following this decision 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 full text of the letter is available at:
The 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, DVRs, 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. For the full text of those principles, please go to:
The chairman of the Senate Commerce Committee, Ted Stevens (R-AK), is championing Senate legislation to enact the Broadcast Flag and an audio flag as part of reforming the Telecommunications Act of 1996. The Senate Commerce Committee passed this legislation in June, but it isn’t clear when the full Senate might consider the legislation. Concerns over numerous controversial provisions in the bill make it unclear when Stevens could obtain enough votes to hold off a filibuster. Chairman Stevens is targeting early fall for further action. The House of Representatives has already passed their proposal to reform the Telecommunications Act, which did not contain either the video or audio flag.
 USACM Releases Annual Report
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, and 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.
You can read the FY 2006 USACM Annual Report at:
 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.
The report was conducted by the Technology Administration (TA), part of the Department of Commerce, which was required by law to conduct a 6-month assessment of implications of workforce globalization in knowledge-based industries. They also addressed trends in higher education in the U.S. and abroad. The review used data available through June 2004. You can access the executive summary and summary of findings and a 12 page overview online. Both are PDF files, with variations in image quality.
The overview can be accessed at:
While the ACM examined the global migration of jobs within computing and information technology and how that migration influenced countries and businesses, the TA report focused on the effects of outsourcing on firms and U.S. competitiveness. Language in the report resonates with the competitiveness debate that has emerged from time to time since the 1970s. India and China (among other countries) are discussed in the TA report from the perspective of present and future economic competitors. Even with the broad industry focus of the TA report, the findings on some of the trends of globalization were similar to those of the ACM report. Here is a sampling of the TA findings:
* The United States business climate, large consumer markets, and a formidable research and university system remain magnets for business activity and continue to attract leading scientific and technical talent within these industries.
* Despite the challenges and risks associated with relying on foreign workforces, U.S. firms have and will continue to globalize in today’s competitive global marketplace.
* U.S. businesses use workers in other countries for a variety of reasons: cost savings, market expansion, increased focus on core competencies, and service of customers in other nations.
* U.S. companies tap labor pools in other countries for specific segments of their operations, rather than the entire value chain of work, and appear to have maintained most higher-value work close to their home base.
* The ability of developing economies to acquire sophisticated technology and to rapidly develop business and telecommunications infrastructure to support modern commerce allows the countries to attract foreign business investment and their domestic companies to compete with both U.S. and multinational businesses.
* Although, both India and China are attempting to develop national science and technology education systems that meet international standards, they face huge obstacles in creating such systems.
* Limits in available data make it difficult to quantify the effects of workforce globalization on an industry, worker displacement, national productivity, and economic growth.
* There are a number of risks associated with IT services and software offshoring.
Taken together, both reports give a pretty good perspective of global trends in the IT software industry and are well worth a review. The ACM globalization report is available at:
 ABOUT USACM
USACM is the U.S. Public Policy Committee of the Association for Computing Machinery (ACM). ACM is an educational and scientific society uniting the world’s computing educators, researchers and professionals to inspire dialogue, share resources and address the field’s challenges. ACM strengthens the profession’s collective voice through strong leadership, promotion of the highest standards, and recognition of technical excellence. ACM supports the professional growth of its members by providing opportunities for life-long learning, career development, and professional networking.
For more information about USACM and ACM, see:
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