Cisco Government Affairs E-Update

Volume 1, Issue 40

7 December 2001

Brought to you by Cisco Government Affairs Online: http://www.cisco.com/gov

NETWORK FOR GOOD, an independent, 501(c)(3) organization, was founded by the AOL Time Warner Foundation and AOL, Inc.; the Cisco Foundation and Cisco Systems, Inc.; and Yahoo! Inc., in partnership with over 20 nonprofit foundations and associations who share the desire to foster the informed use of the Internet for civic participation and philanthropy. The Website aggregates content and resources from these leaders, organizes them and makes them available in one comprehensive, easy-to-use destination, which also helps to expand the reach, effectiveness and pervasiveness of all of Network for Good's nonprofit partners. www.networkforgood.com

This Week@Cisco in Government Affairs

Cisco's E-Update keeps you up to date on the major policy news of the week. Focusing on broadband, education and e-government areas, but covering high-tech and telecom in general, the E-Update is a great source of information for state, federal and international policymakers. To subscribe, send a message with �subscribe� in the subject line to �Subscribe-eUpdate@cisco.com

SPECIAL REPORT � NET IMPACT - The Internet already stands as one of the most important innovations of our time, despite the fact that its impacts are just beginning to be measured and understood. Although several studies have been done on the relationship between information technology and productivity, no study has looked at firm-level data to measure the economic impact of Internet business solutions.� According to preliminary results of the study, the deployment of Internet business solutions has yielded to date a cumulative cost savings of $155 billion to U.S. organizations, and is expected to produce another $373 billion in cost savings, most of which will be realized by 2005.� Furthermore, based on projections from the study, Internet business solutions could account for 40 percent of the U.S. productivity increase over 10 years, possibly making it the single largest private sector contribution to productivity growth over the next decade. http://www.netimpactstudy.com/

This Week@WASHINGTON, DC

TRADE PROMOTION AUTHORITY PASSES HOUSE - The House today passed legislation that gives the Bush administration a stronger hand to negotiate trade agreements, awarding a hairbreadth wartime victory to President Bush that the same chamber twice denied the Clinton administration.� Bush administration officials and Republican leaders squeezed their party ranks, relying on several longtime trade-wary lawmakers, one late vote switch, and the House speaker, J. Dennis Hastert, who often does not vote, to eke out the 215-214 victory.� http://www.nytimes.com/2001/12/07/politics/07TRAD.html

CISCO PRESIDENT AND CEO JOHN CHAMBERS STATEMENT on TPA� - http://www.cisco.com/gov/markets/trade.html

NTIA CHIEF NANCY VICTORY SPEECH ON BROADBAND - http://www.ntia.doc.gov/ntiahome/speeches/2001/cpi_120601.htm

THE POLITICS OF TELECOMMUNICATIONS IN TIMES OF CRISIS - Assistant Secretary for Communications and Information U.S. Department of Commerce, Nancy J. Victory, delivered remarks before the Latin American Wireless Industry Association (ALACEL) summit Meeting of the Presidents of Latin American Mobile Carriers. http://www.ntia.doc.gov/ntiahome/speeches/2001/alacel_112601.htm

PRUDENT STRATEGY NEEDED TO JUMP-START BROADBAND - To boost public access to broadband technology, the federal government should support new initiatives and monitor developments rather than pursue policies that are premature and could inhibit the market, says a new report of the National Academies' National Research Council. However, once the market takes shape, the federal government may need to step in to help improve service where broadband availability is lacking or to address any abuses of market power that might occur. http://www4.nationalacademies.org/news.nsf/isbn/0309082730?OpenDocument

http://dailynews.yahoo.com/h/nm/20011129/wr/telecoms_broadband_dc_3.html

Full report: Broadband: Bringing Home the Bits (228 pages)

http://www.nap.edu/books/0309082730/html/

RESEARCH PANEL RECOMMENDS TAX CREDITS FOR DEVELOPMENT OF BROADBAND NETWORKS - A federal research panel Thursday recommended tax credits and grants to spur

deployment of high-speed Internet services, particularly in rural areas. The report, by the National Research Council, says the value of broadband Internet access for educational and economic uses is worth federal help, even when telecommunications companies have difficulty justifying the expense. A bill sponsored by Sen. Jay Rockefeller (D., W.Va.) calls for a tax credit of 10% to 20% to companies that provide broadband access to rural areas. Adam Thierer, of the libertarian Cato Institute, said the tax credits are corporate welfare for large communications companies and may also bring unwanted regulation of the Internet. The recommendations -- which include ways to stimulate competition among Internet providers -- were fueled by the dismal rate of broadband use by Americans. Nikil Jayant, chairman of the council, said only 8% of American households have high-speed Internet connections. http://interactive.wsj.com/articles/SB1007072790992942920.htm

(requires subscription)

BUSH: NO NEW NET TAXES - President Bush renewed a ban on Internet taxes Wednesday, ensuring that the country's 130 million Internet users will not face new taxes for at least another two years.� Bush said the legislation, which he signed into law, would "ensure that the growth of the Internet is not slowed by additional taxation and that holiday shoppers will not be burdened by new taxes on their online purchases."� Congress passed the original ban in 1998 to prevent states and local governments from imposing new taxes that might discourage growth of the new medium. http://news.cnet.com/news/0-1007-200-8015654.html

HOW TO GET BROADBAND MOVING AGAIN - Tech companies want Washington to break the broadband traffic jam by helping old-world, old-geezer telcos. Good luck.� http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=205365

BROADBAND WIRELESS STANDARD APPROVED - Looking to foster widespread deployment of 10 GHz to 66 GHz wireless metro area networks, the IEEE-SA gives the IEEE Standard 802.16 its stamp of approval. The broadband wireless standard enables interoperability between devices from multiple manufacturers and includes a medium access control layer (MAC) that supports multiple physical layer specifications. The standards group says 802.16 will fuel the use of fixed broadband wireless as an economic alternative for last-mile connection to public networks. The standard supports voice, video and data applications.� The 802.16 will be published in Jan. 2002. http://broadbandweek.com/newsdirect/0112/direct011207.htm#3
http://wirelessman.org/

THE COMPETITIVE TELECOMMUNICATIONS ASSOCIATION (CompTel) recently sent a letter to the United States Trade Representative (USTR) expressing strong support for the insertion of pro-competitive telecommunications principles in the Free Trade Agreements (FTAs) currently being negotiated with Chile and Singapore. Specifically, CompTel supports the inclusion of:

- Obligations requiring interconnection, unbundled access to incumbents' network elements, and timely provisioning;

- Where there is no effective competition, cost-based pricing of incumbents' leased circuits;

- Collocation at cost based-rates;

- Resale at appropriate wholesale rates;

- Access to rights of way;

- Requirements that ensure effective enforcement of the pro-competitive measures by an independent regulator; and

�- Ensuring that U.S. service providers are able to access and use the public telecommunications networks and services of trading partners on a non-discriminatory basis.

http://www.comptel.org/press/nov29_2001_ustr.html

TAUZIN DINGELL RALLY FOR HOUSE PASSAGE - http://media.usta.org/pr/pressRelease.cfm?id=80

E-GOV TOPS CIO CHALLENGES - Ask federal information technology managers what their highest priority is in these post-Sept. 11 days, and they'll say building e-government. But they also express a heightened sense of urgency about security. Eighty chief information officers and senior technology officials at federal agencies ranked "using IT to improve service" and "making the business and cultural changes necessary for full e-government transformation" at the top of their concerns, according to the sixth annual survey of top challenges facing federal IT managers, conducted by the Association for Federal Information Resources Management (AFFIRM).� http://www.fcw.com/fcw/articles/2001/1203/web-affirm-12-05-01.asp

DELAY SEEN IN RULES ON ULTRA-WIDEBAND - New rules on a controversial wireless technology that some critics fear will disrupt vital navigation aids are likely to be delayed until next year, sources familiar with the situation said on Wednesday.� Although the Federal Communications Commission has listed ultra-wideband (UWB)for discussion at its Dec. 12 meeting, the matter is likely to removed from the agenda to allow further discussion, the sources said.� Deputy Defense Secretary Paul Wolfowitz asked the Commerce Department last month for help in seeking a delay, saying the Pentagon needed more time to prepare a report on potentially harmful interference with the Global Positioning System (GPS). http://dailynews.yahoo.com/h/nm/20011205/tc/telecoms_ultrawideband_dc_1.html

E-GOVERNMENT REPORT - The Progressive Policy Institute, a Washington DC based Democratic Party think tank, released a report titled "Breaking Down Bureaucratic Barriers: The Next Phase of Digital Government".� www.ppionline.org/documents/digigov_Nov01.pdf (Adope File)

FEDS PICK NEXT-GENERATION ENCRYPTION STANDARD - The U.S. government today formally adopted its next-generation data encryption standard, aimed at better protecting government data transmission and storage. Known as the Advanced Encryption Standard (AES), the new algorithm will replace one first adopted by the federal government in 1977. The new standard was developed by Belgian cryptographers Joan Daemen and Vincent Rijmen. http://www.computerworld.com/storyba/0,4125,NAV47_STO66311,00.html

CENTER OFFERS E-GOVERNMENT RESOURCES - A leading organization for government managers and a Virginia university last week unveiled an online clearinghouse to make it easier for government officials, academics and others to exchange ideas about the impact of technology on privacy, civic engagement and other public policy issues. The National Academy of Public Administration and the Virginia Polytechnic Institute and State University intend for the Center for eGovernance (www.napawash.org/ce) to serve as a focal point for the emerging topic of e-governance, said Mike Dunham, who co-directs the center. http://www.fcw.com/fcw/articles/2001/1203/news-egov-12-03-01.asp

This Week@INTERNATIONAL

UK TO SPEED UP BROADBAND - A push to speed up the growth of fast internet access has been made by the UK's e-commerce Minister Douglas Alexander.� A series of measures to boost the broadband market were announced to map out the way ahead for both the government and industry. Less than 1% of the UK people have fast internet access, placing Britain last among the Group of Seven nations in broadband penetration.� To speed up the roll-out of broadband, the advisory body Broadband Stakeholder Group (BSG) has recommended better access to local telephone exchanges for providers of broadband, noting that local loop unbundling where BT opens up its "last mile" of telephone lines to other providers had been "disappointing".�� BSG also called for more investment in broadband by government bodies, along with stimulus packages to content providers.� And it wants measurements of service quality to be introduced.� http://news.bbc.co.uk/hi/english/business/newsid_1689000/1689929.stm

UK BROADBAND STAKEHOLDERS GROUP REPORT -

http://www.e-envoy.gov.uk/ecommerce/broadband/bbsgrep_menu.htm

CHINESE GROUPS VISIT CISCO � Mayors from the Province of Jiangsu recently visited Cisco to hear about Cisco�s history and operations as well as our the policy issues that are important to us.� Laura Ipsen, Vice President of Government Affairs shared Cisco�s overview and our policies for extending broadband.� Separately, the Shanghai Government Information Office visited Cisco to hear about Cisco business culture, history and our public policy positions.

EU FAILS TO FIND COMPROMISE ON TELECOMS LAWS - The European Union seemed likely to miss a high-profile deadline on its ambitious economic reform agenda on Thursday night, as ministers failed to agree a compromise on sensitive telecommunications legislation.� The EU's biggest members are unhappy about the heart of the telecoms package, which would give the European Commission the ability to overrule national telecoms regulators. The ministers seem set for a clash with the European Parliament, which backs the Commission, and is scheduled to vote on the key provisions on Tuesday.� http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3B3AMZWUC&live=true&tagid=ZZZPCGI2B0C

UK GOVERNMENT LAUNCHES SAFE E-SHOPPING FOR CHRISTMAS - The UK s DTI (Department of Trade and Industry) has launched a campaign to reassure shoppers that buying Christmas presents over the web is just as safe as buying them in regular stores.� http://www.europemedia.net/shownews.asp?ArticleID=7065

UK ONLINE SHOPPING BOOMS � Online shopping in the UK is growing fast despite the collapse of the dot-com bubble, according to research published by retail consultancy Verdict on Monday.� Verdict said the online retail market, excluding travel and tickets, grew 142 percent in 2001 to 3.26 billion pounds, though this still only represents 1.5 percent of all retail sales.� The increasing number of female online shoppers helped boost sales through the Internet and older shoppers aged 55 years plus, otherwise known as ``silver surfers,'' were spending more than their youthful counterparts.� http://dailynews.yahoo.com/h/nm/20011202/wr/retail_online_dc_1.html

ONLINE SCHOOLING PLAN GAINS PACE - South Africa's Gauteng province, home to the cities of Johannesburg and Pretoria, is moving forward in its plans to provide Internet and email access to its

2,400 schools. The R500 million (USD $45.6 million) GautengOnline initiative will connect local schools to the Net and create email accounts for the province's 1.5 million students and educators.

Approximately 25 networked computers will be installed in each school. http://allafrica.com/stories/200111290565.html

AFRICAN DATA TRAFFIC ON THE INCREASE - ITWeb reports that data traffic, including Internet traffic, is growing in Africa. http://www.nua.com/surveys/index.cgi?f=VS&art_id=905357425&rel=true

EUROPE�S FIRST 3G NETWORK GOES LIVE IN THE ISLE OF MAN - On December 4, Europe s first 3G network went live on the Isle of Man via the 3G network of Manx Telecom, whose parent company is mm02.

http://www.europemedia.net/shownews.asp?ArticleID=7141

�

UK INTERNET ACCESS CLOSE TO 50 PER CENT - The number of UK adults connecting to the Internet each month is approaching 50 per cent of the population, uptake is slowing while Internet use steadily increases.� http://www.nua.com/surveys/index.cgi?f=VS&art_id=905357475&rel=true

CHINESE TO BE MAIN LANGUAGE ON WEB BY 2007 - Chinese will outrank English as the most-used language on the worldwide web by 2007, according to forecasts cited on Thurday at a United Nations symposium on multilingual internet addresses.� At present a slim majority of the world's 460m-plus internet users are from English-speaking backgrounds. This reflects the system's origin and development in the US, but is changing rapidly as internet use spreads internationally.� As early as next year most internet users will have a mother tongue other than English and by 2003 a third of web users will be using another language online, the World Intellectual Property Organisation (Wipo) said. Wipo is jointly organising the two-day Geneva meeting with the International Telecommunication Union.� http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3FZJZWWUC&live=true&tagid=FTDDMJNIFEC

SPAIN - The Ministry of Economy will implement at the beginning of 2002 a model of electronic administration, by which all the citizens will be able to carry out from Internet a series of administrative proceedings without the need to physically go to the offices and to fill in the traditional documents.� http://www.elmundo.es/navegante/2001/12/05/esociedad/1007564437.html

SHIN LAUNCHES BROADBAND SERVICE IN THAILAND - Broadband Internet access in Thailand was given a much needed boost last week with the commercial launch of telecom carrier Shin Satellite's iPSTAR service.� While only the ground segment of iPSTAR is now in place � its next-generation satellite is not due to launch until 2003 - it will significantly improve performance for customers and allow for a true two-way Internet service. Previously, the service was one-way and had to use a telephone line as the return path. http://www.newsbytes.com/news/01/172728.html

ONLINE KIOSKS AID ABUSED WOMEN - Women who are victims of domestic violence will soon be able to turn to technology for help. Women in London, UK, who suffer mental and physical abuse by their spouses or partners, will be able to find and contact support services via the net-connected kiosks that dot some of the capital's streets. Because using a kiosk is anonymous, the project could reach women whose access to help is otherwise controlled by their abusive partner, said Jo Todd, national development worker at the Domestic Violence Intervention Project, (DVIP), which is co-ordinating the kiosk project. http://news.bbc.co.uk/hi/english/sci/tech/newsid_1691000/1691434.stm

E-GOVERNMENT - THE UK ONLINE 2001 ANNUAL REPORT - describes in a lot of detail the progress that the UK has made in e-government and e-commerce. It contains a mass of useful statistics,charts and facts. http://www.e-envoy.gov.uk/ukonline/champions/anrep_menu.htm

MINISTERIAL DECLARATION: EGOVERNMENT - A PRIORITY FOR EUROPE - Ministers and State Secretaries from 28 countries spanning the EU, EFTA and countries in accession negotiations with the EU today declared that higher priority should be given to eGovernment issues in promoting the development of a European Information Society focused on growth, employment and quality of life.�

http://europa.eu.int/information_society/eeurope/egovconf/documents/press2.doc

COMMISSION PUBLISHES FIRST SURVEY ON EGOVERNMENT SERVICES IN EUROPE - The European Commission today released a study on online public services. For the first time, the availability of basic public services on the Internet has been measured in all Member States. According to the survey, Ireland, Finland, Sweden, Denmark, Spain, the United Kingdom and Portugal are demonstrating particularly good results.

http://europa.eu.int/information_society/eeurope/egovconf/documents/press1.doc

EU LAUNCHES EGOVERNMENT AWARDS - The European Commission s new eEurope Awards for Innovation in "e-Government aims to highlight and promote the efforts made by European national, regional and local administrations in using Information Society Technologies to improve the quality and accessibility of their public services. Its launch follows the success of the eGovernment label .� http://europa.eu.int/information_society/eeurope/egovconf/documents/press3.doc

SPEECH BY MR ERKKI LIIKANEN Member of the European Commission, responsible for Enterprise and the Information Society "Network Security - Policy Development in the European Union" Opening Statement at the EU Forum on Cybercrime.� http://www.europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=SPEECH/01/589|0|RAPID&lg=EN;

�

This Week@US STATES

MICHIGAN GOVERNOR LOBBIES FOR BROADBAND - Michigan Gov. John Engler is encouraging state residents to write to their respective state lawmakers and urge support for the Michigan HiSpeed Internet Plan.� The state's main Internet portal asks constituents to e-mail lawmakers and tout the creation of a financing authority to help fund the rollout of broadband services, and the establishment of a right-of-way authority to streamline the process and lower the fees for installing high-speed Internet infrastructure. Engler said the plan would create 500,000 new jobs over the next 10 years, increase income by nearly $500 billion and help close the "digital divide."� "The bottom line is that Michigan needs broadband," Engler said. "And I will not let Michigan continue to fall behind."

http://www.michigan.gov/emi/1,1303,7-102--5330--,00.html (National Journal�s Tech Daily)

NATIVE AMERICANS STAKE A HIGH-TECH CLAIM - The Northern Ute tribe, seeking to enhance economic opportunities, paid cable companies to install hundreds of miles of high-speed optical cable

through the mountainous terrain of the 4.5 million-acre Uintah and Ouray Reservation located 150 miles east of Salt Lake City in Utah. High tech could strongly influence the future of this tribe, which suffers unemployment rates of 65% or more. Now Uinta River Technology (URT) is one of a handful of Native American IT outsourcing companies that have sprung up in recent years. Native Americans have been traditional underserved by information technology. The 1995 Census found that 53% of American Indians' homes did not even have a phone. But tribes like the Northern Ute and the Cheyenne River Sioux are hoping that new technologies will help bridge economic and information divides. "With information-management work, there are no boundaries," says Carey Wold, the URT's general manage. "The walls [around the reservations] have come down. With technology, [Native

Americans] have more choices. They are empowered." http://www.businessweek.com/bwdaily/dnflash/nov2001/nf20011126_0470.htm

GAO REPORT - Update on State and Local Revenue Loss from Internet Sales.� http://www.gao.gov/cgi-bin/getrpt?gao-02-83r (Adobe file)

LEADING THE CHARGE ON INTERNET TAXATION� - Mike Leavitt may seem a strange choice to cast as the Internet tax man.� The Republican governor of Utah has cut taxes repeatedly in his state. But Leavitt has been outspoken about allowing states to collect taxes on e-commerce sales. http://news.cnet.com/news/0-1014-201-8020382-0.html

MAINE SCHOOL LAPTOP PROJECT IN PERIL - It was only a few months ago that the Legislature set aside $30 million for Gov. Angus King's cherished plan to equip middle-school students with laptop computers.� Now, with the 2002 legislative session little more than a month away, some cost-conscious lawmakers are unconvinced that the state has the money for what seemed eminently affordable earlier this year.� http://www.portland.com/news/state/011126laptop.shtml

GOVERNMENT AFFAIRS HIGH TECH COMMUNITY � Broadband Deployment � It is estimated that 2.5 BILLION hours are wasted with people accessing the Internet via dial-up. Broadband access, or always-on, high-speed Internet, allows productivity increases, standard of living increases and new applications that haven't even been thought of. Broadband can be delivered via satellite, wireline, wireless, cable, fiber and technologies are being tested for access through electrical wires. Broadband is the future of the internet and the future of communications.� What does broadband mean in your life?� Add your thoughts at Cisco�s High Tech Community - http://forums.cisco.com/cgi-bin/Community/HtCom?page=main.

FACTS AND STATS:

BROADBAND IN THE U.K. AND GERMANY - A 2001 Support.com survey of 430 people from Britain and 580 Germans finds that 58% of people in the UK and 38% in Germany believe broadband services are too expensive. Only 22% of the study's British respondents believe that the lack of availability bars them from subscribing.� Support.com also reports that British Telecom announced in November 2001 that it had 70,000 digital subscriber line (DSL) subscribers and that Deutsche Telekom is gaining subscribers at a rate of 30,000 per week in November. Support.com believes that high-speed support issues are not fully addressed by a company until it has at least 100,000 subscribers on board.

AROUND THE WORLD WITH HIGHSPEED - Cahners In-Stat reports that worldwide digital subscriber line (DSL) subscribers will generate $36 billion in revenue by 2005 -- $21 billion of which will come from business DSL subscriptions. Cahners believes that there will be over 1.8 million business DSL subscribers by the end of 2001, a total that will grow to 8.5 million by 2005.

HOLIDAY SHOPPING - The Jupiter Media Metrix Holiday 2001 E-Commerce Index Series reports that during the week of the US Thanksgiving holiday, 50.2 million unique visitors shopped online from home or work - up 43% from 35.2 million during the same week in 2000. The index also indicated that retail website traffic on the Friday after Thanksgiving (22 November) increased by 68% from the same day in 2000, with a total of 16.1 million unique visitors. Traffic on 24 November 2001 was up 59% to 15.3 million and on 25 November it was up 55% to 16.1 million (compared to the same dates in 2000).

For Facts and Stats on the New Economy, visit our Facts and Stats page.� Also, see our special State of the Internet report on this page. For daily, topical Facts and Stats visit our Hot In Tech page.

CISCO GOVERNMENT AFFAIRS@2001

Cisco�s top policy focuses for 2001 are the areas of Education, Broadband Deployment and eGovernment.� To read or listen to our thoughts on these issues, please visit our Government Affairs home page or our visit our multimedia section . http://www.cisco.com/gov/multimedia/index.html

E-UPDATE ARCHIVE

To view past issues of Cisco�s Government Affairs E-Update, visit our E-Update Archive page . http://www.cisco.com/gov/archive/eupdates/index.html

DISCLAIMER

Positions in articles and papers from outside sources are in no way endorsed by Cisco Systems' Office of Government Affairs. We offer articles on topics of interest to our audience to further the debate on the issues that are important to high-tech.� To view our positions on the policy matters that we care about, please visit our Government Affairs homepage. � http://www.cisco.com/gov

CISCO.COM/GOV AND E-UPDATE FEEDBACK

As we continue to build out Cisco�s Government Affairs web site, as well as this service, this E-Update, we welcome comments, criticisms, praise and suggestions. Please send any feedback to John Earnhardt at jearnhar@cisco.com.

To contact any member of the Government Affairs team, please visit our �Contact Us � page. http://www.cisco.com/gov/contact/index_ext.html

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