With federal legislation pending that will affect matters ranging from DVD copying to spyware dissemination, technology firms are spending heavily on lobbyists to impress their views on influential members of Congress.
Overall, the technology and communications industries spent more than $111 million on lobbyists in the second half of 2003, according to data compiled by the campaign finance site PoliticalMoneyLine. The sector's lobbying expenditures were exceeded by only two other industries: health care and financial services.
Tech and communications spending relative to other industries is down slightly from the latter half of 2002, when the sector ranked second only to health care. At the same time, however, lobbying budgets have continued to grow.
"The rankings change, but the overall spending for everyone has gone up," said Tony Raymond, co-founder of PoliticalMoneyLine, which has compiled approximately 90 percent of lobbyist filings for the second half of last year. He expects lobbying expenditures for the first half of this year will also be up across the board when they are made public in a few months.
For lobbyists, the technology and communications industries represent a largely predictable clientele: phone companies, online marketers, software firms and digital content providers.
In filings made public this month, a recurring theme involved use of copyright digital content. In particular, lobbyists are targeting two bills pending in the House of Representatives that could either rein in or strengthen the recording and motion picture industries' ability to control access to copyright materials.
Among the most activist lobbyists on behalf of copyright owners is the Recording Industry Association of America, which has spent the last several years waging a fierce campaign to quash exchange of copyright materials on online file-trading networks.
Earlier this month, the RIAA disclosed that it has hired three firms to lobby on its behalf for "recording industry issues," "anti-piracy efforts" and "intellectual property protection." Among the group's hires were the firm DC Navigators and one of its chief lobbyists, Cesar Conda, the former assistant for domestic policy under Vice President Dick Cheney.
The RIAA declined to discuss its lobbying activities, nor was a dollar figure available for its total expenditures. But Cary Sherman, its president, offered a look into the RIAA's legislative agenda when he testified last week in a congressional subcommittee hearing, speaking in opposition to the Digital Media Consumers' Rights Act of 2003, a proposed bill that would loosen restrictions on technologies used to manipulate digital content.
According to Public Knowledge, a group that supports legalizing broader access to digital content, the act is one of two proposed bills setting the battle lines between copyright owners, consumers and electronics makers. The other bill, the Piracy Deterrence and Education Act of 2004, intended to make it easier for copyright owners to crack down on digital piracy, is supported by the recording and motion picture industries.
Lobbying expenditure records show several groups lining up opposite Hollywood and the record labels. Supporters of looser controls on use of digital content include the Consumer Electronics Association and 321 Studios, a beleaguered maker of DVD-copying software that is lobbying to promote passage of the Digital Media Consumers' Rights Act.
"These are going to be major fights," said Art Brodsky, spokesman for Public Knowledge. He expects much of the congressional wrangling will focus on defining fair use, the right of individuals to use excerpts of copyright works for educational purposes or make backups of their own copies.
Also drawing lobbyist dollars are two anti-spyware bills, one pending in the House and the other in the Senate. In a recent filing, 180solutions, an Internet marketing company, disclosed that it employed lobbyists to represent its interests regarding both bills.
A group called the International Employee Stock Options Coalition is also employing lobbyists in a push for legislators to reconsider accounting treatment for employee stock options. Currently, many technology firms are concerned that a decision by the nation's accounting standards-setting board will deflate earnings of companies that dole out stock options to employees on a wide scale.
As for the largest technology and telecommunications firms, spending levels remained healthy in the latter half of 2003, to say the least.
IBM alone spent $3.5 million, citing bills that would expand automation of check processing as a key topic of interest.
Microsoft, meanwhile, spent $4.6 million and employed the services of 16 lobbying firms. Among the software giant's key issues of interest: cybersecurity, licensing, competition and government procurement in the software industry.
Not to be outdone, Verizon spent a hefty $4.5 million to lobby largely on behalf of seven pending bills, including legislation that would allow more favorable tax treatment of business expenses and equipment. Its wireless arm, Verizon Wireless, meanwhile, spent $1.1 million to promote its own interests, including legislation to protect against mobile-phone spam.
