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IP: Wired News on the Politics of Netscape
From: David Farber <farber () cis upenn edu>
Date: Thu, 21 Aug 1997 13:25:07 -0400
From: "--Todd Lappin-->" <telstar () wired com>
From Wired Nnews: http://www.wired.com/news/news/business/story/6190.html
Political Player Isn't Yet a Political Power by Ashley Craddock 5:10am 21.Aug.97.PDT In the heart of the digital universe, one thing seems clear: Although Netscape's once skyrocketing fortunes may be in turnaround, and its sometime stellar public profile is in the early stages of eclipse, CEO Jim Barksdale, the corporate guru who raised Netscape from squirrelly start-up to industry leader, is still striving to position the company as a heavy hitter. And he's doing it by working the smoky corridors of DC politics. Consider the evidence: Since Netscape's founding in 1994, Barksdale has dabbled in antitrust law, poked and prodded the Clinton administration about immigration policies, and toyed with tort reform. He's testified before Congress about the long-term folly of using export policy to choke the development of robust encryption technologies - and, by extension, the most booming sector of the nation's economy. And this summer, pairing with venture capitalist and Silicon Valley good ol' boy extraordinaire John Doerr, Barksdale did something heretofore unthinkable: From the center of the politics-wary world of high tech, he launched the Technology Network, the industry's first formal stab at creating a political organization to advance info-tech goals on Capitol Hill. But no matter how maverick Barksdale's political acumen looks from the Valley, the view from the Hill is more mundane: He's simply the CEO of a vulnerable start-up scrambling to protect his corner of the volatile info-tech boom. "What gave anyone the idea that Netscape is a big political player?" asks one well-known Washington Internet activist who doesn't wish to be identified. "Don't get me wrong, Netscape has played an invaluable role in the fight for stronger encryption, but on all the other big Internet issues, they've been pretty much invisible." Even in Technology Network's Palo Alto, California, offices, where several dyed-in-the-wool politicos have parked their stars, Barksdale's political aura seems to pale beside co-chair Doerr's notoriously intense wattage. "We still think the Gore and Doerr thing is a joke," says TechNet Republican consultant Dan Schnur, citing a recent New Yorker profile of the nominally Republican Kleiner, Perkins, Caufield & Byers partner. "But let's just say I wish we had someone like Doerr pushing our side of the agenda." Isolated victories Barksdale, who arrived at Netscape after stints at Federal Express and McCaw Communications, carried to the Valley a more intimate knowledge of the necessary intersection between politics and business than many of the Valley's homegrown execs. "Jim is far more seasoned than people like [Intuit's] Scott Cook, [Sun Microsystem's] Scott McNealy, and [Marimba's] Kim Polese," says Peter Harter, Netscape's public policy counsel. "At Fed Ex, he worked with labor unions and the trucking industry. He worked the FBI and the National Security Agency on issues about shipping packages. And at McCaw, he had to deal with the Federal Communications Commission. He knows the way Washington works, and people in Washington know he knows it." Since arriving at Netscape, Barksdale has used that experience to his company's benefit. He has won at least three significant individual battles in the looming Internet policy war. After several key pilgrimmages to DC, he obtained major concessions on the export of encryption embedded in Netscape Navigator, the browser that made his company's name and fortune. He influenced the free-market tilt of the Clinton administration's white paper on electronic commerce. And, in negotiations on the budget bill earlier this summer, Barksdale pushed for tax credits on research and development and software exports. But those were isolated victories, and Netscape and the rest of the software industry have still barely cracked mainstream Washington's consciousness. The Congressional Internet Caucus has little real clout. And while administration officials note that the president's yen to improve his historical rank offers favor-seekers a perfect opportunity for political leverage, Silicon Valley seems strangely unprepared to act. The reason, says Oliver Smoot, executive vice president of the Information Technology Industry Council, is simple: Nobody in the Valley, including Netscape, wants to pay to play. Indeed, while technology executives account for 26 of Forbes' list of the 400 richest in America, only five show up on Mother Jones' list of the nation's 400 top political contributors. "In terms of its contribution to the national economy, the software industry is beginning to have very high visibility here," says Smoot. "But compared to a lot of less profitable industries, it doesn't really carry much of a punch." And for all Barksdale's nipping and tucking, Netscape, like its counterparts, seems content to hurl only a few strategic pitches a year. Indeed, as far as Washington presence, the company falls far short of the low-water mark set by an industry known for stashing its lobbyists in sunless backroom offices. Netscape employs only one full-time lobbyist, who doesn't even have a DC base. Since his arrival at Netscape fresh from a stint at an Ohio nonprofit, Peter Harter has peddled the company's somewhat meager influence from his Palo Alto office. Political Lobbyist Head Count - - - - - - - - - - - - - - - - - - - - - - Netscape 1 Microsoft 6 Intel 12 IBM 24 - - - - - - - - - - - - - - - - - - - - - - Of necessity, Harter is pragmatic about his position in the lobbyists' galaxy. "Say we identify five issues that are very important," he says. "As a small company, we may only have resources for three, so we'll look at what's ripe for resolution and focus on that." In the two years Harter has been working for Netscape, his main focus has been relaxing export controls on encrypted software so the company can expand overseas sales. Now, he says, priorities are shifting. Believing that the administration is about to hand down regulations Netscape can live with, Harter has shrunk his cryptography budget and is now turning his attention toward copyright and privacy concerns. Underdog seeks an upper hand As much as anything, Netscape's public-policy initiatives all stem from the need to protect and bolster an increasingly fragile bottom line. "Netscape is the underdog, so Barksdale is focused on ensuring that it's able to remain competitive," says the Internet activist, who worked with Netscape in the fight against online content regulations imposed by the since-eviscerated Communications Decency Act. "If that lines up with sound public policy, great. But that's not really what's driving any of the company's politics. In fact, as far as the CDA, Netscape's only significant action was to make sure that Internet access providers, i.e. browser-makers like Netscape, were exempted by the original bill." By signing on as co-chair of TechNet, however, Barksdale is explicitly leveraging Netscape's reputation as a catalyst for the Internet-driven new economy. Born out of a successful 1996 fight against California's Proposition 211, an initiative that would have lowered the barrier to shareholder lawsuits, TechNet was founded in July to endorse candidates, raise money, and lobby state and DC politicians. Since its founding, the nonpartisan Valley-based group - whose members include Polese, Cook, and McNealy - has wined and dined Jack Kemp, Al Gore, Senator Tom Daschle, and William Bennett, among others. In spite of Netscape's leadership role, there remain uncertainties about what the organization will do to advance the goals nearest and dearest to the company's heart. No key Internet issues - not access fees for service, not bandwidth, not free speech, not domain names, not even encryption - have so far lit the nascent group's radar screen. And, says Harter, they probably won't. For one thing, TechNet hopes to represent the biotech industry as well as software and hardware companies. For another, "All TechNet's member companies have different agendas when it comes to encryption," says Harter. "It's a divisive issue that TechNet probably doesn't need to touch." So far, TechNet's overall strategy - fighting for passage of a bill that would standardize regulations on state-level securities litigation, and lobbying for education reform - has worked like a charm. "People in Washington are fascinated by Silicon Valley's magic," says Mark Gitenstein, a lobbyist who worked on the 1995 Federal Securities Litigation Reform Act and is now TechNet's DC consultant on the issue. "TechNet's creation represents the industry's first real acknowledgement that no important sector in our economy can avoid government regulation. And god knows, this is an important sector." Why does the economic powerhouse info-tech industry insist on playing wiffle-ball politics? Essentially, while the nascent industry is bursting with cash, it's also bursting with competition. "The rebirth of Silicon Valley three years ago is different than anything that came before," says Jim Bidzos, CEO of RSA Data Security, the Valley's leading cryptography software firm. "You see tons of companies making tons of money, and you see tons of companies disappearing. It's all any CEO can do to keep up. And Washington is so far behind, it's hard to care what's going on except when some wrongheaded government initiative becomes a direct political threat." Other observers believe that Silicon Valley magic-makers like Barksdale may wield more influence in DC than several pots of gold. "If these groups stick to the high ground on developing the Internet as a public resource, they may be able to exert a lot of power without a ton of money," says Marc Rotenberg of the Electronic Information Privacy Center. "Right now, the industry that TechNet represents is a policymaker's darling. They can ride that a long way." Copyright =A9 1993-97 Wired Ventures Inc. and affiliated companies. All rights reserved.
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