High-tech industry in high spirits

High-tech companies could be a big winner in the budget battle, depending on how House and Senate members reconcile their different deficit-reduction plans, according to industry lobbyists.

The Senate’s version in particular would benefit companies such as Microsoft, Dell, Oracle and Intel that have lobbied heavily for the bill, unlike other industries, which view it as a bitter pill because of its budget cuts.

The high-tech industry favors the Senate bill for three reasons:

• The measure sets a deadline for the transition to digital television, which will free up prime spectrum and likely spur technology sales.

• It allocates more annual H1B visas for highly skilled foreign workers to come to the United States.

• It provides new grant money to college students who major in math and science, critical but often unpopular fields of study.

Because favored high-tech provisions are now tied up with the fate of the overall reconciliation package, which remains a tough sell politically, Senate Republican staffers are calling on the industry to lobby even harder.

“We would like to use this opportunity to bring to your attention these important provisions and would also like to ask you to consider actively supporting passage of this important legislation,” states an e-mail from the Senate Republican High-Tech Task Force, which plans to send it to various high-tech associations in town.

The e-mail, written by task-force policy coordinator Gina Grandinetti, includes talking points on three topics and asks the associations to share them with member companies and have their employees call Capitol Hill.

The transition to digital television is expected to add $10 billion to federal coffers when the freed-up broadcast spectrum used for analog TV is auctioned. But the high-tech industry also favors it because it will undoubtedly result in additional sales of wireless equipment for the spectrum’s new users.

Ralph Hellman, a lobbyist at the Information Technology Industry Council (ITIC), called the spectrum, which is to be shared with emergency first-responders, “prime real estate.”

Task-force talking points describe the provision’s value as freeing up spectrum for “third-generation wireless uses to help us catch up with the rest of the world” — in particular Japan and South Korea, countries with wireless services that surpass the technology used in United States.

Although the specifics of the language differ, the House bill also sets a hard date for conversion to digital television and has attracted the high-tech industry’s support.

The Senate version of the bill would also allow for 30,000 more H1B visas for skilled foreign workers to immigrate to the United States than the House version, giving workers a three-year visa initially that could extend to six years. It also provides a $2.5 billion boost in grant money available to math and science majors.

The grants, which came after personal appeals to Senate Majority Leader Bill Frist (R-Tenn.) by Michael Dell, chairman of Dell Inc.; Bill Gates, chairman of Microsoft; and Craig Barrett, chairman of Intel, were the subject of a news conference yesterday.

“Math and hard sciences drive innovation in almost every industry, and we need to take immediate action to significantly improve math and science education in this country,” Frist said.

The reconciliation bill would authorize $2.25 billion to be spent on tuition for students who major in math and science, engineering, technology or a foreign language. The grants would supplement the $4,050 available to low-income students each year through the Pell-Grant program.

The National “Smart” Grant would provide up to $1,500 in additional grant money.

Jennifer Greesom, a spokeswoman for Intel, said boosting the number of students in math and science is a top priority for the company.

Both the grants and the visas are designed to remedy the same problem: a shortage of highly skilled workers.

“Our industry can’t find enough,” Hellman said.

“In order for Intel to continue to innovate we need access to skilled workers,” Greesom said.

The additional 30,000 annual visas are expected to be used within three months. The current allocation limit is 65,000 H1B visas.

Because the visas come with fees, the Senate measure would bring in $600 million annually. The House measure doesn’t raise the allocation level but increases the fees and would reap $300 million.

Industry lobbyists say they are confident the Senate version will win out in a House-Senate conference in part because they can appeal to House Republicans that the higher fees amount to a tax increase — something Republicans are usually loath to embrace.

But the industry has also promised to continue to support broader immigration reforms, which increasingly looks like a high-priority agenda item when Congress returns from its holiday break.

In fact, Greesom called the additional visa allocation just an “interim step,” while Hellman referred to it as a “band-aid.”

Intel, for example, wants Congress to make it easier for foreign students who study certain subjects to stay in the United States after graduation; it also wants the visa allocations to be limited only by market demand.

Still, industry lobbyists say 2005 is shaping up to be a very good year for Silicon Valley and other fertile tech regions.

“Our issues are hot. We’ve been pretty successful,” Hellman said.