The 109th Congress may have bold plans to tackle new laws over the next two years, but legislators returning to Washington this week face a stack of old regulatory business dredged up by industry and awaiting attention on Capitol Hill.
A chorus of complaints about the Sarbanes-Oxley Act, passed in 2002, for example, is pushing Congress to reconsider the law. Critics want to reduce the burdens of time and money imposed by Sarbanes-Oxley, which requires chief executives to account for corporate financial statements and imposes anti-fraud controls.
“I think a realistic assessment needs to be done of cost versus benefits,” said Irving Tyler, CIO at Quaker Chemical Corp., in Conshohocken, Pa., adding that 25 percent of his IT departments key resource—time—is spent complying with the act.
“Everyone is concerned about doing this right, and because not all of the outcomes are certain and because no one wants deficiencies of a significant nature, everyone does this process in more detail and at greater repetition,” Tyler said, adding that he was speaking only for himself, not his company.
Through Sarbanes-Oxley, Congress validated the independence of the Financial Accounting Standards Board, which some industries will challenge this year on the issue of recording stock options as a company expense.
The technology industry, in particular, opposes the new rule on the grounds that it could impede young companies ability to attract the most-talented employees and thus hamper innovation.
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The House of Representatives passed a bill in the last Congress opposing the options-expensing requirement, but the Senate did not follow suit and the legislation died. For TechNet, a Silicon Valley-based network of CEOs, reviving the House initiative is the top legislative priority this year.
Stock options are “a tool that startups and other technology firms use to draw talent to their firms,” said TechNet spokesperson Jim Hock in Washington. “Unfortunately, its fallen under the whole aura of Enron [Corp.] and CEO scandals.”
Also high on the tech industrys legislative agenda this year is broadband deployment, which will necessitate a second look at the 1996 Telecommunications Act.
As IT companies move steadily toward delivering communications products and services, ubiquitous high-speed Internet access becomes increasingly vital. The merging of data and voice networking—particularly in the form of VOIP (voice over IP)—upends the traditional telecom regulatory regimen, particularly the means by which service providers access one anothers networks.
“There arent just phone companies anymore; there arent just Internet companies,” Hock said. “Whatever changes we need to make will be looking to where well be in 20 years.”
Telephone and Internet companies will be front and center in the broadband debate on Capitol Hill. It is just the latest chapter in the decades-long debate over how to transform the former monopoly telephone system into a competitive telecom system. The implementation of the plan that Congress set forth in the Telecommunications Act satisfies few parties today.
“If Congress decides to look at re-opening the 1996 act, we hope that it will correct the course that the [Federal Communications Commission] is on,” said Jason Oxman, general counsel of the Association for Local Telecommunications Services, which represents CLECs (Competitive Local Exchange Carriers). “Its very clear that the FCC in the last few months has decimated the pro-competition provisions of the 1996 act.”
RBOCs (Regional Bell Operating Companies), meanwhile, will push for continued deregulation on the grounds that service providers should face the same regulatory burdens regardless of technology.
“Weve got cable and satellite and wire-line and wireless and even software providers,” said Ed Merlis, senior vice president for government and regulatory affairs at the United States Telecom Association, also based in Washington. “We want to see our telecom laws updated to reflect the consumer making decisions in the marketplace. As a consumer, I dont want my decisions and cost of product related to regulatory costs.”
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