Tech CEOs call for better US education, broadband

TechNet group also advocates friendly stock option rules

WASHINGTON - For the U.S. to stay competitive, the government needs to put more money into education programs and eliminate regulations that slow broadband adoption, TechNet, an advocacy group made up of technology chief executives, said Tuesday.

The group also called for national rules more friendly to stock options and more federal funding for technology research and development in its Innovation Policy Agenda, released at a Washington, D.C., press conference.

Three tech executives at the press conference stayed away from criticizing President George Bush or the Republican-controlled U.S. Congress, but said the U.S. government is falling short in funding of programs such as Bush's No Child Left Behind education initiative. The program, intended to hold schools to higher standards and increase student test scores, was one of Bush's major initiatives during his first four years in office, but critics have complained that it's never been fully funded.

Bush's budget for fiscal year 2005 included $24.9 billion for the program, $9.4 billion below the amount originally authorized for No Child Left Behind.

Between the fourth and eighth grades, the U.S. education system seems to fall behind other industrialized nations, said John Chambers, president and chief executive officer of Cisco Systems. "We're beginning to see our global competitors close on us," he said. "While we have made major improvements in terms of focus on No Child Left Behind and other programs ... we have to realistic, we are not competitive."

TechNet announced Tuesday it was forming an education task force. The task force will not only focus on ways government can better support education, but also on ways tech companies can help to improve education, said John Doerr, a partner with Kleiner, Perkins, Caufield & Byers, a Silicon Valley venture capital firm.

The group also pressed for increases in federal research and development (R&D) funding, saying the federal R&D budget has been flat for the last 30 years. TechNet called for Congress to pass a permanent extension to an R&D tax credit that's been renewed multiple times since 1981.

"Our competitive countries -- Brazil, India, China, Israel -- their research and development has grown dramatically," said Bob Greifeld, chief executive officer of Nasdaq Stock Market Inc. "Unless we take steps now to increase our national commitment to research and development, we will not win the global competitive challenge in the decades to come."

Bush's proposed federal R&D budget for fiscal year 2006, a total of $132.3 billion, would increase by less 1 percent. John Marburger, director of the White House Office of Science and Technology Policy, has defended the Bush R&D budget as responsible given a federal budget deficit that was $412 billion in fiscal year 2004.

In addition to government funding, U.S. industry has to focus on increasing R&D investment, Greifeld said.

Chambers and Greifeld also urged Congress and federal regulators to support policies that encourage the rollout of broadband across the U.S., saying broadband adoption is critical for new technologies to flourish. The U.S. ranks 13 among nations in broadband adoption, and part of the reason is that U.S. residents have access to slower broadband connections than people in Japan and South Korea and often pay more than residents of other industrialized nations, Chambers said.

"Our information superhighway is really a bumpy, two-lane country road," Greifeld said. "We need the superhighway, because it is the lifeblood of new industries that will develop."

Bush has called for all U.S. residents to have access to broadband by 2007. White House officials say that about 90 percent of U.S. zip codes now have at least one choice of broadband provider. But with only about 7 percent of U.S. residents purchasing broadband connections, U.S. regulators need to create hands-off policies that encourage providers to build higher speed networks and to cut prices, Chambers said.

Other goals on TechNet's agenda for the U.S. government:

-- A new stock option tax plan that rejects a U.S. Financial Accounting Standards Board's (FASB) proposed formula for stock options to be counted as expenses in financial reports. The FASB plan creates uncertainty and discourages U.S. companies from offering stock options to the 14 million U.S. residents who now have stock options, TechNet said.

-- Enact free trade agreements with Central American nations.

-- Support private sector efforts to improve cybersecurity.

-- Enact legal reform by reducing "frivolous" lawsuits.

The U.S. needs to act to maintain an entrepreneurial culture that is the envy of the world, Greifeld said. "This entrepreneurial, innovative culture is not a natural birthright," he said. "It is not our birthright that will continue to lead the global economy. It is something we've excelled at, but it is something we must work hard to ensure it continues."

Copyright © 2005 IDG Communications, Inc.

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