Hands off, Intel's Grove tells Washington

ITworld.com –

Intel Corp. Chairman Andy Grove knows exactly what he wants from policy-makers in Washington. In his speech given during a dinner hosted by the Progressive Policy Institute here Monday night, he made no bones about his agenda.

"It's really wonderful to be in a town where people have steady jobs," the chairman said to warm up the crowd, referring to the endless spate of layoffs afflicting his company's home turf, Silicon Valley. Grove launched into a brief summary of the highs and lows that the IT industry has reached over the course of the last few years, and then got down to business.

In order for the government to help the industry "finish what it started" with the Internet revolution, it must get out of the way, Grove said. Specifically, government must not inhibit adoption of broadband communications services, must eliminate export controls on technology goods, and must liberalize trade, he said.

"The government can help, not by generating return on investments, but (by) not putting up roadblocks," the Intel chairman said. "Public policy is a hero in this story."

To spur the adoption of broadband connections -- which only 8 percent of the U.S. population enjoys today -- government must not regulate companies looking to provide new "last mile" broadband service by forcing them to open up those lines to competitors.

Such is one of the topics raised in a bill currently being debated by the House of Representatives that would allow local telephone companies formed after the 1984 breakup of AT&T Corp. to enter the nationwide broadband market without first opening their local markets to competitors. Opponents of the bill fear those "Baby Bell" phone companies, which include BellSouth Corp. and Qwest Communications International Inc., could use their control over local markets to stifle competition. They say local providers should open their networks to competitors before being allowed to compete at the national level. The bill is sponsored by Reps. W.J. "Billy" Tauzin, a Republican from Louisiana, and John Dingell, a Democrat from Michigan.

"If we want to see broadband (adoption) we have to follow the money, as cruel and unfair as it sounds," Grove told the group, stressing that he believes only providers of new local loop services should be exempt from forced competition. Grove confided that he recently arrived at this opinion; he had long believed that forcing competition in the telecommunications industry via regulation was the right solution.

Here's one place where the government can meddle, Grove continued: In order to spur adoption of broadband connections by small businesses, the government should offer a tax advantage for entrepreneurs who purchase broadband equipment.

Returning to his hands-off theme, Grove said the government must relax export controls and stop "trying to control what is uncontrollable." He denounced the government policy of restricting the export of computer equipment to certain countries, specifically China, which has the potential to become the world's second-largest computer market by year's end, he said.

Grove added that he supports the move to give President George W. Bush the trade promotion authority "that he sorely needs to conduct business" and that would open up more markets for technology companies to sell into.

In conclusion, Grove told the audience that Intel is betting on the future of Internet technology. "I ask the members of Congress, the Administration, and those who influence them to bet with us," he said.

Intel, based in Santa Clara, Calif., can be reached at +1-408-987-8080 or at http://www.intel.com. The Progressive Policy Institute, in Washington, can be reached at +1-202-546-0007 or via the Web at www.ppionline.org.

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