Hide your XBox, because the House of Representatives has lost its mind
Defense bill could stifle computer trade
By Robert Lemos
Staff Writer, CNET News.com
In a move that has re-energized the debate over export controls on high-performance computers, the latest version of a defense-spending bill would require companies to seek licenses to export even underpowered desktop computers.
What's new:
The latest version of a defense-spending bill in the House requires companies to obtain licenses to export even low-powered computers.
Bottom line:
The proposed rules are the latest flashpoint in a decades-long tussle between computer companies and national security hawks over the best way to limit the export of technology that could end up in enemy weapons.
The dramatic tightening of export regulations is included in the National Defense Authorization Act, an annual military funding bill that has already passed the U.S. House of Representatives. Though the proposed rules are only a tiny portion of the 630-page bill, they could have a devastating impact on the computer industry.
"It would bring exports to a grinding halt," said Dan Hoydish, director of trade, public policy and government affairs for Unisys and chairman of the Computer Coalition for Responsible Exports, a trade group that counts many major technology companies as members. "We wouldn't be asking for 20 export licenses in a year, we would be asking for 20,000 in a day."
Today, computer sellers are required to get a license to export any computer with performance equal to or greater than a system with 32 Intel Itanium processors. The current version of the defense authorization act would lower that limit to systems deemed "militarily critical" by the Department of Defense. That level is currently set to the equivalent of a computer using a Pentium 3 processor running at 650MHz, state of the art in 1999 but considered feeble today.
Moreover, the proposed rules would apply to exports destined for any country, including U.S. allies.
The controversial section is not included in a U.S. Senate version of the bill that passed last week. That means the fate of the proposed rules, known as Section 1404, will be determined by negotiations between the House and the Senate, currently slated for later this month.
