July 29, 1998, 8:30 AM EST

 

 

Government Witness

 

By John Moore, Sm@rt Reseller

 

IT advocates are pushing for a law that would shield companies from costly Y2K lawsuits.

 

     Resellers are waking up to potential legal fallout from the looming Year 2000 problem.

 

     The sobering prospect of $1 trillion-plus Y2K litigation costs has the entire IT sector paying attention. The legal issue may not have been an agenda item a few months ago, but today it's a key consideration. In a meeting earlier this month, members of the Computing Technology Industry Association (CompTIA) told John Koskinen, the White House's Y2K czar, that their top concern is exposure to liability.

 

     With that in mind, trade associations are working the legislative front to get their members greater protection from lawsuits. The National Association of Manufacturers is preparing draft legislation that would protect companies from litigation if they disclose how they are dealing with potential Y2K glitches. The association, founded in the 19th century, represents a number of industrial segments including high tech. Other trade groups, such as the Information Technology Association of America and CompTIA, are pursuing similar legislation.

 

     Koskinen told CompTIA that the Clinton administration would support Y2K legislation provided it was sufficiently narrow in scope. Bruce Hahn, director of public policy at CompTIA says Koskinen made it clear that the White House would not back legislation that exempted IT companies from all Y2K liability.

 

     Time is not on industry's side. There are fewer than 40 working days on the Congressional calendar before the November elections. To make it through by year's end, a Y2K litigation bill would have to run on an extremely fast track. The legislation's supporters concede that passage in 1999 is a much more realistic goal. But Y2K-related lawsuits already are being filed (Sm@rt Reseller, Feb. 23, p. 46).

 

     "One has to make the push to get it done now," says a spokeswoman for the National Association of Manufacturers.

 

     The question for IT companies is whether a narrowly focused Y2K bill--one that could be rammed through Congress in short order without controversy--would provide enough actual benefit. Hahn suggests another option for industry players would be to pursue a somewhat broader piece of legislation and hope for passage early next year.

 

     But resellers shouldn't count on protective legislation. A new law may help, but it's no substitution for combing contracts for vulnerabilities and managing your customer's Y2K expectations.

 

Heard on the Hill

 

     With time running out on the 1998 legislative calendar, Congress has a number of IT policy measures on its plate. The House will address securities litigation reform, Internet copyright infringement and visa caps for high-tech foreign workers. The Senate has approved parallel bills in each of those areas . . . Technology advocates are making a last-ditch effort to extend the research and development tax credit, which expired June 30. The tax credit didn't make the cut in the budget bill, but two other bills are seeking a permanent extension (S. 1464 and H.R. 2819).