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Public Policy Backgrounder
Microsoft’s work with policymakers and other stakeholders falls into three categories: enhancing online safety, promoting the knowledge economy and implementing business practices that serve these ends. Our overall goal is to advance policies that improve economic and social well-being, and that enable people to realize their full potential.
Internet Safety
Security & Privacy
Security and privacy are top priorities. • The last several years have shown that security is an industry-wide challenge as bad actors continue to roll out ever-more-sophisticated attacks. Although no complex software system can be perfectly secure, we help reduce risks by continually improving our software development practices and security response mechanisms. • In the coming months, we will release several products that will bring substantial security upgrades to the Internet experience. They include the beta version of Internet Explorer 7, Service Pack 1 for Windows Server 2003 and the newest version of Internet Security and Acceleration Server 2004. Reflecting the fact that enhancing security is a continuous process, we also have just updated and simplified our tool for removing viruses and worms from PCs. Its capabilities are being refreshed on a regular basis. • More broadly, we continue to partner with industry and government to make the IT infrastructure more secure; we have created a rewards program to help law enforcers find criminal hackers; and we support government efforts to fund training for its IT professionals. Globally, we support ratification of the Council of Europe Cyber Crime Treaty. • As to privacy, we have long supported empowering users to control the collection, use and distribution of personal information. We advance this objective through our technologies and our data management practices. We also recognize policymakers’ interest in assuring baseline privacy protection via legislation, and we look forward to working on proposals that address both consumers’ and innovators’ concerns in this area.
Combating Spam, Spyware & Phishing:
Microsoft continues its rigorous, multi-prong strategy to combat other misuses of technology. • We continue to invest in tools that deter spammers without unduly burdening legitimate e-mailers. We are beta-testing Windows AntiSpyware, a tool that alerts users to the fact that a potentially unwanted software download may be occurring. And we have launched an industry working group to develop definitions and best practices for spyware removal. • We also believe that strong legal action can deter bad acts. Our in-house investigators continue to bring lawsuits against spammers, and they have recently expanded their efforts to include “phishers” – people who seek to defraud consumers via identity-theft tricks. Carefully tailored legislation – i.e., legislation that carefully defines and prohibits bad behavior -- also can help in this regard. At the federal and state levels, we are helping to shape anti-spyware bills that strike this balance and that avoid inadvertent regulation of legitimate, consumer-assistance technologies. We also are working with legislators to enact measures that criminalize phishing.
Children's Online Safety:
Microsoft demonstrates its commitment to children’s online safety by regularly providing technology tools and educational materials, and by partnering with law enforcement. Our popular Xbox game console and our MSN Premium service include integrated, easy-to-use parental controls and easy-to-understand tips for parents; we have a number of programs underway to enhance the teaching of Web safety in classrooms; and we bring our training expertise to law enforcers, collaborating with international and domestic police forces on training activities around the world. • Our most prominent, recent effort is the development of the Child Exploitation Tracking System (CETS). This tool is a joint effort of Microsoft and Canadian law enforcement. It already has provided local police assistance in identifying child predators and their victims. • Ultimately, we see technology tools, awareness and vigorous law enforcement as the most effective ways to improve children’s safety online.
Consumer Education:
We recognize that the Internet has spawned a range of issues that can make consumers’ online experience frustrating, or worse. The experience can be especially daunting given the sophistication of bad actors and the apparent complexity of the topics. To help consumers understand the most prominent issues, Microsoft has produced several consumer-friendly videos. In plain language, they walk viewers through the basics of the topic, as well as steps to take to protect themselves. Videos are available on Security for Beginners, Spyware, Phishing, Spam and Keeping Your Computer Up to Date. More are in development.
Promoting the Knowledge Economy
Contribution of the Software Industry to Economic Growth:
Software and the software industry contribute substantially to economic growth and global competitiveness. The industry is unique in terms of its heavy investment in R&D and innovation. It provides opportunities for workforce and skills development training. More broadly, it creates an ecosystem of software partners, hardware companies and systems developers that all fuel economic activity. • Current research by IDC, for example, shows that every $1 of Microsoft revenue generates between $6 and $18 of downstream revenue for other local software, hardware and services firms. • In addition, Microsoft and the software industry support research in the sciences by local universities as an important means of advancing both the future of technology and the development of a local skills base.
Intellectual Property:
Like most innovative companies, Microsoft maintains a diverse portfolio of intellectual property, including copyrights, patents, trademarks and trade secrets. Strong intellectual property laws assure that innovators can continue to license and invest in new technologies, fostering broader benefits for the general population. U.S. creators of IP enjoy a strong legal framework. However, government must devote sufficient resources to combat IP crimes and to educate the public on the importance of respecting IP. To enhance our IP infrastructure, legislation aimed at assuring patent quality and making the patent system more accessible to all innovators should be considered. The U.S. Patent and Trademark Office also must continue to receive the resources it needs to improve patent quality and to reduce application processing time.
Unbiased Access to Markets:
Access to markets outside the U.S. on fair terms also fuels economic growth. Microsoft therefore supports both bilateral and multilateral trade agreements that open private and government markets, and that improve IP protection. Agreements recently concluded with Singapore, Chile, Australia, Bahrain and trading partners in Central America are positive steps in this regard. • We oppose government-imposed preferences for any particular software development or licensing model. Governments should maintain neutral procurement practices, select software on its merits and manifest their commitment to such practices by acceding to the World Trade Organization (WTO) Government Procurement Agreement. Similarly, governments should not freeze innovation by mandating use of specific technology standards. Competition and interoperability are enhanced when standard-setting processes are open, voluntary, industry-led and consensus-based.
Well-Balanced Communications Regulation:
Convergence among IT, electronics, communications and entertainment products is benefiting consumers and innovators greatly. At the same time, these changes are creating tension with traditional regulations. To avoid impeding innovation, policymakers need to proceed both creatively and carefully in developing rules better suited to the new reality. • With respect to new Voice-over-Internet Protocol services, for example, we urge caution. While the onset of VoIP raises tough regulatory questions, policymakers should be mindful of how social needs might be met via new techniques. • To stimulate broadband deployment, Microsoft supports creative spectrum reform. Here, the goal should be to improve the odds that new wireless technologies can become realistic broadband options, and the key to success will be to accelerate the digital television transition in order to free up high-capacity spectrum below 1 GHz. • It is also important that broadband users continue to enjoy basic Internet “freedoms,” such as the ability to access any site and use any lawful application or device. These Internet freedoms further fuel innovation.
Advancing Digital Inclusion:
Through innovative technologies and partnerships, Microsoft is working to broaden digital inclusion. We aim to bring the benefits of technology and technology skills to 250 million underserved people by 2010. To achieve this ambitious goal, Microsoft is investing in an array of programs to increase the availability and accessibility of software for people everywhere. • Several programs focus on learning. Our Unlimited Potential (UP) program provides grants to community learning centers that, in turn, train transitioning workers, out-of-school youth and other populations not served by traditional educational institutions. The UP program has established partnerships with 343 organizations in 83 countries; to date, it has distributed $95 million in cash grants and software donations; and its curriculum is available in 9 languages. • Other programs include Partners in Learning, which provides K-12 teachers and students in 91 countries access to tools and training they need to meet basic educational needs; and our Microsoft IT Academy, which helps educational institutions prepare students to pursue careers in IT. • We also work to make our technology easier for underserved populations to use. Our Local Language Program enables local organizations to create computer solutions in their native languages, including Estonian, Icelandic, Serbian Cyrillic and Latvian. Windows Starter Edition supports a low-cost, limited functionality PC for populations that have a high proportion of citizens with no previous exposure to a PC. And, Microsoft’s R&D for accessible technologies means computers are now more accessible for people with a variety of disabilities.
Government Investment in Basic Research:
Sound economic development policy requires private and public sector investment in research. It is well known that government-funded and university-developed basic research laid the foundation for much of today’s Internet. Continued government funding enables long-range exploration of areas that are beyond the private sector’s collective reach and helps develop the skilled workforce we need. As important, governments should assure that the innovations they fund can be further developed and commercialized by all who want to advance the state-of-the-art beyond what government researchers achieve.
Other Business & Governmental Practices
European Commission Decision:
In March 2004, the European Commission announced a decision in its five-year investigation of Microsoft. The decision came days after the parties announced they were unable to settle the dispute, despite months of negotiations. The parties did resolve the specific concerns raised by the EC, but were unable to agree on a principle to address potential questions of future technology innovation and integration. The Commission proposed a €497 million fine (approximately $613 million), as well as remedies requiring the compulsory licensing of our intellectual property and the removal of Media Player functionality from Windows for products distributed in Europe. We believe that the proposed remedies will compromise our intellectual property, disrupt our industry and harm consumers by reducing innovation. • We appealed the decision to the European Court of First Instance (CFI) and requested a stay of the proposed remedies. In December, the CFI denied our request for a stay, noting, however, that some of our arguments on the merits are well-founded and may ultimately carry the day when the substantive issues are resolved in the full appeal (which could take up to three years to resolve). Regardless of the outcome, we remain committed to legal compliance, our customers, our partners and to working with governments worldwide.
Global Sourcing:
Recently, some policymakers have expressed concern about U.S. firms’ creation of IT jobs overseas. The phenomenon is not a new one, but there is concern about an increase in the rate of growth of overseas jobs relative to domestic growth. Like many large U.S.-based companies, Microsoft has long had to focus on creating a global presence in order to serve our diverse customer base and to compete in the global marketplace. Unlike some who have engaged in the debate, however, we do not see the globalization of the IT workforce as a zero-sum challenge. Growth in both domestic and overseas employment is the most likely outcome as long as the sector as a whole continues to grow. The U.S. can enhance the competitiveness of its workforce by continuing to make strong investments in basic R&D (which, in turn, creates new opportunities for U.S. firms and their employees) and by increasing its investment in education and worker training.
Immigration:
To remain competitive in the global marketplace, Microsoft and other IT firms need access to professional talent from around the world. The U.S. government’s H-1B and L visa programs provide such access. Microsoft uses these visas selectively to employ professional researchers, engineers and managers. Many of the software professionals we identify in our search have completed higher education in their homelands and have gained valuable experience at major companies abroad; others come to Microsoft after earning degrees as foreign students from the best U.S. universities. Our nonimmigrant employees, as well as their foreign-born co-workers who are now lawful permanent residents or naturalized citizens, contribute immeasurably to our success. Weakening these visa programs would have a negative impact on the industry’s overall competitiveness.
Pro-Investment Tax Rules:
Microsoft's commitment to innovation is evidenced by our significant investment in R&D. It will approach $7 billion this year and is among the highest in the world. The federal R&D tax credit provides a critical, effective and proven incentive for companies to increase their investment in U.S.-based R&D. The credit has been extended through December 2005 and should be extended permanently.
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Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
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What are Microsoft's Policy Priorities? |
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Cyber Security
Privacy
Combating Spam
Intellectual Property
Spyware
Children's Online Safety
Internet Neutrality
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