Mr. Chairman, I want to thank you and the Joint Economic Committee for hosting this annual High-Tech Summit and for the opportunity to participate in this important discussion about removing barriers to the New Economy.

The theme of this year’s summit reflects the recognition that we should usher in and fully embrace the benefits that this economy brings.

I commend this committee for taking this view, and I praise members of the House and Senate—from both parties—who are choosing a similar, forward-looking path on the critical issue of permanently normalizing trade with China.

There are few issues more vital and fundamental to U.S. economic growth than trade policies that open markets and remove barriers to American products and services.

Like the issues surrounding trade with China, the issues we face when discussing barriers to the New Economy—barriers driven by unprecedented advances in technology—are neither simple nor easy to resolve.

The paradox is that even as technology simplifies our lives on the one hand, on the other hand it has made our lives, in the public policy arena, more complex.

And that complexity—and the public anxiety that often accompanies it—is what must be addressed by you—in the public sector—and by CEOs, like me, in the private sector.  We will be making decisions for our companies and employees or for our country and our constituents that will set the course for all of our futures.

As we chart the course for this new century, we must be guided by a clear purpose and take a principled path to reaching our goals.

While we come from different roles and perspectives, our common purpose is the same: to better the lives of our constituents.

In your case, constituents are the citizens of your district and state—and more broadly—this country.  In my case, they are HP’s customers, partners, employees, shareowners and communities.

The principled path to serving our shared constituency must have the following elements:

Our efforts must be cooperative – bipartisan and reaching across real and virtual borders;

It must be for the good of the many, while minimizing potential negative impacts to the few;

And it must promote creative, inventive solutions, rather than jumping to quick-fix, simplistic approaches.

To provide a better life for our constituents in the New Economy—there are at least three areas where we must provide principled leadership:

1.Open Trade Policies… 2. Education . . . …and  3. Consumer trust

I’ve already mentioned the importance of open trade policies, which provide growth and opportunity for workers, businesses and consumers—in the U.S. and abroad.

And for some time now, I’ve been talking about education and its importance to our nation, to our businesses, to our children, and to our future.

I believe education is at the heart of everything.

As we help to bridge the digital divide, we are promoting what HP calls e-inclusion—providing opportunities for everyone -- people of all ages, sizes, shapes, and colors -- to participate in our economy through education, access to technology and community outreach.

But we know that to get to the root of the problem—to make a real difference—to be truly committed—we must give more than just technology, more than just money, although these are essential. While giving money is important, it’s the easy thing to do.

Giving people well-prepared teachers, career development paths, mentoring, training—that’s one-on-one stuff—important stuff. And it’s hard to do.

I'll mention just three examples of federal initiatives that are making important contributions in this area: the Dwight D. Eisenhower Professional Development Funds, the National Science Foundation and the TRIO programs.

The Dwight D. Eisenhower funds are helping to bridge the digital divide by promoting effective teaching, through quality training, focused on helping students achieve high-performance standards in mathematics, science and other core academic subjects. Eisenhower funds have been critical to successful science teacher development in many HP K-12 partnerships.

The National Science Foundation (NSF) has played a significant role in making effective math and science curricula available for all of our nation’s students.  In fact, HP was able to leverage NSF’s excellent curricula development in our own Hands-on Science program, which reaches more than one-quarter of a million students in 60 school districts across the United States.

Finally, the TRIO Programs serve students from low-income families who need extra attention and services to finish high school and prepare for college.  Since its founding, TRIO has helped roughly 2 million low-income, first-generation-college bound students enter college, graduate and move on to participate more fully in America's economy.

Whether through outstanding government programs, like these, or through private-sector initiatives, like HP's education and diversity initiatives, we must do more to achieve e-inclusion for the students of today and the workforce of tomorrow.

Working together, we can ensure that our schools have the resources they need – whether in funding and people . . . teaching materials and facilities . . .  standards and research—to give every student the opportunity and the tools to learn and succeed in the New Economy.

And while education is important to all of us, today what I’d really like to focus on is consumer trust in the virtual world.

Looking ahead in the New Economy, all of us must be ready to tackle the future—to tackle a new world.

A world that we believe will be defined by a different kind of technology landscape. It’s a landscape that’s defined by three things: infrastructure, appliances and e-services.

An infrastructure . . .  that’s always-accessible, always reliable.

Appliances … that are simple, affordable and unobtrusive.

E-services … that are useful and meaningful.

The next era will see the Net becoming personal, warm, human, friendly, rather than distant, cold, remote, alien—the words to describe cyberspace.

The next era we’ll see the rise of wireless everything; everything becomes a platform for accessing e-services; everything will have a Web page.  It’s an era where the Web works for you, rather than you working for the Web.

This rapidly changing technological landscape poses unique challenges for government and industry.

To help fully realize the possibilities of this future we must focus on building consumer trust in the virtual world and public policy compatibility—both domestically and internationally.

Inspiring trust depends on a range of ethical business practices.  It is the ongoing commitment to delivering on our promise to customers that leads to business success.  If they trust us, especially online, they vote with their dollars, or yen, or euros.

Which is why public policy compatibility is crucial: The borderless nature of this technology calls for increasingly compatible public policies.  Policies that will coordinate—not conflict—between states, regions, and countries.

So, how will we – as business and government leaders – protect consumers and promote trust in the on-line world of this New Economy?

How should we address issues of online privacy?  Resolve consumer disputes in Internet transactions?  Protect individuals and our businesses against cyber-terrorism?

These issues strike at the heart of consumer trust, which is a prerequisite for growth of global e-commerce in the emerging Internet or dot.com industry.

Cyber security truly brings home the reality of this new and borderless Economy.  With each “cyber attack,” which can strike from any part of the world-as we’ve recently experienced in the last couple of months—trust and confidence in the online world is shaken.

Following HP’s participation in the White House Summit on cyber security in February, we are participating in an industry coalition to address this issue. The coalition is developing a voluntary mechanism to share cyber-security information among IT companies, establishing a communication system to alert companies to attacks and identifying solutions.

As the IT industry joins together to combat cyber terrorism, it may prove necessary for Congress to consider removing some of the potential barriers to these efforts.

Similar to the Y2K issue, companies are concerned about liability in sharing information or running afoul of antitrust regulations.

We also must be cautious about making our companies vulnerable to civil, product liability lawsuits, as security weaknesses are shared openly.

And if we share security information with the government, how can we ensure that we don’t give the public access to sensitive, proprietary product information using the freedom of information act?

In each of these areas, Congress could help clear the way for greater collaboration to strengthen cyber security by reducing the barriers to information sharing between and among businesses and government.

Another online issue of concern is consumer confidence, especially in the area of privacy.

Consumers now have access to a tremendous amount of information to help them negotiate prices, terms and conditions.  They are no longer limited in where they shop, when they shop, or with whom they do business.

But these benefits cannot be fully realized if consumers are concerned about how their personal information is treated online.

In a recent Business Week/Harris Poll,  92% of Net users expressed discomfort with sites sharing personal information with other sites.  And 57% of respondents to the survey said that government should pass laws on how personal information is collected.

A recent Federal Trade Commission report on “Privacy Online” echoes that sentiment – concluding that industry’s self-regulatory efforts to ensure consumer privacy have not advanced far enough and that legislation is needed.

State governments from New York to California have considered – or are considering—privacy legislation that range from being narrowly focused to broad in scope.

I worry about non-uniform state actions on Internet privacy, and I am concerned about ‘regulatory overkill’ at all levels of government.

While industry self-regulation may not be the complete solution, I believe the private sector has done a good job of responding to privacy concerns during the seminal growth of e-commerce. Still, I know we can and must do better.

In fact, HP is making an offer that we hope will encourage many more companies to join HP as a member of the Better Business Bureau Privacy Seal program.

Beginning this month through September, HP will pay other companies’ application fees and up to $5,000 for each company’s first year of membership to join the BBBOnLine Privacy Seal program.  We are also offering limited, free consultation from HP’s Privacy Manager to help each company get started.

This offer reflects both our commitment to addressing consumer privacy concerns as well as our belief that the Better Business Bureau offers the ‘gold standard’ of privacy programs.

In fact, the BBB program has been singled out by the European Commission as the kind of program that gives them confidence that an American ‘safe harbor’ will meet European adequacy standards for privacy.

What I think the FTC “Privacy Online Report” points out, however, is that self-regulatory efforts need to be made more effective by requiring all commercial Web sites to inform consumers about their privacy policy.

Consumers have the right to know what is being done with their private information.  Such a disclosure requirement would require that the Web site inform consumers –in a clear and conspicuous manner—what the site does with consumer information.

This approach, coupled with broad-based consumer awareness programs, would empower consumers to only do business with those sites that have privacy policies that satisfy their needs.  Whether they prefer opt-in or opt-out, whether they want to share some information in exchange for discounts or customization, they can reward businesses that meet their privacy needs and avoid those that don't.

Support for a privacy disclosure requirement is the one step that all five FTC commissioners agree on.  This pro-consumer initiative would build on and enhance our industry's self-regulatory efforts.

But to truly earn the trust of consumers, we can't stop there.  We also need to expand self-regulatory efforts internationally.  For example, consumers need to have confidence that when they do business across national borders, that there will be a redress system if anything goes wrong with the transaction.

It would be difficult –and probably not cost-effective– for the court system to resolve consumer complaints when the business is based in another country.

That's why we have been working with the Better Business Bureau, trade associations and consumer groups in a number of countries, to develop a system of 3rd party mediation to help resolve trans-border consumer complaints.  I am pleased that we have had the active support of the FTC and the European Commission in these efforts.

Current concerns about consumer confidence should not turn into barriers to empowering consumers through global e-commerce.   HP believes that the high-tech industry has a stewardship responsibility to ensure that this new, online marketplace remains a clean, well-lighted venue for businesses and consumers.

Given differing views about the best approach to online consumer protection, what does HP recommend?

We recognize that government has a role in protecting consumers online.  To guide these decisions, here are four “do’s: and one “don’t.”

Do:  Work to harmonize conflicting consumer protection legislation.  Better yet, use a compatible approach to federal, state, and international public policies governing online consumer protection before conflicts arise.

Do:  Support disclosure, requiring that all commercial Web sites  — clearly and conspicuously— state what their Web site does with personal information (as proposed in the Boucher-Goodlatte bill, H.R.1685).

Do: Work to establish global alternative dispute resolution systems to instill consumer confidence in cross-border e-commerce.

Do: Recognize that the online industry is still young, operating in a rapidly evolving marketplace.  Allow industry to make greater progress in strengthening and expanding online consumer-protection self-regulation.

Now, here is the one “don’t”:

Don’t: Enact legislation that would be premature and could impose standards that are difficult and costly to implement, especially for small businesses.

In that last caution, it’s important to note that HP is a leader in online consumer protection and supports the four fair data handling practices outlined by the FTC, BBBOnline and EU Safe Harbor requirements:

--notice,
--choice,
--access, and
--security.

So, it's not that we are concerned about our own ability to comply.  We are concerned that legislation that is too onerous or too restrictive could negatively impact smaller, emerging online businesses, and that U.S. regulations developed in isolation could conflict with international policies.

As we usher in the New Economy, some of the greatest opportunities for business and employment growth will come from electronic commerce. Both the public and private sector must ensure that we protect consumers from fraudulent acts, whether locally or globally to promote the trust that is needed for electronic commerce to flourish.

While my discussion covered only a few topics today, the principles to use on the path to eliminating barriers to the New Economy apply across many, if not all, high-tech, borderless economy issues we face:

Cooperative efforts, reaching across real and virtual borders;
Good for the many, while not neglecting the few;
Creative, inventive solutions, not quick-fix, simplistic approaches.

With this formula, we’re sure to realize the benefits of the New Economy for our constituents—young and old—who represent the values of our past and the promise of our future.

Thank you.  I would be happy to take any questions at this time.