Cisco CEO calls for education reform, broadband push

The U.S. Congress needs to invest more in the U.S. education system and do more to encourage broadband adoption, the chief executive of Cisco said Wednesday.

Cisco President and Chief Executive Officer John Chambers didn’t offer specific suggestions to Congress in his speech on U.S. competitiveness, but said that the tech industry views improving the U.S. education system as a top priority. “In the end the jobs will go to where the best-educated workforce is, with the right infrastructure,” he told congressional staffers and others gathered at an Information Technology Industry Council high-tech summit in Washington, D.C.

Fewer than 6 percent of master’s degrees issued in the U.S. in 2001-02 were in engineering, and fewer than 1 percent were in math, Chambers noted.

The U.S. is also lagging behind most industrialized nations in broadband adoption, Chambers said. Japanese consumers have access to broadband speeds 400 percent to 500 percent faster than in the U.S., he said. “We’ve got to move faster,” Chambers added.

He praised the U.S. House of Representatives for passing the Stock Option Accounting Reform Act, which reverses an accounting standard issued by the U.S. Financial Accounting Standards Board requiring firms to expense their stock options on their balance sheets.

The legislation, which has not yet passed the Senate, also requires the U.S. departments of Commerce and Labor to complete a study on the economic impact of expensing of stock options. The study would also focus on whether stock options help recruit and retain workers and whether they stimulate research and innovation.

Chambers called on the Senate to pass the legislation and act to encourage stock options. “Ownership, whether you’re living in a house or owning a piece of the company, should be encouraged in this country,” he said.

House Speaker Dennis Hastert, an Illinois Republican, also urged Congress to act on legislation that would help the tech industry. He noted the House has passed both the stock options bill and an Internet tax moratorium, but the issues have hit snags in the Senate. Hastert, also speaking at the event, said Congress needs to continue to re-evaluate regulations such as Sarbanes-Oxley, needs to pass lawsuit reform laws, and needs to continually look at tax rates that U.S. businesses pay.

By the time a U.S. product goes to market, it’s been taxed several times, including real estate and employee taxes, Hastert said. “Taxes are embedded into products,” he said.

House Minority Leader Nancy Pelosi, a California Democrat, agreed with Chambers that the U.S. needs to invest more money in its education system. “Nothing does more to bring money into the economy and grow the economy than the education of U.S. citizens,” she said.

Pelosi also called on Congress to modernize a research and development tax credit that was extended when President George Bush signed a tax bill into law Monday. She criticized Republicans for running up a projected US$2.3 trillion government budget deficit and the Bush administration for opposing new stem cell research, saying the policy was part of Bush’s “antiscience agenda.”

“It’s a mistake, in my opinion, to offshore stem cell research,” she said.

She urged tech companies to support the issues she raised. “Help us with some of these things,” she said. “Anything is possible — we just have to fight for it and make it a priority.”