Stimulus bill keeps H-1B hiring limits on bailout recipients
A provision intended to require banks receiving federal bailout funds to give hiring priority to U.S. workers over foreigners with H-1B visas was left in the economic stimulus package when U.S. House and Senate negotiators agreed on a compromise bill this week.
The $789 billion stimulus bill was subsequently approved by the House of Representatives Friday, and a vote in the Senate is expected Friday night.
[ Tech's Bottom Line blog: Why it's time for the H-1B visa to go away. ]
The provision designed to curb the use of H-1B visas was proposed last week by Sens. Bernie Sanders (I-Vt.) and Chuck Grassley (R-Iowa) as an amendment to the Senate's stimulus legislation. The proposal initially sought to bar H-1B hiring by financial services firms receiving bailout money, but it was later modified to restrict such hiring.
The stimulus bill, once it is approved by the Senate and signed by President Barack Obama, will require firms that take bailout funding to make a good-faith effort to hire U.S. citizens before people who are in the country on H-1B visas.
Opponents of the measure says it is so restrictive that affected financial services firms likely will stop hiring H-1B workers altogether. However, the provision doesn't prevent them from using offshore outsourcing contractors, which typically are heavy users of H-1B visas.
As a result of the conference agreement, Sanders said in a statement Friday that he expects the H-1B provisions to be adopted along with the rest of the stimulus bill. He added that what may have prompted the negotiators to keep the H-1B restrictions in the bill were all of the ongoing layoffs and other job losses. "With thousands of financial services workers unemployed, it is absurd for banks to claim they can't find qualified American workers," Sanders said.
The proposed restrictions require firms that receive money under the federal Troubled Assets Relief Program (TARP) to comply with hiring rules set for "H-1B dependent" firms -- those with more than 15 percent of their workers on visas. Those rules set a number of strict requirements for hiring H-1B holders, including a need for companies to attest that they actively recruited American workers and are not displacing or replacing U.S. citizens with foreign workers.
However, the impact of the new legislation on offshoring of IT work may be limited. Ron Hira, an assistant professor of public policy at Rochester Institute of Technology and co-author of the book Outsourcing America, claimed that many TARP-recipient banks "have huge shadow workforces -- people who work for the bank indirectly through outsourcing contract firms."
The TARP-related hiring provision "will rectify some of the indefensible practices of quasi-nationalized banks," Hira said. "But unfortunately, it doesn't close the loopholes where most of the abuse occurs."
Hira said the amount of outsourcing by Wall Street firms has actually increased since the bailout program began last fall, citing deals such as offshore outsourcer Tata Consultancy Services Ltd.'s October agreement to acquire a unit of Citigroup that does business process outsourcing and IT services work. Similarly, Wipro Ltd. agreed in December to buy Citigroup's IT subsidiary in India.
In addition, Hira contended that "many, if not all, of these banks have human resource practices where they force their American workers to train foreign replacements, and subsequently lay off the American workers." That practice "sometimes results in tragedy," he added, citing the 2003 suicide of a former Bank of America programmer who reportedly was laid off after training his replacement.
On the other hand, Charles Kuck, president of the American Immigration Lawyers Association, expressed disappointed at the inclusion of the hiring restrictions in the compromise stimulus bill.
"These banks will not able to hire qualified foreign talent to pull them out of this mess -- if that was necessary," Kuck said. "Maybe we've got all the homegrown talent we need to pull us out of this mess, because now we have to hope we do."
While the restrictions don't prevent employers from hiring H-1B holders, Kuck predicted that the affected firms will be unlikely to do so because of the added cost and work that will now be involved. The key advantage of the H-1B program, he said, is the ability it gives companies to quickly hire people to fill available jobs.
"There are very few employers that are going to wait that period of time to be able to do that [under the restrictions] when they have to bring somebody on board right away," Kuck said. "You are effectively saying, 'You can't use the program.'"
The big question, according to Kuck, is whether companies receiving TARP funds will be able to bring in "the best person available to do the job." That's a separate issue, he said, from the low-level work that typically is going to outsourcing firms.
Computerworld is an InfoWorld affiliate
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WiMax and LTE supporters prepare for battle at MWC
Supporters of rival technologies WiMax and LTE (Long Term Evolution) will do their best to show momentum behind their respective technologies at Mobile World Congress.
The last week has seen a number of products announcements from the LTE camp, which will do its best to show that the development of the technology is moving forward at a rapid rate. Ericsson and Nokia Siemens, which last week unveiled a new base station, have announced new core network products ahead of the show.
[ Get the latest on mobile developments with InfoWorld's Mobile Report newsletter. ]
The message from the vendors will be that they have equipment, especially radio base stations, ready for immediate trials and then deployment, according to Joao da Silva, senior research analyst at IDC.
Several of the operators that have voiced support for LTE will also be at the show in Barcelona, including Verizon Communications, China Mobile, and T-Mobile.
Operators from Asia and the U.S. can be expected to be more up front with their plans, compared to their counterparts in Western Europe, who have to be more cautions because most of them still don't have the frequencies needed for rolling out LTE, according to da Silva.
Visitors at the show can also expect a plethora of demos in the exhibition halls for prototype LTE chips and devices, according to Mark Newman, chief research officer at Informa Telecoms and Media.
While LTE is stewing, its proponents are also pushing faster versions of HSPA (High-Speed Packet Access) as an alternative to WiMax. On Wednesday, Ericsson, for example, announced support for HSPA at 42M bps in its network equipment.
But the mobile WiMax camp is also out on a mission to demonstrate that a lot of operators are choosing WiMax. Mobile World Congress is a good opportunity to show how the ecosystem is developing, and show on the ground what it has going today, according to Ashish Sharma, corporate vice president of market development at Alvarion.
'"We are bringing in customers to the Intel pavilion to give a talk; Digicel is going to be there from the Caribbean; WiMax Telecom from Austria is coming, and I heard that Comstar is coming from Russia," Sharma said.
It's currently the best and worst of times for WiMax, according to Mike Roberts, principal analyst at Informa Telecoms & Media.
It's the best of times because the technology has progressed quite a lot in the last year. "They've got equipment and devices certified to help with interoperability. There are also more devices to choose between, and we've got some major operators launch, such as Clearwire," said Roberts.
But when you look at the overall market picture; the worst of times is that the competition has made even more progress. HSPA has just boomed, and gone mass market, according to Roberts.
"In markets such as Western Europe it has effectively closed the door for WiMax," he said.
The WiMax camp will try to turn the tide at Mobile World Congress, but will struggle to do that, according to Roberts.
But there is still a future for the technology. "I think its going to be a sizeable niche. The bulk of the market is going to migrate to LTE, and WiMax will take a slice of the wireless broadband market," said Roberts.
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Update: Google opens Android store to paid apps
Developers of Android applications finally will be able to charge consumers for them, ending a few months of free Android downloads and potentially making Google's mobile platform more attractive to developers.
U.S. and U.K. developers can now go to the Android publisher Web site and upload their applications along with consumer pricing. Paid applications will go on sale in the U.S. starting in the middle of next week and in additional countries in the coming months, Google's Eric Chu wrote in a blog post Friday.
[ Related: Read all about Google Android in InfoWorld's special report ]
The Android Market launched in October when the first phone based on the platform went on sale. But until now, it hasn't had any checkout or payment system, so application publishers have only been able to offer free software. Google had said it would start allowing sales early this year.
The post did not indicate how much the applications might cost, saying only that developers would be able to "upload their application(s) along with end-user pricing." Unlike on the App Store for Apple's iPhone, developers don't need to get their products approved by Google or by service providers. All they have to do is register for $25 and upload their apps.
The payment and billing tool for Android Market will be Google Checkout. That platform, launched in 2006, allows payment through major credit cards and lets users save their payment information on the site.
Later this quarter, developers in Germany, Austria, Netherlands, France, and Spain will be able to offer paid applications, and by the end of the quarter, additional countries will be announced, Chu wrote.
Also on Friday, Chu wrote that Android Market for free applications will become available to phone users in Australia beginning Sunday, Pacific time. Singapore users will get access in the coming weeks. The Android-based HTC Dream handset is set to launch on Monday in Australia and later in Singapore.
Developers are likely to take a wait-and-see attitude to selling Android applications, said analyst Greg Sterling of Sterling Market Intelligence. With the low price of a typical mobile application, developers may be drawn to the platform slowly as they watch the audience grow, he said.
"The sweet spot is really $1.99 or less. I think that's been pretty well-established by Apple," Sterling said.
Writing applications for the iPhone offers much more potential for volume today. There are more than 15,000 applications available from the App Store, and consumers have downloaded more than 500 million, according to Apple. There were 13.7 million iPhones sold in 70 countries last year. By contrast, the only Android phone available now is the T-Mobile G1, which is on sale in the U.S., the U.K., Germany, Austria, Poland, the Netherlands and the Czech Republic. There are more than 1,000 applications on the Android Market, and thousands of developers are writing for it, according to Google.
For Google Checkout, the Android Market could be a big opportunity, Sterling said. Originally seen as a potential rival to eBay's PayPal, Checkout hasn't grabbed much market share, he said.
"It never really materialized as a threat to PayPal," Sterling said.
As a Web-based service, Checkout is fairly straightforward, but it will be critical for Google to make it easy for Android phone users to start using it, he said. Apple signs up iPhone users for its iTunes store as part of the activation process for the handset.
"If (Google) blows this part of it, then developers will be upset, and (Android) will be a less successful platform overall," Sterling said.
This story was updated on February 13, 2009
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