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Clinton stumps for e-commerce

President Clinton and Vice President Al Gore are expected to lobby the private sector to step forward with e-commerce initiatives.

President Bill Clinton and Vice President Al Gore aren't likely to spring any surprises Tuesday when they unveil the White House's long-awaited framework for global Internet commerce. But the ceremony will almost certainly serve as a bully pulpit for the administration's efforts.

Clinton and Gore are expected to lobby the private sector to step forward with initiatives to address critical Internet policy issues, such as protecting consumers and businesses from Net crime. With it will come the implicit threat that if private efforts don't go far enough, the government stands ready to step in.

The second message will be directed internationally, where Clinton will push the principle that the global Internet, especially Net commerce, should not be regulated by different rules in different nations.

The first message may be an easier sell than the second. "They are trying to do a government-to-government sell, as well as to address private sector audiences," said James Johnson, a Washington lobbyist who heads the U.S. delegation for the Group of Seven on electronic commerce. The G7, as the policy group is known, just met in Denver and consists of the seven most industrialized economies in the world.

The e-commerce policy "is a clear commitment to private-sector leadership and little government leadership," Johnson added. "It will talk about a duty-free zone for international trade on the Internet."

As reported earlier by CNET's NEWS.COM, the e-commerce framework has been in the works since April of last year. The proposal to create an Internet "duty-free zone" for digital goods is expected to be a key component of the policy, as is a recommendation to levy no special taxes on Net commerce.

Earlier drafts of the policy--there have been more than 20--also have urged protecting intellectual property; unifying those protections across borders; ensuring individual privacy; letting the private sector set Internet standards; adapting the commercial legal code to cover Internet commerce; allowing controlled use of encryption for secure Internet communications; and eliminating unfair regulations that restrict online service providers from reaching end users.

Clinton is expected to set up a commission, chaired by Gore, to monitor implementation and ensure that it's done by January 1, 2000.

Protecting children on the Internet is a key concern, but the paper twice opts for industry self-regulation over government mandate, according to a Reuters report based on a Washington Post story today. To handle objectionable content, the Clinton administration urges a system of private ratings from different groups and software that allows parents to block access to inappropriate sites.

It also gives industry and privacy advocates time to create practices and technologies to control the collection of names, addresses, and other personal data from children who use the Internet. But if that doesn't happen quickly, the document urges government action, Reuters reports.

To lobby other nations, Clinton will dispatch Ira Magaziner, the White House aide who drafted the e-commerce policy, and two cabinet secretaries--Robert Rubin of the Treasury Department and Richard Daley of the Commerce Department--on an international road show to push the administration's position. Magaziner recently spoke on the policy at the annual Internet Society meeting in Malaysia, and Daley did the same in Silicon Valley yesterday.

Globally, the White House is trying to beat back multiple efforts to censor content, set privacy rules, insist that a percentage of Internet content viewed within a country be created within that nation, dictate which language must be used on Web sites, and to tax Internet transactions or imported digital goods.

The administration also is lobbying for support of its encryption export policy and for cross-border protections of intellectual property. Although the White House could alter its stand on encryption exports, no such change was evident yesterday when Magaziner briefed Washington groups that have commented on the e-commerce policy.

In addition, no new efforts are expected by Tuesday to censor Web content since the Supreme Court struck down those rules yesterday. (See related story)

On the domestic front, while earlier drafts of the documents pushed for private initiatives on Net standards, privacy, and content, that policy comes with an implicit threat.

"There are some hidden statements that say, 'Today you have the responsibility to self-regulate--don't blow it," said Randy Whiting, president of e-commerce trade group CommerceNet. "The administration is risking a lot in taking this position."

Yesterday, Magaziner delivered a similar message to industry officials. "He made himself very clear that if there are loopholes left open by the online and Internet industry that in any way have deleterious effects on businesses or consumers, the government is fully prepared to step in," said Brian O'Shaughnessy of the online trade group Interactive Services Association. He termed that warning "fairly worrisome," which is probably what Magaziner intended.

The White House appears to be pursuing a similar strategy with other federal and state agencies, which already are considering different laws on censorship, taxation, and other issues.

"Laws have to be consistent from one state to another," said Whiting. "[On the Internet], you are definitely not working in a confined regional space where boundaries are clearly defined. You have to work in a consistent environment."

The White House appears to be pursuing a similar strategy with other federal, state, and local agencies, which already are considering different laws on censorship, taxation, and other issues.

The White House report is not expected to endorse federal preemptions--meaning cyberspace taxes and the commercial code, for example, will not be designated as strictly federal matters--at least not yet. Instead, the administration hopes that national associations of state legislators will draft model laws this year that could be implemented in each state starting in early 1998.

But the possibility of federal preemption is implied. "The threat of exercising external power by the feds is always the best way to get governments to cooperate," noted Johnson, a former director of a national group for state governors. "I think that's part of what they're banking on."

Aside from what various other governments may do in the future, e-commerce uncertainties will remain even after Clinton outlines guidelines, messages, and action items next week, Whiting said.

"Nonlinear, interactive media is fundamentally different than other types of media, and as such, electronic commerce done over the Internet and commerce [done] in different forms are fundamentally different," he added. "What works in physical space may not work in cyberspace. We need a consistent, predictable environment overall."

Reuters contributed to this report