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MCI mimics White House on e-commerce

Internet companies, hoping to stave off government legislation, are scrambling to create self-regulatory mechanisms on a broad range of Net policy issues.

Internet companies, hoping to stave off government legislation, are scrambling to create self-regulatory mechanisms on a broad range of Net policy issues.

The industry is trying to seize an opening created by both the Supreme Court's June ruling to overturn the Communications Decency Act online decency law and the July 1 release of the White House's Framework for Global Electronic Commerce.

President Bill Clinton preaches self-regulation first, with the looming possibility of federal intervention if the voluntary efforts fail. But legal analysts say self-regulation is as good as law on the Net, which allows little room for debate or success.

Today, MCI Communications (MCIC) released its "Internet Policy Vision" paper, which largely mimics the White House's e-commerce policy in championing private-sector efforts.

"Market-based private solutions, rather than governmental mandates, should be policymakers' first choice, not their last resort, in tackling critical Internet issues," the MCI paper urges. But it also calls on businesses to strive for "consumer-friendly" corporate policies, specifically mentioning privacy.

Industry bodies are moving toward self-regulation on a broad range of topics: privacy, content screening, gambling, junk mail or spam, and marketing to children.

But one observer isn't sure these efforts qualify as "self-regulation," given government's interest in the issues. "With government-endorsed self-regulation, we have lawmaking by vague threat instead of the president having to go through the normal constitutional procedures," said Tom W. Bell, director of telecommunications and technology studies for the Cato Institute.

"If industry doesn't do exactly what the administration wants, then the administration will regulate. The industry figures if they cave into the threat, they save lobbying money and then they have certainty," he added.

Lance Rose, an attorney who specializes in Internet issues, said self-regulation won't work on every Net issue but may allow larger online businesses to skirt liability if new laws are passed.

"It's not going to satisfy the people who want to protect kids," he noted. "However, if the commercial sector can set up safe-harbor treatment from future regulation by self-regulating, then Congress could be encouraged to regulate around them."

Currently, online access providers, content publishers, and Net users face an array of different laws or voluntary guidelines for every corner of cyberspace. From sexual material to junk email, there is no telling whose self-regulatory policy one could break when setting up a site on the Net, collecting private data, or hosting content not fit for children's eyes.

The issue of online privacy is one area struggling to find a broadly adapted self-regulatory model. The World Wide Web Consortium (W3C) is developing an Open Profiling Standard (OPS) that would put Web users in control of what personal information they disclose to Web sites. Backers include consumer privacy groups as well as Microsoft, Netscape, and Oracle.

Yet not all privacy advocates like OPS, with Marc Rotenberg of the Electronic Privacy Information Center arguing it will strip privacy and let personal data be used without an individual's consent.

Firefly Networks, coauthor of OPS, said today it's working with Microsoft, Netscape, and Oracle to establish an OPS-based application development platform for online personalization with privacy. Net Perceptions, another personalization technology firm, said today it is shipping software tools to implement OPS.

In privacy hearings last month, Federal Trade Commission member Christine Varney pushed hard for private-sector privacy regulations.

At those hearings, major firms with databases of personal information, including Lexis-Nexis, issued practices and guidelines last month for what kind of data are collected and who can access it online. The Direct Marketing Association also issued privacy guidelines that state marketing data should not be available through "look-up" services

In the content sphere, self-regulation efforts are concentrated on filtering technologies that would let families, schools, and employers screen out objectionable content. Under a existing W3C effort called PICS (Platform for Internet Content Selection), private groups create databases of objectionable Web pages, which are tagged based on their content so users can block them.

Last week, Digital Equipment's AltaVista software unit said it's working with Net Shepherd and others on creating a standard for Internet content tagging and filtering.

On another hot-button Net issue, trade group Interactive Services Association in May issued a voluntary code of conduct for online casinos. It urges protecting privacy and security of Net wagers, honest advertising, and local licenses for gambling operations.

In corporate guidelines released today, MCI said it will not host gambling Web sites or offer Internet services to online casinos.

MCI added it won't tolerate use of its network for spam or mass emails. At last month's FTC privacy hearings, a new group called the Internet Marketing Council said it will grant a logo to bulk emailers if they offer discounts to junk email recipients.

"It would be hard for people to feel that regulation is avoidable when it comes to junk email," attorney Rose said. "We will have regulation here for the most extreme practices."

Last month, Varney urged bulk emailers and others to come up with a self-regulation program before the FTC makes recommendations to Congress.

However, experts say the practice of marketing to children or collecting their private data will gain the most attention from self-regulators and the government. Already, the FTC has issued guidelines that make collecting data from kids an unfair and deceptive business practice if a site doesn't properly disclose to parents how the data will be used.

"Self regulation to ward off government regulation would most likely succeed in the area of collecting kids information," Rose predicted.