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Congressional leader pushes for fewer rules

The retiring chairman of the House Commerce Committee talks in an interview with CNET about a number of unresolved issues in Congress, including taxes and privacy on the Internet.

More than anything else, Tom Bliley would like to be remembered as a deregulator.

The retiring chairman of the House Commerce Committee has a long legacy on that front, from co-authoring the Telecommunications Act of 1996 to privatizing the commercial satellite industry this year. Nearly any piece of legislation affecting the New Economy in recent years has passed through his committee.

When the Republicans took control of the House in 1995 they imposed term limits on how long one could chair a committee. His pending exit from the chairmanship is what the Richmond, Va., politician and former mortician called "a little added impulse" to not seek re-election to Congress this year after 20 years in that body.

There remain a number of unresolved issues in Congress, including taxes and privacy on the Internet. Other issues, such as the recent vote on a bill that Four years ago wireless was very expensive and very few people had it. Today it is as common as dishwater. would eliminate fees the Bells have to pay to competitors for connecting to ISPs--known as reciprocal compensation--await Bliley's signal for further action.

Bliley may still be involved in the debate on the New Economy after the election. In an interview with CNET, Bliley said he hadn't decided where he'd be working after he retires later this year, but he did say he expected to spend two or three days a week in Washington, a hint that lobbying or political consulting could be in his future.

CNET Are you planning on having a markup (debate and vote) on reciprocal compensation, and if so, when?
Bliley: Well, we're considering our options. There were a lot of questions raised in the subcommittee markup, and these in my opinion will need to be answered before we move to full committee markup. We've got a lot on the agenda. But we're certainly considering all our options with reciprocal payments, and we'll just have to see if we can get the kinks and bugs worked out.

Could a possible hike in Internet rates be one of those kinks?
Well, that's very much on the brothers' and sisters' minds as we wind down this Congress. I mean, nobody wants to see that happen. So these are part of those sticky wickets that have to be dealt with.

Are we seeing too many companies merge? Should they be putting those efforts into new services or competition?
First of all, the mergers are neither good or bad. It depends on each one and you have to judge them on their merits. We're in a global economy and only the most efficient will survive. Obviously, in these mergers that's one of the big things these people are looking for. Economies of scale, how can we produce a better product at a better price and still remain profitable to our shareholders who, after all, put up the money for us to do these things.

On the other hand, we created a highway. Nobody knew how they'd use it, but we knew people would come and use it. No less a person than Alan Greenspan has said the Internet is fueling this economic growth we're experiencing. Four years ago, wireless was very expensive and very few people had it. Today it is as common as a dishwater. I mean, it's everywhere. So the only scary part about it is when you're driving down the street and you see that SUV coming at you and the driver is on his cell phone.

Next: AOL-Time Warner, Net taxes and other issues  AOL-Time Warner, Net taxes and other issues

Maybe we need a law there.
I think we missed a vote on that, that you should not be able to place a call on wireless while the car is in motion. I think you can receive it, because you got the hands-free thing, but dialing all those digits is very dangerous. And we've all done it, and it's still dangerous.

Back to the AOL-Time Warner merger. A lot of people say it's a new kind of merger with one company controlling content and the pipe, and that it may be simply too big.
I don't think you should rest your judgment on that bottom line that it's too big. You shouldn't convict a person in advance. The European Union I don't think that and the Federal Communications Commission are going to force some changes if it's allowed to go forward, so let it go forward. If there is a problem with too much dominance, we still have the antitrust laws, just as Justice brought on Microsoft...

But that's not an easy process, and it's still ongoing.
It shouldn't be an easy process. You shouldn't be able to act just on a whim, because you could get in a situation in which for political reasons the government might take offense at some companies and go after them arbitrarily. You've gotta have due process. I don't think you can sit here now with the way things are changing and say automatically that because of AOL and Time Warner that they are all of a sudden going to be the octopus that strangles the rest.

One of the reasons we're the leaders in the world is we haven't smothered industries with regulation or with taxation. We need to let this thing go. I don't think that "no tax" on the Internet should be permanent, but we can come back and look at it five years down the road and see where we are. We may have to address that.

Do you feel that Congress needs to renew the moratorium (a temporary ban on Internet-specific taxes expiring October 2001) before it figures out what to do with sales and use taxes on the Internet?
At this point in time I would say that's a definite yes, because neither the governors nor the mayors can show they've had a diminution in sales tax revenues as a result of the Internet. Now five years from now, that may not be the case, and that's why we should not make it permanent, and we should come back and look at it.

The current moratorium expires about a year from now.
Right. We've passed an extension; the Senate has not. Hopefully, maybe in the final (spending) package it could be included because it has overwhelming support in both bodies.

Has this been a good Congress for the Internet?
I think it has. We adhered to the No. 1 principle--do no harm. Congress is not a lead dog; Congress is reactive. And because of what's happened The biggest disappointment is that we did not get electricity restructuring done. you get reaction. I'm not saying that's good or necessarily bad. I'm just saying that's a fact of life. But we have looked over it carefully and we have not rushed to judgment and done anything that in my opinion would have an adverse effect in the near term.

How about actions the telecommunications community likely welcomed?
Well, we did e-sign this year. That's a huge asset. If you're buying a car or buying a home, you will be able to complete the transaction with a digital signature. It will have the same validity as a paper signature.

Have there been some disappointments for you?
The biggest disappointment is that we did not get electricity restructuring done. That needs to be done. One of the reasons is 10 years ago, 15 years ago, people felt that we had enough electricity generation in the United States for the future. Then along came the Internet. And the Internet is now consuming about 7 percent of the electric energy in the United States and it is expected to double in the near term.

Another thorny issue is privacy.
Privacy is huge. It's going to be front and center in the next Congress. I tell the Internet companies that you need to develop a code. You need to say, "No. 1: We do not give nor sell our customers' information outside the Privacy is going to be front and center in the next Congress. corporation. Two: We will tell our customers what information we have and what we intend to do with it. Three: You allow the customer to then say, 'I don't want you to do X, Y and Z,' and they opt out. Four: You create a security system with the best technology available to make sure it doesn't escape your hands. Then you hire an accounting firm to do a random audit and make sure you're doing what you said you were doing. And I told the U.S. Chamber of Commerce, "You guys develop a logo, like a seal of Good Housekeeping or Underwriters Laboratories for electronics stuff that you put on sites for companies that do the right thing." (Days after this interview a coalition of Web companies announced a process to develop a code similar to this.) "And if you do that, you will avoid onerous federal regulation. Absent that, you will feel the heavy hand of government."

For Toysmart, in bankruptcy it turned out the only asset it had was its customer list. There's the possibility that if you put too many restrictions on customer information it could hurt the economy.
I think you're right, you can have too many restrictions. If you have to opt in to have your information used it will smother the Internet. If you look at the Washington phone directory, imagine the size of that directory if every person had to opt in that you could list my number? The whole thing would be meaningless. So opt out, but you gotta let the people know what you have and what you intend to do with it, and let them make the choice.