Clinton sets e-commerce course

After years of courting the Internet, the Clinton administration today is announcing its long-awaited electronic commerce policy, which would make buying and selling easier and more popular online.

The White House will release the final version of its long-awaited "Framework for Global Commerce" today. The paper--which relies on the private sector, not the government, to take the lead in creating a predictable and stable environment for Internet commerce and warns governments against regulation and taxation--casts the United States in the leading role on international e-commerce. It may also be the platform from which Vice President Al Gore will launch his presidential campaign for the 2000 elections.

The wide-ranging document lays the foundation for a set of predictable, consistent domestic and international rules in nine areas, including encryption, taxation, censorship, and protection of children's personal data.

While there are few surprises in the Clinton policy, it outlines for the first time a clear, comprehensive vision of how governments should approach the Internet as a global marketplace. Both the United States and the European Union have dealt with individual polices, such as encryption, regulation, and electronic payments with little recognition of how each issue impacts others in the borderless Internet. Even different branches of the U.S. government have held widely varying policies and views towards the Internet.

White House officials said this policy was drafted, in part, to head off clashes and regulatory turf wars between federal agencies. Drafted under the direction of senior White House adviser Ira Magaziner, the policy involved 18 federal agencies over a period of 15 months and incorporates extensive public comment. Yet it barely breaks new ground on policy. In the controversial area of encryption exports, for example, it simply reiterates the administration's current policies.

Its most surprising element discourages governments from passing laws that needlessly restrict the type of information that can flow over the global networks, either because governments consider it pornographic, seditious, or contrary to their countries' cultural norms.

"[L]aws to restrict access to certain types of content through the Internet...can impede electronic commerce in the global environment. The administration...will develop an informal dialogue...to ensure that differences in national regulation, especially those undertaken to foster cultural identity, do not serve as disguised trade barriers," the paper states.

The administration recently lost its Supreme Court bid to defend the Communications Decency Act (CDA), a law that penalized the display of "indecent" materials to minors with fines and prison. In an about-face for the White House, the commerce policy opposes further CDA-like laws and calls for industry regulation, filtering software, and other means to let parents control what their children view.

In an afternoon White House ceremony today, Clinton is expected to announce that Gore will step into the limelight to head a blue-ribbon commission to oversee implementation of the policy by January 1, 2000. Among the attendees will be IBM chairman Louis Gerstner, ISP EarthLink Networks chairman Sky Dayton, and e-commerce software firm Open Market chairman Shikhar Ghosh.

The paper makes recommendations in nine areas:

The Internet should be declared a "tariff-free environment" for transactions that cross national borders, and no new taxes should be imposed on Internet commerce. But it does not support a "federal preemption," which would bar states and local governments from levying taxes on the Internet, for now.

Electronic payments should not be regulated now; instead, regulators should monitor e-payment experiments case by case.

A global Uniform Commercial Code should be enacted to recognize electronic contracts and notarized documents, accept electronic signatures and other types of authentication, resolve disputes, set ground rules for exposure to liability, and streamline use of electronic registries for signatures.

Clear, effective protection of copyright, patent, and trademarks should be established. The World Intellectual Property Organization treaties should be ratified, but further study is needed on whether an international treaty to protect databases is necessary. Internet domain names should be allocated on a more competitive and market-based basis.

Privacy, particularly that of children, should be protected. As reported earlier by CNET's NEWS.COM, the document endorses private efforts now under way to create self-regulatory privacy protection systems, stating that consumers should be informed of what is being collected and how it will be used so they can bar or limit reuse of personal data.

Limits on excessive fees, based on national telecom monopolies, for online service providers and Internet companies should be removed. The administration will seek to enforce recent international agreements to limit non-tariff barriers.

Domestic regulations imposed on radio and television to shield viewers from objectionable content should not be extended to the Internet. Instead, rating systems, content filtering, and industry self-regulation should help parents control their children's access.

Content quotas, excessive regulation of advertising, and other methods of content control should be limited. The government will pursue global agreements to curb such practices.

Technical standards and other mechanisms for interoperability should be created by the private market, not governments. Government efforts risk inhibiting innovation.

The document also recognizes the need to coordinate policies among various agencies and states that the interagency group that created the guidelines will work both to implement and update the strategy.