Digital business: Taxes, gambling, and piracy
Congress is trying to strike a legislative balance that will allow plenty of digital business without endangering copyrights or causing lost tax revenue.
The commercialization of the Net hasn't avoided the regulatory eye of
Congress. For example, a bill to federally outlaw online casinos is on the
table. Strict penalties for those who distribute, reproduce, and sell
illegal copies of digital music, video, or literature are being considered
as well. But many lawmakers
Legislation to watch |
Signed into law |
Gambling
Internet Gambling
Prohibition Act
Introduced by Sen. Jon Kyl (R-Arizona)
Includes the Net under the federal Wire Act, which prohibits making or accepting wagers over telephone wires. States would not be allowed to permit online bets under the act. Operators could get a $20,000 fine and four years in prison for accepting just one cyber-wager, and a "casual bettor" would get a $2,500 fine and six months in prison for betting on the Net.
| Status Passed various Senate committees, now awaiting debate and a vote by the full Senate. Previous coverage |
Taxes
Software Equity
Act
Introduced by Rep. Jennifer
Dunn
(R-Washington) and Sen. Orrin
Hatch (R-Utah)
Cuts software exporters a tax break that was previously enjoyed by most other industries under the 1971 Foreign Sales Corporation statute, which gave U.S. manufacturers up to a 15 percent export tax exemption. Now software exporters can apply for the exemption, which Congress estimates could save them $1.6 billion over the next decade.
| Status Signed into law by President Clinton in August. Previous coverage |
Internet Tax
Freedom Act
Introduced by Sen. Ron Wyden
(D-Oregon) and Rep. Chris Cox
(R-California)
Places a six-year ban on states and localities passing new taxes specifically aimed at online access, e-commerce, and other Net services. The bill has moved forward despite ongoing opposition from U.S. mayors and some state lawmakers, who say the legislation takes away their right to tax and create new revenue streams.
| Status Passed by crucial committees in both the Senate and House; they are expected to vote on the bill early next year. Previous coverage |
Copyright
No Electronic
Theft Act
Introduced by Rep. Bob Goodlatte (R-Virginia)
Gives online pirates of software, music, video, or literature up to five years in prison and a $250,000 fine for a felony offense, which is defined as "willfully" making or possessing ten or more illegal copies with a retail value of $2,500 or more.
| Status Passed by Congress, awaiting action by President Clinton. Previous coverage |
WIPO Copyright and
Performances and Phonograms Treaty Implementation Act
Introduced by
Rep. Howard Coble (R-North Carolina) and Sen. Orrin Hatch (R-Utah)
Ratifies international treaties to protect copyrights in cyberspace. The United States signed the treaties at the World Intellectual Property Organization's diplomatic conference in Geneva, Switzerland, last December. One controversial provision would make it a crime to import, manufacture, or distribute technology, which could include PCs, that could be used to "circumvent" copyright protection devices.
| Status House subcommittee hearings held. Previous coverage |
Online Copyright
Limitation Liability Act
Exempts Net access providers and telephone companies from liability for their customers' copyright violations if the providers don't know about the illegal activity on their networks.
| Status House subcommittee hearings held. Previous coverage |
Digital
Copyright Clarification and Technology Education Act
Introduced by
Sen. John Ashcroft
(R-Missouri)
Makes it illegal for Net users to circumvent anticopying technology that protects copyrighted material online. The bill also expands the fair use of a copyrighted work to include digital materials so that teachers, researchers, and libraries will not be in violation of the proposed law.
| Status Judiciary Committee hearings held. Previous coverage |
Digital Era Copyright Enhancement Act
Introduced by Rep.
Rick Boucher (D-Virginia) and
Rep. Tom Campbell
(R-California)
This bill also implements the WIPO treaties. The proposal would make it a crime to break anticopying devices, but would not outlaw products that could be used to destroy copyright-protection devices. In addition, this act lays out more exemptions for libraries and distance-learning institutions regarding fair use and fair sale, so that downloading or sharing copies of protected online material that was purchased legally by someone else is not a crime for these entities. Finally, the bill overturns software makers' claims that by unwrapping their products or clicking past an online licensing agreement, end users have agreed to honor certain copyright stipulations.
Criminal
Copyright Improvement Act
Introduced by Sen. Patrick Leahy (D-Vermont)
Amends existing copyright laws to include electronic piracy under existing criminal code.
| Status Referred to Senate Judiciary Committee. Previous coverage |
Net Access
Internet
Protection Act
Introduced by Rep. Rick White
(R-Washington)
Prohibits any new regulation targeted specifically at the Net, including any action by the Federal Communications Commission concerning Internet access providers.
| Status Referred to House Subcommittee on Telecommunications, Trade, and Consumer Protection. |
Next Generation Internet Initiative
White House plan to create new applications for the Internet and develop networking technologies to improve communication among the nation's academic and research centers as well as federal agencies and the health care industry. NGI technology also promises to route data at 1,000 times the speed of today's Net, setting aside bandwidth so that huge packets of data can be transmitted in real time. The Clinton administration sought $100 million for the project for 1998; Congress allocated $95 million.
| Status Sent to President Clinton on October 21. Previous coverage |
Technology
Literacy Challenge Fund appropriation bill
Earmarked $425 million of the Education Department's 1998 budget for education technology spending--more than doubling the 1997 budget. The one-year-old federal program allocates funds to states for hardware, software, and online access, but on the condition that localities work with private industry to turn out tech-savvy students. In addition, the part of the tech-literacy fund known as the Technology Challenge Grant Program will receive $116 million next year to distribute technology grants to low-income schools.
| Status Signed by President Clinton on November 13. Previous coverage |
Telemedicine
Provides funding for a demonstration project that uses computers and networks to provide primary care and preventative services to diabetes patients in medically underserved rural and urban areas.
| Status Signed by President Clinton on August 5. |
Medicare
Modernization and Patient Protection Act
Introduced by Sen. Ron Wyden (D-Oregon)
Reforms Medicare; calls for the creation of a Commission on Telemedicine to make recommendations regarding which telemedicine services should be covered by Medicare. In addition, it doles out benefits for telemedicine providers and Net access for physicians in rural areas who deliver medical information via electronic systems including videoconferencing to share patient records and diagnostic images.
| Status Referred to House Finance Committee. Previous coverage |
High-Tech Stocks
Securities
Litigation Uniform Standards Act
Introduced by Rep. Tom Campbell (R-California)
Moves all civil securities lawsuits under federal jurisdiction.
| Status Referred to Subcommittee on Finance and Hazardous Materials from the House Commerce Committee. Previous coverage |
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