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Trying to regulate the global market

The Clinton administration is eager to push its e-commerce agenda, but other nations may consider it unwelcome meddling.

In the name of global leadership and cross-border consistency, the Clinton administration is eager to push its e-commerce agenda. But other nations may consider it unwelcome meddling in their internal affairs.

Cultural issues explain part of the differences. "Europeans fear that data collected by private industry will be misused, while Americans think data collected by the government will be misused," said James Johnson, a Washington lobbyist who heads a U.S. delegation on electronic commerce.

But for Net-based businesses--whether multinational corporations or start-ups drawn by the allure of a worldwide market--hope that the U.S. influence will knock down trade barriers and discourage Internet taxation.

"MCI hopes that the administration's new paper will spark international efforts to lift all legal and policy impediments to robust commerce in the electronic marketplace," MCI chief executive Timothy Price said in a statement. His firm, merging with British Telecom to form a new multinational called Concert, could specifically benefit from a provision in the Clinton framework to roll back telecommunication regulations.

"In too many countries, telecommunications policies are hindering the development of advanced digital networks," the White House document states, using language not likely to win points in some foreign capitals or the boardrooms of monopoly phone carriers.

But Clinton's e-commerce troops will try anyway. Treasury Secretary Robert Rubin, Commerce Secretary William Daley, and Ira Magaziner, who spearheaded the e-commerce policy for the White House, are scheduled for series of diplomatic meetings soon in Europe at which they'll push the plan.

The president gave Rubin, Daley, and U.S. Trade Representative Charlene Barshefsky 12 months to ward off new Net taxes, cut tariffs on Internet commerce, push copyright protections, and lay the groundwork for a predictable legal environment for electronic commerce.

That lobbying effort begins next week. On the way to a July 6-8 ministerial meeting in Bonn, the trio is expected to stop in London to talk to international bankers about electronic currency issues.

The German meeting, which involves European Union countries and other European nations, will tackle issues of commerce and content. Johnson, who follows international e-commerce issues, says U.S. officials have already made their influence felt: The meeting originally addressed how to control Internet content on Internet, but the United States, Canada, and Japan wouldn't agree to that agenda.

But U.S. efforts to get other nations to toe its line on restricting strong encryption software haven't made much headway. One formulation, Johnson said, is the view of other nations that "trade restrictions should not mask as crypto policy."

Nor will the White House's concern about censoring or otherwise controlling Internet content play well in nations such as Singapore, Malaysia, China, and Saudi Arabia, which limit some content for moral, social, or political reasons.

"It's particularly inappropriate for the United States to be promoting techniques [such as filtering software] in other countries that will enable restrictions on the free flow of information," said Marc Rotenberg of the Electronic Privacy Information Center.

Consensus on content controls was tough even before the White House belatedly reached its industry self-regulation stance. The European Union recently concluded that because of cultural differences, member nations could reach their own conclusions on what is permissible.

In fact, the White House's expressed concerns about censorship may ring hollow in foreign capitals because the Clinton administration defended censorship in the Communications Decency Act, which the Supreme Court rejected last week.

But the White House is also concerned about "foreign content quotas," which dictate a certain percentage of broadcast content originate from that nation, may spread to Internet sites. Likewise, the report worries about laws that dictate what languages Web sites must use. Such broadcast laws already exist in Canada and France, and efforts have surfaced to extend them to the Internet.

European Union nations must to enact laws to protect certain databases, even though the don't contain original content, by 1999. Protecting "sui generis" databases would allow database compilers to copyright collections of facts. Clinton's policy recommends further study, but the Europeans are already headed toward protection.

Other international venues where the U.S. may push its policy include a private sector meeting in Geneva in September on implementing global telecommunications reform and a November gathering in Finland on dismantling trade barriers to the European Union.

The duty-free Internet may run into a particularly tough time, Johnson said, as tax collectors in other nations realize that they may lose revenue sources if its consumers and businesses buy items or services overseas on the Net. The European Union has explored a "bit tax" on all information sent over the Internet.

Randy Whiting, president of the CommerceNet e-commerce trade group, also believes that the White House admonition to let the private sector set Internet standards will collide with European practices.

"The U.S. says the standards process has to be driven by industry, but in the Europeans' perspective, standards need to be driven by pseudo-governmental organization because they need the ability to interoperate," Whiting said.

However, he adds: "Task forces, as in the European Union, that the government runs have a less than stellar record."

Reporter Courtney Macavinta contributed to this report.

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