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Uncle Sam, online shopper

A Commerce Department official says the government can play a role as a major online buyer, as well as an e-commerce booster.

MOUNTAIN VIEW, California--In its efforts to encourage Internet commerce, the federal government can play a role as a major online purchaser, a Commerce Department official told an e-commerce trade group today.

"The federal government is almost 20 percent of the U.S. economy," Gary Bachula, undersecretary of commerce for technology, told a CommerceNet audience gathered here. "With the states and local government, it represents almost one-third."

Bachula outlined an early draft of a position paper on the electronic commerce industry, a document that will be revised based on industry input before it is released later this year.

"We believe that e-commerce will be the major engine of economic growth in the next century," he said. "As a result, we hope more people will experience higher standards of living."

He described the government's purpose as "not a heavy-handed, top-down role," but a facilitative one aimed at creating a "reliable, transparent, fair playing field."

Bachula said the report also will identify barriers and obstacles to e-commerce, including the existence of almost 100 e-commerce standards and a lack of interoperability among them.

Other major concerns include slow Internet connections for homes and businesses, consumer concerns about privacy and security, low U.S. usage of smart cards, difficulty in implementing the Secure Electronic Transactions (SET) protocol for Internet credit card transactions, and a shortage of technical workers to build e-commerce systems.

Bachula said the government will try to stop other governments from using standards to create trade barriers that favor domestic companies.

While reinforcing Clinton administration policy by stressing private-sector leadership in Net commerce, Bachula said the report will identify five areas where the government can help by doing the following:

  • Becoming an end user. Federal rules could mandate greater use of online ordering and payments for procurement and for paying government benefits such as Social Security, food stamps, and disability payments.

    "We can help break down cultural concerns [about the Net and e-commerce] by using cards to make people comfortable," he said.

  • Acting as a facilitator for consistent tax policies across jurisdictions; regulating telecommunications; developing a uniform commercial code for e-commerce (in areas such as digital signatures); and protecting intellectual property.

  • Becoming an early investor, as it originally did with the Net. It is investing now with the Internet II project by connecting research universities with ultra-high-speed connections.

  • Bringing parties to the table by acting as a negotiator. Bachula acknowledged, however, that to date the Commerce Department has been notably unsuccessful in getting U.S. export controls on strong encryption relaxed. Other areas include tax incentives and working globally against trade barriers in e-commerce.

  • Being an evangelist for e-commerce, a role the White House has already played, including Vice President Al Gore's call last month for an "electronic bill of rights."