Clinton seeks expanded e-commerce

President Clinton reaffirms his belief that the private sector, not government, should lead efforts to boost Internet commerce.

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President Bill Clinton today reaffirmed his belief that the private sector, not government, should lead efforts to boost Internet commerce, sticking to a hands-off approach that pleases industry but leaves consumer activists and some European governments frowning.

In a White House ceremony, Clinton also pushed for greater access to the Internet for small U.S. firms and in developing nations. He outlined measures to encourage private investment in high-speed Internet connections to the home, fight fraud on the Internet, and measure e-commerce's effect on the economy.

"We must give consumers the same protection in our virtual mall they now get at the shopping mall," Clinton said in his remarks."And if the virtual mall is to grow, we must help small businesses and families gain access to the same services at the same speed that big business enjoys."

Clinton's agenda includes a program to promote growth of the Internet in developing countries, an area where private organizations like the Internet Society have been active for years. Clinton's initiatives were unveiled at a White House event this morning.

"The Administration will continue to implement market-driven policies that encourage the development of this new digital economy in an environment that respects the concerns of individuals and families," stated the executive summary of a report on steps taken by the federal government to boost Internet commerce.

Clinton also named David Beier, his principal domestic policy advisor, as chairman of a federal interagency task force on Internet commerce, replacing Ira Magaziner, who will leave that post by the end of the year.

Holiday shoppers expected to flock online Today's report is a follow-up to the Framework for Global Electronic Commerce report issued by the White House July 1, 1997. Clinton then issued about a dozen directives to federal agencies, requiring them to report back on their progress.

"E-commerce is doubling in size every year," Magaziner, Clinton's e-commerce czar, told Bloomberg. "Getting the right policy architecture in place to develop that growth is an essential economic issue."

"We've put e-commerce on the front burner of policy agendas everywhere and we've been able to help set the terms of the debate," Magaziner said.

Today's report, which had been scheduled to be issued in September, said that progress "has been more rapid than we initially anticipated."

The document cited four pieces of legislation passed by Congress to advance the e-commerce agenda: a three-year moratorium on new Internet taxes, ratification of an international copyright treaty, privacy protections for children online, and an initiative to encourage electronic filings and record-keeping in the federal government.

On Friday, for example, the U.S. General Services Administration announced it has issued 2 million cards to federal employees designed to simplify federal purchases.

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The latest report also lists a series of international agreements that largely incorporate the White House positions favoring private self-regulation over government action and eschew taxes on Internet transactions.

The U.S. and Australia today issued a joint release based largely on the White House e-commerce framework.

But potential conflict still remains over the European Union privacy directive, which demands legal protections of personal information, a position at odds with the Clintonites' private self-regulation stance. The Commerce Department is currently negotiating with European leaders to resolve their differences, and the Europeans have agreed to let U.S. firms operating in Europe to continue to send personal data to the U.S. while those talks continue.

The administration also was slated to tell the Small Business Administration to help U.S. companies connect to the World Wide Web and press the World Bank and private companies to fund projects in developing countries, the Wall Street Journal reported.

The chairman of the Senate Judiciary Committee, Sen. Orrin Hatch (R-Utah), on Saturday released a list of Internet issues his committee will deal with next year, including online privacy protection. Other issues include: quick resolution of Y2K disputes, greater protection for owners of huge databases of personal information, competition in broadband Internet access, the transition to a competitive system for issuing Internet domain names, and free speech protections online.

Hatch also intends to revisit the competition issue that coincided with the current Justice Department antitrust lawsuit against Microsoft

In a speech to be delivered at the event, John Chambers, chief executive of Networking firm Cisco Systems, praised the Clinton administration's approach to Internet commerce, as did the Business Software Alliance.

"With Internet leaders and government working hand in hand, America can look to a bright horizon filled with hope," Chambers said in remarks prepared for delivery. "To achieve that, government and business leaders, and teachers and parents, must accept the challenge to give everyone access to the Internet and a quality education."

Meg Whitman, CEO of online auction site eBay, also spoke at the event.

Today TRUSTe, a private-sector effort to protect the privacy of Internet users that is consistent with Clinton's philosophy, reported that 390 sites have published privacy policies and received TRUSTe's seal, including 30 of the top 100 Internet sites.

But consumer privacy advocates, such as Marc Rotenberg of the Electronic Privacy Information Center, have criticized industry self-regulation of privacy issues, calling for legislation.

"All of the market research shows that the biggest obstacles to consumer adoption of online commerce are concerns about privacy and security," Bill Whyman, an Internet analyst with Legg Mason, told Bloomberg, giving the administration "poor grades" in those areas.

"The progress has been substantial, but not as much as American businesses and consumers expect or need," Whyman said. "They realize there's a lot of work that needs to be done."

Bloomberg and Reuters contributed to this report.