Legal battles: The rights of passage

The debate over the Communications Decency Act topped the list. In February, President Clinton signed the bill making it illegal to knowingly transmit "indecent" material over the Internet, with violators risking a possible two-year jail sentence or $250,000 fine.

Since then, the law has been blocked, appealed, and, most recently, sent to the U.S. Supreme Court. The high court is expected to hear the case next year and perhaps issue a ruling that will set a precedent for free speech on the Internet.

State laws regulating indecency on the Net also were challenged by civil rights groups, most notably in New York and Georgia. The American Civil Liberties Union will file lawsuits to block state regulations in early 1997.

On the national front, the fight over encryption rules was all over the news. In December, the Clinton administration loosened restrictions on encryption-export licenses. But the revisions didn't go far enough, according to many companies in the U.S. software industry.

Disputes over international copyright law, a long-standing issue in the publishing world, also spilled onto the Internet. They involved cases ranging from the use of Marilyn Monroe's name on an e-commerce site to a newspaper in Scotland that linked to a rival's headlines.

The legal fighting also hit home. America Online battled with junk emailers in response to customer complaints. So far, online services have scored major legal victories, but the rulings are being challenged. Online services also fought to keep their services from being banned in some countries, such as Germany, because some of their material was sexually explicit.

In more familiar terrain, the Internet spawned old-fashioned business squabbles. Netscape Communications charged Microsoft with anticompetitive actions in its bid to take control of the Internet market. The Justice Department continues to investigate those claims.