Internet

High tech seeks e-commerce help

A group of 11 high-tech companies will issue a report calling on Congress and the White House to help speed the development of e-commerce.

A group of 11 high-tech companies tomorrow will issue a report calling on Congress and the White House to help speed the development of Internet commerce.

The coalition, Computer Systems Policy Project (CSPP), which includes CEOs from Hewlett-Packard, IBM, Compaq, and Sun Microsystems, is calling for a moratorium on Internet taxes, loosening of encryption software controls, and the addition of Internet-specific language in the Uniform Commercial Code to address electronic commerce transactions.

The report is in response to the Clinton administration's challenge to the computer industry to self-govern, issued last July in a policy paper entitled "Framework for Global Electronic Commerce."

In the 18-page report to be issued tomorrow, called "Global Electronic Commerce," the CEOs outline their recommendations urging the government to act quickly to increase digital commerce, a potential $200 billion market by the year 2000.

CSPP recommended that the government help increase access to the Internet by speeding the implementation of the Telecommunications Act of 1996. The group is specifically targeting local carriers. The report states: "Until there is competition in the local markets for data or digital traffic, there will be no pressure on the incumbent telephone carriers to deploy new technologies."

The coalition also called for "tax neutrality" in Internet commerce, arguing that 30,000 tax jurisdictions across the United States--and many more internationally--"could impose discriminatory and multiple taxes on e-commerce transactions, taxes in excess of those paid in conjunction with identical, non-electronic transactions."

This policy recommendation, although supported by President Clinton, may run into opposition by state and city governments that have recently become aware of the potential size of Internet commerce as a means for recovering significant revenue.

Another potential detractor is Congress itself, where a bill to impose a six-year tax moratorium will be voted on by both houses early next year. CSPP is expected to lobby heavily for the passage of the Internet Tax Freedom Act.

On the touchiest e-commerce subject, encryption policy, the coalition voiced its concern that moves to regulate and restrict encryption use would be detrimental to transactions where businesses and consumers have come to expect security. Although the group recognizes the government's concerns in restricting widespread availability of encryption software, it offered few solutions for making encryption software available globally in a manner that addresses the law enforcement issues.

CSPP said that it will continue in its efforts to ensure that domestic encryption remains unrestricted and that it supports the "voluntary development and use of recoverable encryption products," or "keys" that would allow law enforcement officials to access and read encrypted information.

Ken Kay, executive director of CSPP, says that the organization has identified taxation, deregulation, and the legal framework as the long-term items the coalition must address. They expect to publish more detailed recommendations next year.

Kay said that he expects the issues of encryption, deregulation, and taxation to meet with the most resistance.

"Our recommendation for encryption policy will be met with resistance from the director of the FBI, who thinks that domestic controls are an acceptable way of doing things," said Kay.

"Our general concern is that the technology industry, still new and fragile, should not be overly regulated prematurely," he added. "And we take seriously our role to provide a lead and have people rely on us for guidance. The more the industry's role is proactive, the less likely the government will regulate prematurely."

Members of CSPP include Apple Computer, Data General, Digital Equipment, NCR, Silicon Graphics, Stratus Computer, and Unisys.