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'State of the Internet' report urges light touch on regulation

U.S. lags in wireless penetration


In this story:

Internet community should monitor itself

Closing the digital divide

Law enforcement necessary without intruding

Explosive growth

Europe leads wireless revolution



(CNN) -- Governments around the world must allow the evolution of the Internet to remain largely unfettered by regulations if its full potential is to be realized, according to a report released Friday by an Internet analysis group.

The U.S. Internet Council's "State of the Internet 2000" report addresses numerous global issues facing the future of the Web, such as the need to close the digital divide, encouraging online education, protecting personal privacy, limiting government intervention and the revolution in wireless communication.

The U.S. Internet Council was formed in 1996 as an independent, nonpartisan resource for state and federal policy makers. Members of the group also meet with leaders overseas to help shape decisions related to the Internet.

The 60-page report provides an overview of the Internet's status quo, using information about a wide variety of topics, much of it culled from other sources.

Mark Rhoads, vice president of the council, said since the Internet is becoming so ubiquitous and changing so fast, that the same methods used to measure the Internet for this report might not be useful in 2001.

"We tend to think of Internet use now as an individual sitting before a personal computer or a terminal at the office," said Rhoads. "But the Internet will become machines talking to machines ... and the devices for accessing the Internet are changing rather dramatically. Even a year ago we did not tend to think of cell phones as an Internet access device."

Internet community should monitor itself

Who is e-ready?

Going wireless

The report also offers several recommendations aimed at better melding the relationship between government and industry. In particular, the report advises government officials to allow the Internet to take its course, wherever that may lead.

"Governments need to recognize the amazing benefits of the Internet and do nothing to cripple it," the report states. "The characteristics of the Internet do not (make) the medium receptive to government regulation."

Although the report suggests that governments should promote the tools by which people can protect themselves from harmful content online, "efforts by one governmental unit to ban these activities will only succeed in driving them to more hospitable locations, away from the less friendly physical jurisdictions. Government should rely on the Internet community to regulate itself, where this is possible."

William Myers, CEO of the council, reinforced the primary recommendation of the report aimed at keeping government's regulatory involvement to a minimum.

"The Net by its very nature is hostile to the traditional methods of governance," said Myers.

He said the main challenge facing governments around the world is different policies on how to manage the Internet. Myers said governments in North America and much of Europe have done well to remain somewhat detached, while in any other countries the government bodies are clamping down too hard.

Yet the report states that industry must recognize there are areas where governments have to act, including the need to prosecute predators who stalk children and creating multi-jurisdictional laws to apprehend cyber terrorists and malicious Internet users.

Closing the digital divide

The focus of government should be on access and infrastructure, the report states, in order to ensure that everyone can reach the Internet without barriers of income or geography. And legislators at every level of government need to become increasingly Internet-savvy.

Even as more governments go online with services like tax payment, applying for license registration and even voting, the report cautions governments not to create another digital divide whereby such efficiency is reserved only for higher-income earners.

"Within the U.S. the digital divide is not as serious as it appears at first glance," the report states. "Initially considered race-based, it now appears that the digital divide is primarily income-based."

But government and industry commitments to combating the digital divide, as well as the declining costs of computers and Internet access, will continue to narrow the gap, it said.

Law enforcement necessary without intruding

The report also says governments must tread lightly in the area of law enforcement online to ensure personal privacy rights. This recommendation appears to be related to the FBI's Internet wiretapping system known as "Carnivore," which can intercept e-mail transmissions based on a court order.

"Law enforcement agencies need to find ways and means in this new technological environment to very carefully target the interception of Internet messages in the same way that older voice wiretaps could narrowly target only the suspects in an investigation," the report states.

While some online activities can be controlled by businesses, "governments should start thinking about what an Internet 'cop' looks like, and how to train officers."

Explosive growth

The report also points to the torrid pace of growth on the Internet, referencing two different studies that saw the number of unique indexable Web pages grow from 1 billion in January 2000 to more than 2 billion in June.

And the number of people who use the Internet on a regular basis has dramatically increased from fewer than 90,000 in 1993 to more than 304 million in 2000.

In terms of e-commerce, the report states that more people will purchase products and services as they feel their identity is secure.

"As long as online sites can ensure a strong degree of information security and maintain a policy of not releasing customer information, the Internet retail market will prosper."

Myers also underscored the need for people to educate themselves on privacy issues.

There is an "enormous understanding gap" with many consumers between wanting privacy online and knowing the technological steps necessary to protect themselves, Myers said.

And while not taking a position on the role of peer-to-peer services like Napster Inc.'s song-swapping site, Myers said that type of communication is "here to stay." Napster is currently embroiled in a lawsuit with the Recording Industry Association of America over copyright infringement.

Europe leads wireless revolution

One of the other notable sections in the report says the United States is falling behind both Europe and Asia in terms of wireless penetration rates because the market is burdened with numerous competing standards that have resulted in interoperability problems and incompatible services.

Five countries -- Finland, Norway, Iceland, Sweden and Hong Kong -- exceed 50 percent wireless penetration, or the percentage of people regularly using wireless technology in the region. The U.S. lags behind 22 other nations with only 27.6 percent penetration.

However, in terms of total number of wireless users, the top three are the United States, Japan and China.

      • Average U.S. Internet economy worker earns $46,000 per year compared to national average of $28,000 per year

      • Information technology spending in U.S. higher education will approach $5 billion by 2003, up from $3.1 billion in 1998

      • Canada has a much smaller percentage of the world's Internet users (4 percent), but Internet penetration rate of 41 percent is nearly equal to that of the United States at 42 percent

      • Sixty-four percent of people in Finland and 60.3 percent of people in Sweden are wireless users

      • Japan is second only to the U.S. in terms of Internet users, soaring from 17 million in 1999 to 27 million in 2000

      • Seventy-eight percent of all Web sites are currently in English, while 96 percent of e-commerce sites are in English.

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Chinese online pioneer calls for light regulation
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Vietnam's government ponders knowledge economy
June 27, 2000

United States Internet Council
Pike and Fischer Publications: Internet Law & Regulation
Bureau of National Affairs: E-commerce and Internet Regulation

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