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Government circles in on Net

January 13, 1999
Web posted at: 2:52 p.m. EDT (1452 GMT)

by James Niccolai

SAN FRANCISCO (IDG) -- World governments will rush in and legislate the Internet unless the computing and online service industries step up their efforts to self-regulate matters of consumer protection, two former aides to U.S. President Bill Clinton said here on Monday.

"The next two to three years will be crucial in determining whether the Internet remains a free medium or whether it becomes an area that governments cannot resist regulating," said Ira Magaziner, a former Clinton advisor who helped shape the U.S. administration's current policies for the digital age. He stepped down from his White House job in December, after three years with the administration, to become a business consultant.

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National laws governing taxation, import, and encryption can stifle the growth of the Internet economy, said Christine Varney, another former White House advisor, who has also served on the U.S. Federal Trade Commission.

Varney now heads up the law firm Hogan and Hartson and represents Netscape Communications in the ongoing U.S. v. Microsoft antitrust trial. She was another speaker at the annual forum sponsored by the Internet Content Coalition.

Consumers need assurance that personal information they submit on the Web isn't going to be used for unscrupulous purposes, and they need to protect children from potentially harmful Internet content, Varney said.

Online sales may drive legislation

Ironically, the success of the online retail business over the holidays may quicken the move to legislate the Internet, Varney said.

"I can guarantee you that every American who bought something over Christmas and had never bought something on the Web before is going to get spammed," Varney said. Other consumers may have fallen victim to online fraud, she said.

Many of those Internet users will write to their government representatives, who may then feel compelled to write legislation to protect their constituents, she said

"If you walk away from the problem, you can be sure the government will impose the solution on you," Varney warned industry executives.

Giving control to consumers

The fairest and most effective way to protect consumers is to empower them to make their own decisions about what type of Internet content enters their home and what happens to personal information they submit online, Magaziner said.

To protect personal information, third-party organizations must come up with a code of conduct and then provide certificates to Web sites that adhere to those codes, Magaziner said. Those Web sites could then display a symbol signifying to customers that they meet certain standards. Trust-E in the U.S. is an example of such a service available today.

To protect minors from obscene content, Internet service providers could offer multitiered service offerings that would allow users to prevent sexual and violent content from entering their home. ISPs could use filtering software and other means to do this, Magaziner said.

Empowering individual users rather than imposing laws at a national level also helps the Internet become a seamless global network, he said. "Implementing consumer protection internationally is difficult because each country has a different sense of what consumer protection amounts to," Magaziner said.

Congress gets busy

But while third-party consumer protection initiatives like those proposed by Magaziner are already under way in the U.S., Japan, and elsewhere in the world, industry must move faster if it is to avoid government regulation, Varney said.

"I think you're going to see a lot of activity this year in Congress," she said. U.S. legislation to protect financial and medical information on the Internet is likely to be passed this year, she predicted. Meanwhile, the FTC is moving quickly to define more general consumer privacy laws, she said.

More harmful are attempts to regulate so-called "obscene" online content, Varney and Magaziner said. The Child Online Protection Act, which was passed by Congress last year and is currently being reviewed by a U.S. court, is too broad and inhibits free speech, Magaziner and Varney agreed.

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