Resisting Urge to Regulate Cyberspace

How should the Internet be regulated? "As little as possible, but as much as necessary." That is the formula being heard in Europe today.

Online regulation is a question being wrestled with on both sides of the Atlantic. President Clinton has just called for the online industry to develop a labeling system to shield children from offensive content on the Internet. He met this week with lawmakers, softwaremakers, and advocacy groups who are seeking an alternative to the Communications Decency Act, struck down last month by the Supreme Court as an infringement of First Amendment rights to free speech.

Here in Bonn, representatives from 29 countries, including the United States, Canada, and Japan, met at a European ministerial conference on global information networks July 6 to 8.

The light-handed approach to regulation embraced here came as a relief to observers who worried that a European propensity for rulemaking would slow traffic on the information superhighway to a crawl. Mr. Clinton's July 1 call for a free-trade zone on the Internet was widely hailed here, if not completely endorsed.

Among the principles that gained broad support:

* Minimize government regulation, and emphasize industry self-regulation instead.

* Appreciate that the Internet has grown so fast precisely because it has been so unfettered.

* Set global standards, even if it's not clear yet what is the appropriate forum for setting those standards.

* Recognize that winning consumers' trust and increasing their comfort level will be important to growth in electronic commerce.

The conference was "a love fest," as one observer put it, a typical European consensus-building exercise intended to enable the 15-nation European Union to go forward into the brave new world of the Internet, especially electronic commerce.

Among the issues it addressed:

Can free societies regulate the Internet?

That may be the real question. Monroe Price, professor of law at Yeshiva University in New York, suggests that the specific questions being debated are only side issues in comparison with the really big question.

"A lot of this is about whether law itself has a continuing function," Professor Price says. "Does the state have a role, a capacity to enforce?" The whole debate, he adds, is about "the relationship of government to information."

Singapore licenses operators of Web sites as if they were broadcasters. China appears to have no inhibitions about using "firewall" technology to block access to certain Internet sites. On the other hand, HKNet.com, the Internet service-provider in Hong Kong, is offering a "blue-ribbon debit card for Internet access," even after the handover to China July 1, says Lori Fena, executive director of the Electronic Frontier Foundation in San Francisco. This, she says, sounds like a vote of confidence in continuing cyberfreedom in Hong Kong.

"Good" and "bad" bits blitz through the fiber-optic cables of cyberspace at light speed, hopelessly intertwined. Skilled cybernauts tend to be a jump ahead of the firewall masons.

What are the key issues in regulating the Internet?

Jurisdiction: Whose laws apply where? Child pornography and other "content" issues get a lot of attention from government. But they are being solved by the market, as filtering software and other solutions become available.

Jurisdiction and content: Can Country A prosecute an Internet service provider in Country B for material that offends Country A's decency laws? The issue remains unresolved.

What about encryption?

Encryption software protects documents as they travel across computer networks. Strong encryption software is seen as essential to developing electronic commerce, such as the use of credit-card numbers by consumers who want to make purchases via the Internet.

"Consumers have to be guaranteed absolute security of data," says Deutsche Telekom chief Ron Sommer.

The argument in Europe is with the US government, whose law-enforcement authorities want to be able to listen in on electronic communications. Export of strong encryption software from the US requires a special license.

But US softwaremakers tend to see this restriction as cutting them off from lucrative markets.

To what extent is the Internet unlike older media?

Answering this question correctly may be the key to good regulation. Much of the existing effort has consisted of applying laws passed to govern other media.

"Whatever is illegal offline should be illegal on-line" is a principle frequently cited by officials like German Research Minister Jrgen Rttgers and European Commissioner Martin Bangemann. "And yet there's a point where that breaks down," says Karen Hagberg, a lawyer at Morrison and Foerster in New York. "One of the positive things in the Supreme Court decision [striking down the Communications Decency Act] was that it recognized that the Internet is different. It's not invasive, so that there's not the same risk of inadvertent exposure to offensive images" as with television.

Although global standards and international cooperation sound appealing, some observers sound a note of caution. "Too much cooperation will ... bring down the content of the Internet to the level of 'Sesame Street' for the whole world," warns Ms. Fena of the Electronic Frontier Foundation.