Wild Web hears hoofbeats of lawmakers

The grace period has ended.

Until now, the regulatory relationship between Washington and the Internet was painted in libertarian hues. The idea: Market forces, not legislatures, should shape the character of the Net.

But this year lawmakers nationwide are sharpening their regulatory pencils as electronic business and crime explode and as advocacy groups cry for a World Wide Web made safer for commerce.

State legislators will consider some 2,000 Internet-related consumer bills while Congress entertains scores of its own. And bill-introduction deadlines are still open in most states.

Hacking, fraud, the spreading of computer viruses, and other forms of cybercrime will surely get attention - as will the resulting complications of jurisdiction.

Here are some other issues to watch:

Privacy. Consumer surveys consistently show that privacy concerns are the No. 1 impediment to online shopping. So lawmakers are buffing up to restrict the flow of personal information online.

Eighty-two Internet privacy bills are pending in 24 states as are some 500 bills that relate in some way to privacy online and offline, according to Emily Hackett of Internet Alliance (www.internetalliance.org), a Washington-based trade group.

The Federal Trade Commission, industry groups, and some members of Congress prefer to let the industry self-regulate. They argue that Internet time is faster than regulatory time, meaning that market forces and new technologies such as "anonymizing" software are faster correctives to privacy problems than regulation.

Others say self-regulation isn't enough. Privacy advocates want comprehensive laws regulating, say, companies that harvest information about people's buying habits and sell it to direct marketers or, worse, to scam artists.

Lawmakers are particularly concerned with children's privacy. Congress had already passed the Children's online Privacy Protection Act of 1998, which forbids sites from collecting personal information about kids without parental approval.

And pending congressional legislation seeks to forbid companies from selling information about a child under 16 without parental consent. Other hot topics: access to public records, health and financial information, and Social Security numbers.

Taxation. Two important events will happen this year: A federal law imposing a three-year moratorium on new Internet taxes will expire, and a congressionally mandated commission studying Internet taxation will issue its findings.

Some lawmakers have called for a permanent tax moratorium, claiming that America's 30,000 taxing jurisdictions could stymie the Internet's commercial evolution. But many state and local leaders say a permanent moratorium would preempt their taxing authority and rob them of vital revenues.

States can't collect sales taxes on goods sold over the Internet unless the vendor has a substantial presence, such as a sales force or warehouse, in the buyer's state.

"[It's] the same problem we face with mail-order catalogues," says Walter Hellerstein, a law professor at the University of Georgia. "If the vendor isn't physically present in state, you can't require it to collect. These are antiquated rules based on physical presence in a borderless world of digital commerce."

Spam. Expect Congress and states to take dead aim at spam, those unsolicited e-mails that companies fling across cyberspace (story, page 18). More than just an annoyance, spam clogs computer networks and results in higher access prices for consumers, because service providers must upgrade hardware and broaden bandwidth to accommodate the barrage.

Fourteen states have already passed antispam laws and others are likely to follow. California Rep. Gary Miller (R) has proposed a bill that would permit Internet service providers to sue users who violate their antispam policies.

Digital contracts and "click wraps." Granting digitally "signed" contracts the same legal status as paper contracts is a prerequisite for building a legal regime supportive of virtual commerce.

Several states have already passed digital-contract legislation and 21 have bills pending so far this year. Experts also say so-called click-wraps, those ubiquitous contractual agreements consumers face, for example, when downloading software, will likely draw legislative attention.

By clicking the "I Accept" button, consumers are bound to the contract. But "the odds of consumers reading and understanding what they are actually signing away are slim," says Tara Lemmey of the Electronic Frontier Foundation, a San Francisco-based Internet advocacy group.

Thorny issues also arise when automated search-and-retrieve programs, agree or "click through" contracts. Is the person who unleashed the search bound to the contracts it accepts?

More than 2,000 Internet-related consumer bills will be considered this year.

(c) Copyright 2000. The Christian Science Publishing Society

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