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Internet firms want to axe regulatory barriers
Reuters Story - November 20, 1997 09:11
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By Neil Winton, Science and Technology Correspondent
TURKU, Finland, Nov 20 (Reuters) - U.S. and European
Internet service providers said on Thursday action is required
to shake up telephone networks and governments which threatened
the development of their businesses.
EUnet International BV, the Amsterdam-based Internet
services provider, and America Online Inc , the world's
largest consumer link to the Internet, made pleas for action at
a conference here organised by the Organisation for Economic
Co-operation and Development (OECD).
The conference, called "Dismantling the Barriers to Global
Electronic Commerce," is part of an examination of the issue
which will culminate in a summit meeting in Ottawa, Canada next
October.
OECD governments are concerned the burgeoning business
generated by people using personal computers to arrange their
banking, buy books, groceries, holidays and CDs may be
constrained by inept or over-bearing regulations.
Member states are also worried their sales taxes and
value-added tax revenues will be slashed by electronic commerce.
EUnet's director of product development and marketing, Johan
Helsingius, said Europe's telecommunications infrastructures
were not only slow and ponderous to deal with, but failed to
provide enough capacity for business generated over the
Internet.
"We have a constant struggle against national
(telecommunications operators) in Europe, which are often
controlled or funded by public money, or money from protected
monopoly business," he said in a speech.
"You are required to negotiate rights of way. In the U.S.
this is no problem, but in Europe it is a big problem."
Helsingius compared the open market in Finland, which has
the highest number of telephones and internet subscribers in the
world, with conditions in countries like France.
He pointed to what he called the "Minitel Trap" in France.
Since the early 1980s France has provided on-line terminals to
most telephone subscribers, but because of its monopoly, there
was no incentive to invest in Minitel, which has stagnated.
America Online's assistant general counsel Tom Dabney, in
another speech to the conference, echoed EUnet's frustration
with Europe, but the U.S. didn't escape criticism.
Dabney said he was struggling to get local phone call costs
reduced and more open access to telephone infrastructure. "Until
the entire process is more transparent, the hope for full
universal access (for consumers) is DOA, dead on arrival."
He said government regulation was also a problem, in
particular the U.S. position on encryption.
Many experts say electronic commerce will never take- off
until consumers feel they can safely inject personal details
over the Internet.
Encryption is likely to provide that safety, but U.S. law
enforcement agencies have said making state-of-the-art computer
code encryption widely available would give criminals carte
blanche on the Internet.
"We are handicapped by the uncertainty of the European
Union's position on data protection," Dabney said.
Jim Tobin, chief executive of Bell Canada's Bell Emergis
Internet services subsidiary, was more positive.
Tobin said capacity problems would probably be solved by
technological improvements like data compression, which would
allow much higher traffic over current equipment. Mobile
telephones would also take a bigger share of Internet traffic
away from land-based infrastructure.
EUnet's Helsingius though pointed out demand for capacity
for Internet business was doubling every four months.
Neil Winton 44 171 542 7975 neiljinks.demon.co.uk
Reuter nw
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