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To: H James Morris who wrote (10088)	4/16/1998 7:55:00 AM
From: Glenn D. Rudolph	Respond to of 27307

U.S. predicts boom in Internet commerce Reuters Story - April 15, 1998 22:52 %US %WASH %TEL %DPR %TRD %ENT %PUB %BUS %MUNI CSCO V%REUTER P%RTR (Recasts, adds details, industry reaction, byline) By Aaron Pressman WASHINGTON, April 15 (Reuters) - Booming growth in information technology industries driven by the Internet is boosting U.S. economic growth and holding down inflation, according to a Commerce Department report issued on Wednesday. "The digital economy is alive and well and growing," Commerce Secretary William Daley said in a speech outlining the Clinton administration's electronic commerce initiatives. The report found that information technology industries, like computers and communications, are growing at twice the rate of the overall economy and accounted for more than one-fourth of the economy's surge in the past five years. Plummeting prices for high-tech goods have also helped keep inflation at bay, the report said. Commerce among businesses on the Internet, barely a trickle last year, could grow to more than $300 billion by 2002, the report said. The report also projected a future where consumers will do more of their shopping, banking and reading online. For example, online bookings in the travel industry could rise to $8 billion within three years from $1 billion last year. In other examples cited, sales at the World Wide Web site of Cisco Systems Inc. (http://www.cisco.com) , a leading provider of computer network equipment used to build Internet connections, rose to an annual rate of $3.2 billion by the end of 1997 from less than $100 million in 1996. Sales of new cars at the Web site Auto-by-Tel (http://www.autobytel.com) were running at an annual rate of $6 billion by the end of 1997, up from sales of $1.8 billion in 1996. Daley said the administration generally favored a low-profile role for the government in regulating electronic commerce. "Our approach to e-commerce is that the private sector should lead," Daley said. "Government's role is to establish a climate where electronic commerce can flourish." High-tech industry officials priased the report. "Information technology is truly driving the U.S. economy more than previous estimates had revealed," said Rhett Dawson, president of the Information technology Industry Council. Daley, leaving later on Wednesday with President Bill Clinton for the Summit of the Americas in Chile, said he planned to take that message to other countries. The administration has called for an Internet free-trade zone, allowing electronic commerce to expand without government tariffs and taxes. The administration also favors an international convention approving use of digital signatures and other authentication technologies, Daley said. Several challenges remain for the administration in key areas, however. Congress has yet to pass legislation favored by the administration to impose a moratorium on state and local taxation of Internet commerce. And the administration's plan to have industry adopt voluntary codes of conduct to protect the privacy of consumers has not caught on as widely as hoped, Daley conceded. "Industry has been slow to put these protections in place," he said, adding that "the pace has picked up recently." On perhaps the most contentious issue, tight export limits on computer data scrambling technology, Daley called for renewed efforts to find a compromise solution. Clinton has sought to balance the interests of both industry and law enforcement by slightly relaxing export limits, granting a series of exceptions for certain products and encouraging development of products acceptable to law enforcement. But Daley conceded Wednesday that the administration's encryption policy was in need of overhaul. "Our policy, ironically, encourages the growth of foreign products at the same time it retards growth here," he said. "The truth is that while our policy goal -- balance -- is the right one, our implementation has been a failure," Daley said.