White House to Release New Internet Commerce Report Monday
ALAN M. WOLF
c.1998 Bloomberg News
WASHINGTON -- President Bill Clinton and Vice President Al Gore will
ask executives from companies like Cisco Systems Inc., legislators, and
government officials Monday to help boost the Internet as a global
marketplace.
Yet while the Clinton administration will use the White House event
to promote efforts to make it easier for companies to expand their electronic
commerce, critics say the industry isn't doing enough to protect consumers'
privacy online.
''All of the market research shows that the biggest obstacles to
consumer adoption of online commerce are concerns about privacy and
security,'' said Bill Whyman, an Internet analyst with Legg Mason Inc.'s
Precursor Group. The administration gets ''poor grades'' in those areas.
Almost 9 million households will have shopped on line by year-end, up
from 4.5 million last year, according to Cambridge, Massachusetts-based
Forrester Research Inc.
Market researcher Boston Consulting Group projects that online
retailing is growing more than 200 percent annually and merchants will sell
$13 billion worth of goods this year through the Internet.
''The progress has been substantial, but not as much as American
businesses and consumers expect or need,'' Whyman said. ''They realize there's
a lot of work that needs to be done.''
Toward that end, Clinton's top Internet adviser, Ira Magaziner will
release a report on White House Internet initiatives and recommend further
steps in several areas, including beefing up privacy protections.
''E-commerce is doubling in size every year,'' said Magaziner, who
plans to step down before year end. ''Getting the right policy architecture in
place to develop that growth is an essential economic issue.''
The Clinton administration generally has advocated a hands-off
approach to Internet regulation. It favors self-regulation efforts such as the
Online Privacy Alliance, a group representing America Online Inc.,
International Business Machines Corp., Walt Disney Co., Yahoo! Inc. and other
companies.
The administration puts too much faith in the ability of industry to
regulate itself and needs to be more aggressive, the critics say. They want
the administration to push Congress to adopt new laws protecting the
collection and distribution of personal information online.
''The laws we have now are just not strong enough,'' said Mary
Griffin, a financial privacy specialist at Consumers Union, publisher of
Consumer Reports magazine.
The Clinton administration has invited executives such as Cisco's
John Chambers and Margaret Whitman, CEO of eBay Inc. to Monday's White House
meeting, and will call for more industry action on the privacy front.
A subsidiary of the Better Business Bureau, for example, will put
forth a new program designed to verify the privacy policies of Web sites.
''The administration recognizes the importance of online commerce to American
competitiveness,'' said Russell Bodoff, chief operating officer of BBBOnLine.
The latest focus of concern for privacy advocates is a plan by the
Commerce Department to issue ''safe harbor'' regulations that would exempt
U.S. companies operating in Europe from meeting tough privacy standards
adopted last month by the European Union.
Industry officials complain the administration also needs to do more
in the area of advanced data-scrambling, or encryption, technology. In
September, the U.S. said it would loosen export controls on encryption
technology for the insurance, health care and online industries.
Intel Corp. officials and others said the move was a step in the
right direction but that additional measures are needed so U.S. companies
don't face a competitive disadvantage. Customers outside the U.S. can buy
software with stronger security protections from non-U.S. companies.
The Clinton administration should work more with the World Trade
Organization, World Intellectual Property Organization and other international
organizations to foster Internet growth, Whyman said. ''They have to be more
aggressive in dealing with the international implications'' of the Internet.
Magaziner's report is a followup to Clinton's July 1997 directive
that first outlined the administration stand on Internet issues such as
encryption, taxes and copyright protection.
This year, Congress and Clinton agreed to extend copyright
protections to the Internet and adopted a three-year ban on new taxes on
Internet business. On the international front, the administration convinced
the WTO to adopt a one-year ban on tariffs.
''We've put e-commerce on the front burner of policy agendas
everywhere and we've been able to help set the terms of the debate,''
Magaziner said.
Magaziner shepherded rules for a new system of handing out Internet
addresses, or so-called domain names, and asked the Internet community to work
out its own proposal for the transition.
He's working closely with a new non-profit organization, the Internet
Corporation for Assigned Names and Numbers, that will oversee the system for
the .com, .net and other tags at the end of World Wide Web addresses.
''Ira is to be commended for getting the administration to adopt a
decentralized vision of the Internet,'' said Jerry Berman, president of the
Center for Democracy and Technology, a group that advocates civil liberties on
the Internet.
Elliott Maxwell, recently named special adviser to Secretary of
Commerce William Daley on the digital economy, is likely to lead the
administration's inter-agency Internet agenda next year.
''When the work began with respect to electronic commerce, few people
were worrying about the policy questions,'' Maxwell said. ''All that's
different now.''
|
