October 31, 1997 2:20 PM PST

Net policy agenda in works

COLORADO SPRINGS, Colorado--From cybercrimes and Net taxes to electronic commerce, lawmakers at the first Internet Summit of the States are tired of Congress working alone to shape policy for the Information Age.

Joined by high-tech and telecommunications industry executives, legislators from 29 states have gathered here to bang out their own Internet policy agenda during the next two days.

Topping the lawmakers' list is whether to support a temporary federal ban on localities imposing new taxes targeted at only Net-related services. Also on the list are how to drive investment in local phone service infrastructures in order to increase bandwidth for data transmission; how to handle unsolicited email and online privacy; and figuring out what legislation--if any--will lure Silicon Valley wealth to their diverse states.

The event was organized by the United States Internet Council, whose members include companies such as Microsoft, AT&T, and America Online.

In comparison to Congress, the information technology and computer industries have been slow to recognize state legislatures' role in laying the framework for robust e-commerce, widespread Net usage, and education for a tech-savvy workforce.

This disconnect often has left states in the dark as to how to attract high-tech companies. They also need to know how to avoid unpopular regulatory moves such as censoring online speech, which has been a hard lesson for Congress to learn. Moreover, states tend to stay out of debates going on in Washington, although the results could have serious effects on future technology markets as well as the companies that already reside in their territories.

To get states in gear, Bill Archey, president of the American Electronics Association, drove this message home today: the high-tech industry is not only the largest U.S. exporter, but it also pays 73 percent higher wages on average than other industries.

After hearing such statistics, it is no surprise that the legislators here want to learn what they are doing wrong when it comes to fostering the Internet's growth, and more importantly, what they can do right.

"We want users of e-commerce to have confidence in it and a feeling that their legal transactions can be upheld in court if they had to be," said Republican Georgia Rep. Don Parsons, whose state adopted a digital signatures program this year to ensure the authenticity of documents sent over the Net.

Georgia has come a long way from the reverse approach it took last year when it outlawed sending anonymous email or using pseudonyms online. This summer, the American Civil Liberties Union won its case to have the law overturned on grounds that it was unconstitutional. Still, the example shows that like the federal government, states are beginning to realize that outlawing online activity is tricky. Drawing up policies that please the high-tech industry can be just as tough.

For example, whether to support the Internet Tax Freedom Act is one of the main issues being debated at the summit. The USIC members support the legislation introduced by Sen. Ron Wyden (D-Oregon) and Rep. Chris Cox (R-California) that calls for placing a moratorium on new state and local Net taxes.

"You have a right to impose new taxes as long as the Net and e-commerce aren't singled out," Wyden told the crowd today via satellite from Washington.

The bill is expected to be voted on by Congress early next year, although it is not yet clear how long the ban would last. The House version of the bill states six years, but the length in the Senate bill is undetermined.

The time limit isn't what is worrying these legislators most; rather, it's the loss of decision-making power to determine what revenue streams are best for their states. Minnesota Sen. Steve Kelley suggested to Wyden today that the bill underestimates the intelligence of state lawmakers.

"The industry omitted the responsibility of educating the states about these taxation issues, and instead went to the feds and told them to block us," said Kansas Sen. Paul Feleciano, who opposes the bill.

Others say states may need to tax Net service providers in order to finance universal service subsidies, for example. This idea is also churning in Congress, although the Federal Communications Commission rejected it when implementing the Telecommunications Act of 1996, which laid out new rules for providing low-income and rural areas with discounted Net and phone service.

"If they don?t want me to tax them, then they need to provide equal opportunity in employment and equal access to the Internet," Feleciano added.

However, many wholeheartedly support the Cox-Wyden bill. "We need to keep the government out of the Net and give it time to grow," said Colorado Rep. Ron May, who chairs the newly formed Colorado Internet Caucus, which aims to fuel e-commerce in the state.

Another industry concern attendees are hearing is that local phone loops can't deliver Net content at the speed consumers are demanding. Long-distance and cable companies are building pipes to make online multimedia look like TV, and chipmakers are building the processors to handle real-time video and images once they get to users' desktops. But between those is the local telecommunications copper-wire infrastructure, which many say isn't ready to support advanced Net applications.

"The local loop issue is the nastiest problem we have," said Jonathan Seybold, chairman of the board for Pretty Good Privacy, who spoke on the future of the Net.

Seybold encouraged state leaders to push for passage of legislation to lift federal encryption export limits. For many, it was the first time they heard about the struggle between law enforcement--which wants access to private email in order to investigate criminal activity--and the software industry and Net users. Netizens want total privacy in their online communication, and the makers of encryption technology want to compete with others in the international encryption marketplace.

Tomorrow, the lawmakers will hammer out the actual Net policy agenda. Despite the consensus-building, it is obvious that a majority face unique problems that will have to be worked out at home.

"We can't keep people in state information technology positions; they're going on to better, higher-paying pastures," May of Colorado noted.

Others are grappling with community demand for online content regulations. "I just introduced a bill to put criminal provisions on sending pornographic, unsolicited email," said Ohio Rep. George Terwilleger. "People can put it on the Net if they want, but I don?t want them pushing it to kids or adults."

Still, states' actions always have a ripple effect, so attendees are being encouraged here to shop their ideas around before passing any new Net laws.

"Good ideas and bad ideas float across state lines and percolate up to Congress. In fact, more than half of all members of Congress were once state legislators," said Mark Rhoads, the USIC's legislative director. "The traditional territorial and subdivisions of government are gone with the Internet. They need to learn how to deal with this."

 

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