U.S. Report Gives Net a Clean Bill of Health

An optimistic report released Friday by the U.S. Internet Council (USIC) predicts that the Internet will continue to evolve into an open and global information environment and that those nations, corporations and citizens who can adapt to the Net's constant innovation will thrive.

The study also showed that although English-speaking users in North America are still the largest single block of Internet users, the Web is rapidly becoming an international medium.

"The growth in the number of non-English speaking Web sites, combined with the rapidly rising number of Internet users in Asia and Europe, is transforming the Internet from an American-dominated medium to a true international communications backbone," said Bill Myers, CEO of the council.

The USIC's "State of the Internet 2000" report examined a variety of Internet issues, including e-business, government regulation and cybercrime.

E-Business

The Internet has changed the way that companies do business by providing retailers with a direct portal to millions of users and potential customers around the world. Additionally, the Internet revolution has allowed companies to save money and realize increased efficiencies.

The report concluded that companies that leverage the power of the Internet have realized better internal operations, customer services and significant cost savings. The report cited a study by the Giga Information Group, which stated that moving business online would save companies around the world $1.25 trillion (US$) by 2002.

As additional evidence of the cost savings to be realized online, the report said that Cisco Systems saves over $800 million annually by placing key business applications online.

One group that is just beginning to realize the potential of the Internet to provide product exposure and create cost-savings is small and medium-size enterprises (SMEs). Eighty-five percent of SMEs polled recently by Arthur Andersen use the Internet, and 85 percent maintain a homepage. Additionally, 50 percent view the Internet as their favored growth strategy for the next 12 months.

Notably, 54 percent of the SMEs polled do not conduct e-commerce and do not intend to launch an e-commerce-capable site in the next 12 months.

The report also said that e-commerce has fueled the U.S. economic boom during the last 10 years and that the emergence of new e-business models have kept the U.S. economy vibrant and healthy. Other countries sharing in this e-prosperity include Japan, Korea and Australia.

Government Regulation

Governments should adopt a hands-off approach to most Internet issues, according to the USIC. The report cautioned that "Governments need to recognize the amazing benefits of the Internet and do nothing to cripple it."

In addition, attempts by governments to regulate sites that they consider socially unacceptable, such as gambling and pornography sites, will only drive those businesses to more hospitable locations, according to the report.

In most instances, the Internet should be self-regulating and the government should allow e-commerce to be market-driven instead of government-driven.

However, with the privilege of self-regulation comes responsibility. The report said, "Successful industry leadership and self-governance requires that the industry is willing to cooperate and enforce a set of standards and practices."

The report did indicate some instances where government interference was appropriate -- most notably cyberterrorism and the prosecution of pedophiles who use the Internet to stalk children. In areas where government intervention is required, the USIC recommended an "aggressive multi-jurisdictional campaign."

Cybercrime

As the Internet has grown in popularity and become an increasingly important tool for businesses and individuals, concerns over cybercrime have arisen. A recent poll stated that 67 percent of Americans either felt concerned or threatened by cybercrime.

A recent number of highly publicized cybercrimes -- including February's hacker attacks on a number of well-known Web sites and the Love Bug virus in May that caused at least $7 billion of damage worldwide -- have added to these concerns.

Fortunately, as cybercrooks become more sophisticated, so too do law enforcement officials. The report said that in recent months government and industry officials have been working together to identify and combat cyberthreats.

The Washington, D.C.-based U.S. Internet Council was formed in 1996 as independent, nonpartisan resource for state and federal policy makers.