Congress and Clinton Duplicate E-Commerce Initiatives

The U.S. Department of Commerce is ready to let the public help shape its policy on electronic commerce, but more than a dozen members of Congress have decided that they already know what the public wants.

The Commerce Department released a survey about online commerce this week to give the public an easy electronic means of expressing their opinions about taxation, security, privacy and other hot online issues. At the same time, many different bills are pending in Congress to address specific e-commerce issues, and one recently introduced by Senator Bill Frist (R-Tennessee) would tackle the whole slate of issues through a new division of the National Institute of Standards and Technology (NIST).

Detailed Justification

The online survey from the Department of Commerce essentially seeks detailed justification from the public for changes that the federal government has already put into motion. In December, the Clinton administration ordered all federal agencies to start looking for ways to make their operations electronic and to take greater advantage of the Internet. They were also asked to look for flaws in their current regulations that may be holding back the development of e-commerce across the public and private sectors.

Responses to the online survey are due March 17th.

“Our aim is to establish a legal framework that facilitates electronic commerce around the globe, to protect consumers and their privacy, and to enable everyone in our country to fully participate in this remarkable economic transformation,” Commerce Secretary William Daley said.

“Some laws and regulations designed for the ‘physical world’ may not always work in cyberspace. We need to ensure that governments do everything possible to foster this revolution in opportunity, convenience, and choice, while providing online equivalents to important consumer protections we now have in the paper-based world,” he added.

Duplicate Efforts

The administration’s plan is startlingly similar to the one laid out in Frist’s bill, which was introduced in the Senate in November and now awaits action by the Commerce Committee. The only major difference is that the Frist bill would create a “Center of Excellence for Electronic Commerce” within the NIST to oversee the country’s e-commerce transformation.

The Frist bill would direct the federal government to “facilitate the growth of electronic commerce by allowing the private sector to continue to take the lead in developing this dynamic global market, and refraining from undue regulatory measures whenever possible.”

The bill also states that the “government should unambiguously support the development of electronic commerce as a market-driven phenomenon, yet also signal its strong desire to promote and facilitate the growth of the electronic commerce market.”

Centralized E-Commerce Information Resource

The center would be a centralized electronic commerce information resource for federal agencies, provide guidance to the Office of Management and Budget in developing e-commerce policies, and promote the use of e-commerce by federal agencies and small and medium-sized businesses.

It would also make sure that U.S. e-commerce policy is promoted in international meetings pertaining to the development of the Internet and e-commerce technology.

The Frist bill would order its new “Center of Excellence” to form yet another inter-agency working group to explore e-commerce issues. The Clinton administration has already formed what it calls a “Working Group on Electronic Commerce,” and Congress appointed an Advisory Commission on Electronic Commerce (ACEC) last summer to explore Internet trade issues.

The center would also work with the Commerce Department’s Manufacturing Extension Program and the Small Business Administration to boost small businesses’ participation in the online world.

Reheating a Hot Debate

Regardless of which plan emerges as the blueprint for the federal government to follow, all of the various bills and administration directives have already heightened awareness of — and debate over — electronic commerce and its potential for the U.S. economy.

Some of those debates are likely to boil again in the Commerce Department’s survey, as it asks pointed questions about key topics. The survey prompts respondents to identify certain types of transactions that have the technology in place to go online immediately if federal, state or local barriers were removed or reduced.

“In responding to this and other questions, you are urged to take into account cross-border transactions that are now likely to occur electronically,” the survey says. A similar question asks if e-commerce has been held back by specific state laws, conflicts between state and federal laws or a lack of uniformity among the laws set by different states.

Renewed Complaints

Such language throws the door wide open for renewed complaints about taxation of electronic purchases, a debate that has yet to be resolved but is under scrutiny by the ACEC. Some researchers have argued that uncertainty and confusion over the taxation question has prevented the online marketplace from reaching its full potential.

The department also asks if any current federal laws or regulations prevent businesses or individuals from conducting commercial transactions online. Such impediments could include record keeping requirements and “written notice” requirements that can slow such transactions down. The department asks respondents to estimate how much they or their firms suffer financially because of those transaction delays, and to suggest alternatives.

The survey also questions the impact that federal laws and regulations have on the ability of small businesses to compete online and on consumer privacy. Regarding the latter, the department asks for specific suggestions for making required electronic notices or disclosures more conspicuous, easier to disseminate, and easier to understand to improve consumer confidence in online deals.

In addition, the survey asks consumers if any laws or regulations that have recently been put on the books have reduced the level of protection for consumers online, such as rules about fraudulent, unscrupulous or exploitative content.

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