White House Promotes Industry Self-Regulation

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White House Promotes Industry Self-Regulation

By Neil Munro
Staff Writer

To accelerate the growth of online commerce, the White House is about to announce a new policy that would give the high-tech industry the chance to draft rules that span a broad spectrum of their business.

The policy was outlined in a draft plan prepared by White House policy expert Ira Magaziner, with advice from industry executives. The plan offers the high-tech manufacturers, systems integrators, software developers and Internet companies the chance to write rules for protection of consumers' private data. Industry would also help draft regulations that govern routine business transactions and develop software that could be used to exclude online pornography from consumers' PCs.

"One always fights a losing battle if one tries to fight technological development," said Magaziner in an interview.

The plan should be approved by President Bill Clinton by the end of June, said Magaziner. Once completed, White House officials will select a few policy goals to be accomplished in the next six months, he said.

However, he declined to name of any of the short-term goals being considered for selection.

The administration's reliance on industry self-regulation is warmly welcomed by high-tech industry executives and free-speech advocates, who say that it will accelerate economic growth and minimize the government's intrusion into online communities.

"The best policy of government ... is to empower people in the private sector to act," said David Johnson, founder of Counsel Connect, a Washington-based network for lawyers. "Both of the traditional parties [must] come to grips with this" deregulatory trend, he said.

But the administration's increasing reliance on industry appalls some observers, including Gary Chapman, an academic at the University of Texas at Austin.

"The idea that there might be some public interest concerns about media concentration, large corporations getting bigger, the whole Internet getting out of control ... these things don't seem to concern this administration very much," he said, adding that both President Bill Clinton and Vice President Al Gore have adopted pro-business policies similar to those championed by the Republican Party.

The new policy is "an abandonment of the way that we thought this administration would deal with issues," he said.

Increased industry self-regulation will help democracy, counters Johnson. "People have a lot more power in the Internet than in the real world," because they can better shape companies' actions by how their spend their time and money in the online marketplace, by periodically voting in political elections, he said.

According to Magaziner's draft report, industry should develop the technical standard for electronic commerce, devise ways to protect the privacy of consumers' personal data, develop standard contracts for online commerce, and distribute software filters needed to screen out online pornography.

"Participants in the marketplace ... should define and articulate most of the rules that will govern electronic commerce," while government officials try to extend those common rules worldwide, according to Magaziner's report.

Online commerce, estimated at $200 million in 1995, could rise to several billion dollars by 2001, say industry observers. Such growth would create numerous jobs and increase the federal government's revenue from corporate profit taxes, says Magaziner.

In recent months, industry executives have drafted voluntary codes to guide their use of consumers' data. They have also proposed software technology to let consumers' shield their data and drafted a voluntary code to guide the operation of online gambling firms.


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