E-Commerce Legislation Moves Forward

E-Commerce Legislation Moves Forward

Rep. Billy Tauzin

By Anne Gallagher, Contributing Writer

Legislation that could remove an obstacle to electronic commerce, along with a host of other information technology-related bills, will move to the front burner when Congress returns in September from its monthlong recess.

One bill that is advancing paves the way for use of electronic signatures in online business transactions, allowing consumers and businesses to use electronic signatures the same way they use handwritten signatures when making online business transactions.

The Electronic Signatures in Global and National Commerce Act (H.R. 1714) unanimously passed the House Commerce Telecommunications Subcommittee in late July.

The bill could move to the full House for consideration after Congress returns.

During debate on the bill by members of the subcommittee, more clarity to state e-commerce regulations was added in the form of an amendment offered by Rep. W.J. Billy Tauzin, R-La., chairman of the panel. The amendment, adopted in a voice vote, increased the length of time a state has to enact its own electronic signature law from two years to four years.

One of the impediments in e-commerce has been the disjointed laws governing state procedures regarding electronic signatures.

"Currently, the legal status of an electronic signature used to seal an online transaction is unclear," said Commerce Committee Chairman Rep. Thomas Bliley, R-Va. "To date, 44 states have enacted some sort of law to provide legal recognition to an electronic signature. Unfortunately, no two laws are the same. Some only recognize electronic signatures used on government filings, while some laws recognize an electronic signature generated by a specific technology."

Because of the patchwork of laws, industry is hesitant to widely use electronic authentication, Bliley said.

"For unfettered interstate commerce to occur, businesses and consumers must have a single, nationwide standard so that all online transactions enjoy the same legal protection regardless of the location of the parties," he said.

During the debate, lawmakers stressed it is not their goal to endorse a specific technology or limit the types of companies that can offer electronic signature services.

"These are decisions that should be left to the marketplace, not to Congress," Bliley said.

Meanwhile, members of the Senate Republican High-Tech Task Force, which held a news conference on Capitol Hill Aug. 3 to report their agenda for the remainder of the legislative year, said they intend to push for passage of related e-commerce bills before the end of the year.

At the top of the High-Tech Task Force's agenda is the Millennium Digital Commerce Act, task force members said.

The Millennium Digital Commerce Act (S. 671) addresses the use of electronic signatures in interstate and commercial contracts. It also establishes a national legal framework for using electronic signatures, grants parties the right to choose electronic signature technologies and establishes that the intent to sign documents electronically depends on surrounding circumstances. The bill is sponsored by Sens. Spencer Abraham, R-Mich.; John McCain, R-Ariz.; and Ron Wyden, R-Ore.

While the task force expects to pass the Millennium Digital Commerce Act before the end of the year, it has another e-commerce bill it intends to pursue but may not pass this year.

That bill, the Electronic Securities Transactions Act (S. 921), would enable the use of electronic signatures by broker-dealers and others in the securities industry in dealing with customers and other transactional parties.

Members of the task force also signaled their intent to pursue passage of several other information technology bills, including the Anti-Cybersquatting Consumer Protection Act and Information Technology Education and Training Act.

Task force members noted that the Anti-Cybersquatting legislation is a priority for high-tech companies, particularly those with well-known trademarks.

Cybersquatting refers to the deliberate and abusive registration of Internet domain names in violation of the rights of trademark owners.

"Cybersquatting harms e-commerce and the goodwill value of U.S. trademarks by eroding consumer confidence in brand names consumers rely upon to identify genuine goods and services on the Internet," task force members said.

The Information Technology Education and Training Act, sponsored by Sen. Bill Frist, R-Tenn., provides $145 million over five years for competitive teacher development grants to improve educators' IT skills.

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