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| Demographic || Economic || Political || Cultural || Natural || Technological |monobar.gif (1022 bytes)

oranlogo.gif (4389 bytes) The Political Environment

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| government regulation || freedom of speech || taxation |
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Legislatures, government agencies, and interest groups want to regulate business activity to forward their own interests. Business in general, more than other groups, uses lobbying efforts to obtain legislation favorable to their competitive interests.

Legislation Laws generally attempt to protect:

opinp.gif (941 bytes) companies from each other to create more competition and more value for the consumer
opinp.gif (941 bytes) consumers from unfair and sometimes dangerous business practices
opinp.gif (941 bytes) society as a whole from practices that endanger whole communities or other publicly owned resources such as rivers, forests, and parks
In addition to the perennial issues of copyright, privacy, and security, three recent legislative issues are in the news: government regulation, freedom of speech, and taxation. Al Gore and other politicians are trying to decide which ones to emphasize in the next presidential election.

Jerry Kang of UCLA Law School maintains the Top Cyberspace Law Cases of 1997 site for the UCLA Online Institute for Cyberspace Law and Policy. The twelve cases include Reno v. American Civil Liberties Union, American Library Association v. Pataki, and NBA (National Basketball Association) v. Motorola. Each case has a brief explanation, as well as links to the actual court ruling (when available) and other information about the case.

Enforcement The effect of laws depends upon the emphasis given to enforcing them within the regulatory agency responsible for administering the law. Regulation varies in intensity with political agendas of sitting presidents and budget allocations. Public interest groups also affect the degree of legislative activity and administrative enforcement.

 

The Enigma

If our property can be infinitely reproduced and instantaneously distributed all over the planet without cost, without our knowledge, without its even leaving our possession, how can we protect it? How are we going to get paid for the work we do with our minds? And, if we can't get paid, what will assure the continued creation and distribution of such work?

Since we don't have a solution to what is a profoundly new kind of challenge, and are apparently unable to delay the galloping digitization of everything not obstinately physical, we are sailing into the future on a sinking ship.

This vessel, the accumulated canon of copyright and patent law, was developed to convey forms and methods of expression entirely different from the vaporous cargo it is now being asked to carry. It is leaking as much from within as from without.

from "The Economy of Ideas" in Wired 2.03
by John Perry Barlow
co-founder and executive chair
Electronic Frontier Foundation

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WEBLEADERS is a lightly moderated discussion list for anyone interested in
the direction of the internet. Owner: Hal Croasmun

The primary question is "WHO CONTROLS THE INTERNET and how?" Discussion topics include:

orange pushpin What direction is the Internet headed?
orange pushpin Is it necessary that it be controlled in some way?
orange pushpin If so, who will control it?
orange pushpin Does the Internet need to be regulated by governments and if so, how?
orange pushpin What other forces are attempting to gain control and how?
orange pushpin Who will govern the net and in what ways?
orange pushpin Is it possible to create a self governing system for the net?
orange pushpin If so, what would it look like? If not, why not?

To Subscribe send mail to list.manager@maillists.com
And in the body include only the command:

subscribe webleaders

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Increased Emphasis on Ethics

At both the grassroots and corporate levels, more US companies are showing a greater concern for more ethical conduct and more socially responsible action.

Ethical companies often enjoy better consumer relations and public image. When Johnson & Johnson behaved responsibly after the Tylenol poisonings, they were able to recapture all of their market share when the product was re-introduced.

Between the power of computers in our lives and the jargon spoken by the people with power over the computers, computer ethics have come to the fore. On the one side, prosecutors are reluctant to pursue crimes they know little about. On the other side, organizations have acceptable use policies for the Web -- but I don't usually hear of any for the phones and VCRs.

The Computer Ethics Institute has an often-quoted guide that should help in most cases of indecision.

Ten Commandments for Computer Users

1. Thou shalt not use a computer to harm other people.
2. Thou shalt not interfere with other people's computer work.
3. Thou shalt not snoop around in other people's files.
4. Thou shalt not use a computer to steal.
5. Thou shalt not use a computer to bear false witness.
6. Thou shalt not use or copy software for which you have not paid.
7. Thou shalt not use other people's computer resources without authorization.
8. Thou shalt not appropriate other people's intellectual output.
9. Thou shalt think about the social consequences of the program you write.
10. Thou shalt use a computer in ways that show consideration and respect.

What's with the do's and don't's? Don't ethics come down to how you feel -- or maybe, how your conscience makes you feel? Here's an excerpt from Internet Ethics, by David Lousecky and Thomas Zillner.

Although it's certainly not nice to hurt people's feelings, and causing unnecessary suffering is clearly wrong, doing ethics is not a matter of figuring out how people feel about cases. How you feel about inefficient computers and beating workers into increased productivity doesn't matter. Inefficient computers get less done and beating workers violates their rights. There's nothing either subjective or unclear about it.

Free trade might improve living conditions for everyone. What we need to find out is whether it will, not how you feel about it. Clinton's health care plan might drive out small business. We need to get clear about the consequences of the plan. We need to get clear about whether people have a right to health care. We don't need a poll of people's feelings. If people are sensible, then their feelings will be governed by the consequences and rights involved, but it's the consequences and rights that make the ethical case.

Some of you may have extensive personal experience with the Net. Others may have little. But none of us can have personal experience sufficient to answer questions about, for example, the effects of commercializing the Net. In order to answer that question, we will have to do some research to gather evidence, even learn something about the dismal science of economics. There's a lesson here. Since doing research is difficult, time-consuming, and boring, it is tempting to jump to a conclusion on the basis of personal experience. Since the more experienced may be more tempted, it's important to remember that no amount of personal experience is adequate to answer broad questions of public policy.

To get started researching ethics, try the Electronic Privacy Information Center. Another good starter page is hosted by the Institute for Business and Professional Ethics. The person who designed the the home page got a little carried away. But the material is useful, so please overlook the design excesses.

For an international view:

Netherlands: Nijenrode Business Information Services

United Kingdom: Center for Computing and Social Responsibility

At some point the larger ethical questions come down to codes of conduct. Folks on the Internet call this "netiquette." If you use a search engine, add another search term, for example "netiquette AND email", or you'll get too many responses. At Liszt, you'll find netiquette links at the top of the home page.

An Intellectual Property Law Primer for Multimedia Developers
by J. Dianne Brinson and Mark F. Radcliffe

Licensing Still Images
Index Stock Photography treats copyright and intellectual property issues facing multimedia developers.

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Almost everything we think we know about intellectual property is wrong. We're going to have to unlearn it. We're going to have to look at information as though we'd never seen the stuff before.

from "The Economy of Ideas" in WIRED 2.03
by John Perry Barlow
co-founder and executive chair
Electronic Frontier Foundation

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Government Regulation
Microsoft's Adventures with the Feds

51.gif (7458 bytes)By several measures, Microsoft is the mightiest marketing organization that the world has ever seen. Sure, they do R&D. Sure, Bill Gates looks harmless on TV. But those folks have you convinced that you have to have computers even though they are expensive, hard to use, and harder to learn. They take gobs of time to the point where some find them addicting.

Even though press reports about the issue are full of jargon, it's clearly Microsoft's marketing tactics that get the rest of the industry so incensed. The word monopoly keeps coming up because we don't know what else to call it.

Nicholas Economides' Economics of Networks site has a concise resource page with links to all the relevant primary documents such as Microsoft's and the DOJ's positions and filings.

Perhaps with the new economics, we need new vocabulary. Every publication is covering this story, but Red Herring is a good place to start. That's Nathan Myhrvold on the cover of the February 1998 issue.

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A photoessay in the January 1998 Wired magazine notes that "networks tend to leach power out of traditional institutions, including electoral politics and the state."

Wired goes on to recount the results of a poll taken at the 1996 World Economic Forum.

not at all

3%

a little 34
quite a lot 43
to a great extent 18
To what extent is the new digital world eroding the power of the nation-state?

In the year 2010, to what extent will the power of the nation-state have been eroded?

2%

not at all

20

a little

52

quite a lot

25

to a great extent

yes 59
no 40
Should governments attempt to regulate digital networks?

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Freedom of Speech
Smut 'n' Spam on the Web

Smut

Remember the kiddie-porn bill that Congress passed a few years ago? Well, it's back. And the folks at the Center for Democracy and Technology don't like it one bit.

ciec.gif (7599 bytes)Sounds to me like the folks who wanted to ban automobiles because they would scare the horses. Well, if the horses could make room on the highway, why can't the children?

Please take issue with that paragraph.cdtlogo.gif (9968 bytes)

You rip a pornographic photo into a hundred pieces. A hundred friends each takes one piece across the border. You reassemble the pieces. Who committed a crime? Isn't that what happens when the digital version of that pornographic photo gets broken into packets? They are sent out to find the path of least electrical resistance through the Internet to be reassembled only at the host computer. Can any one packet be any more pornographic than one scrap of paper?

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Other leading sites on the issue:

Citizens Internet Empowerment Coalition

The Electronic Frontier Foundation

Founded by John Perry Barlow, author of the Declaration of Independence and other documents quoted on this course web.

The Cyberporn Debate

The Time magazine cover story that started it the debate + links to the articles that revealed the hoax played on Time + links to more accurate statistics.

What to do?

What else to do

The international W3 consortium is working on a set of technical improvements called PICS, the Platform for Internet Content Selection. Also, Paul Burton's Controlling access to the Internet site in England has links to material on Internet regulation and control, including pornography, racism, and harassment.

Spam

Unsolicited commercial email. The online equivalent of junk mail, which at least costs a quarter for postage. Plus printing. On the Internet, sending one costs the same as sending to all nine million AOL accounts.

Most people don't like spam. Do you? Personally, it doesn't bother me that much. I'm pretty quick with the delete key. However, unlike the smut issue above, I have trouble seeing the other side.

The media's whipping boy is Sanford Wallace of Cyber Promotions, Inc. Companies such as Spamnet sell anti-spam software. The Realtime Blackhole List tells you who the worst spammers are. Lots of web pages discuss how to protect yourself from spam.

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Taxation

From your home in Buffalo, you dial in to AOL in Virginia where you find an Iowa company's coffee-and-fruit basket on a site hosted in Nebraska. You get UPS to ship it to relatives in Texas. How many states can tax this transaction?

Some 30,000 tax jurisdictions can tax interstate transactions, so we haven't even mentioned the locations of the banks involved. For example, in how many states did the individual packets of these messages momentarily reside in an Internet router? Can they impose a per-bit usage tax? The questions:

opinp.gif (941 bytes) Should electronic commerce be taxed, and how?
opinp.gif (941 bytes) What should be taxed -- income, sales, bandwidth?
opinp.gif (941 bytes) Who should tax, the federal government, the states, or both?
opinp.gif (941 bytes) Should a special excise tax be imposed on selected aspects of electronic commerce, for example, depth of encryption?
opinp.gif (941 bytes) Is Internet taxation politically feasible, that is, do enough folks care to fight it effectively?

getacro.gif (712 bytes)Read about it in the May 1997 paper "Internet Taxation: Economics, Technology, and Law" by Charles McLure, Jr., a senior fellow at the Hoover Institution. (Adobe Acrobat (.pdf) format)

The Case Against

The Clinton administration, in an attempt to pave the way for mainstream electronic commerce, has introduced a bill to limit taxation on Internet transactions. It is proposed by the Internet Tax Freedom Act to place a six-year ban on states and localities passing new taxes aimed at online access, e-commerce, and other Net services.

Lobbyists in favour of the bill believe that inconsistent and inadministrable taxes imposed on Internet commerce threaten to subject consumers and businesses engaged in interstate and foreign commerce to confusing and burdensome taxation. ... Because the tax laws and regulations of so many jurisdictions were established long before the Internet, their application to the new medium in unintended and unpredictable ways threatens every Internet user, access provider, vendor, and interactive computer service provider.

"Web is not a tax-free zone"
The Business Journal


Here are some resources to get you started:

Cyber Biz Tax
Resources on Taxation of Internet Commerce.

Vertex Tax Cybrary
The most up-to-date, accurate and comprehensive automated tax compliance software and reference manuals. Resources available state-by-state as well as a section on trends and analysis.

The Taxation of Cyberspace
An overview by Arthur Andersen researchers of Internet and e-commerce tax issues.

Buying and Selling on the Internet
Richard Ward of Bird & Bird on tax "planning," that is, tax avoidance.

State Tax, the Internet and Electronic Commerce: A Backgrounder (1996)

Debates wage on Internet taxation, USA Today, September 3, 1997

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Link to TALK (discussion forum)

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last update: July 22, 2000
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