Electronic Commerce: A Washington Perspective

Presented Before The Sixth Conference on Organizational

Computing, Coordination and Collaboration

International Conference on Electronic Commerce

Austin, Texas

October 31, 1995

(Revised May 31, 1996)

By James B. Rapp


Alexandria, Virginia

Opening Statement

Electronic Commerce issues and conduits such as the Internet, have arrived in Washington.  No, not in an application sense---but in a policy sense. A U.S. Treasury financial crime unit head expresses concern about money laundering and tax evasion via the Internet, a group of 160 telephone service resellers petition the Federal Communications Commission (FCC) to place restrictions on Internet telephony, and certain U.S. federal agencies desire the ability to access encrypted private electronic transmissions.

     The current crop of futurists tell us old order industrial society governments will react to the shift towards a new order information/electronic commerce society, but have not really told us how they will react, or what is happening at this time.  This writing will take the next step and offer a "snapshot" of the current Washington environment, as relates to issues impacting electronic commerce. 

     Much of this writing will focus upon Internet related issues.  This is for two reasons: 1) At present, the Internet is one of the primary communication tools that electronic commerce will be conducted over; 2) Most of the policy debate in Washington has centered around the Internet, likely as a result of the significant media attention that has occurred.  However, the issues raised could apply to almost all electronic commerce delivery vehicles and application systems.

     Lastly, the purpose of this writing is to make electronic commerce interests aware that public policy issues need to be on their "radar screens" when making business decisions, as they will impact pricing, service/product offerings, and marketing approaches.  Also explored is what to expect in the future, and why and how to take a pro-active approach. 


      Electronic Commerce issues and  conduits such as the Internet are now on the “radar screens” of Washington federal policy and law enforcement officials.

     “The Players,” which in Washington parlance means relevant participants, includes the Executive Branch, Congress, and “other players,” such as the media.

     In late 1993 the Clinton Administration launched the  National Information Infrastructure (NII) initiative in order to ensure that a nation of information “haves” and “have nots” would not emerge, and that seamlessness of technologies take place. The NII initiative is based upon the premise that while the private sector will construct the “information superhighway,” government must play a major role.  The National Telecommunications Information Administration (NTIA), and The Information Infrastructure Task Force (IITF), have been leading advisory bodies and implementers of the NII initiative, however, in many instances, this role has been overtaken by other departments and agencies. 

     The Congress, in both a technical implementation and policy sense, has been much slower to adapt to electronic information mediums than the Executive Branch.  However, since late 1995 this has changed dramatically, Congressional electronic mail and World Wide Web sites have been established, hearings are taking place on issues impacting electronic commerce, and the establishment of an Internet Task Force, and Congressional Technology Working Group has occurred. 

     A number of issues relevant to electronic commerce have been reviewed within the Clinton Administration and are now being looked at by Congress.  Important issues include copyright/intellectual property, privacy, financial crime, tax, electronic banking/currency, content, international, universal service, labor, consumer protection, cryptography, and federal versus state legal/regulatory authority.

     Politics plays a role in respect to Washington involvement in the advent of the information age and electronic commerce.  The Clinton Administration has been a big proponent of public-private “dual-use” Internet/electronic commerce programs.  However, the Republican controlled Congress has attempted to scale back monies for these efforts under the guise that winners and losers should not be selected by government, and that the  private sector will quite ably take the U.S. into the emerging information age. Many in the Republican Congressional majority look upon “dual-use” programs as Executive Branch patronage. 

     Factors driving Washington’s interest in Cyberspace and electronic commerce include media attention and trendiness.  The media has focused on the Internet, which along with electronic commerce is a trendy topic today.  Politicians look for “political mileage,” and federal bureaucrats like to implement programs related to hot button issues.

     Another factor driving governmental interest in Cyberspace and electronic commerce is fear.  The technology opens up the possibility that a diffusion of power from centralized bureaucracies to many communities spread throughout the globe could occur.  Old order industrial society Washington interests will go to great lengths to maintain power during the transition to the new order information age.

     Monetary authorities are fearful that electronic currency transactions may enable massive tax avoidance and cause a lack of monetary stability/control.

     What should electronic commerce interests do? 1) keep abreast of government and law enforcement initiatives, and adjust electronic commerce business models accordingly; 2) contact elected officials in a proper manner in order to ensure that the private sector plays a major role in the development of the electronic commerce regulatory environment, and does not wholly leave it up to government; 3) look for new business opportunities that government regulations and laws will spawn; 4) be a good Netizen, educate electronic commerce “newbies,” and particularly the media. 

  Education of business, government, and the public at large over the next three years is crucial to the development of electronic commerce.  Working groups comprised of business, government, and academic interests  must be formed to explore electronic commerce issues in respect to how they will impact the international business sector, international economies, and society in general. 

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