3rd Annual Report, 2000

The U.S. Government Working Group

on Electronic Commerce

Leadership for theNew Millennium

Delivering on Digital Progress

and Prosperity

Leadership

New Millennium

3rd Annual Report, 2000
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

i

Table of Contents

Preface ................................................................................................................................................ iii

A Record of Digital Progress and Prosperity ...................................................................... v

Executive Summary ...................................................................................................................... ix

Introduction ..................................................................................................................................... 1

I. Fostering Digital Equality.................................................................................................... 3

A. Digital Opportunity ...................................................................................................................... 3

1. Connecting Low-income Americans ............................................................................................... 4

2. Connecting Children and Students................................................................................................. 5

3. Increasing Access for Persons with Disabilities.............................................................................. 7

4. Connecting Rural Americans .......................................................................................................... 8

5. Building Awareness and Mobilizing Resources.............................................................................. 8

6. Delivering on Digital Opportunity .................................................................................................. 10

7. Connecting Not-for-profits............................................................................................................. 11

8. Connecting Small Businesses ...................................................................................................... 11

9. Connecting the Globe ................................................................................................................... 15

B. E-Society ...................................................................................................................................... 19

1. Improving Medical Care and Public Health .................................................................................. 19

2. Enhancing Education .................................................................................................................... 21

3. Sharing Environmental Information ............................................................................................... 22

4. Empowering Non-Profit Organizations ......................................................................................... 22

5. Improving Rural Communities ...................................................................................................... 22

6. Protecting Public Safety ................................................................................................................ 23

7. Creating Digital Libraries and Preserving our Cultural Heritage ................................................... 23

8. Realizing the Potential of Geospatial Information Systems .......................................................... 24

C. E-Government ............................................................................................................................. 25

1. Providing One-stop Government Information ............................................................................... 26

2. Moving Government Procurements Online .................................................................................. 26

3. Implementing Electronic Filing...................................................................................................... 27

4. Developing a Public Key Infrastructure ......................................................................................... 27

5. Putting Government Services Online ............................................................................................ 28

6. Facilitating Electronic Payments ................................................................................................... 29

7. Other Government Services and Information Available Online .................................................... 31

8. Improving Government Accountability and Efficiency .................................................................. 32

9. Exploring E-voting ......................................................................................................................... 33
3rd Annual Report U.S. Government Working Group on Electronic Commerce

ii

II. Enhancing Consumer Confidence .................................................................................. 35

A. Consumer Protection................................................................................................................... 35

1. Alternative Dispute Resolution ...................................................................................................... 35

2. E-Commerce at Home and Abroad ñ Domestic and International Consumer Protection............ 36

3. Education to Protect the Consumer.............................................................................................. 37

4. Enforcing Consumer Protection Laws Online ñ Protecting the Consumer Against Fraud ........... 38

B. Ensuring Privacy on the Internet ............................................................................................... 39

1. Privacy Protection through Self-Regulation and Example ............................................................ 39

2. Privacy Protection through Law and Regulation ........................................................................... 40

C. Protecting Children from Inappropriate Content Online ñ A Special Responsibility ......... 41

D. Enhancing Consumer Confidence ñ Security on and Security of the Internet....................... 42

1. Security on the Internet ñ Protecting Information through Encryption .......................................... 42

2. Security of the Internet ñ Protecting the Internet for Businesses and Consumers ....................... 42

III.Creating a Seamless Government .................................................................................. 45

A. Trade and Financial Environment .............................................................................................. 46

1. Increasing Market Access............................................................................................................. 46

2. Promoting Duty Free Cyberspace ................................................................................................ 48

3. Protecting Against Discriminatory Taxes in the Global Environment ............................................ 48

B. Legal and Regulatory Environment ........................................................................................... 50

1. Facilitating E-Commerce through Electronic Signatures .............................................................. 50

2. Reducing Barriers to E-Commerce ............................................................................................... 51

3. Intellectual Property Protection ..................................................................................................... 53

C. Understanding the Digital Economy ......................................................................................... 55

IV. Facilitating the Growth of the Internet ........................................................................ 59

A. Building High Speed Tracks for High Bit-Rate Internet Access.............................................. 59

1. Competition is Driving Investment ................................................................................................ 59

2. Where Competition does not Drive Broadband Access, Special Attention is Needed ................ 62

3. Advanced Mobile Communications/Third Generation Wireless Systems .................................... 62

B. Making Sure Every Train Runs on Every Track ñ

Standards to Facilitate Competition, Compatibility and Functionality .................................. 63

C. Letting the Private Sector Name the Destinations ñ

Domain Name System Privatization.......................................................................................... 64

Conclusion ...................................................................................................................................... 67

Acknowledgements .................................................................................................................... 69

Appendices ..................................................................................................................................... 71

Endnotes .......................................................................................................................................... 85
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

iii

Preface

n many respects, we first began writing this Ireport in 1993.

When the President and I took office that year

the information super highway was no more

than a vision. Here, in the same White House

where Thomas Jefferson charted the course

of continental exploration with Lewis and Clark,

and John F. Kennedy challenged us to put a

man on the moon, we were faced with a

stark choice. We could either push into new

frontiers or allow opportunities to slip away.

The choices we have made since then have

left us substantially better off than we were

eight years ago.

We decided to offer America a vision and a

strategy for creating a National Information

Infrastructure, a seamless web of communication networks, computers, databases and

consumer electronics that would put vast

amounts of information and new tools at usersí

fingertips. We knew an Information Revolution

was upon us and that it would change the way

we lived, worked and interacted with each

other. We wanted to maximize the benefits it

would offer to our citizens.

In 1994, we broadened our vision to include

the developing world. In Buenos Aires, before

the International Telecommunication Union,

I outlined a vision for creating a Global

Information Infrastructure that would reach

large segments of the world population and

create new opportunities for their economic

and social development. We recognized that

we could not be complacent about the disparity

between the high and low-income nations and

their access to new technologies. We recognized that the development of the GII must be

a cooperative effort among governments,

businesses, non-profit groups and people.

We based our strategy for achieving these

objectives on five essential principles: private

investment, competition, open access, flexible

regulatory frameworks, and universal access.

Since 1994, these principles have been broadly

accepted worldwide and have helped create

flourishing markets in many countries that have

enabled telecommunications and information

technologies to reach more people and

improve their lives. Privatization, competition,

and liberalization remain the cornerstones of

our policy.

In 1997, we released the Framework for Global

Electronic Commerce and again sharpened

and extended our vision and strategy to make

it even more relevant to then-embryonic

developments in the electronic marketplace.

While e-commerce is the product of the

innovation, imagination, and investment

decisions of the private sector, we helped

create an environment in which these forces

could flourish. We made private sector

leadership, avoidance of unnecessary

restrictions, and, when needed, government

intervention that is supportive, predictable,

minimalist, consistent, and simple our

watchwords. These principles have endured

and have continued to serve us well. They

increasingly have become the de facto

common law of e-commerce policymaking

around the world.

Ostensibly, this report records the progress

we have made implementing our e-commerce

principles and policies over the last year. In

fact, it summarizes the progress we have

made over the last eight. Over that period,

we have worked together with stakeholders in

the business, non-profit and international

communities to narrow the digital divide and

create digital opportunity at home and abroad.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

iv

We have not only recognized the potential of

new technologies like the Internet, we have

harnessed their power to the cause of progress

and prosperity.

Our economy, which has experienced the

longest expansion in peacetime history, reflects

our success in using information technologies

to spur growth, raise productivity, limit inflation,

and create jobs. Our society reflects our success

in using information technologies to expand

greatly access to education, training, and medical

and health information. Our government reflects

our success in empowering our citizens and

reinventing government for the Information

Age. We have made our government more

efficient, accessible, accountable, and, most

importantly, more responsive to its customers

than ever before.

I want to commend all of those in the Federal

government who have assisted me in overseeing the issues described in this report. I

would like to especially thank the senior staff

on Internet and e-commerce related issues

who have toiled to secure these results,

including David Beier, Sally Katzen,

Elizabeth Echols, Jim Kohlenberger, Tom Kalil,

Andrew Weinschenk, Ron Keohane and

their colleagues.

Those of us in public service have not

accomplished these goals alone, however.

This report, in fact, testifies to the power of

unleashing the energy, creativity, and resources

of the private sector. Our colleagues in

business and civil society have offered crucial

leadership and support, as have many in

Congress, international institutions and foreign

governments. Without them, without you, we

would not have achieved all that we have. May

the next stewards of policymaking in this field

continue to benefit from your dedication,

wisdom and hard work.

Together, over the last eight years, we have

established a record of digital prosperity and

progress. It is only a beginning. But we have

blazed a trail that others can follow with

confidence and conviction.

Al Gore
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

v

A Record of Digital Progress and Prosperity

Fostering the Digital Revolution

he Clinton-Gore Administration entered Toffice at the dawn of the Digital Era and

has guided one of the most fundamental

transformations in our nationís history. New

information and communications technologies

have altered the way

we play, work and do

business in a way we

have not witnessed

since the advent of

steam power and

electricity over a

century ago. In

1993, the Internet

was a tool for a

relatively small

group of scientists,

researchers, and

hobbyists, many of

them living and

working in the United

States. Today, the

Internet is a familiar and increasingly critical

part of daily life around the globe. The ClintonGore Administration has played a major role in

nurturing the medium and creating a global

policy and regulatory environment that has

allowed the Internet to flourish beyond our

expectations. In partnership with businesses

and civil society, we have succeeded in

dramatically increasing the connectivity of our

citizens and their access to opportunity. We

have used the medium to boost the quality of

education and health care. We have hastened

the development of electronic commerce.

And we have instituted policies that have made

digital technologies the dynamo that drives our

economy. Working together over the last eight

years, we have unleashed an Information

Revolution that will continue to improve the

lives of our citizens for decades to come.

Putting America and the

World Online

Nothing epitomizes the stark transformations of

the past eight years better than the growth of

the Internet itself. The number of Internet hosts,

or computers with a unique Internet address,

has ballooned from 1.3 million in 1993 to

more than 93 million in 2000.1 The number

of Internet users has increased by roughly

423 million over the same period.2 The

Clinton-Gore Administration and its partners

have made particular progress in connecting

Americans. The number of Americans online

has surged some 1,315 percent since 1993,

from roughly 90,000 people to 137 million

people today.3 Meanwhile, the number of U.S.

households online has soared over the last

seven years from just 6 percent to 42 percent,

nearly a seven-fold increase.4 Over the same

period, the number of U.S. households with

personal computers has more than doubled to

over half.5 Some observers predict that within

three years 62 percent of Americans will be

online and that within five years some 91

percent will be online.6

While few nations can boast they are as wired

as our own, the Internet has experienced

tremendous international growth as well. In fact,

while North America accounted for 45 percent

of users worldwide as recently as last year

within five years our region will account for just

29 percent.7 Of the roughly 100 million new

users who logged onto the Internet this year,

three-quarters were located outside the

United States.8 The percent growth in the

online population in such countries as China,

South Korea and Italy was over 140 percent

between 1999 and 2000. Countries like Brazil,

Germany and France more than doubled our

growth rate.9 The Internet has truly gone global.

ìHere in America,

a revolution in

technology is

underway. It is

more than a time

of innovation, itís a

time of fundamental

transformation, the

kind that happens,

at most, every

hundred years.î

President Clinton

June 24, 2000
3rd Annual Report U.S. Government Working Group on Electronic Commerce

vi

Delivering on Digital Equality

The Clinton-Gore Administration and its

partners also have delivered in narrowing the

digital divide and creating digital opportunity

for all our citizens, regardless of race or

ethnicity, location, age or gender (http://

www.digitaldivide.gov). Digital opportunity for

everyone is not only an attainable goal; it is

becoming a reality. The latest research shows,

for example, that the gap between rural

households and households nationwide has

narrowed to just 2.6 percentage points in

2000.10 The percentage of rural households

with Internet access shot up 75 percent since

late 1998, from 22 percent to 39 percent. At

every income level, but especially at middle

income levels, Americans are connecting at far

higher rates from their homes. Today more than

two-thirds of all households earning more than

$50,000 have Internet connections.11 Access

to the Internet also has expanded across every

educational level. Households headed by

someone with some college experience have

shown the greatest expansion in Internet

penetration, rising from 30 percent in December

1998 to 49 percent in August 2000.12

African-American and Hispanic groups also

have logged impressive gains in Internet

access, although they still lag behind other

groups. Black households are now more than

twice as likely to have home access than they

were two years ago.13 Hispanic households

also have seen Internet usage nearly double

over the same period.14 Meanwhile the

disparity between men and women has largely

evaporated.15 In fact, some observers believe

that women have overtaken men as the primary

users of the Internet. Individuals age 50 and

over have experienced the highest rates of

growth of all age groups over the last two

years: 53 percent compared to a nationwide

growth rate of 36 percent.16

Building a Digital Society

The Internet and related technologies are

improving our society in many ways. Some of

the most notable changes have occurred in

education. The number of personal computers

installed in classrooms tripled from 1992 to

1999, with the number of educational users of

the Internet projected to exceed 110 million

by the year 2003.117 While this increased

access is helping prepare students for todayís

economy, IT also is making school a more

satisfying experience for many students.

Some 43 percent of 9-17 year olds say that

the Internet has improved their outlook

about school.18

The growth of the Internet also appears to be

helping Americans take better care of their

health. A recent survey found that 55 percent of

Americans online use the Internet to search for

medical information. About half of them say the

Internet has improved the way they get medical

and health information and the way they take

care of themselves.19 There also is some

evidence that the Internet is changing and

improving the way we communicate with our

families and friends. Approximately, 26 million

Americans have used e-mail to start communicating regularly with family members with

whom they had previously not had much

contact. Some 61 percent of women and 56

percent of men say that they communicate

more often with family members via e-mail.20

The growth of the Internet has even helped

protect our environment and may be improving

our political and civic life. By not commuting

every day, telecommuters keep some 39,000

tons of hydrocarbons, 590,000 tons of carbon

monoxide, and 31,000 tons of nitrogen oxides

out of the air.21 There is even some evidence

that the growth of the Internet may help create

a more informed electorate. The average

campaign ad on TV or radio lasts 30 seconds

while the average web surfer spent over

15 minutes on major candidatesí websites

in 1999.22

Unleashing E-commerce

Perhaps the most visible symbol of the IT-related

changes over the last eight years is e-commerce.

In 1993, when the Clinton-Gore Administration

took office there was no appreciable business

activity online. In December 1995, when the

White House Electronic Commerce Working

Group first convened, commerce on the

Internet was just beginning and its potential

was not widely recognized. Sales generated by

the World Wide Web that year totaled just over
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

vii

$435 million.23 Since then,

business-to-consumer

and business-to-business

e-commerce has skyrocketed.

Some estimates suggest

that business-to-consumer

e-commerce will total some

$61 billion or more in 2000.24

Some sources suggest that

business-to-business

e-commerce will exceed

$184 billion in 2000.25

Although estimates vary,

there is strong consensus

about continued further

growth. Business-toconsumer e-commerce

could swell to between

$75 billion and $144 billion

in 2003.26 Business-tobusiness e-commerce could

reach between $634 billion

and $3.9 trillion.27 Already

approximately

3 in 5 companies are using e-commerce to

some extent and a further 20 percent say

they intend to do so in the future.28 By 2003

some 80 percent of all business-to-business

transactions could occur online.29 The U.S.

Government also is increasing its ability to

provide information and services online, with

more than 27 million web pages of government

information and a growing number of online

transactions now available to citizens.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

viii

Creating a Digital Economy

The vast growth of e-commerce only begins to

hint at the more profound changes that many

observers believe IT and related technologies

are producing in the overall economy. Today,

we are enjoying sustained economic growth

and a core inflation rate that remains low

despite record employment and the lowest

jobless rates in a generation. Despite a modest

8.3 percent share of the economy, IT industries

are powering our improved economic performance. IT industries, for example, have

contributed about 30 percent of U.S. economic

growth since 1995. They also have accounted

for half or more of the recent acceleration in

U.S. productivity growth, from 1.4 percent per

year during 1973-1995 to 3.0 percent during

1995-2000. In other words, IT appears to

make it possible for our economy to grow faster

than ever before without sparking increased

inflation. Rapid declines in IT prices alone

have directly lowered inflation by an average of

0.5 percentage points. IT industries also have

generated hundreds of thousands of new jobs.

Employment in the software and computer

industries nearly doubled,

from 850,000 in 1992 to

1.6 million in 1998. Over

the same period, employment in those IT jobs that

require the most education

and offer the highest

compensation (e.g.,

systems analysts,

computer scientists,

computer engineers, and

programmers) increased

by nearly 1 million

positions or almost

80 percent. In short, the

combination of growth,

low inflation and low

unemployment experienced

in the overall U.S. economy

in recent years has convinced many observers

that the U.S. economy

has entered a new era

of economic prosperity

and possibility.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

ix

Executive Summary

he Internet, and other information and Tcommunication technologies, are not

only driving our economies but are

transforming our societies in countries around

the world. Recognizing the vast potential for

these technologies to better the lives of all

people, President Clinton and Vice President

Gore last year directed the Electronic

Commerce Working Group to launch three new

initiatives designed to harness the full power of

the Internetís potential benefits. These

initiatives have narrowed the digital divide and

increased access to digital opportunity;

improved the quality and availability of

government services while making government

more transparent, responsive and efficient; and

used new technologies like the Internet to

enrich our lives and address our most urgent

social challenges. At the same time, we have

expanded our ongoing efforts to promote the

growth of electronic commerce and foster a

safe, secure online environment.

This report outlines the Clinton-Gore

Administrationís success in making the Internet

a tool for both social and economic growth. In

pursuing these dual objectives, we have

adhered to the principles the President and the

Vice President first outlined three years ago in

setting forth a global vision for the growth of ecommerce. These principles of private sector

leadership, avoidance of unnecessary

regulation, and a minimalist government role

have continued to prove their durability and

relevance. Our commitment to them has

helped the Internet to flourish beyond our

expectations and brought us closer to our

ultimate objective of achieving digital equality

for all our citizens.

I. Creating Digital Equality

The Clinton-Gore Administration has helped

widen the circle of digital opportunity at home

and abroad. Domestically, the Administration

has helped create unprecedented access to

the information technology. Over the last year,

the digital divide between our citizens has

narrowed dramatically. There were 116.5 million

Americans with Internet access at some location

by August 2000, 31.9 million more than there

were only 20 months earlier. The Administration

also has increased technology access, training

and usage for all students. We also have

helped small businesses to harness the power

of the Internet and take part in the emerging

global digital economy. Today, small businesses

are using the Internet to increase their efficiency,

In the fast changing world of the Internet, the

five policy principles that President Clinton

and Vice President Gore set forth in July 1997

have proven sound and sufficiently flexible to

apply to the new challenges arising daily.

They are:

 The private sector should lead.

 Governments should avoid undue

restrictions on electronic commerce.

 Where governmental involvement is needed,

its aim should be to support and enforce a

predictable, minimalist, consistent and

simple legal environment.

 Governments should recognize the unique

qualities of the Internet.

 Electronic commerce over the Internet

should be facilitated on a global basis.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

x

reach international markets, participate in

business-to-business exchanges, and integrate

themselves into supply chains that stretch

around the world. Finally, the Administration

has expanded digital opportunity globally.

Around the world, we are helping developing

countries use digital technologies to accelerate

their social and economic development and

participate fully in the Information Revolution.

The Administration has:

 Connected Schools and Libraries to the

Internet ñ The e-rate is benefiting more

than 90 percent of Americaís public schools

and providing Internet access for 30 million

children in more than one million classrooms

and 47,000 schools and libraries.

 Tripled Funding for Community

Technology Centers ñ The Administration

proposed tripling funding for Community

Technology Centers in its FY 2001 budget

to $100 million to create up to 1,000 new

centers. These centers will help to close the

digital divide by providing computers and

Information Age tools to children and adults

unable to afford them at home.

 Expanded Access to Education Technology

ñ The President and Vice President have

increased overall investments in education

technology from $23 million in 1993 to

$766 million in FY 2000.

 Increased Technology Training for Teachers

ñ The Administration is providing grants to

help train 400,000 new teachers to use

computers effectively in the classroom. In

addition, the Technology Literacy Challenge

Fund, which the Administration created in

1997 to help states provide software and

Internet access for students, increase the

number of multimedia computers in the

classroom and provide technology training

for teachers, received $425 million in FY 2000.

 Helped Disabled Persons Get Access to the

Web and Assistive Technology ñ The

Administration has supported the World

Wide Web Consortiumís Web Accessibility

Initiative, promoting accessible information

technology through research and industry

collaboration; created an interagency task

force to explore enhancing Medicare and

Medicaid to help people with disabilities pay

for technologies that will assist them to live

and work independently; created state-based

loan programs so that individuals with

disabilities can have access to personal

loans from traditional financial institutions for

the purchase of assistive technology services

and devices; and awarded $9 million to

AmeriCorps to put 1,200 volunteers into

schools and communities to teach students

with disabilities and others the skills they

need to use the Internet effectively.

 Mobilized Public-Private Partnerships

Targeting People with Disabilities ñ With

Administration support, over 45 high-tech

CEOs have pledged to support ìbest practicesî

on accessibility and presidents of 25 of the

nationís top research universities have

agreed to expand research and education on

accessibility issues. SmartForce, an e-learning

company, also has pledged to provide $20

million of free access to its online training

material and Sun Microsystems has created

a lab to make free, open-source desktop

software accessible for people with disabilities.

 Launched a Distance Learning Service for

Small Businesses ñ Through a public/private

partnership, the Administration began

offering small businesses a distance learning

curriculum that features online e-commerce

courses and an e-commerce guidebook.

 Created a Global Digital Opportunity

Taskforce ñ With strong support from key

developing countries, industry, non-profit

groups and other stakeholders, the

Administration and its G-8 partners have

launched a major international effort to create

digital opportunity worldwide by providing

policy advice, building human capacity, and

increasing access (http://www.ecommerce.gov/

ecomnews/pr0725002.html).

 Expanded the Internet for Economic

Development Initiative ñ The Administration

invited India and Jordan to join the initiative in

early 2000 and seven additional countries ñ

Mali, Indonesia, Kenya, Nigeria, Senegal,

Romania and Guyana ñ in July 2000. Vice

President Gore announced 11 pilot countries

in June 1999.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

xi

II. Building An E-Society

The Administration has recognized that the

Internet has the potential to address our most

urgent challenges and improve our quality of

life. The Internet is not just an engine of

economic growth but a means of improving

the quality of our lives. Increasingly, the Internet

is a means to access educational, medical

and other services. Over the last year, the

Administration has stepped up efforts to make

the Internet live up to its full potential to benefit

people in critical areas such as health and

education.

The Administration has:

 Deployed Telemedicine Technologies to

Remote Communities ñ Over the last year,

the Administration has moved rapidly to

deploy state-of-the-art technology to bring

primary care and specialty medicine to

remote communities. Currently, there are

almost 40 telemedicine programs and

partnerships within the Indian Health Service

alone that are delivering care to isolated

communities.

 Put Quality Health Care Information

Online ñ Both health care professionals and

consumers, can get online, accurate, up-todate, quality health care information from the

worldís largest medical library, the National

Library of Medicine at the National Institutes

of Health using MedlinePlus. This service

provides access to extensive information

about specific diseases and conditions, and

has links to consumer health information,

dictionaries, lists of hospitals and physicians,

health information in Spanish and other

languages, and clinical trials. Medline-plus

receives over one million hits per month

(http://www.nlm.nih.gov/medlineplus/). In

addition, medical products consumers can

use Medwatch to search medical product

reporting and safety information (http://

www.fda.gov/medwatch/index.html).

 Made the Human Genome Project

Available Online ñ Members of the scientific

community can use GenBank, a genetic

sequence database, to access an annotated

collection of all publicly available DNA

sequences. The collection contains over

10.3 billion base pairs (http://www.ncbi.nlm.

nih.gov/Genbank/genbankstats.html).

 Improved Monitoring of Public Health ñ

Using information and communication

technologies, the Administration has

improved methods for conducting public

health surveillance to gather health data in

real time, facilitate the monitoring of health

communities and analysis of trends, and to

detect emerging public health problems.

 Improved Rural Communities Through

Information Technology ñ The Administration has approved loans to install over

6,587 miles of fiber optic lines and upgrade

127 rural telephone exchanges so the plants

are ready to allow customers to access highspeed DSL Internet service; awarded $18.7

million to link hospitals, schools, doctors,

educators, patients and students in rural

America with medical research institutions,

universities, libraries, doctors, educators, and

professors; and deployed Mobil Internet Vans

to provide IT training in rural communities.

 Pushed to Establish Online School Report

Cards ñ The Administration has proposed

posting state-level, district and individual

report cards on the Internet; provided funding

for a pilot program in Maryland that has

become a model for other states; and piloted

the development of systems in eight states to

allow states to compare their schoolsí

academic performance.

III. Empowering Citizens

The ClintonñGore Administration has brought

government into the Digital Age. We have used

digital technologies to make government move

at Internet speed and make it possible for

citizens to access critical government services

and information around the clock. Now, anyone

with a computer connection has the government

at his or her fingertips. In addition to making

government more efficient and accessible, we

also have made government leaders more

responsive via e-mail and are exploring ways of

making it easier for all Americans to participate

in the nationís political life. Digital empowerment

is helping citizens take control of their government as never before.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

xii

The Administration has:

 Launched the FirstGov.gov Website ñ The

Administration launched the first-ever website

that provides the public with easy, one-stop

access to all Federal government online

information and services. The customerfocused FirstGov permits users to search

27 million Federal agency web pages

instantaneously and intuitively ñ by subject or

by keyword. The FirstGov search engine, run

by the non-profit FederalSearch Foundation,

can search half a billion documents in less

than one-quarter of a second (http://

www.FirstGov.gov).

 Promoted Online Filing of Government

Paperwork ñ Under the Government ñ 

Paperwork Elimination Act (GPEA), the

Administration directed agencies in May to

plan for electronic filing by October 2003

and to use electronic signatures for the full

range of government activities and services,

considering risks, costs, and benefits.

 Put Government Services Online ñ The

Administration has dramatically expanded

the range of services online. These services

include:

 Taxes ñ Taxpayers can use the IRS e-file

program to file from the convenience of

their homes quickly and simply. E-filing

reduces the chances of an error to less

than one-percent. With the security of

Direct Deposit, refunds are in taxpayerís

savings or checking accounts within three

weeks, half the time compared to paper

filings (http://www.irs.gov/elec.svs/

index.html).

 Students.Gov ñ Post-secondary students

can obtain financial aid, easily complete

electronic student aid applications, pay

student loans and obtain other government

information under the Access America

initiative announced by Vice President

Gore in February 1997 (www.students.gov).

 Seniors.Gov ñ Seniors can receive

estimates of their social security benefits,

verify benefits received, and gather other

government information of particular

interest online (http://www.seniors.gov).

 Medicare Compare Database ñ Citizens

can find the Medicare option that works

best for them using an interactive database

that provides comprehensive information

on various Medicare health plans, including

the cost, quality, and benefits of each plan

(http://www.medicare.gov/mphCompare/

home.asp).

 Paperless Procurement ñ Vendors who

conduct business with the government can

now use a totally paperless procurement

process (http://www.fts.gsa.gov). The

Government Services Administration (GSA)

issues each potential bidder a digital

signature certificate, allowing him or her to

digitally sign and submit proposals and

conclude contracts electronically.

 Campsite Reservations ñ Campers can

now get information and make reservations

at more than 50,000 U.S. campsites and

facilities (http://www.recreation.gov).

 Examined the Feasibility of Online Voting

ñ On October 11-12, 2000 the National ñ 

Science Foundation sponsored the Internet

Policy Institute e-Voting Workshop. The

Workshop explored the issues raised by

online voting, including privacy, security,

authentication, broad and equitable access,

and the potential impact on representative

democracy. A report detailing the findings

from the workshop will be posted at

www.netvoting.org in early 2001.

IV. Enhancing Consumer

Confidence

E-commerce and other Internet applications will

never reach their full potential unless consumers

and other users can go online with confidence.

The Clinton-Gore Administration has worked to

ensure consumers enjoy equivalent protection

whether they shop online or in brick-and-mortar

stores. We also have significantly improved

privacy protections through private sector

self-regulation and legal protection in the most

sensitive areas, and helped provide greater

security on the Internet against cyber-criminals

and other threats. We have achieved these

successes while maintaining our core commitment to minimal government intervention and

private sector solutions like codes of conduct

and third party audits and enforcement

mechanisms.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

xiii

The Administration has:

 Improved Consumer Protection Online ñ

The Administration has enhanced consumer

protection by successfully challenging

industry to establish codes of conduct,

encouraging consumer education, and

aggressively fighting misleading and

deceptive practices online.

 Explored Alternative Dispute Resolution

(ADR) Mechanisms ñ The Administration

held a public workshop in June to explore

the new and innovative ADR models

emerging in the marketplace; exchange

ideas on how to develop fair dispute

resolution systems; identify obstacles to the

more widespread use of ADR for online

consumer transactions; and examine the

incentives and disincentives for creating

these programs (www.ecommerce.gov/adr/).

 Encouraged Industry to Protect Individual

Privacy ñ The number of commercial websites that post privacy policies has jumped

from 2 percent in 1998 to 62 percent this year.

 Enhanced Protection for Children on the

Internet ñ The FTC issued rules to

implement the Childrenís Online Privacy

Protection Act in April 2000. The Administration actively supported enactment of this

Act, which requires sites aimed at children to

get verifiable parental consent before they

gather and use personal information received

from children under 13 (http://www.ftc.gov/

opa/2000/04/coppa1/.htm).

 Increased Protections for Medical Records

ñ In December 2000, the Administration

issued the final rules guaranteeing the

privacy of medical information under the

Health Insurance Portability and Accountability

Act of 1996. These rules will apply to all

medical providers and plans and their

business associates (13 percent of the

U.S. economy).

 Established a Safe Harbor for Consumer

Information ñ The United States and the

European Commission completed the safe

harbor privacy accord, which helps to ensure

that trans-Atlantic data flows will not be

interrupted. This landmark accord, which

became operational in November of this year,

will enhance privacy protection for U.S.

consumers and assure effective privacy

protection for European citizens whose data

is transferred to the United States (http://

www.export.gov/safeguard).

 Implemented Sweeping Changes to

Restrictions on the Export of Encryption

Products ñ In January 2000, the Administration implemented the new policy on the

export of encryption products. The new

policy, announced in September 1999, both

protects national security interests and paves

the way for U.S. industry to compete in major

markets around the world. It also helps

consumers and other users protect their

data. In July 2000, the Administration

announced a further update that opens up

encryption exports to the 15 member nations

of the European Union as well as eight other

trading partners (http://w3.access.gpo.gov/

bxa/fedreg/ear_fedreg.html#65fr42565).

 Worked to Protect Internet Security ñ

In February, President Clinton convened a

summit of industry leaders to examine the

security of Americaís computer networks.

In July, the White House announced a

proposed legislative package to address

both privacy protections and law enforcement needs for crime in cyberspace. The

package contained provisions to update

telephone-era laws for the Internet-age,

enhance privacy protections and allow law

enforcement to protect the public safety.

 Announced First-ever Critical Infrastructure

Protection Plan ñ President Clinton issued in

January the National Plan for Information

Systems Protection, the first attempt by any

national government to articulate a plan to

protect its computer-controlled networks

(http://www.pub.whitehouse.gov/uri-res/

I2R?urn:pdi://oma.eop.gov.us/2000/1/7/7.text.1).
3rd Annual Report U.S. Government Working Group on Electronic Commerce

xiv

V. Creating A Seamless Global

Marketplace

The Administration has worked to create a

seamless global marketplace that will allow ecommerce and the Internet to reach their full

potential. This year we continued work in

dozens of areas, including taxation, customs

duties, electronic signatures, and intellectual

property rights, to ensure that the global

regulatory environment encourages the

development of global trade in cyberspace

rather than stifles it. Nowhere has the

application of our principles of private sector

leadership and minimal government

intervention been more successful.

The Administration has:

 Established the Validity of Electronic

Signatures ñ President Clinton signed into

law the Electronic Signatures in Global and

National Commerce Act (E-SIGN) on June

30, 2000. E-SIGN promotes electronic

commerce by ensuring explicitly the legal

validity of electronic records, signatures, and

transactions (http://www.ecommerce.gov/

ecomnews/ElectronicSignatures_s761.pdf).

 Worked to Extend the Global Moratorium

on Customs Duties ñ This year the

Administration continued to build on the

successful May 1998 WTO electronic

commerce declaration to formally extend the

existing moratorium on customs duties on

electronic transmissions and continue the

WTO work program regarding the application

of all trade disciplines to e-commerce.

 Promoted Tax Simplification and NonDiscrimination ñ The Administration has

continued to work to prevent multiple or

discriminatory taxes on electronic commerce

through the G-8, the OECD, and in bilateral

efforts. The Administration also furthered

the debate domestically on the simplification

of state and local taxes through our

participation in the Advisory Commission on

Electronic Commerce and called for a

permanent ban on Internet access taxes.

 Provided Global Leadership on Intellectual

Property Protection ñ The Administration

has encouraged worldwide support for the

WIPO Copyright Treaty and the WIPO

Performances and Phonograms Treaty

through trade negotiations, speeches, and

participation in conferences. As of November

2000, 21 and 19 countries respectively, had

ratified the two treaties, representing all

geographical regions of the world.

 Strengthened Procedures for Patenting

Innovation ñ The Administration significantly ñ 

strengthened the procedures for evaluating

applications for business method patents by

partnering with affected industry, enhancing

training for patent examiners, revising

examination guidelines, and improving

management oversight among other steps.

VI. Facilitating the Growth

of the Internet

The Administration has worked to ensure that

the Internet continues to grow. We have

encouraged the rapid deployment of high

speed Internet services through our procompetitive policies. We have encouraged the

development of voluntary standards through

open private sector led processes and

continued successful efforts to ensure that the

domain name system is managed by a global,

functionally diverse, and private sector-led

organization. We also have expanded our

understanding of the Digital Economy and how

to sustain the growth, job creation, and low

inflation that are driving our overall economic

performance.

The Administration has:

 Encouraged the Rapid Deployment of

High Speed Internet Services ñ The

Administrationís pro-competitive policies are

stimulating rapid build-out of high speed

Internet services. In addition, the Presidentís

proposed FY 2001 budget included a new

pilot program that will provide $2 million in

grants and $100 million in loans to accelerate

private sector deployment of broadband

networks in under-served urban and

rural communities.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

xv

 Supported Industry Efforts to Define

Key Standards for the Internet ñ The

Administration has vigorously supported

private sector-led efforts to create voluntary

technical standards for the Internet.

 Advanced Privatization of Domain Name

Management ñ The Internet Corporation for

Assigned Names and Numbers (ICANN),

which was created by the private sector with

strong Administration support in 1998, held

its first worldwide membership drive and

online elections of new Members of its Board

of Directors. ICANN selected seven new toplevel domain names.

 Expanded our Understanding of the Digital

Economy ñ The Administration released its

Digital Economy 2000 report which examines

the evolution of electronic commerce and

the role of IT-producing industries in driving

growth, reducing inflation, increasing

productivity, and increasing jobs (http://

www.esa.doc.gov/de2000.pdf). The Census

Bureau of the Department of Commerce

also began measuring both business-tobusiness and business-to-consumer

e-commerce sales.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

1

Introduction

his, the third and final Annual Report of Tthe Electronic Commerce Working Group,

highlights our progress over the past year

on the work that began in 1997 with the release

of A Framework for Global Electronic Commerce

(www.ecommerce.gov/Framewrk.htm). The

Framework provided a set of principles, a

fundamental approach to the ever-changing

policy challenges posed by the development

of the Internet and e-commerce. In a world

marked by rapid technological change and

instant obsolescence, these principles have

endured. They have guided us for four years,

an eon in Internet time.

While the principles have remained the same,

the scale of our ambitions has grown. We

began by addressing some 13 policy issues,

almost all of them economic, commercial or

trade-related. We have since expanded that

roster twice and this yearís report addresses

almost two dozen distinct issues. Last year, in

the biggest departure from our initial focus,

President Clinton and Vice President Gore

asked us to go beyond economic issues to

address three new topics: creating digital

opportunity by increasing access to the

Internet; using information technology to

address our most urgent social challenges,

such as health and education; and bringing

government into the Information Age. This

report, thus, records our progress not only in

shaping a domestic and global environment

that allows e-commerce to flourish but in

harnessing the power of technology to improve

our lives.

Three years ago, few could have foreseen the

enormous changes that the Digital Revolution

would bring. Few could have predicted the

impact of the Internet. Few could have known

that words starting in ìeì would become

ubiquitous or that a caption for a New Yorker

cartoon about a dog chatting online would

become a cultural catch phrase, or that a

ìwebî would be anything other than something

a spider would weave. Even fewer were

prepared to address the policy challenges

posed by this brave new world.

Now, the Internet is a powerful force that is

facilitating commerce and trade, transforming

social patterns, strengthening links between

citizens and their representatives, and widening

opportunities for economic and social

development around the globe. What seemed

unimaginable is now reality. Fortunately, if the

Internet was the equivalent of a Model T in

1993, President Clinton and Vice President

Gore saw that it would soon be a Mustang.

Their foresight has allowed this Administration

to respond effectively and quickly to these

new developments and outline an approach

that remains as relevant today as when it was

first articulated.

This report describes the work we have

done over the last year to implement the

21 Presidential directives that President Clinton

and Vice President Gore have issued since

1997. We have not attempted to list every

program, action, or accomplishment. Instead,

we have tried to provide a portrait of the

U.S Governmentís efforts to implement and

expand upon the Presidentís and the Vice

Presidentís objectives. We also have looked

back occasionally to see where we started and

how far we have come. We believe that this

report constitutes a proud record of digital

progress and prosperity.

Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

3

I. Fostering Digital Equality

A. Digital Opportunity

top priority of the Clinton-Gore Admin- Aistration has been increasing access to

computers and the Internet in order to

give all our citizens

the chance to

improve their lives.

Today, access to

these basic information tools and

the ability to use

them effectively

are increasingly

important to

participating fully in

Americaís economic,

political, and social

life. Americans are

using the Internet to find lower prices for goods

and services, search for and apply for a job,

work from home or start their own business,

acquire new skills using distance learning,

make better informed decisions about their

health care needs, and to communicate with

friends, families, colleagues, and others

who have similar interests. Digital literacy can

help individuals qualify for jobs in the rapidly

growing information technology sector that pay

85 percent more than the average wage for all

private sector workers.30 And an Internet-ready

workforce also can help communities better

develop, attract, and retain businesses.

The Clinton-Gore Administration has made

significant progress towards increasing

digital equality. Among the Administrationís

accomplishments:

ìOur mission is to open

the digital frontier

to all Americans,

regardless of income,

education, geography,

disability or raceÖ

If we work together to

close the digital divide,

technology can be the

greatest equalizing

force our society or

any other has ever

known.î

President Clinton

April 4, 2000
3rd Annual Report U.S. Government Working Group on Electronic Commerce

4

1. Connecting Low-income

Americans

To more effectively foster digital opportunity,

the Clinton-Gore Administration created a

Community Technology Center (CTC) program

in 1999 with $10 million and has tripled or

proposed tripling the programís funding every

year since. CTCs, which provide access to

technology for low-income Americans, have

helped children to learn, adults to gain

workplace skills, and families to benefit from

online connections. Research sponsored by

the National Science Foundation and others

has documented the positive effects of CTCs

on individuals and their communities.31

In September 1999, the Department of

Education awarded 40 three-year grants to

fund the creation of more than 87 new CTCs,

and expand another 61. This spring, the

President announced new awards to create

284 new CTCs and expand services at

165 existing centers. In his FY 2001 budget

proposal, President Clinton proposed spending

$100 million for the CTC Program to create up

to 1,000 new centers.

CTCs are making a difference in communities

across the country (www.ed.gov/offices/OVAE/

CTC):

 Valley City, North Dakota: A $550,000 CTC

grant to Valley City, North Dakota is funding

a 20,000 square foot Regional Technology

Center/Business Incubator that will provide

affordable telecommunications access and

help start-up technology firms gain a foothold

in the region and reverse Valley Cityís

considerable out-migration and

underemployment. Half of the facility will be

dedicated to the Business Technology

Incubator and the remaining space will be

used by the Valley City State Universityís

Center for Innovation in Instruction to provide

training for young adults,

dislocated farmers, and

the underemployed/

unemployed.

 Northern Arapaho

Tribe, Wyoming:

A $178,762 grant is

helping the Northern

Arapaho Tribe acquire

10 computer workstations equipped

with advanced office,

business, and networking software for a

Small Business Technology Center (SBTC).

The SBTC will provide

on-site training to

Wyomingís Native

Community and prepare

its members for new

high tech careers that

pay above average

wages. The center will

offer networking,

business, software

development and Microsoft Certified training

and job placement information and

contracting/outsourcing opportunities

otherwise unavailable in the region.

 Pikeville, Kentucky: Two grants totaling

$1,052,000 to Pikeville, Kentucky are funding

construction of a 27,400 square foot telecommunications services building and the

creation of a facility to provide specialized
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

5

hands-on training to the local residents,

particularly the many displaced coal workers.

The Center will help these workers obtain the

skills they need to benefit from new

technology-related job opportunities. The

Center also will serve as a business

incubator and offer temporary office space

for new, start-up businesses.

2. Connecting Children

and Students

While both President Clinton and Vice President

Gore have long made expanding access to

the Internet and

computers for all

Americans a personal

priority, Vice President

Gore has led Administration efforts to

ensure that all

children have access

to educational

technology. His efforts

to connect schools,

classrooms and

libraries to the Internet

through the ìe-rateî

program are giving

millions of students

the skills they need to

prosper in the Digital

Economy. Among

other steps, the

Administration has:

 Connected 95 percent of U.S. public schools

by 1999, compared to 35 percent in 1994;32

 Connected 63 percent of U.S. public classrooms

by 1999, compared to 3 percent in 1994;33

 Increased educational technology funding

from $23 million in FY 1994 to $766 million in

FY 2000;

 Committed $5.6 billion in funding through the

ìe-rateî program for telecommunications

infrastructure and services to schools and

libraries through the end of FY 2000 (http://

www.fcc.gov/learnnet).

ìWe know we must

connect all our

classrooms to the

Internet, and weíre

getting there. In

1994, only 3 percent

of our classrooms

were connected.

Today, with the help

of the Vice Presidentís

e-rate program, more

than half of them are.

And 90 percent of

our schools have at

least one Internet

connection.î

President Clinton

January 27, 2000

The E-Rate is Opening New Doors for American Students

Victor Shen, Whittier, Alaska. Victor Shen is a 16-year-old high school junior who is one of more

than 30 million American children who are online because of the Vice Presidentís e-rate. Victor

lives in Whittier Alaska, which is isolated from the rest of the world for six months out of the year

because of its remote location and severe weather. Victor was cut off from commerce, cut off from

transportation, cut off from society, and cut off from pursuing his dream for the future. Victor wanted

to grow up to be a mathematician, but his teachers didnít have the best resources to teach him; nor

could they afford an Internet connection to connect Victor to his dream. Thanks to Al Goreís effort

and the e-rate, Victorís school is now connected to the Internet and Victor is now connected to

learning and connected to his dream. The Whittier Community School is now online because of the

90 percent discount they received from the e-rate. Now, the e-rate and the Internet are helping send

Victor to Australia. He found and applied to the People to People Student Ambassador Program

online and he will be able to travel far beyond his small village of Whittier to become part of the

global village. The e-rate has enabled Victor and all the students of the Whittier Community School to

expand the walls of the classroom and see all the wonderful opportunities that lie beyond Whittier.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

6

In addition, the

Administration proposed

in its FY 2001 budget

promoting the use of

technology in education

by:

 Creating tax incentives

worth $2 billion over 10

years to encourage

companies to donate

computers; make

sponsorship payments

to schools, libraries, and

community technology

centers; and provide

literacy and computer

training to low-skilled

employees;

 Expanding the Lifetime

Learning Tax Credit from

20 percent to 28 percent.

The credit allows taxpayers to take an

above-the-line deduction for qualified tuition

and related expenses including computer

training;

 Permitting states and local governments to

issue approximately $25 billion of bonds

for construction and modernization of

elementary and secondary public school

facilities.

In addition to requesting $100 million to create

1,000 community technology centers in lowincome communities, the Administration has

proposed spending (http://www.whitehouse.gov/

WH/New/00Budget/index.html):

 $150 million to help train all new teachers to

use technology effectively in the classroom;

 $50 million to support home access to computers

and the Internet for low-income families;

 $45 million to promote

innovative applications of

information technology to

help under-served

communities. Examples

include tele-mentoring for

at-risk youth, and public

health information systems;

 $25 million to accelerate

private sector deployment

of broadband networks in

under-served urban and

rural communities;

 $10 million to prepare Native

Americans for careers in IT

and other technical fields.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

7

3. Increasing Access for

Persons with Disabilities

As part of its commitment to creating digital

opportunity for all our citizens, the Clinton-Gore

Administration is making a special effort to

help persons with disabilities access and use

the Internet effectively. Computers, the Internet,

and other information and communications

technologies increasingly are becoming a

gateway to full participation in Americaís

economic, political, and social life. This is

particularly true for 54 million Americans with

disabilities. Information and communication

technologies designed to be usable by these

Americans can increase their ability to participate in the workforce and lead independent

lives. Designing technologies to make them

accessible to people with disabilities also can

improve their usability for others. Video

captioning, for example, can make video much

easier to search, and help people who are

learning English as a second language.

That is why this Administration, in cooperation

with partners from industry and academia,

has launched an initiative to make the World

Wide Web more accessible to persons with

disabilities. During a visit to the Assistive

Technology Access Center on September 21,

2000 in Flint, Michigan, President Clinton and

Secretary Mineta announced that:

 $4 million in grants would be awarded to the

Web Accessibility Initiative and the National

Center for Accessible Media, to help ensure

that people with disabilities can tap into

the web;

 $9 million in grants from AmeriCorps will help

pay 1,200 volunteers to work in schools to

teach children with disabilities how to use

the Internet;

 Two dozen college and university presidents

have pledged to ensure that their websites

and resources are accessible to those with

disabilities; and

 Forty-eight presidents of high-tech firms

have pledged to adopt ìbest practicesî on

accessibility, such as training their workers to

develop accessible products and services,

and identifying and fixing accessibility

problems in new versions of hardware

and software.

In addition, the President created an interagency group to examine Medicare and

Medicaid coverage of assistive technology.

President Clintonís FY 2001 budget proposal

also included a significant increase in funding

for assistive technology research and support

for state loan financing programs to make

assistive technology more affordable.

This new initiative, which involves the

Department of Education, National Science

Foundation and Department of Commerce,

renews the Administrationís longstanding

commitment to accessibility issues (http://

www.whitehouse.gov/WH/accomplishments/

cc799.html). The Department of Educationís

National Institute on Disability and Rehabilitation Research (NIDRR), for example, has

provided more than $16 million in grants to

promote accessible information technology,

while the Departmentís Learning Anytime

Anywhere Partnerships have distributed almost

$2 million to develop standards for online

learning. NIDRR also supports a Center on

Telerehabilitation that engages in engineering

research to promote new technologies for

teleassessment, telecounseling and other

purposes.

In July, on the 10th anniversary of the

Americans with Disabilities Act, President

Clinton issued an Executive Memorandum

requiring agencies to make all programs

offered on their Intranet and Internet sites

accessible to people with disabilities. Many

agencies already have made significant

progress towards that goal by making their

principal and top 20 (by volume of use)

websites accessible to people with disabilities.

In response to the Executive Memorandum, the

Interagency Committee on Disability Research

will issue a report to the President in 2001 on a

ìStrategy for the Development and Transfer of

Assistive Technology and Universal Design.î

President Clinton and Vice President Gore also

fought for the Telecommunications Act of 1996,

which requires that telecommunications equipment and services be accessible to people with

disabilities. President Clinton signed into law
3rd Annual Report U.S. Government Working Group on Electronic Commerce

8

the Workforce Investment Act of 1998, which

included the Rehabilitation Act Amendments

of 1998. The revised ìSection 508î provisions

require that when Federal agencies develop,

procure, maintain, or use electronic and

information technology, they must ensure that

it is accessible to people with disabilities

(http://www.section508.gov/).

4. Connecting

Rural Americans

The Department of Agriculture has taken the

lead in promoting the availability of advanced

telecommunications services in rural and tribal

communities. Toward that goal, the Rural

Utilities Service (RUS) of the Department of

Agriculture has approved forty-four loans

totaling $4.4 million dollars to install over 6,587

miles of fiber optic lines and upgrade 127 rural

telephone exchanges so that they can offer

customers high-speed DSL Internet service.

Eight loans specifically provided telephone

cooperatives and telephone companies serving

Rural America with funds for Internet services.

As part of a ìdigital divideî initiative announced

by President Clinton earlier this year, RUS also

has established a pilot program to help

advance ìbroadbandî deployment in rural

areas. The program will provide $2 million in

grants and $100 million in loans in FY 2001.

For this pilot program, RUS has raised the

traditional population cap for qualifying

areas from 5,000 to 20,000 people. Typically,

RUS borrowersí investments in fiber optics

significantly outpace those of other telephone

companies that provide service to rural

communities. Fiber optic lines allow homes,

businesses, schools, and hospitals in rural

America to access high-speed Internet

services. This broadband access not only

attracts private sector investments but also

increases access to opportunity to people who

live and work in rural America.

5. Building Awareness and

Mobilizing Resources

While the Clinton-Gore Administration has

worked intensively to use government

resources to create digital opportunity, it also

has sought to raise public awareness and

mobilize private sector resources. Towards this

end, President Clinton

and the Department of

Commerce hosted a

conference in December

1999 on ìClosing the

Digital Divide.î The

summit brought together

about 800 participants,

including executives of

U.S. technology firms,

civil rights and community

leaders, and government

officials. The summit

launched a public

dialogue on how to

expand and coordinate

existing public and private

initiatives aimed at closing

the technology gap.

At the summit, the

President announced a

Digital Divide-New

Markets Tour, which took

place in April 2000 and

highlighted communities that are using

information technology to enhance their

childrenís education, expand access to
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

9

life-long learning, and create economic growth

and high-tech, high-wage jobs. The Presidentís

tour took him to East Palo Alto, California,

Shiprock, New Mexico, and to Whiteville, North

Carolina, where he released a report entitled

Advanced Telecommunications in Rural

America (http://www.ntia.doc.gov/reports/

ruralbb42600.pdf) compiled by the

Departments of Commerce and Agriculture.

This report, discussed in more detail in the

broadband section of the report below,

examines the prospects for high-speed Internet

deployment in rural areas.

Most importantly, over 400 leaders of companies

and non-profit organizations endorsed the

Presidentís ìNational Call To Action,î (http://

www.whitehouse.gov/WH/New/html/

20000404.html) which sets as goals providing

21st century learning tools for every child in

every school and creating digital opportunity for

every American family and community. Under

this initiative, the Administration announced that

it would devote $12.5 million for an ìe-Corpsî

to recruit 750 qualified AmeriCorps members

for a project aimed at bringing digital opportunity to youth, families, and communities.

Industry and non-profit groups responded by

pledging to work with local schools to ensure

that all children are technologically literate,

expand internships to expand high-tech career

opportunities for underserved youth, and lead

grassroots efforts in local communities to

bridge the digital divide.

Private Sector Commitments to President Clintonís ìNational Call to Actionî

 QUALCOMM will help to close the digital divide with a $25 million commitment ó including

$7 million to improve math and science education in San Diego schools through investments

in educational technology and enhancing the math and science instructional skills of K-12 teachers;

 The Kaiser Family Foundation and Black Entertainment Television announced public service

campaigns to motivate young people to participate in technology;

 Hewlett-Packard announced a $15 million Digital Village Initiative ó with products, partnerships

and people in 3 underserved communities ó starting in East Palo Alto. HPís comprehensive

approach will focus on programs that serve adults and kids at home, in school, and through

community centers;

 Gateway pledged to provide 75,000 teachers with technology literacy training under the Teach

America! program. This effort will provide teachers with hundreds of courses to increase their

use of the Internet and multimedia applications;

 The PowerUp program announced a major expansion of its successful program to give

underserved youth access to technology and guidance on how to use it. PowerUP will have

250 ó up from 19 ó new, fully-equipped and staffed sites by the end of 2000. PowerUP is

comprised of more than a dozen non-profit organizations, major corporations and Federal

agencies. The expansion of the PowerUP program is made possible because of commitments

from a number of organizations ó including a pledge by AOL to provide 100,000 AOL accounts

to PowerUP sites, valued at $26 million annually, and a donation of 50,000 Gateway computers

by the Waitt Family Foundation;

 Cisco Systems, Inc., the Department of Housing and Urban Development, and Communities

In Schools pledged to announce a program valued at $1.4 million to establish 10 Cisco

Networking Academies in underserved communities. The Cisco Networking Academy Program

teaches students to design, build, and maintain computer networks through a 280-hour

web-based curriculum and hands-on laboratory exercises on real networks;

 Yahoo! agreed to provide an Internet advertising campaign worth $1 million to enlist volunteers

with high-tech skills in AmeriCorpsí digital divide initiative;

 3Com agreed to provide $330,000 to launch NetPrep Gyrls in partnership with the YWCAís

TechGYRLS program. The program will offer girls aged 14-16 training in computer networking

leading to an industry-standard certification. 3Com expects to reach 600 girls in 30 NetPrep

GYRLS locations around the country; and

 The American Library Association agreed to work with its members to create or expand

ìinformation literacyî programs in at least 250 communities around the country.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

10

The Department of Commerce also has worked

to raise public awareness of the digital divide

issue. Secretary Daley kicked off a 12-city

ìClosing the Digital Divideî tour in February

2000 and Secretary Mineta launched his

own series of ìDigital Inclusionî events in

September (http://www.digitaldivide.gov).

During his tour, Secretary Mineta issued,

Community Connections: Preserving Local

Values in the Information Age34 , which profiles

projects funded under the Technology

Opportunities Program. In September,

Secretary Mineta also helped inaugurate a

program launched by eBay to bridge the

digital divide for seniors. The program pledges

to train over one million seniors, grant $1 million

to SeniorNet, the largest non-profit training

organization for seniors, and create ten new

senior learning centers nationwide.

6. Delivering on

Digital Opportunity

Over the last eight years, the Clinton-Gore

Administration has successfully narrowed the

gap between those

in our society with

access to computers

and the Internet and

those without it. On

October 16, 2000,

Secretary Mineta

released Falling

Through the Net:

Toward Digital

Inclusion, the fourth in

a series of reports

measuring the level of

computer ownership

and Internet

connectivity in the

United States (http://

www.ntia.doc.gov/

ntiahome/fttn00/

contents00.html). The

report, conducted by

the Department of

Commerceís National

Telecommunication

and Information

Administration (NTIA)

and the Economics

and Statistics

Administration (ESA), using information

collected by the Census Bureau from 48,000

homes, found that virtually every group in our

society has participated in the sharp upward

trend of Americans to connect their homes to

the Internet.35

The overall level of U.S. digital opportunity has

rapidly increased in recent years:

 The share of households with Internet access

increased over the last two years from 26 percent

to 42 percent, an increase of 58 percent;

 The number of households with access to

computers, rose from 42 percent in

December 1998 to 51 percent this year, a

21 percent increase;

 The number of Americans online increased

over the previous 20 months by 32 million,

to a total of 117 million;

 The number of Americans using the Internet,

rose from 32.7 percent online in December

1998 to 44 percent in August 2000; and

 The biggest gains recently have been among

those with average incomes and education

levels.

The report also showed heartening evidence

that minorities and other special groups are

achieving sharply higher connectivity rates:

 Rural areas showed large gains, narrowing

significantly the digital divide between them

and the rest of the nation that appeared

20 months ago in the last survey;

 The gap in access between men and women

largely has disappeared;

 African-American households are now more

than twice as likely to have home access

than they were two years ago, although they

still lag behind other groups;

 Hispanic households also have seen home

Internet usage nearly double over the same

period; and

 Individuals age 50 and over have experienced

the highest growth rates of all age groups

over the last two years, 53 percent compared

to a nationwide growth rate of 36 percent.

ìWe must close the

digital divide in this

country. I believe

that every child in

Americaóregardless

of income, geography,

race, or disabilityó

should be able to

reach across a

computer keyboard,

and reach the

vast new worlds

of knowledge, commerce,

and communication

that are available

at the touch of a

fingertip. We cannot

be satisfied until

every American has

the ABCís of the

Internet: Access,

Basic skills, and

high-quality Content.î

Vice President Gore

February 15, 2000
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

11

However, while Internet access and computer

ownership have risen for almost all

demographic groups, noticeable divides still

exist between those with different income and

education levels, different racial and ethnic

groups, old and young, single and dual-parent

families and those with and without disabilities.

For example, large gaps remain between

Internet access rates for Blacks and Hispanics

when measured against the national average of

Internet penetration. Unfortunately, persons

with disabilities are only half as likely to have

access to the Internet as those without a

disability. This gap is cause for concern, and ñ

as noted above ñ has stimulated efforts to

address these issues.

7. Connecting Not-for-Profits

The Department of Commerceís Technology

Opportunities Program (TOP) (http://

www.ntia.doc.gov/otiahome/top/index.html),

which was created to

promote the widespread availability

and use of advanced

telecommunications

and information

technologies in the

public and nonprofit

sectors, provides

another example of

how the Administration

is working to build

connected communities. Since its

inception in 1994,

TOP has focused its

efforts on making

information technology applications

more available to the

nonprofit community,

recognizing that they

often have limited

access to the latest

technology.

In FY 2000, TOP

awarded 35 grants,

totaling $13.9 million.

With the addition of this yearís projects, TOP

has awarded 456 grants, in all 50 states, the

District of Columbia, and the U.S. Virgin

Islands, totaling $149.7 million and leveraging

$221 million in local matching funds. These

grants have been used for a variety of

purposes. The See Forever Foundation, in

downtown Washington, DC, for example, has

used information technology grants to help

residents of a low income inner-city neighborhood solve local problems such as creating

access for the elderly and training teens in

computer skills. The Digital Bridge Foundation

in Boston, Massachusetts has provided lowincome families with computers at home as

well as training and Internet access, in exchange

for community service.

8. Connecting Small Businesses

The Clinton-Gore Administration has long

recognized that part of creating digital

opportunity is helping small businesses

harness the power of the Internet to participate

in the digital economy. In todayís global

information economy, anyone with a bright

idea, a computer and a connection can set up

shop in the global marketplace. To fulfill this

potential, this Administration has encouraged

the development of information technology

applications that enable low-income Americans

to start and manage their own small businesses.

It also is helping small businesses overcome

barriers to the use of the Internet and electronic

commerce, raising awareness of new

technologies, and improving electronic access

to information and services that can assist

small businesses in using the Internet and

electronic commerce. The Administration has

trained Federal government employees who

have contact with small businesses in the use

of the Internet and electronic commerce. It also

has moved commonly used government

products and forms to the Internet to enable

small businesses to use the Internet to interact

with the government.

International Trade Administration: The

Department of Commerceís International Trade

Administration (ITA) has launched an initiative

called ìE-Exports: Connecting U.S. Business to

the Global Digital Economy,î designed to help

small and medium-sized firms overcome the

challenges of international business and make

more effective use of the Internet to expand

ìCommunity

technology centers

provide low-income

individuals with

skills training and

the ability to produce

their dreams. They

are also an important

entryway to the

technology industry.

We think of President

Clinton as our first

angel investor: his

Administrationís

work has been

fundamental to

Plugged In and to

the community

technology center

movement.î

Magda Escobar

Executive Director

Plugged In

East Palo Alto,

California
3rd Annual Report U.S. Government Working Group on Electronic Commerce

12

global sales. The initiative has revamped old

products and services and developed new

ìe-toolsî to connect U.S. businesses to the

new digital economy.

 U.S. sellers and overseas buyers can now

do business at virtual trade shows on the

Department of Commerceís new E-ExpoUSA

site (http://www.e-expousa.doc.gov). The

website features over 50 exhibitors from more

than 50 industry sectors. In addition, the site

offers companies a virtual booth that contains

company overviews, hot links to company

websites, and the ability for companies to put

up as many as 5 products and services

complete with pictures, logos, video and

sound. The site also tracks and displays any

trade leads generated online.

 Exporters of IT equipment can learn how to

take advantage of the E-Exports Initiative

at (http://www.ExportIT.ita.doc.gov). The

initiative helps small- and medium-sized

enterprises with market research, trade

missions, and a seminar series that educates

participants on how the Internet can help

their companies enter and succeed in

global markets; introduces them to solution

providers; and fosters networking among

companies interested in international

markets.

 Small business

exporters now can

easily access

Department of

Commerce information

related to trade on the

Departmentís

completely revamped

export portal (http://

www.export.gov).

The Department also

is building a library of

webcasts on the site,

covering a widerange of exportrelated topics such

as ìUnderstanding

E-commerce: Strategic

Fundamentals for

Small Businesses

and Exporters.î

Manufacturing Extension Program: The

Manufacturing Extension Program (MEP)

(www.mep.nist.gov) of the Department of

Commerceís National Institute of Standards

and Technology (NIST) offers advice and

support to small manufacturers through a

network of 400 centers across the country.

In partnership with the National Association

of Manufacturers, the MEP sponsored a

Manufacturing Summit that assessed the ecommerce needs of small and medium-sized

manufacturers. To address the need for

expanded education on e-commerce, the

MEP has created an eBusiness Product Line

that has four major categories:

 Education and Awareness ó The MEP now

offers a series of seminars and workshops

for CEOs, owners, and others on e-business

strategies and concepts. Offerings range

from an introduction to the Internet to

detailed implementation issues such as web

security. The MEP also offers two workshops,

ìeBusiness Strategic Opportunitiesî for

company owners, CEOs and senior

managers, and ìeBusiness Fundamentalsî

primarily aimed at company information

technology managers. It also offers an

online course, Net Knowledge 101, to keep

MEP field personnel up to date.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

13

 eBusiness Readiness Assessment ó The

MEPís eBusiness Readiness Assessment

offers tools to help companies determine

their existing infrastructure capabilities and

determine future needs. The eBusiness

Opportunities Assessment Kit offers tools

to help a company understand e-strategy

options and the basic IT infrastructure

required to become an e-business. The kit

contains a software-based readiness

assessment tool with a set of questions

designed to provide feedback for a firmís

e-business planning efforts. The kit is

intended to provide companies with a selfassessment capability, but also can be

used in collaboration with a MEP e-business

specialist.

 eBusiness Transformation Planning and

Implementation Project Management ó

The MEP has planned future offerings in

Transformation Planning and Implementation

Project Management. Transformation

Planning will consist of a set of detailed

questionnaires and templates intended to

help a company develop a detailed ebusiness strategy plan. Implementation

Project Management will contain a detailed

set of services which MEP Centers and

partners can offer to help implement

Transformation Planning services. Some

services will be center-specific and others

will be offered nationally.

 eBusiness Solution Center ó The MEP

opened an eBusiness Solution Center on

July 3, 2000 as a resource for MEP field staff.

Support includes general information about

e-business in areas such as strategy and

technology, as well as specific MEP product

support. A website is planned as an

additional means of assistance.

Computer Technology Centers (CTCs): While the

Administrationís CTC initiative has increased

computer and Internet access to low-income

Americans and children, it also is bringing

small business into the digital economy and

helping upgrade the information technology

skills of Americaís workforce, particularly

workers living in disadvantaged urban and rural

communities. On September 21, 2000, the

Department of Education awarded a $2 million

contract to create the America Connects

Consortium. The Consortiumís strategic priorities

include helping CTCs create or improve

small-business assistance, IT workforce and

micro-enterprise development programs.

Consortium partners include the Information

Technology Association of America, whose

more than 400 companies are advancing

workforce development and other issues; and

the National Alliance of Business, which is

linking employers to improve education and

training throughout the United States.

Minority Business Development Agency:

Over the last half of 2000, the Department of

Commerceís Minority Business Development

Agency (MBDA) (http://www.mbda.gov)

conducted a series of E-Business Seminars

in partnership with the Telecommunications

Industry Group (TIG). These seminars have

helped small businesses develop websites,

implement Internet security, understand

website hosting services, and develop

roadmaps for implementing e-business

strategies. These seminars have been free of

charge, and have been conducted by ebusiness experts within the TIG companies.

In June 2000, the MBDA also conducted a

high-level conference focused on the

telecommunications and information

technology issues. The conference was based

on The New Realities of Minority Business

(http://osecnt13.osec.doc.gov/public.nsf/docs/

73CEF2DF103AD022852568080071213F), a

White Paper released earlier in the year that

addresses the impact of emerging market

factors such as globalization, technology,

procurement streamlining, and changing

demographics on minority businesses. The

June conference brought senior executives

of technology companies together with the

finance and investment community, specifically

to encourage mergers, acquisitions, strategic

alliances, and other rapid-growth strategies

among minority-owned technology firms.

To better benchmark the minority business

communityís current use of e-commerce

technology, the MBDA also has commissioned

a comprehensive nation-wide survey of minority

business owners. The survey will determine,

among other things, the extent to which

minority businesses are currently engaging in

e-commerce and the types of business
3rd Annual Report U.S. Government Working Group on Electronic Commerce

14

activities for which they are using e-commerce.

It also will explore why some minority firms are

not currently engaging in e-commerce, and

what opportunities and threats minority

business owners believe the emerging Digital

Economy poses.

Small Business Administration: If current

trends continue, some 85 percent of small

businesses will conduct business over the

Internet by the year 2002.36 To help U.S. small

businesses overcome the information barriers

preventing them from joining the digital

economy, the Small Business Administration

(SBA),the Department of Commerce, and the

Department of Agriculture launched an

aggressive outreach program in 2000. This

campaign included national, regional, and

state-level e-commerce conferences; the

development of e-commerce educational

materials; and expanded e-commerce

offerings on the SBA website. During 2000,

SBA also co-hosted several Town Hall

meetings, hundreds of training sessions, and

thousands of counseling sessions on ecommerce related themes. The SBA , the

Department of Commerce, and the Department

of Agriculture, also co-sponsored the first

national ìeCommerce Small Business Summitî

in June 2000. The summit showcased cutting

edge technologies and provided information

to assist small business to successfully use

e-commerce.

The SBA also has reached out to small

businesses over the World Wide Web. Its

award-winning website (http://www.sba.gov)

attracts nine to ten million Internet ìhitsî a

week. The website offers small businesses

e-commerce resources created by SBA and

private sector co-sponsors, electronic

networks, and procurement opportunities. It

also hosts online services for small business,

distance learning through online e-commerce

courses, and an e-commerce guidebook.

Users have responded very positively to these

offerings. The Tobin College of Business

Administration at St. Johnís University, New

York, for example, uses the SBAís Online

Classroom as a key part of its coursework.

Working through Small Business Development

Centers (SBDCs) (http://www.sba.gov/SBDC/),

the SBA and its partners also offer small

businesses free e-commerce summits, training,

conferences, CD-ROMs, webcast e-commerce

events, and e-mail business counseling.

Recently, SBDC counselors have received

training in all aspects of e-commerce to

enhance their ability to counsel and train small

businesses. While most SBDCs use e-mail,

online e-commerce training, and technology

assessments to work with small businesses,

the Idaho SBDC uses a mobile training lab that

allows rural businesses to learn locally and

earn globally. The Arkansas SBDC has

partnered to establish an Internet Incubator

that targets small service and retail businesses

seeking to increase sales via the Internet.

Among other steps, the Incubator helps clients

develop websites and register domain names

for their businesses. In North Carolina, the

Small Business Development Technology

Center, developed an e-Commerce Resource

Guide 2000 for small businesses.

Small Business

Development Center Successes

 Snow Drift Farm saw its sales increase

from $3,000 to $226,000 after it worked

with Maineís SBDC to build a website and

improve its business process.

 Lark Toys, a wooden toy maker, was

discovered by Disney for the movie

ìGepettoî after becoming e-commerce

ready as a result of completing a course

with Access Minnesota Mainstreet (http://

www.ecommerce.umn.edu).

 MacArthur Bed and Breakfast (http://

www.boreal.org/macarthur) saw its

reservations triple after launching its

new website.

 Glad Corn snacks (http://www.gladcorn.com)

received 18,000 requests for free samples

after its website appeared on a list of free

samples on the Internet.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

15

9. Connecting the Globe

The Clinton-Gore Administration has long

recognized the importance of closing the

digital divide not only at home but abroad.

Vice President Gore has led Administration

efforts to close the gap between the worldís

richest and poorest countries and use

information and communication technologies

to speed economic and social progress in the

developing world. In 1994, the Vice President

set forth his vision of a ìGlobal Information

Infrastructureî before the International

Telecommunication Union (ITU). In his speech,

he laid out principles of private investment,

competition, open access, flexible regulatory

frameworks, and universal access that

governments, international organizations and

others have widely endorsed and implemented

(http://www.interesting-people.org/archive/

0949.html). In 1998, before the ITU Plenipotentiary Conference, the Vice President

posed five great challenges to the global

community that together constitute a

Digital Declaration of

Interdependence (http://

www.whitehouse.gov/WH/

EOP/OVP/speeches/

itu.html):

 Improve access to

technology so that

everyone on the

planet is within

walking distance of

voice and data

telecommunications

services within the

next decade;

 Develop technologies

that can overcome

language barriers by

providing real-time

digital translation so

that anyone on the

planet can talk to anyone else;

 Create a Global Knowledge Network of

people working to improve the delivery of

education, health care, agricultural

resources, and sustainable development and

to ensure public safety;

 Use communications technology to ensure

the free flow of ideas and support democracy

and free speech; and

 Use communications technology to expand

economic opportunity to all families and

communities around the world.

Nations that succeed in harnessing ITís

potential can look forward to greatly expanded

economic growth, dramatically improved

human welfare, and stronger forms of

democratic government. Through the use of

IT, developing nations have an unprecedented

opportunity to reduce poverty and improve

basic education and health care. The United

States is committed to assisting developing

countries and seeks to partner with other

governments, the private sector, international

organizations and other stakeholders to

achieve these goals. This year, the Administration greatly expanded its efforts to accelerate

the spread of the Internet and electronic

commerce overseas.

Digital Opportunity Taskforce: At the Okinawa

G-8 Summit in July 2000, President Clinton and

the other G-8 leaders launched the Digital

Opportunity Task Force to create digital

opportunity in developing nations (http://www.

ecommerce.gov/ecomnews/pr0725002.html).
3rd Annual Report U.S. Government Working Group on Electronic Commerce

16

Although access to IT is only one component of

a broader development strategy, it is becoming

increasingly important. For example, global

electronic commerce could exceed $7 trillion

by 200437, and developing countries could fall

further and further behind if their companies

lack access to these markets.

The mission of the Task Force, commonly

known as the dot force, will be to develop a

strategy and set of recommendations for

creating digital opportunity in developing

countries. The dot force will address issues

such as:

 Creating a policy and regulatory framework

that will promote competition and private

sector investment in the telecommunications

industry, and that will allow the Internet and

e-commerce to flourish;

 Expanding the IT workforce of developing

countries;

 Strengthening the capacity of developing

country entrepreneurs to create businesses

that will drive economic growth and create

jobs; and

 Promoting applications of the Internet and

information technologies such as e-learning,

e-government, and e-health.

The dot force is unique in that it is composed

of representatives from developed and

developing country governments, high-tech

industry, civil society, and international

organizations. In addition to developing a

strategy and set of recommendations for

helping to bridge the global digital divide,

the dot force also will work to mobilize the

resources needed to implement its recommendations. The President named Markle

Foundation President Zoe Baird, HewlettPackard Chairman Carleton (Carly) Fiorina and

Special Assistant to the President Tom Kalil as

the U.S. representatives to the dot force.

To mobilize public and private sector support

and demonstrate U.S. commitment to the dot

force, the President issued a ìGlobal Call to

Actionî in Okinawa. Over 50 leading high-tech

companies, foundations, and non-governmental

organizations heard the call and committed

themselves to taking concrete steps toward

achieving digital access and education for all

by the year 2010. Among other measures, the

U.S. Government announced it would expand

its Internet for Economic Development Initiative

(IED) (described below) to seven new countries

and that the Overseas Private Investment

Corporation would establish a $200 million line

of credit for e-commerce and digital divide

projects in developing countries.

The U.S. Governmentís partners also agreed to

provide specific assistance or take specific

actions. Among other steps:

 The Markle Foundation, World Economic

Forum, IBM, Harvard University, the UN

Development Program, and the UN Foundation

announced they would create a network

readiness initiative available to all developing

countries;

 Andersen Consulting has announced a

substantial commitment to develop a

strategy and implementation plan for

bridging the digital divide in conjunction

with the Markle Foundation, and the

UN Development Program;

 Cisco Systems announced it would expand

its Cisco Networking Academies to 24 of the

least developed nations;

 The Global Business Dialogue on e-commerce

announced it would partner with ASEAN

nations to strengthen e-commerce policies;

 Intel announced it would expand its ìTeach to

the Futureî technology training program for

teachers in at least 10 more countries; and

 AOL announced it would launch four

international PowerUP sites in 2001.

Internet for Economic Development Initiative:

Under the Internet for Economic Development

(IED) program, which Vice President Gore

announced in June 1999, the Department of

State, the U.S. Agency for International Development (USAID), the Federal Communications

Commission (FCC), the Department of

Commerce, and other agencies are working
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

17

with host governments, multilateral organizations,

and the private sector to implement projects

that respond to participating countriesí specific

needs. The initiative holds great promise for

success in part because it helps participating

countries create pro-competitive policy and

regulatory environments that attract long-term

private investment. USAID has provided the

vast majority of funds required to implement

IED programs. Total fiscal year 1998-2000

funds dedicated to IED totaled approximately

$34 million.

The initiative initially involved 11 countries.

These countries were Guatemala, Haiti,

Jamaica, Bulgaria, Egypt, Morocco, Ghana,

Guinea, Uganda, South Africa and

Mozambique. In 2000, the Administration

expanded the IED program by more than half.

The Administration invited India and Jordan

to join IED in early 2000 and in July 2000, as

part of the G-8 Digital Opportunity Task Force

described above, expanded the program to

include efforts associated with seven additional

countries: Mali, Indonesia, Kenya, Nigeria,

Senegal, Romania and Guyana.

Examples of specific IED country programs in

2000 include:

 Guatemala: The U.S. Embassy in

Guatemala, the Peace Corps, and the

Department of State Economic Bureau

(http://www.state.gov/www/issues/economic/

index.html) and Global Technology Corps

(http://www.globaltechcorps.org) worked

together to assist a Mayan womenís

cooperative in efforts to establish a website

(http://www.tesorosmayas.com) that markets

traditional Mayan textiles over the Internet.

USAID is developing a network of communitybased tele-centers in small towns and rural

areas of El Quiche. USAID also funded

Internet access at four teacher-training

colleges in Mayan areas to prepare bilingual

materials for language training and develop

Mayan cultural instructional materials.

 Egypt: USAID is funding business management training via distance learning in

cooperation with the World Bank Institute and

the Regional Information Technology Institute.

 Ghana: The Multilateral Initiative on Malaria, a

collaboration involving USAID and other USG

agencies, established an Internet and voice

communication link with the U.S. National

Institutes of Health and the World Health

Organization in Geneva to facilitate malaria

vaccine development. USAID and non-profit

partners also are operating self-sustaining

Internet community access centers.

 India: During his March 2000 visit to India,

President Clinton announced a $5 million

Rural Information Technology Program,

which provides policy advice and information

technology training.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

18

 Bulgaria: The private sector is establishing

Internet community access centers, and

USAID has subsidized start-up costs through

vouchers to NGOs.

 Jamaica: The Department of State, USAID

and the FCC collaborated with Jamaican

partners to develop market-opening provisions

of the new Telecom Act, establish a Spectrum

Management Authority, and train the Utility

Regulation Office.

 Africa: USAID has funded three study

tours to the United States by telecom and

regulatory officials from 10 African countries.

The FCC hosted these tours, which included

visits to the Departments of State and

Commerce. The FCC, the International

Telecommunication Union and the Nigerian

Communications Commission also

sponsored a September 21-22, 2000

workshop for 40 West African telecommunications regulators.

The IED Initiative builds on the success of

USAIDís Leland Initiative, a $15 million, fiveyear program launched in 1996 in cooperation

with the Department of State to enhance

Internet connectivity in 21 African countries.

The Leland Initiative promotes policy reform,

helps build necessary infrastructure, and works

to increase the ability of African countries to

use IT to sustain development. The IED

countries in Africa are also Leland countries.

FCC Development Initiative: FCC Chairman

William E. Kennard launched a related

development initiative in June 1999 (http://

www.fcc.gov/ib/developinitiative). The FCC is

providing telecommunications policy and

regulatory assistance to developing and

emerging countries and helping them build

independent regulatory agencies equipped to

facilitate universal service through competition,

liberalization, privatization, and transparency.

As of December 2000, Work Programs had

been signed with telecom policymakers in

Uganda, Ghana, South Africa, Peru, Argentina,

Jamaica, Hungary and Turkey. In 2001, the FCC

expects to agree to additional Work Programs

with countries in Eastern and Central Europe.

Recognizing that demand for FCC information

and guidance on telecom matters far outstrips

its resources, the FCC published Connecting

the Globe: A Regulatorís Guide to Building the

Global Information Community as the first step.

This manual highlights the major issues facing

telecom regulators and is meant to be

especially useful to those who may not have

the resources to participate directly in the

FCCís initiative. Finally, in June 2000, the FCC

premiered a set of online training modules that

the Commission will make available to anyone

that wants telecommunications policy and

regulatory assistance. In 2000, the FCC also

hosted over 800 foreign visitors, many from

developing countries, through its International

Visitors Program. The program enables foreign

delegations to informally discuss with FCC staff

a wide range of communications issues.

Global Technology Corps: Within the Department

of State, the Office of International Information

Programs established the Global Technology

Corps (GTC) in mid-1999 to set up publicprivate partnerships committed to closing the

international digital divide. The GTC works with

companies, individuals, and organizations

willing to volunteer their time, expertise, and

resources to help spread the benefits of

information technology worldwide. In 2000,

GTC activities in IED countries included a

video-journalism seminar introducing South

African university students to the latest digital

video cameras, which produce television-quality

video at a small fraction of traditional costs.

Telecommunications Summits and the Technology Opportunities Program: The Department

of Commerce has furthered the Administrationís

IED goals by holding e-commerce workshops

in developing countries. Over the last few

years, the Department of Commerce also has

held telecommunications summits, including a

series of Latin America Telecommunications

Summits and China-U.S. Telecommunications

Summits. These policy conferences are

designed to bring government and industry

leaders together to discuss new technologies

and advance understanding of the role that

transparency and pro-competitive policies have

in promoting e-commerce and access to

information and communications technology.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

19

Many grants issued to U.S. recipients under

NTIAís Technology Opportunities Program

(TOP) are helping close the international digital

divide by providing models for similar programs

overseas. Community networking, educational,

and health and wellness programs can be

linked to parallel efforts in institutions and

communities overseas. TOP, for example, has

facilitated a joint project between one of its

community network grantees and an

international project in Mexico funded by the

World Bank.

Peace Corps E-Initiatives: Virtually every Peace

Corps Volunteer sworn in today is adept at

using computers and accessing the Internet.

Increasing numbers of Volunteers are helping

to make globalization ìpersonalî and ìlocalî

by bringing the benefits of the information

revolution into the hands of micro-entrepreneurs,

students, health workers, farmers, artisans,

teachers and others with whom they live and

work. Volunteers are integrating information

technology into field projects, and helping

partners use e-mail and develop websites to

participate more fully in national, sub-regional

and global commerce.

To leverage Volunteersí existing skills and

enhance them where appropriate, the Peace

Corps has launched an ìe-initiativeî under

Director Mark Schneider. Under this initiative,

the Peace Corps has developed an

ìInformation Technology Training-of-Trainersî

package. After field testing in six countries, the

package was distributed and implemented

worldwide in November 2000. A follow-up

training package on computer hardware and

software troubleshooting, repair, and upgrading

is currently being prepared.

Internet training also has become a standard

part of overseas staff training to ensure

Volunteers have the tools to integrate IT into

all field projects. A workshop in Banjul, The

Gambia, in September 2000, for example,

brought together staff, primarily managers of

Small Business Development projects, and

Volunteers from 15 African countries to share

experiences and best practices on integrating

IT into their projects. A similar workshop for

Latin American Small Business Development

project managers focused on e-commerce.

B. E-Society

Creating digital opportunity in the United

States, and globally are only two aspects of the

Clinton-Gore

Administrationís

policy of fostering

digital equality. Used

creatively, the Internet

and related technologies also can

help us tackle our

most urgent social

challenges and build

a more inclusive

society. In addition to

helping people and

communities become

better connected

through the Internet,

this Administration is

using the Internet to

improve access to

health care and

education, make it

easier to acquire new

skills, and improve

the quality of life in

rural communities.

Our society is fast

becoming an

ìe-societyî where we

use the Internet to

deliver services more

efficiently and allow

citizens to access

them with greater

flexibility than ever

before. The U.S.

Government has led this transformation

through a variety of grants and web-based

public information programs and conferences

across a range of fields.

1. Improving Public Health

and Medical Care

The Department of Health and Human Services

(HHS) has vastly expanded access to higher

quality, health and medical information online.

Virtually every part of HHS contributes to the

effort of putting health and family welfare

ìWe should realize

that the technological

revolution makes

possible a revolution

throughout every

aspect of our

societyófrom our

classrooms, where

educational software

can tailor learning to

the pace of each child;

to our businesses,

where the World

Wide Web gives

even the newest

entrepreneur a

worldwide reach; to

our families, where

new technology can

open new doors of

opportunity to the

homebound elderly,

people with

disabilities, people

who are too far away

from the nearest

hospital or job

training program.î

Vice President Gore

February 15, 2000
3rd Annual Report U.S. Government Working Group on Electronic Commerce

20

information online. HHS Healthfinder website

(http://www.healthfinder.gov) provides a broad

range of health information from federal and

other trusted sources. The Agency for Healthcare Research and Quality makes available

online information on the effectiveness, quality,

and cost of health care. The Food and Drug

Administration Online contributes food safety

information (http://vm.cfsan.fda.gov/list.html).

The Substance Abuse and Mental Health

Services Administration, working with state and

local governments, provides information for

clearinghouses on substance abuse and

mental health services. The Administration for

Children and Families (ACF) provides adoption

information at the National Adoption Information

Clearinghouse. NIH also has continued

development of PubMed, an online medical

publication service, and soon will expand its

online registry of information on clinical trials

to include private as well as Federally-funded

trials.

There is growing evidence that efforts like these

are making a direct impact on the health of the

52 million American adults that have sought

health and medical information on the Web.

Half the people who have used the Internet to

get health and medical information say that this

information has improved the way they take

care of themselves and many report that

online information has directly affected their

decisions about how to treat illness and deal

with doctors, according to a recent report

from the Pew Internet American Life Project

(http://www.pewinternet.org/reports/

toc.asp?Report=26).

Other examples of how HHS and the Centers

for Disease Control and Prevention, the

National Institutes of Health, the National

Library of Medicine, and the Federal Drug and

Food Administration use the Internet to

distribute information, monitor public health,

and improve medical treatment are listed below:

 Both health care professionals and consumers,

can get online, accurate, up-to-date, quality

health care information from the worldís

largest medical library, the National Library of

Medicine at the National Institutes of Health

using MedlinePlus. This service provides

access to extensive information about

specific diseases and conditions, and has

links to consumer health information,

dictionaries, lists of hospitals and physicians,

health information in Spanish and other

languages, and clinical trials. Medline-plus

receives over one million hits per month

(http://www.nlm.nih.gov/medlineplus/);

 Medical products consumers can use

Medwatch to search medical product

reporting and safety information (http://

www.fda.gov/medwatch/index.html);

 Members of the scientific community can

use GenBank, a genetic sequence database,

to access an annotated collection of all

publicly available DNA sequences. The

collection contains over 10.3 billion base

pairs (http://www.ncbi.nlm.nih.gov/Genbank/

genbankstats.html);

 State public health officials can order

vaccines for distribution to immunization

providers electronically through the Center

for Disease Control using HHSí Vaccines for

Children Program;

 Professional health care providers can

enhance their professional competencies by

accessing public health-related topics over

the Public Health Training Network (http://

www.cdc.gov/phtn/); and

 Researchers have improved methods for

conducting public health surveillance, using

the National Electronic Disease Surveillance

System. The system uses information

technology to gather health data in real-time,

facilitate monitoring of health communities,

and detect emerging public health problems

(http://www.cdc.gov/od/hissb/

docs.htm#nedss);

 Patients transferred among federal medical

facilities will receive better health care with

the implementation of the Government

Computer-based Patient Record. The system

facilitates the secure exchange of patient

records and helps ensure that doctors have a

complete picture of the patientís medical

history (http://www.ihs.gov/gcpr).

Various U.S. Government agencies also are

using telemedicine to provide or support

clinical care at a distance. Telemedicine
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

21

applications range from specialty consultations

between health care practitioners in areas such

as radiology, dermatology, cardiology to direct

services to patients in such areas as psychiatry

and speech therapy. Major agencies funding

telemedicine projects include HHS, the

Veterans Administration, and the Departments

of Agriculture, Commerce, Justice and

Defense. In FY 2000, the HHSí Office for the

Advancement of Telehealth alone administered

62 telemedicine projects and evaluations,

totaling over $19 million.

The Indian Health Service (IHS) also is moving

rapidly to deploy advanced technology to bring

primary care and specialty medicine to remote

locations. For example, clinical engineers are

equipping local health care providers in remote

Alaskan villages with telemedicine systems to

provide to distant doctors transmissions of

patientsí ear drums, skin conditions, and

tonsils. Another program allows social workers

in the Upper Midwest to communicate during

frequent blizzards. Currently, there are about

40 telemedicine programs and partnerships

within the IHS that are delivering care to small

and isolated communities.

2. Enhancing Education

The Administration is using information technology to increase accountability, establish

comparative benchmarks, enhance the delivery

of education and training to underserved

communities across America and around the

world, and improve the availability and

effectiveness of technology in the classroom.

These efforts are making it easier for us to

measure how our schools are performing and

revolutionizing opportunity by making education

and training more accessible than ever.

To support and encourage states and local

communities to increase accountability and

benchmark results, the Department of

Education is making ìschool report cardsî

available on the Internet. The Department

supported a pilot project in Maryland that has

become a model for many other states. The

Department also has helped states to compare

their schoolsí academic performance. Making

such information available on the Internet is

popular with both school districts and states,

but many of these efforts have been hampered

by lack of funding and technical expertise. The

Departmentís system, currently known as the

Integrated Performance Benchmarking System,

or IPBS, is still several years from being fully

functional, but is enjoying strong support.

The Department of Education, along with the

Department of Labor, also is using distance

learning technologies to bring classes and

curricula to those without access to a brickand-mortar building. Those agencies are

collaborating with colleges and universities

to remove regulatory, legal and other barriers

to high-quality distance learning as another

means of receiving an education or training,

and earning a degree.

The Distance Education Demonstration Program

(DEDP), for example, allows 15 schools,

systems and consortia, comprised of 100

institutions located in 17 states, to more easily

obtain Federal student aid for distance

education students pursuing college-level

studies. This program, which was authorized

in the 1998 Higher Education Amendments,

is testing the statutory and regulatory barriers

to the expansion of distance education.

Participants in the DEDP program receive

waivers of certain provisions found in Title IV

Student Financial Assistance Programs and are

helping to test other barriers to administering

student aid to distance education students.

They also are providing information that will

help compare the quality of distance education

with that offered in a traditional classroom.

The Department of Labor also is expanding

educational opportunity through information

technology. It is working with the Department

of Defense and industry on a program called

Advanced Distributed Learning, which is

developing international standards for building

distance-learning curriculum plans (http://

www.adlnet.org). Additionally, the Department

of Labor is working through the Sloan Foundation

and others to make available online an extensive

inventory of courses available over the Internet.

Finally, the Department of Education has updated

the Administrationís Educational Technology

Initiative, which enhances teacher training,

improves integration of technology in the

classroom and supports investments in

educational technology and research. Among
3rd Annual Report U.S. Government Working Group on Electronic Commerce

22

the initiativeís new goals are ensuring that all

students and teachers have universal access to

information technology in their classrooms,

schools, communities and homes; all teachers

use technology effectively; and all students are

technologically proficient and responsible

cybercitizens.

3. Sharing Environmental

Information

The Environmental Protection Agency (EPA) is

using information technology to provide the

public with accurate information on environmental quality and public health issues. Among

other programs, the EPA has created a new

Environmental Monitoring for Public Access

and Community Tracking Program (EMPACT) to

help communities monitor projects by providing

real-time environmental information they can

understand and use. The project allows people

to check the quality of their air, water and

drinking water and make decisions about their

health. EPA also has launched a new version of

its Toxic Release Inventory Explorer, an online

analytical tool that advances citizensí right to

know about and identify health risks they may

face from facilities and chemical releases in

their community. At the same time, EPA is

working with state governments on its Online

Targeting Information System. This system

combines air, water and hazardous waste

information together with toxic release and

demographic information to create a single,

integrated record of a regulated facilityís

environmental compliance status. The

information provided by the system helps state

and federal environmental officials target

enforcement actions and, ultimately, do a better

job of protecting the environment.

4. Empowering Non-Profit

Organizations

The Department of Commerceís Technology

Opportunities Program (TOP), as described

above, was created to promote the spread and

use of advanced telecommunications and

information technologies in the public and

nonprofit sectors. It also provides an example

of how Administration programs are using the

Internet to benefit society.

Of the 35 grants TOP awarded in FY 2000, half

went to nonprofit organizations. Awards went

to projects such as Crisis Services of Alabama,

which will create an online human services

network to give citizens easy access to community services, and the Pangea Foundation in

California, which will create a network to facilitate

communication and interaction among organizations serving persons with disabilities.

TOP evaluates and actively shares the lessons

learned from its projects to ensure the benefits

are broadly distributed across the country,

especially in rural and underserved communities.

Information on all grant proposals and projects

is posted to the TOP website (http://

www.ntia.doc.gov/otiahome/TOP/index.html).

TOP also conducts periodic audits to evaluate

how well funded projects are doing. One

such report, Community Connections:

Preserving Local Values in the Information

Age (www.ntia.doc.gov/otiahome/top/

publicationmedia/comm_conn/community_

connections_illus.html), released on September

6, 2000, describes how communities are using

information technology to further economic

and community development efforts. Finally,

TOP also sponsors an annual conference on

strategies for using information infrastructure

to enhance services in the public and

nonprofit sectors.

5. Improving

Rural Communities

The Department of Agriculture also is

committed to using information technology to

improve the quality of life in rural communities

through its Rural Development Distance

Learning and Telemedicine program (http://

www.usda.gov/rus/telecom/dlt/dlt.htm). In

November, 2000, Secretary Dan Glickman

announced the Department was accepting

applications for $325 million in loans and

grants to be awarded in 2001 for distance

learning and telemedicine projects. The

program has invested $102 million in more

than 383 projects since 1993, improving the

educational opportunities for thousands of

students and providing better quality health

care to rural citizens served by more than

1,000 hospitals and rural health care clinics.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

23

6. Protecting Public Safety

U.S. law enforcement agencies at all levels

increasingly are using the newest information

technology tools to fight crime and protect the

public. The Federal Bureau of Investigation

(FBI), for example, has established a Law

Enforcement Online (LEO) program that

provides law enforcement officers, for the first

time, with a secure Intranet link that connects

them to other law enforcement officers across

the country. The LEO program ensures that law

enforcement officers have access to the best

information on cases, fingerprints, DNA

samples, ballistics and other criminal-related

intelligence. Use of LEO has more than

doubled since March 1999, jumping from

12,000 users to almost 26,500 at the beginning

of December 2000. The FBI is working to make

the system even more easily accessible and

efficient by developing a web-based version

that uses sophisticated encryption to limit

access to authorized viewers. The Drug

Enforcement Administration also has a number

of information technology programs to store

and retrieve evidence in cases, link its agents

and track fugitives.

Among other initiatives, the Department of

Justice has helped law enforcement agencies

develop and disseminate crime maps, which

enable law enforcement agencies to better

analyze crime patterns and target their resources.

This year, the Department developed a Crime

Mapping Tutorial CD-ROM and made its

contents available on the Web. The Departmentís Crime Mapping Research Center also

has completed development of an interactive

distance learning class for beginners, ìMapping

for Community Police and Problem Solving.î

The first interactive class was held September.

Finally, the Department of Justice and the

Information Technology Association of America

have launched a Cybercitizenship Partnership

to raise awareness and educate society about

cyberethics and discourage hacking and other

abuses. The Partnership launched a website on

September 5, 2000 for parents and educators

who want to teach children and young adults

how to use the Internet responsibly (http://

www.cybercitizenship.org). The Partnership

also has launched another website directly

targeted at kids (http://www.usdoj.gov/

kidspage/do-dont/kidinternet.htm).

7. Creating Digital Libraries

and Preserving Our

Cultural Heritage

To help expand access to high-quality content,

the Administration has supported the

development of a Digital Library for Education.

Such a digital library would put high-quality

educational resources at the fingertips of

students and teachers. Although Congress did

not fully support this initiative in the FY2000 and

FY2001 appropriations process, the National

Science Foundation (NSF) received funding

for a Digital Library for Science, Mathematics,

Engineering and Technology Education. In

October 2000, the NSF awarded $13.5 million

to 29 different projects.

Examples of NSF-funded projects include:

 The development of a National Biology

Digital Library, building on the content of the

NSF Plant Genome Project and the 5 million

plant species in the University of Missouri

Botanical Garden;

 The development of a Digital Library for Earth

Systems Education;

 The ALSOS Digital Library, which allows

students to explore from a variety of

perspectives the origins, functions and

legacies of the Manhattan Project, the World

War II-era effort to build an atomic bomb; and

 A research initiative that will make it easier

to locate educational video resources and

incorporate them into lesson plans and

multimedia essays.

Although much more remains to be done,

progress toward a Digital Library for Education

has been made in other areas as well. In

response to a 1997 Presidential Executive

Memorandum, almost 50 federal agencies

have made available hundreds of educational

resources to students, parents and teachers

through the Federal Resources for Educational

Excellence (FREE) website (http://www.ed.gov/

free/). These resources include documentation

of volcano eruptions over the last 10,000

years, the diaries of George Washington, the

complete papers of the Salem Witch Trials, and
3rd Annual Report U.S. Government Working Group on Electronic Commerce

24

the wind tunnel tests of the Wright Brothersí first

airplane. Using ìmetadata,î the Department of

Educationís Gateway to Educational Materials

(GEM) allows students, parents and teachers

to search through over 14,000 educational

resources by subject, grade level and keyword.

In order to preserve our heritage and make it

more accessible, the Administration also has

worked to digitize our nationís cultural resources.

With support from the Congress and private

sector donors, the Library of Congress has

been digitizing its special collections that tell

the American story, including documents,

films, manuscripts, photographs, and sound

recordings. The American Memory project, for

example, contains over one million items,

including the papers of Alexander Graham Bell,

the Civil War photographs of Matthew Brady,

and a multimedia ethnography of Dust Bowl

migrants in 1940-41.

8. Realizing the Potential

of Geospatial

Information Systems

The Clinton-Gore Administration also has

worked to realize the potential of geospatial

information systems to improve the lives of our

citizens. Geographical information systems

(GIS) are computer systems designed to

capture, analyze, manipulate and display

data that is spatially referenced to the Earth.

What distinguishes GIS from other forms of

information systems, such as databases and

spreadsheets, is that GIS data is most

commonly displayed as a map.

GIS have many applications. Water supply

companies can use GIS to display pipes and

manholes. Local governments can use GIS

to update property boundaries, manage

emergency operations and environmental

resources, and decide where certain services

such as health care and primary education

should be provided. Businesses can use GIS to

determine where to locate an outlet, identify a

potential market, and better understand where

their customers live. Public health professionals

can use GIS programs to relate demographic,

environmental and other data sources to

each other to get a more revealing portrait of

health issues.

The Federal Geographic Data Committee

(http://www.fgdc.gov), which is chaired by the

Secretary of the Interior and includes 17

Federal agencies, was established to

coordinate geographic information activities in

the U.S. Government. The FGDC is responsible

for developing and implementing the National

Spatial Data Infrastructure (http://

www.fgdc.gov/nsdi/nsdi.html) which provides a

framework of policies, standards, and

procedures that is needed for organizations to

cooperatively produce and share geographic

data. The Data Clearinghouse has grown from

about 160 searchable networked sites in

October 1999 to over 210 in September 2000.

The NSDI also sponsored six Community

Demonstration Projects, which were completed

in May 2000, to illustrate how geographic

information can help citizens and governments

address such issues as crime prevention and

reduction, watershed and water quality

management, disaster preparedness and

recovery, and urban growth and land-use

planning. The FGDC also competitively

awarded over 35 new Cooperative Agreements

as part of its ongoing program to encourage

resource-sharing projects under the NSDI.

On July 18, 2000, the Deputy Secretary of the

Department of the Interior and members of the

Native American tribes in northwestern

Montana use Geographic Information

Systems to plot as few roads as necessary

to harvest timber and preserve the scenic

beauty of the Mission Mountain range,

maintain high water quality in mountain

streams, protect fish and wildlife habitat,

and care for plant life and historic sites.

With new information and logging

technologies, the tribe found it could

conduct logging with just four miles of

road per square mile of forest, compared

to between six and eight miles of road per

square mile of land previously.

From Community Connections: Preserving

Local Values in the Information Age

National Telecommunications and Information

Administration, September 2000
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

25

FGDC hosted a Geospatial Information

Technology Roundtable with the Office of

Management and Budget (OMB) to discuss

existing and new policies that would make

geospatial data a fundamental element of

e-government activities. About 150 people

participated in the Roundtable, including

representatives of state,

and local governments,

the private sector and

academia. Since then

many of these representative have formed

ongoing teams to ìalignî

geospatial data from

various sources. The

FGDC already is working

closely with the Vice

Presidentís National

Partnership for Reinventing

Government to make

geospatial information

available to users of the

FirstGov search engine

(described below) and a

planned Interactive

Town Square.

C. E-Government

While governments in the past have often

adapted slowly to the latest technologies,

Vice President Gore

has had the vision to

re-invent government

for the Information

Age. The Clinton-Gore

Administration has

seized on the

potential of digital

technologies to

transform government. Through the

aggressive use of the

World Wide Web and

other information

technologies, our

government has

become more

efficient, responsive,

and accountable than ever before. It is also

more accessible. Many government services

now are available at a citizenís fingertips seven

days a week, 24 hours a day, 365 days a year.

Anyone with access to a computer and an

Internet connection has a gateway to a universe

of government information. In the past, applying

for government service often required standing

in line; today, many of the most critical services

are available online. Getting government

information used to require searching for an

obscure pamphlet; today it means accessing

a central website.

The ongoing conversion of government

information and applications to a digital,

accessible format also has enhanced citizen

access by causing government agencies to

simplify and clarify government information and

re-think the relationship between themselves

and their customers. Simply put, todayís

Federal government can deliver solutions to

citizens at Internet speed. By the end of

December 2000, the public will be able to

download from the Internet and print the forms

for 500 of the most used government services.

Among the forms already available online are

those that allow users to pay their taxes, apply

for student loans, get a Social Security card,

volunteer for the Fish and Wildlife Service,

enlist in the U.S. Army, enter a science fair

competition, or even file for bankruptcy. Users

can fill and submit many of the forms directly

from their computer. We expect all appropriate

government services to be available via the

Internet by 2003.

ìUnder the leadership

of Vice President

Gore, we have greatly

expanded the spread

of information

technology throughout the government,

cutting reams of

red tape, putting

vast resources at the

fingertips of all of

our citizens.î

President Clinton

June 24, 2000
3rd Annual Report U.S. Government Working Group on Electronic Commerce

26

1. Providing One-stop

Government Information

A key Administration goal has been to create

a simple, straight-forward mechanism for the

public to locate

information and

services available

from the U.S. Government, without the

need to know which

Federal agency to

contact. In June, in a

webcast to the country,

President Clinton

announced a plan to

create a comprehensive FirstGov.gov

website, a single

online portal connecting users to all government

sites, one of the largest and most useful

collections of web pages in the world. The

President challenged government and industry

to create a site that allows citizens to search

government information faster and more efficiently

than ever before and by topic rather than by

agency. He also challenged government and

industry to finish it within 90 days. The site

launched on schedule in September of 2000

(http://www.firstgov.gov).

FirstGov has solicited partnerships with private

sector, academia, state and local governments,

and non-profit organizations. FirstGov partners

give their customers the capability to search

U.S. Government websites for relevant information and services, or link to the FirstGov

website to perform the search. Partners benefit

by adding a valuable service for their customers,

and the U.S. Government builds awareness of

FirstGov. Most of all, U.S. citizens benefit by

being able to obtain government information

and receive government services online from

a variety of starting points. To date, GSA has

signed up over 30 private sector partners.

While the FirstGov site provides unprecedented

search capabilities, it also provides access to

the home pages of major agencies and entities

in all three branches of government, a section

that provides topics of current interest to web

users (e.g., a direct link to the Weather Service

during hurricane season, to NASA during a

shuttle launch, or to IRS during tax season),

and key sites for access to State and local

government web pages.

FirstGov also links to many government

websites that provide access to government

information organized not by agency, but by

the type of service or topic. These sites were

established through Vice President Goreís

Access America Initiative, a government-wide

effort to provide Internet access and services

organized to meet the needs of specific

communities. Through Access America,

over 40 Federal agencies have been working

together on web portals directed to those

with disabilities (http://www.disabilities.gov),

seniors (http://www.seniors.gov), businesses

(http://www.business.gov), students

(http://www.students.gov) and workers

(http://www.workers.gov). The portals provide

information, news, and some capabilities for

online interactions with Federal agencies and

programs that serve the target citizen groups.

2. Moving Government

Procurements Online

Another key Administration e-government goal

has been to save taxpayers money by using

digital technology to make government more

efficient and cost-effective. In fact, the General

ìThis new site is a

powerful tool for

restoring trust in

governmentís more

basic mission ó to

help, serve, listen,

and respond to the

American people.î

Vice President Gore

September 22, 2000

The private sector has played a key role in

creating FirstGov and now is helping broaden

its reach. The FirstGov search engine was built

as a gift to the government by Dr. Eric Brewer,

a University of California, Berkeley researcher

who is the co-founder and Chief Scientist of

Inktomi Corp., a company that provides search

engine technology to a number of Internet

companies. To reach out to even more users,

FirstGov Power

FirstGov.gov allows users to search all

27 million Federal agency web pages at one

time. The FirstGov search engine can search

half a billion documents in less than onequarter of a second, and handle millions of

searches a day. To speed searches, FirstGov

allows citizens to find information intuitively ó

by subject or by keyword.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

27

Services Administration (GSA) already has

made significant progress in using electronic

commerce to facilitate faster, cheaper Federal

procurements:

 GSA Advantage! allows Federal employees

to access quality products and services and

order them directly over the Internet at a

reduced government price. The number of

items on Advantage grew by 57 percent

and sales grew by 50 percent in 2000 with

over a million dollars per day in sales in

late September.

 FedBizOpps allows agencies to post

contracting opportunities on the web and

vendors to download these notices directly

from the Internet. This service started as a

five-agency pilot, but now some 19 agencies

participate and nearly 60,000 vendors are

registered to receive notification of business

opportunities. Over 3 million searches for

opportunities have been performed.

 The SmartPay program provides purchase,

travel and fleet charge cards to Federal

agencies. Use of purchase cards streamlines

procurement, invoicing and payment

processes, saving the Federal government

$1.1 billion in FY 1999 alone on total sales of

$14.8 billion. Participants in the program are

eligible for refunds tied to sales volume and

payment performance. In FY 1999, contractor

payments to agencies for refunds totaled

over $55 million. SmartPay sales continue to

grow at a rate exceeding 20 percent annually.

3. Implementing

Electronic Filing

The government is moving quickly to stimulate

the use of electronic filing. The Government

Paperwork Elimination Act (GPEA) was enacted

in October 1998. Under GPEA, agencies must

generally provide for the optional use and

acceptance of electronic documents and

signatures, and electronic record keeping

when practicable. The Act is intended to

increase the ability of citizens to interact with

the Federal government electronically. It

specifically provides that electronic records and

their related electronic signatures are not to be

denied legal effect, validity, or enforceability

merely because they are in electronic form,

and calls upon the Federal government to use

a range of electronic signature alternatives.

Agencies submitted plans on implementing

GPEA by October 31, 2000. Those plans were

consistent with the principles that new electronic processes are compatible with accepted

technical standards; do not inappropriately

favor one industry or technology; ensure an

appropriate level of reliability and security;

provide for electronic acknowledgments; allow

multiple signature methods for large-volume

filings; achieve an efficient transition to electronic

commerce. These plans will provide a road

map for the Federal government transition to

electronic government and allow us to focus

our resources on those initiatives that can

provide citizens with an efficient and responsive

government. By October 21, 2003, all agencies

are required to have electronic filing and

electronic signature capabilities in place.

4. Developing a Public

Key Infrastructure

The Administration recognizes, as does the

private sector, that online security is essential

to safeguard transactions and privacy of those

who use e-commerce methods. As a result, a

Federal Public Key Infrastructure Steering

Committee, representing more than 24 agencies,

has worked to establish a growing U.S. Federal

Public Key Infrastructure (PKI) to facilitate

trusted communication among government

agencies, between government and their

trading partners, and between government and

the public. PKI verifies the identity of the parties

to an online transaction, ensures data has not

been altered in transit, prevents a party from

repudiating having sent a message, and makes

certain that data remains confidential in transit.

Ultimately, the delivery of high-value or sensitive

benefits and information online depends upon

establishing a PKI to insure security, privacy,

and legally protected transactions in an

electronic environment.

A number of agencies already have established

operational PKIs that can authenticate and

protect transactions. To encourage Federal

agency implementation of PKI technology, GSA

in partnership with industry, has made 500,000
3rd Annual Report U.S. Government Working Group on Electronic Commerce

28

certificates available to interested agencies

at no cost for issuance. In July 2000, the

Department of Veterans Affairs (VA) and the

Federal Emergency Management Agency were

granted another 110,000 certificates for use in

providing online capabilities to their constituents

and partners. Another 20 agencies have issued

approximately 65,000 certificates to employees,

contractors and business partners. In addition,

the U.S. Postal Service has issued over 300,000

certificates for use in their electronic postage

service. This number is expected to double by

the end of this year.

A number of agencies, including the Health

Care Financing Administration and other parts

of the Department of Health and Human Services,

the Defense Department, the Social Security

Administration and the Veterans Administration,

are now evaluating options for a pilot project to

initiate the use of PKI for cross-agency health

care applications.

5. Putting Government

Services Online

The Digital Revolution has the potential to make

government more efficient and its services more

accessible. The

Clinton-Gore

Administration is

committed to

delivering on this

promise, and getting

citizens online and

out of government

lines. Many agencies,

in fact, are moving

aggressively to

become models of

Information Age

government.

The Social Security

Administration (SSA),

for example, has posted 28 frequently used

forms on its website and plans to post an

additional 40 by the end of 2000. More

significantly, it announced that as of November

2, 2000, the public can apply for Social Security

retirement benefits online at its ìApply to Retireî

website (http://www.ssa.gov). New applicants

can fill out the online application, send it to the

agency electronically, and track their claim

online. The Social Security Administration uses

the strongest commercially available encryption

to ensure that an applicantís confidential

information remains secure in transit. The SSA

also offers an Online Retirement Planner that

allows users to compute future Social Security

benefits online. Among other services, the site

offers in-depth information on factors affecting

eligibility. Users can determine whether they

qualify for payment and, if not, how to become

eligible.

The Veterans Administration (VA) started similar

services on November 3, 2000, which allow

veterans to apply for health care, and other

benefits quickly, easily and securely. One

system, initially tested at 30 VA facilities, allows

veterans to fill out and submit an Internet-based

health care application that is automatically

e-mailed to the VA health care facility he or she

selects. VA employees register the data, print

the form and mail it back to the veteran for

signature. Veterans also can print out the

completed form and mail it to a VA health care

facility themselves. Using the other service,

ìVeterans On Line Applicationsî (VONAPP),

veterans can apply for compensation, pension,

and vocational rehabilitation benefits and send

completed applications electronically to their

local VA office (http://vabenefits.vba.va.gov/

vonapp). Processing begins right away and

veterans receive a response letting them know

the status of their applications. Later this year,

VA plans to offer applications for educational

benefits on the Internet. Currently, veterans

attending school under the Montgomery GI Bill

can make their monthly certification of enrollment online as well. Eventually, the VA aims to

put all its health care and benefits applications

online.

During the last year, the Department of Education

also has expanded significantly the electronic

delivery of benefits to students and its educational partners. These new services have

simplified and expedited the delivery of benefits

and information. At the Departmentís ìBorrower

Servicesî site, for example, users can complete

a loan consolidation application online or

download it to a computer and mail a hardcopy

to the Departmentís Consolidation Center.

An online ìstatus look-upî function enables

borrowers to track their consolidation as it

ìOne important way

to make government

cheaper, faster, and

better is by putting

more critical services

on the Internet, and

taking full advantage

of the information

revolution that is

taking place in

private industry.î

Vice President Gore

April 25, 2000
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

29

moves through the consolidation process

(http://loanconsolidation.ed.gov/borrower/

borrower.shtml).

The Department of Education also has

reengineered a number of reporting processes

over the last six months. Itís web-based

ìForms 2000î software has reduced reporting

requirements for the Departmentís partners

by consolidating three paper reports into a

streamlined electronic form. This streamlining

and improved data also has enabled the

Department to make payments to these

partners more quickly, and reduced error rates

and reconciliation and correction efforts.

The Department also has unveiled, revamped

or expanded the use of other sites:

 To make it easier to access student aid, the

Departmentís Office of Student Financial

Assistance (SFA) recently posted all relevant

software and documentation on the Internet.

The website saves time and money by

eliminating paper and diskette copying of

forms. Over the past six months, it has

saved SFA over $2.5 million while improving

customer service (http://ifap.ed.gov/dev_csb/

new/home.nsf).

 The Department continues to improve Direct

Loan Servicing by making more loan-servicing

functions available to borrowers online. The

newly redesigned Direct Loan Servicing

website has earned the prestigious Government Technology Leadership Award from

Government Executive Magazine. The

website was chosen from more than 60

nominations (http://dlservicer.ed.gov).

 Over the last six months, students have

requested over five million new personal ID

numbers ó for a total of twelve million to

date ó so that they can file Free Applications

for Federal Student Aid (FAFSA) over the web

(http://www.fafsa.ed.gov). Over the past year,

more than four million (FAFSA) have been

processed electronically.

The Equal Employment Opportunity Commission

(EEOC) has expanded its website and redesigned it to make information more easily

accessible. The website received approximately 100,000 visitors per month on average

during fiscal year 1999, a 50 percent increase.

EEOCís web site has been selected as one of

the nationís top 100 Internet sites for new

companies by Entrepreneur Magazine and has

been featured in PC Magazine and the National

Law Journal. The website also was designed

and is constantly being upgraded to provide

accessibility to disabled persons. It meets the

World Wide Web Consortiumís Web Content

Accessibility Guidelines and draft standards

under the Rehabilitation Act. Users using any

web browser or any adaptive equipment ó

such as screen readers, speech-based browsers,

and Braille terminals ó can access the site.

The website also meets or exceeds the standards

proposed by the Access Board, and has done

so since it was launched in 1997.

6. Facilitating

Electronic Payments

The U.S. Government is working hard to

accelerate the use of electronic payments in

Federal government financial transactions and

in the economy overall. Few Americans realize,

however, that it already has achieved

compelling results. The Federal Government

now collects electronically and spends

electronically the vast majority of money it

handles, improving efficiency and saving the

taxpayer money. The Department of Treasury

runs one of the largest payment collection

systems in the world and collects electronically

more than $1.3 trillion of U.S. government

revenue, approximately two out of every three

dollars. In 1999, the first year for which detailed

information is available, the Federal

government paid 78 percent of its 959 million

payments electronically. That includes 96

percent of salary payments, 81 percent of

vendor payments, and 73 percent of benefit

payments.

To achieve these successes, Department of

Treasury has implemented a number of initiatives.

The Electronic Transfer Account (ETA) Program,

for example, enables recipients of Federal

benefit, salary, or retirement payments who do

not have traditional bank accounts to receive

their payments by Direct Deposit through a low

cost account with the same consumer

protections available to other account holders.

With the ETA, all benefit recipients can enjoy
3rd Annual Report U.S. Government Working Group on Electronic Commerce

30

the safety and convenience of receiving their

Federal payments by electronic funds transfer.

Users can access an Internet site to search by

ZIP code, city, or state for financial institutions

certified to offer the ETA.

To facilitate payments to the U.S. Government,

the Financial Management Service in the

Department of Treasury also established an

Internet Credit Card Collection System (ICCC).

Federal agencies can now offer better

customer service through acceptance of credit

cards over the Internet for goods and services.

In FY 1999, total collections through the ICCC

reached $14 million. This total is expected to

increase significantly in FY 2000.

To expand on these successes, the Department

of Treasury launched in July 2000, a program to

create a secure government-wide payment and

collection portal. When operational (in 2002),

Pay.gov will be a one-stop shop for making

government payments over the Internet.

Corporations and citizens will be able to use

the site to pay electronically government fees,

fines, sales, leases, donations, and certain

taxes ó everything from camping licenses to

corporate fines. Many of these transactions are

currently processed through paper lockbox

collections and over-the-counter.

The Pay.gov site also could be used for direct

electronic processing of government forms,

such as direct deposit enrollment forms or

order forms for government products like U.S.

Mint coins and maps from the National Park

Service. Individuals will be able to view agency

bills, while agencies will be able to immediately

view and share information about bills paid,

forms completed or purchases made. This

program has the potential to process 80 million

transactions, totaling $125 billion each year.

After a year of technical development, the

Department of Treasury expects to conduct a

pilot project with five government agencies

starting in February 2001.

The Department of Treasury also expanded this

year a pilot program that lets vendors accept

taxpayersí credit card payments of federal

taxes and send them to the Treasury through

EFTPS. The program was expanded to include

estimated taxes and tax payments with filing

extensions. The Department of Treasury also

will launch a pilot Internet application in early

2001 to encourage small businesses to enroll

in the program and begin paying taxes through

EFTPS. The web application also will allow

small businesses and other taxpayers to enroll,

view their account history, and obtain customer

service over the web.

The Department of Treasury also is developing

or testing a variety of new payment systems,

including digital cash and digital checks for

vendors. Designed specifically for the Internet,

electronic checks (e-checks) are created on a

Electronic Federal Tax

Tax Payment System

The Electronic Federal Tax Payment System

(EFTPS), implemented in 1996, processes

electronic payments from taxpayers to the

Internal Revenue Service (IRS). In FY 1999,

EFTPS processed 55 million transactions for

over 2.3 million taxpayers with an error rate of

only 0.08 percent, or one-nineteenth that of

the paper system it is replacing. EFTPS is

among the worldís largest collection mechanisms. In 1999, it accelerated over $1.35

trillion to the Treasury by more than one day.

Stored Value Cards

The Departments of Treasury and Defense

have expanded the use of stored value cards

to replace cash and paper payroll systems for

military personnel. In fact, the Department of

Treasury is now the worldís largest issuer of

smart cards. Its stored value card programs

are the largest in the United States with over

$80 million in transfers, representing 3 million

transactions and 375,000 cards. The program,

which is still expanding in the United States,

also is used at several peacekeeping bases in

Bosnia and at facilities in Hungary. All soldiers,

civilians, and contractors stationed at these

camps use stored value cards to receive their

salary and make payments to merchants on

the base. Use of the card in Bosnia has

significantly reduced cash requirements and

the support costs related to holding and

securing cash.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

31

computer, digitally signed, and e-mailed with

payment related information to a payee. The

payee then verifies the identity of the payor,

endorses the check with his or her own digital

signature, and e-mails the e-check to a

financial institution for deposit. The Department

of Treasuryís Financial Management Service

(FMS) first began testing e-checks in 1998.

Since that time, over $10 million dollars in

e-checks have been processed. Electronic

checks have the potential to substantially

reduce agency administrative costs, and may

serve as a model for private sector efforts.

The Department of Treasury also has been a

leader in accepting electronic payments for

its own services and products. Auctions of

Treasury securities, for example, are now

entirely electronic, and consumers holding

Treasury securities through the Treasury Direct

program can make purchases or reinvest on

line or through an automated phone system.

Savings bonds also can be purchased over the

Internet 24 hours a day, 7 days a week, using

one of several major charge cards. In fact, the

ìSavings Bond Connectionî is one of the most

popular Department of Treasury websites and

its success has far exceeded initial expectations. The Department of Treasury ës State and

Local Government Securities program also

enables state and local governments to invest

in special-purpose Treasury securities, access

their accounts and conduct transactions

electronically. Transactions often total several

million dollars and are secured by digital

certificates and paid by electronic funds transfers.

In addition, the Department of the Treasury

hosted a conference on electronic financial

transactions and payments in Washington, D.C.

in September 2000. The conference brought

together key government and industry leaders

in electronic payments innovation to discuss

new developments in electronic payments

systems and the public policy issues they

raise. The conference featured CEOs of firms

that are developing new payment mechanisms

or improving existing systems for use on the

Internet, developing ways to make moving

money on the Internet safe and more secure,

and finding ways to address privacy issues

raised by electronic payments(http://

www.treas.gov/ofi/agenda.htm).

7. Other Government

Services and Information

Available Online

The initiatives listed above are only some of

those the U.S. Government has undertaken.

Some of other

initiatives (current and

planned) that make it

easier than ever to

access government

services are listed

below:

 The millions of

Americans

who value and

use recreational

facilities can now

make reservations at more than 5,000

government-administered campsites

nationwide through the Forest Serviceís

online reservation system, computer kiosks

at field sites or over the telephone (http://

www.recreation.gov).

 Applicants for Federal trademark registration

can now apply online through the newly

enhanced U.S. Patent and Trademark Office

Trademark Electronic Application System (TEAS).

TEAS now allows almost all trademark-related

forms, including applications, to be submitted

directly to the trademark examining operation

over the Internet. Over 10 percent of all

trademark applications at the USPTO are

now received electronically (http://

teas.uspto.gov/).

 Small businesses working to expand their

use of IT to remain competitive in todayís

global economy can use an ìIT Management

Planning Toolî a CD-ROM developed by the

Department of Commerceís ITA. The tool is a

self-guided, step-by-step assessment of a

companyís IT use. It also helps companies

plan for additional IT related investment

improvements. The CD-ROM includes a

video on the benefits of information technology,

a userís manual and informational Internet links.

 Small business owners will be able to learn

about legal and regulatory issues from

patents to tax identification to e-commerce

ìThe power of

government should

not be locked away

in Washington but

put at your service,

no further than

your keyboard.î

Vice President Gore

July 2000
3rd Annual Report U.S. Government Working Group on Electronic Commerce

32

at SBAís Electronic Legal Clinic. SBA began

development of this interactive resource

in 2000.

 Small business owners also can seek online

small business partners, contractors,

sub-contractors, technology and research

partners, manufacturers and investment

opportunities on SBA-Net, a free network

of several electronic gateways (http://

www.sbanetweb.com/).

 Employers and employees can learn how to

comply with numerous employment laws

enforced by the Department of Labor by

going to Elaws (http://www.fdol.gov/elaws/).

This interactive site contains electronic

ìElaws Advisorsî that give advice and provide

information on a specific law or regulation

based on the userís particular situation.

 Agricultural exporters can now use the

Department of Agricultureís, Foreign

Agriculture Service (FAS) website to apply for

export credits. FAS has combined a number

of programs and cumbersome paper

processes into a single streamlined online

application process. Over 90 percent of all

applications that FAS receives are now

submitted through the FASOnline website

(http://www.fas.usda.gov/).

 Importers of fruits and vegetables, animal

products, organisms, and other vectors now

can submit applications to the Department of

Agriculture Animal and Plant Health Inspection

Service on its new Import Authorization System.

Customers also can check the status of and

submit revisions to an existing application

(https://Web01.aphis.usda.gov/ias.nsf/

Mainform?OpenForm).

 Consumers in inner-city Baltimore, Maryland

and outside Tallahassee, Florida can now

use no-fee ATMs in six post offices. As a pilot

project to test the demand for and economic

viability of ATM transactions among residents

of communities that lack access to conventional banking services, the Department of

Treasury, in cooperation with the U.S. Postal

Service, unveiled no-fee ATMs in November

1999.

 To help the public prepare for natural disasters

and reduce disruption and loss, the Federal

Emergency Management Agency (FEMA)

has placed electronic maps on the Web that

chart the history of tornadoes, hurricanes,

hailstorms, earthquakes, windstorms and

floods in any area in the United States.

The electronic mapping project will enable

local governments and the public to make

decisions about whether to buy certain types

of disaster insurance, how much local

revenue to devote to disaster preparation,

and whether to develop land that might be

highly susceptible to flooding (http://

www.esri.com/hazards/).

 State agencies, local governments, and

private non-profit organizations will be able

to request public assistance via the Internet

after a disaster through the Federal Emergency

Management Agencyís Electronic Service

Project. This project will eliminate timeconsuming paper-based procedures and

processes without special telecommunications

or computer equipment.

 FEMAís claims staff can now identify and

respond to troubled claims before they are

closed, using FEMAís new Quick Claims

reporting system that began operating during

the 2000 flooding season. The Quick Claims

system also has given mitigation experts early

access to claims data when flooding occurs.

8. Improving Government

Accountability and Efficiency

To improve the accessibility and accountability

of government

officials, all cabinetlevel agencies also

have created public

electronic mail

addresses. Both

President Clinton and

Vice President Gore

also have public email addresses. In

addition, all agencies

provide specialized

e-mail addresses for

high profile programs

ìIt is the heart of

what we must do to

revitalize the ideal

that has animated

our democracy since

its founding: that

people are the master

and government is

the servant.î

Vice President Gore

July 2000
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

33

or agency organizations.

The Department of

Education, for example,

which handles 12,000

e-mails per month, has

approximately 800 unique

e-mail addresses for

public inquiries.

In addition, the U.S.

Governmentís Chief

Information Officersí

Council has created the

Federal White Pages

(http://directory.gov).

The White Pages provide

a searchable database

of e-mail and telephone

contact information for

over 400,000 Federal

officials in 20 Departments

and agencies. Citizens also

can access the White Pages wirelessly from

most Internet-ready telephones. The General

Services Administrationís complementary

Federal Blue Pages (http://bp.fed.gov) allows

citizens to look up organizational contacts or

a specific government service.

Most agencies have instituted enterprise-wide

efforts to use the Internet to become more

efficient and responsive. Several agencies

have created new offices of Electronic Government or Electronic Commerce to oversee the

expanding use of the Internet and Intranet to

deliver convenient, interactive services quickly

and easily. Many Federal government agencies

also are educating senior policy and management personnel about how to more effectively

use technologies like the Internet through

online self-assessments, distance learning,

virtual libraries, virtual universities, information

technology fairs, Web-based newsletters,

Webmaster certification training courses, and

learning portals. Through partnerships with the

private and public sectors research communities,

many agencies also are developing advanced

applications that will transform the way government operates, the way it interacts with business,

and the way it delivers services, information

and engagement opportunities to individuals.

Finally, to share ìbest practicesî in the government, the National Partnership for Reinventing

Government and the E-Government Committee

of the Chief Information Officers Council has

created a web-searchable database of

ìSuccess Stories in E-Government.î This

database contains over 200 success stories

related to e-government activities at federal,

state, and local levels. The database, which is

managed by the Chief Information Officers

Council, will be accessible by the public in

January 2001.

9. Exploring E-voting

To explore the feasibility of online voting, the

National Science Foundation sponsored the

Internet Policy Institute e-Voting Workshop on

October 11-12, 2000. Conducted in

cooperation with the University of Maryland and

hosted by the Freedom Forum, the workshop

sought to identify the critical issues relating to

online voting, assess the status of current

knowledge with respect to those issues, and

define an agenda for future research. The

approximately 30 panelists and 80-90

attendees at the workshop addressed many

aspects of online voting from both a technical

and social science perspective, including:
3rd Annual Report U.S. Government Working Group on Electronic Commerce

34

 Participation in elections;

 Security and reliability of the voting process;

 Protection of voter privacy;

 Authentication of voter identity;

 Broad and equitable access to voting;

 Representative democracy and community;

and

 The convenience and cost-effectiveness of

voting systems.

Panelists included information technology

experts, social scientists, and election officials.

Attendees included representatives from the

United Nations, Switzerland, Denmark, Canada,

and several states, vendors of electronic voting

software and services, voting-related nongovernmental organizations, as well as

academic researchers. The workshop project

team is drafting a report on the workshop, and

will post it at http://www.netvoting.org in 2001.

The project team will then solicit comments on

the report from the public and interested groups

for inclusion in the final version.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

35

II. Enhancing Consumer Confidence

onsumer confidence in online sales Crequires adequate security, respect for

privacy, and protection from unfair,

deceptive, and fraudulent commercial conduct.

The U.S. approach to securing these

protections relies on a combination of private

sector self-regulatory initiatives, government

enforcement of existing legal protections, and

efforts to better inform consumers. Moreover,

both the private sector and governments must

share information and cooperate across

borders to ensure that these efforts are

effective in a global marketplace.

A. Consumer Protection

Consumers should have equivalent rights and

protections when shopping online as they do in

the physical world. However, ensuring those

rights and protections involves additional

challenges in the online world. The Administration has undertaken many efforts ó both

domestically and internationally ó to ensure

effective consumer protection online, including

promoting the development and implementation of alternative dispute resolution and

other self-regulatory mechanisms, ensuring

the enforcement in the

online world of existing

consumer protection laws,

and taking important

steps to educate

consumers and

businesses on consumer

protection issues.

1. Alternative

Dispute

Resolution

Transactions between

buyers and sellers online

might not always go

smoothly. For consumers

to participate in electronic

commerce, they must

have confidence that they

can seek redress if some

aspect of the initial transaction is unsatisfactory.

The global nature of e-commerce, however,

complicates the issue because choice of law,

jurisdiction and liability rules vary significantly
3rd Annual Report U.S. Government Working Group on Electronic Commerce

36

among countries, and causes uncertainty about

consumer rights and business obligations in

cross-border transactions. Even if issues of

applicable law and jurisdiction could be

adequately resolved, international private

litigation over small-value Internet transactions

generally does not make practical or economic

sense. Alternative dispute resolution can be

a practical way to provide consumers with

fast, inexpensive, and effective remedies, and

can reduce businessesí exposure to foreign

litigation. For this reason, the Administration

has promoted collaborative efforts among the

private sector and consumer groups to develop

and implement fair and effective Alternative

Dispute Resolution (ADR) mechanisms for

online transactions as one means of promoting

consumer confidence and participation in

electronic transactions.

Many organizations and stakeholders have

expressed interest and support for ADR

mechanisms, including the Organization for

Economic Cooperation and Development

(OECD), the Global Business Dialogue on

Electronic Commerce, the Internet Law and

Policy Forum, the Trans-Atlantic Business

Dialogue, the Trans-Atlantic Consumer

Dialogue, and participants at a June 1999

Workshop on Consumer Protection. The

Department of Commerce and the Federal

Trade Commission held a workshop in June

2000 (http://www.ftc.gov/bcp/altdisresolution ( )

to promote discussion among interested

stakeholders on how ADR programs can foster

consumer confidence without unduly burdening

business. Representatives of industry, consumer

groups, and government explored new and

innovative ADR models and exchanged ideas

on how to balance competing needs.

Participants indicated that continued

cooperation from industry, consumers, and

government was essential. They also believed

that governments should adopt flexible public

policies that will allow the private sector and

consumer groups to develop and implement

new and innovative ADR technologies and

mechanisms, and noted that both consumers

and businesses needed to be educated in

the new dispute resolution mechanisms. In

addition, they supported law enforcement for

unfair and deceptive practices related to the

use of ADR for Internet transactions.

The U.S. Government issued a joint statement

with the European Union on this issue at the

December 2000 US-EU Summit. In addition,

in December 2000, the Department of

Commerce and the Federal Trade Commission

will participate in the first major multilateral

conference addressing online ADR which will

be jointly sponsored by the OECD , the Hague

Conference on Private International Law, and

the International Chamber of Commerce.

2. E-commerce at Home

and Abroad ñ Domestic

and International

Consumer Protection

The Administration has challenged the private

sector to work with consumer groups to

implement effective consumer protection

practices online. This approach helps to ensure

the application of a fair and predictable set of

rules across countries and regions, and also

reduces the complications of jurisdiction and

applicable law. This year, in response to the

Administrationís challenge, the Better Business

Bureauís online division, BBBOnLine, worked

with industry, consumer representatives and

governments and issued a code of conduct (http://

www.bbbonline.com/code/codeenglish.pdf).

Businesses adhering to the code must disclose

terms of sale, avoid unfair and deceptive

advertising, register with the local Better

Business Bureau, and meet other reliability

standards in order to display a reliability seal.

In addition, these businesses must commit to

participate in alternative dispute resolution

proceedings. The Administration sees the

BBBOnLine Reliability Program as a model for

voluntary actions that can promote consumer

confidence in online transactions. Other

important efforts are also underway. For

example, the Electronic Commerce Consumer

Protection Group, whose members include

AOL, American Express, AT&T, Dell, IBM,

Microsoft, Time Warner and Visa, issued a

code of conduct for online business in June

2000. This code is an important statement of

best practices for web merchants, and

encourages merchants to participate in fair and

effective dispute resolution mechanisms (http://

www.ecommercegroup.org/guidelines.htm).
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

37

In December of 1999, the Administration

launched a pilot project at the Consumer

Product Safety Commission called Operation

Safe Online Shopping (SOS). Under this

project, the CPSC monitors websites for

recalled, illegal, and potentially hazardous

consumer products. CPSC investigators,

posing as consumers, also shop for items

that could be dangerous to consumers. The

purchased items are checked for compliance

with federal safety standards. CPSC has

found dangerous products being sold online,

including flammable childrenís sleepwear,

prescription drugs without child-resistant

packaging, and defective power tools.

Since the Internet facilitates international

commerce on an unprecedented scale,

consumer protection can not stop at the border.

Accordingly, the Administration has worked

with our trading partners to share information

and develop policy. We also have worked with

industry and consumer representatives to

promote global codes of conduct, reliability

programs, and related mechanisms.

In December of 1999, the Federal Trade

Commission (FTC) and other U.S. agencies,

working closely with industry and consumer

advocates, participated in the OECDís effort to

produce guidelines for consumer protection

online (http://www.oecd.org/dsti/sti/it/secur/

prod/PRIV-EN.HTM). The United States will

participate in a conference on implementing

the Guidelines to be held in March 2001.

In June 1999, the FTC, with participation from

the Department of Commerce and the United

States Trade Representative (USTR), conducted

a public workshop on Consumer Protection in

the Global Electronic Marketplace. The participants, including foreign representatives,

academics, industry members, and consumer

advocates, discussed issues such as jurisdiction,

international agreements, and private sector

initiatives. In September 2000, the FTC issued

a report on this workshop, called Consumer

Protection in the Global Electronic Marketplace:

Looking Ahead (www.ftc.gov/bcp/icpw/

lookingahead/global.htm). The reportís recommendations include promoting incremental

convergence of international consumer

protection laws, enhanced cross-border

judgment recognition and enforcement, private

sector initiatives to better inform consumers

and prevent disputes, and international law

enforcement cooperation.

The Administration also encouraged international consumer protection by working with

groups such as the Free Trade Area of the

Americas joint government-private sector

Committee of Experts on E-Commerce,

the Global Business Dialogue on Electronic

Commerce, the Trans-Atlantic Business

Dialogueís Electronic Commerce Working Group,

and the Trans-Atlantic Consumer Dialogue.

3. Education to Protect

the Consumer

Acting on the basis that the best-protected

consumer is an educated consumer, the

Administration has worked hard to increase

consumer awareness. For example, the Federal

Trade Commission has used the Internet to

alert consumers to the telltale signs of fraud,

the importance of privacy in the information age

and other critical consumer protection issues.

More than 200 of their consumer and business

publications are available on their website

(http://www.ftc.gov/ftc/consumer.htm). The

number of publications viewed online in 1999

(2.5 million) compared to 1996 (140,000) tells

the story of the Internetís coming of age. Those

2.5 million page views are in addition to the 6

million print publications distributed each year.

Knowing that many consumers use the Internet

to shop for information, the FTC has developed

ìteaserî sites that mimic the characteristics of

a fraudulent site (http://www.ftc.gov/reports/

fraud97/consumer.htm). The teaser pages link

back to the FTC, where consumers can find

the practical, plain English information they

need. The agency has developed 14 teaser

sites on topics such as health care products

and investments.

The FTC provides resources for online

marketers using a variety of approaches such

as compliance guides, brochures, public

addresses, web-based public service

announcements, and workshops on issues of

interest. Among the publications for business

that have been distributed widely in print and

online are Advertising and Marketing on the
3rd Annual Report U.S. Government Working Group on Electronic Commerce

38

Internet: Rules of the Road (http://www.ftc.gov/

bcp/conline/pubs/buspubs/ruleroad.htm) and

Dot Com Disclosures: Information About Online

Advertisers (http://www.ftc.gov/bcp/conline/

pubs/dotcom/), which describes how the

FTCís advertising and marketing rules apply

online. In addition, two business alerts Selling

on the Internet: Prompt Delivery Rules (http://

www.ftc.gov/bcp/conline/pubs/alerts/intbalrt.htm);

and Website Woes: Avoiding Web Service

Scams (http://www.ftc.gov/bcp/conline/pubs/

alerts/webalrt.htm) have been widely disseminated. The FTC also has issued consumer

and business education materials specifically

related to the OECD Guidelines on Consumer

Protection in Electronic Commerce (www.ftc.gov/

bcp/conline/pubs/alerts/ecombalrt.htm and

www.ftc.gov/bcp/conline/pubs/alerts/

glblalrt.htm).

Under a law passed in 1998, the Federal Trade

Commission is responsible for establishing a

ìcentralized complaint and consumer education

serviceî for victims of identity theft.38 Over the

past year, the FTC has established an Identity

Theft Hotline and an Identity Theft Data Clearinghouse. On the hotline (toll-free, 877-ID THEFT),

consumers can report identity theft. The data

clearinghouse is the Federal governmentís

centralized identity theft database used for law

enforcement over a secure

website. The FTC also

has developed education

materials including a

website devoted to

identity theft issues

(http://www.consumer.gov/

idtheft) and a comprehensive booklet on

identity theft, When

Bad Things Happen to

Your Good Name. (http://

www.ftc.gov/bcp/conline/

pubs/credit/idtheft.htm)

The Consumer Product

Safety Commission

(CPSC) also has taken an

active role in consumer

protection and education.

In March, eBay and

Amazon.com agreed

to link their sites to

the CPSC site

(http://www.cpsc.gov/cpscpub/prerel/

prerel.html) and post guidance for consumers

about recalled products. This initiative focuses

on popular products such as childrenís toys,

tools, exercise equipment, and household

items. eBay also links to CPSC from its website

(http://www.members.ebay.com/aboutme/

uscpsc); CPSC received 25,000 hits from eBay

users the first month this link was in place. To

make sure that their educational outreach

reaches the greatest number of people, the

CPSC website has added Spanish language

pages (http://www.cpsc.gov/cpscpub/spanish/

spanish.html) and the major Spanish television

networks, Univision and Telemundo, have links

to the CPSC from their websites.

4. Enforcing Consumer

Protection Laws Online ñ

Protecting the Consumer

Against Fraud

The U.S. Government continues to fight

misleading and deceptive practices online. For

example, the Federal Trade Commission has

brought 165 enforcement actions against 564

violators of existing law ranging from pyramid

schemes and miracle cures to sophisticated
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

39

scams in which a consumersí ability to control

their Internet access or the websites they visit

are altered (http://www.ftc.gov/os/index.htm).

These actions are both domestic and foreign.

The FTC has gained redress for thousands of

consumers in 68 foreign countries. In order to

combat the growing problem of international

fraud, the FTC has entered into law enforcement cooperation agreements with Canadian

and Australian agencies. The FTC cooperates

in law enforcement investigations with the

consumer protection agencies of 29 countries

through its membership in the International

Marketing Supervision Network (http://

www.imsnricc.org). The FTC also has conducted

domestic and international fraud training sessions

for law enforcement personnel.

The FTC is using new weapons in the fight

against Internet fraud. Last year, it established

an Internet Lab, which allows investigators to

search for fraud and preserve evidence in the

event of a criminal proceeding. In 1997, the

FTC established Consumer Sentinel (http://

www.ftc.gov/sentinel), a fraud complaint

database for enforcement officials in the U.S.,

Canada, and Australia. The Consumer Sentinel

database contains over 44,000 complaints

specific to the Internet. The proportion of

Internet-related complaints has risen quickly

from 13 percent of all complaints in 1998, to

25 percent in 1999, to almost 30 percent so far

this year. Approximately one in eight Consumer

Sentinel complaints involve foreign consumers

or companies.

The FTC also has used ìSurf Daysî to deter

fraud. The first occurred in 1996 and focused

on pyramid schemes. Commission investigators enlisted the assistance of the SEC, the

U.S. Postal Inspection Service, the Federal

Communications Commission, and 70 state

and local law enforcement officials from 24

states. During a three-hour surf, this task force

found over 500 websites or newsgroup

messages promoting what appeared to be

pyramid schemes. FTC staff then sent e-mails

to the individuals or companies, warning them

that pyramid schemes violate federal and state

law and providing them a link to the FTC for

more information. The FTC has led 16 of these

surfs with over 150 other agencies and 28

countries identifying some 5,000 sites making

dubious claims. In the most recent, the target

was ìget rich quick schemes.î During a

compliance follow-up a month later, 40 percent

of the problem sites were either gone or had

changed their representations. The others

remain under investigation.

B. Ensuring Privacy on

the Internet

Because consumers continue to cite privacy

concerns as a reason not to use the Internet,

efforts to improve privacy should increase

consumer confidence about participating in

online communications and business. The

Administration continues to support industry

self-regulatory initiatives as an effective

approach to create meaningful privacy

protections. In certain highly sensitive areas,

however, the Administration has consistently

supported legislative solutions. These sensitive

areas include financial and medical records,

genetic information, social security numbers,

and information involving children (http://

www.cio.gov/docs/privacylist.htm).

1. Privacy Protection

Through Self-Regulation

and Example

The importance of protecting online privacy

continues to grow. The Administration has

called on industry to provide online privacy

policies that articulate the manner in which a

company collects, uses, and protects data, and

the choices they offer consumers with regard to

their personal information. Based on FTC

surveys of commercial sites, 62 percent now

post privacy policies compared to 2 percent in

1998. Businesses have increasingly hired

privacy experts and made the protection of

consumer information a priority. However,

industry can and should do more. Only 20

percent of the surveyed sites had policies that

satisfy all the generally accepted fair

information principles.39

In July, the Network Advertising Initiative

adopted Principles for Online Preference

Marketing (http://www.ftc.gov/os/2000/07/
3rd Annual Report U.S. Government Working Group on Electronic Commerce

40

NAI%207-10%20Final.pdf). The Administration

applauded this action as an effective method

for safeguarding personal information.

The Initiativeís general principles were first

announced at a ìprofilingî workshop held

by the Department of Commerce and the

Federal Trade Commission in November of

1999 (www.ntia.doc.gov/ntiahome/privacy/

previndex.html). The principles promise special

protections for sensitive information and choice

about how network advertisers use personal

information. The Administration is also strongly

encouraged by the private sectorís increased

participation in third party enforcement

organizations.

New Technologies: Another important development is the Platform for Privacy Protection (P3P),

a standard developed by the World Wide Web

Consortium that will enable users to express

their privacy preferences through their

browsers. In September of 2000, a Department

of Commerce Workshop demonstrated this

technology (http://www.ntia.doc.gov/ntiahome/

privacy/index.html). In a show of support,

the White House and the Department of

Commerce recently made their home-pages

compliant with this privacy-enhancing ìP3Pî

technology.

Government Online Privacy: Through the

P3P effort and other initiatives, the Federal

government continues in its mission to be a

ìmodelî citizen of cyberspace in its information

practices and lead by example. On June 2,

1999, OMB directed Federal agencies to

post privacy policies on their principal website

and at other appropriate pages (http://

www.whitehouse.gov/omb/memoranda/

m99-18.html). A recent GAO study found that

an overwhelming majority of federal websites

have complied already (http://www.gao.gov/

new.items/gg00191.pdf). In June of 2000, OMB

directed Federal agencies to avoid using

ìcookiesî except in special cases.40 The

Presidentís FY 2000 budget has made privacy

impact assessments, which evaluate and

address privacy needs, a standard for new

government computer systems.

International Efforts: On the international front,

the U.S. Government continues to promote an

industry self-regulation approach to privacy

protection with groups such the OECD, the

Free Trade Area of the Americas, and the Asia

Pacific Economic Cooperation. For example,

the U.S. Government played a leading role in

developing the OECD Online Privacy Generator,

which will encourage and help organizations

develop online privacy policies that comport

with the 1980 OECD Privacy Guidelines.

Bridging different privacy approaches, the

United States and the European Commission

have completed the safe harbor privacy accord,

which helps to ensure that trans-Atlantic data

flows will not be interrupted. This landmark

accord builds on the U.S. self-regulatory

approach to privacy, and can serve as a model

for bridging the gap between different

approaches to electronic commerce issues

in the international context. The Safe Harbor

Accord became operational in November of

this year (http://www.export.gov/safeharbor).

Private sector organizations such as the Global

Business Dialogue on Electronic Commerce

and the TransAtlantic Business Dialogue also

help find ways to bridge different national

privacy approaches. Moreover, in May of this

year, BBBOnline and the Japan Information

Processing Development Center (JIPDEC)

teamed up to develop a transnational online

privacy seal. The seal can be displayed by

businesses that have earned either the JIPDEC

or the BBBOnline privacy seals.

2. Privacy Protection Through

Law and Regulation

In areas where highly sensitive information is

concerned, the Administration has worked to

provide strong legal protection:

 Childrenís Information: The Administration

actively supported enactment of the

Childrenís Online Privacy Protection Act in

1999, which requires sites aimed at children

to get verifiable parental consent before they

gather and use personal information received

from children under 13. The FTC issued rules

to implement this Act in April 2000.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

41

 Medical Records: The final rules guaranteeing

the privacy of medical information under the

Health Insurance

Portability and

Accountability Act of

1996 were issued in

December, 2000.

These privacy

regulations apply

to approximately

13 percent of the

U.S. economy, to all

health care providers

and plans and their

business associates.

Furthermore, the rules

apply to online as well

as offline records and

provide a crucial baseline of legal protection for these especially

sensitive records. Additional legislation also

will be needed to assure better protection of

some medical records, such as those held

by life insurance companies and in many

employment uses that are outside the scope

of the current statute.

 Financial Records: The Administration has

continually emphasized the importance of

adopting protections to ensure the privacy

of consumersí financial records. This year,

we announced a new legislative proposal

to protect consumerís financial privacy that

includes the right to choose whether a firm

shares consumer financial information,

provides extra protection for especially

sensitive information, and creates a new right

to review and correct information collected

about consumers. This proposal, developed

by the Department of Treasury, the Office of

Management and Budget and the National

Economic Council, built upon the financial

privacy protections of the 1999 Financial

Modernization legislation and filled gaps in

that ground-breaking law.

 Genetic Discrimination: This February, the

President signed an Executive Order banning

the use of genetic information in Federal

government hiring and promotion decisions.

The Administration supports legislation to

extend these protections to private sector

employment and insurance practices.

C. Protecting Children

from Inappropriate

Content Online ñ

A Special Responsibility

The potential for children to access inappropriate content online is of particular concern

to society. In response to this challenge, the

Administration continues to support an

approach combining the widespread

availability of consumer empowerment

technology, enhanced consumer awareness,

and an industry-led self-regulation.

The government can further industry and

consumer awareness through means such as

the Commission on Child Online Protection,

which was established under the Childrenís

Online Protection Act. This Commission

examined how technological tools such as age

verification mechanisms and Internet filtering,

labeling and rating schemes can help protect

children from inappropriate content. The

Commission delivered its final report and

recommendations to Congress on October 20,

2000. The recommendations called on industry,

consumers and the government to act in four

main areas: public education, consumer

empowerment, law enforcement, and industry

self-regulation.

The Administration also supports protecting

children by requiring that schools and libraries

receiving e-rate funding have an ìacceptable

useî policy. Recent studies confirm that virtually

all schools have such policies in place.

Acceptable use polices are locally developed

rules and guidelines for children that offer

parents a reasonable assurance of their childís

online safety. The Administration has expressed

concerns about proposed legislation that would

deny e-rate funds to schools and libraries that

have not installed specific software to block

access to inappropriate material. While the

Administration strongly supports protecting

children, there are powerful arguments that the

government should not mandate a particular

type of technology in a rapidly changing

environment. The Administration believes that

acceptable use policies (which at the discretion

of local officials can include software as a part

ìNothing is more

private than someoneís

medical or psychiatric

records. And,

therefore, if we are to

make freedom fully

meaningful in the

Information AgeÖ

we have to protect the

privacy of individual

health records.î

President Clinton

December 2000
3rd Annual Report U.S. Government Working Group on Electronic Commerce

42

of the solution) should be given a chance for

success before mandating a technological

solution.

Through the Office of Management and Budget,

the Administration has made clear that Federal

agencies are to comply with the standards of

the Childrenís Online Privacy Protection Act,

even though Congress did not include the

Federal government within the scope of that

law. In addition, each agency is to describe its

privacy practices in its budget submissions this

year. In this way, the federal commitment to

privacy protection is built into the budget process.

D. Enhancing Consumer

Confidence ñ Security

on and Security of

the Internet

The security of information flowing through

the Internet is a critical element of e-commerce.

It is a necessary part of building trust in the

accuracy and integrity of transactions made

over the information infrastructure. There is

growing awareness that Americaís information

infrastructure ñ the basis of e-commerce ñ is

becoming an increasingly attractive target for

deliberate attack or sabotage. Consumers

must have confidence that both the content

and the infrastructure of the Internet are secure.

1. Security on the Internet ñ

Protecting Information

through Encryption

To ensure that sensitive information is protected,

the Administration supports the use of information

security tools such as encryption. However,

unlimited use of encryption by groups such as

criminals, drug traffickers or rogue governments

risks public safety and national security. Therefore, the Administration continues to promote a

balanced approach to encryption policy.

In September of 1999, the Administration

announced sweeping changes to the

restrictions on the export of encryption

products. These changes both protected

national security interests and paved the way

for U.S. industry to compete in major markets

around the world. The new guidelines came

one year after Vice President Gore pledged that

the Administration would review and update its

policy to ensure it protects privacy and is in

step with the growing market for electronic

technology. The Administration worked with

industry, law enforcement and privacy groups

to create a balanced policy that addresses all

interests involved. In January of 2000, after

months of consultation with interested parties,

the Administration implemented this new

approach consisting of security within the

Federal government, a new framework for

export controls, and updated tools for law

enforcement (http://www.bxa.doc.gov/

Encryption/pdfs/Crypto.pdf).

The updated policy will provide U.S. companies

with new opportunities to sell their encryption

products to most end users in global markets.

In addition, in July 2000, the Administration

announced a new policy to further open up

encryption exports to the 15 member nations

of the European Union as well as eight

other trading partners. The Administration

implemented this new policy in October 2000.

(http://www.bxa.doc.gov/Encryption/pdfs/

EncryptionRuleOct2K.pdf). These updates

track with recent policies adopted by the

European Union, and ensure that U.S. industry

can continue to effectively compete.

With these updates in encryption policy,

individuals and businesses will be able to

secure their communications and data over

global networks. Businesses can conduct

secure transactions with their clients and

business-to-business transactions can be

protected from unauthorized access. Commercial

and individualsí web applications can be

authenticated and secured, and global businesses

will have ready access to encryption technology to secure their corporate databases,

e-mails, and proprietary files and records.

2. Security of the Internet ñ

Protecting the Internet for

Businesses and Consumers

The security of information is central to the

building of confidence in e-commerce. The

growing threat of attack and sabotage can

undermine that confidence. Our government,
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

43

economy, and society are connected in an

ever expanding and interdependent digital

system of computers and information systems.

With this new interdependence comes new

vulnerabilities. From almost anywhere, a skillful

user with malicious or criminal intent can break

into sensitive files, shut down a public safety

system, or paralyze the Internet.

For example, in May of 2000, any user who

opened the attachment to an e-mail containing

the irresistible subject line ìI love youî

unwittingly released a virus that destroyed files

and then propagated itself via the e-mail

address book of the userís mail program.

In attacks in February of this year, messagesending programs were surreptitiously placed

on numerous computers operated by a variety

of organizations. These hosts then flooded

targeted websites so that the targets were

unable to respond to normal message traffic.

This tactic, known as a ìdistributed denial of

serviceî attack, forced sites such as Yahoo!,

Lycos, Excite to shut down for significant periods

at considerable cost to owners and users.

In July of this year, the Administration announced

important new measures to assure the security

and trust of Americans in cyberspace. These

measures include updating law enforcement

authorities for the Internet age; harmonizing

the rules that apply to different technologies

such as telephones and e-mail; promoting

public-private partnership; and preserving

fundamental values such as protecting public

safety, privacy and civil liberties.

A key element of the Administrationís approach

to Internet security is the importance of private

sector leadership. Following the denial of service

attacks in February, President Clinton called

together leaders of Internet and e-commerce

companies, civil liberties organizations, and

security experts to take actions to strengthen

Internet and computer network security

(http://www.whitehouse.gov/WH/New/html/

20000215.html). This White House Cyber

Security Summit emphasized the need for the

private sector, which owns and operates most

of the computers that Americans rely upon, to

take responsibility for leading in computer and

network security.

Prior to the Summit, in January of 2000,

President Clinton issued the National Plan for

Information Systems Protection, the first ever

attempt by a national government to design a

strategy for protecting its computer networks

from deliberate attacks (http://www.ciao.gov/

National_Plan/national_plan%20_final.pdf).

The current plan focuses on federal efforts to

protect the nationís critical information infrastructures. Later versions will focus on the work

of the infrastructure owners and operators, as

well as the broader business community.

For the National Plan to succeed, government

and the private sector must work together.

The Administrationís Partnership for Critical

Infrastructure Security is such an effort (http://

www.ciao.gov/partnership/faq.htm). Former

Secretary of Commerce William Daley opened

the first partnership meeting in December of

1999 and a second meeting was held in

February of 2000 with over 220 senior members

of more than 120 partnership companies. The

partnership sponsored a plenary conference in

July of 2000 to continue the effort and to evaluate

the progress that has been made to date.

The Administration has long understood the

importance in working in partnership with the

private sector. In October 1997, President

Clintonís Commission on Critical Infrastructure

Protection produced a report entitled Critical

Foundations: Protecting Americaís Infrastructures

(http://www.ciao.gov/PCCIP/PCCIP_index.htm).

Among the reportís conclusions were that

infrastructure protection is crucial to our

national security and economic power; that

vulnerabilities are increasing steadily, and

that security will depend on new forms of

cooperation with the private sector, which owns

and operates much of the infrastructure.

These were among the recommendations on

which the Administration based Presidential

Decision Directive 63 (PDD-63) issued in May

1998. PDD-63 requires that the Executive

Branch assess the nationís cyber vulnerabilities

and emphasized protection of government

assets from attacks as well as remedies so as

to become a model for information security.41

PDD-63 also recommended that industry form

partnerships with government to better protect
3rd Annual Report U.S. Government Working Group on Electronic Commerce

44

its information infrastructures. A primary goal

was the creation of private sector information

sharing and analysis centers (ISACS) to identify

systems threats, incidents, and vulnerabilities,

and to the extent possible, provide ISAC

members with preemptive capabilities.

For example, the Department of the Treasury

worked with banking and finance industry

leaders to establish the Financial Services

Information Sharing and Analysis Center

(http://www.fsisac.com). The center opened in

October 1999, and its membership now includes

forty organizations, including many of the nationís

largest banks, security firms, investment

companies and insurance companies. The

center has gained recognition for protecting

its members from the distributed denial of

service attacks and the ìI love youî virus

mentioned above.

In addition, the Department of Treasury is now

initiating a study of sector-wide financial system

vulnerabilities in cooperation with the industry

and a private contractor. The Department of

Treasury also is participating in efforts to identify

major cross-sector dependencies and develop

policies and programs to protect financial

institutions from potential difficulties in other

sectors, such as energy or telecommunications.

The U.S. Government also has taken additional

steps to protect the information infrastructure.

For instance, the FBI coordinates the National

Infrastructure Protection Center (NIPC) (http://

www.nipc.gov) This group helps the FBI detect

and respond to cyber attacks on critical

infrastructures, including electronic commerce

sites. NIPC played a critical role in helping to

trace the denial of service attacks that occurred

in February, 2000 against CNN, Yahoo!,

Amazon.com and e-Bay. Late in 1999, the

NIPC had issued warnings in December 1999

about the possibility of such attacks, and even

created and released a tool that victims could

use to detect whether their system had been

infiltrated by an attacker for use against other

systems. The FBI has created the National

Infrastructure Protection and Computer

Intrusion (NIPCI) Program in the 56 FBI field

offices across the country. The FBI currently

has 193 agents nationwide dedicated to

investigating computer intrusion, denial of

service, and virus cases.

Internationally, the U.S. Government is

participating as an observer in the efforts of

the Council of Europe to develop a draft treaty

on cyber-crime. This draft treaty provides for

the adoption of substantive criminal laws on

hacking and other computer crimes, procedural

tools for law enforcement to fight cyber-crime,

and provisions designed to ensure cooperative

law enforcement efforts in the international

context. The U.S. Government intends to

continue working with the Council of Europe to

develop a draft treaty that balances the needs

and interests of law enforcement, privacy

groups and industry. The U.S. Government will

make a decision of whether to sign the treaty

when all the negotiations are complete.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

45

III. Creating A Seamless Global Market

he global nature of the Internet requires Tthat we work in partnership with foreign

governments and the private sector to

promote a seamless marketplace worldwide.

Since the time that President Clinton and Vice

President Gore first articulated our approach

to fostering the growth of e-commerce a

worldwide consensus has begun to emerge.

Countries large and small, developed and

developing have joined with us in recognizing

the importance of private sector leadership,

avoidance of unnecessary regulation, and a

minimalist government role, while protecting

the public interest.

This year, the Administration successfully fought

to include these principles in the Charter on

Global Information Society agreed to at the G-8

Economic Summit. The Charter is significant

because it is the first ever multilateral statement

on information society issues and because it

recognized that the policies that foster e-commerce

also will promote the growth of other social and

economic benefits. In addition, we also have

continued to pursue our work bilaterally, and

this year have added Columbia, the Philippines

and Jordan to our list of joint statements on ecommerce. To date, we have reached

agreement on these e-commerce principles

with 12 countries, plus the European Union.

Milestones in Electronic Commerce Policy Making

December, 1995 President Clinton announces creation of Electronic Commerce

Working Group

December, 1996 First draft of electronic commerce strategy posted on the Internet for

public comment; the first use of the Internet to help shape White

House policy

December, 1996 WIPO agreement protecting copyrights online

July, 1997 President Clinton issues A Framework for Global Electronic Commerce

and the Presidential Directive on Electronic Commerce

July, 1997 Global Information Networks Ministerial Conference in Bonn issues

declaration on electronic commerce

October, 1997 U.S./Netherlands sign Joint Statement on the Development of the

Internet and Electronic Commerce

November, 1997 TABD issues Communique at Rome Meeting regarding electronic

commerce

November, 1997 The APEC Economic Leaders issue declaration on electronic

commerce

December, 1997 The U.S./EU Joint Statement on Electronic Commerce is issued

March, 1998 FTAA issues Ministerial declaration on electronic commerce
3rd Annual Report U.S. Government Working Group on Electronic Commerce

46

A. Trade and

Financial Environment

1. Increasing Market Access

Increasing access to global telecommunications

and information technology markets is central

to the continued growth of electronic commerce.

The United States is ensuring that new World

Trade Organization (WTO) members, through

commitments on market access, national

treatment, and regulatory safeguards, maintain

open telecommunications markets that permit

electronic commerce to flourish. Applicants

such as China have made commitments that

will substantially bolster investment opportunities

abroad, further extending the spread of competitive telecommunications markets. The latest

countries to join the WTO, such as Estonia, Jordan,

the Kyrgyz Republic, and Latvia, all have made

substantive, broad-based commitments.

With the launch of a new round of talks aimed

at liberalizing telecommunications services,

the United States will work to ensure that WTO

members that have not yet taken telecommunications commitments do so, and those that

maintain market access limitations or do not

fully adhere to regulatory principles improve

their commitments. To date, 79 countries have

signed on to the WTO Agreement on Basic

Telecommunications and 71 have agreed to

adopt the pro-competitive regulatory principles

Milestones in Electronic Commerce Policy Making (Continued)

April, 1998 U.S./Ireland sign Joint Communique on Electronic Commerce using

digital signatures

May, 1998 WTO issues Declaration on Global Electronic Commerce

May, 1998 U.S./Japan sign Joint Statement on Electronic Commerce

June, 1998 U.S./France issue French-American Background Paper on the

Challenges of the Information Society and the Digital Economy

October, 1998 The OECD issues Ministerial declarations on authentication and

on taxation

November, 1998 U.S./Korea sign Joint Statement on Electronic Commerce

November, 1998 U.S./Australia sign Joint Statement on Electronic Commerce

January, 1999 U.S./U.K. sign Joint Statement on Electronic Commerce

September, 1999 GBDe issues electronic commerce recommendations at

Inaugural Conference

October, 1999 U.S./Egypt sign Joint Statement Concerning Electronic Commerce

November, 1999 FTAA issues Report with Recommendations to Ministers on how to

increase and broaden the benefits of electronic commerce

December, 1999 The OECD issues Recommendation Concerning Guidelines for

Consumer Protection in the Context of Electronic Commerce

February, 2000 U.S./Chile sign Joint Statement on Electronic Commerce

May, 2000 U.S./Columbia sign Joint Statement on Electronic Commerce

May, 2000 The U.S./EU issue Summit Statement on Data Privacy

June, 2000 U.S./Jordan sign Joint Statement on Electronic Commerce

July, 2000 U.S/The Philippines sign Joint Statement on Electronic Commerce

July, 2000 G-8 issues Okinawa Charter on Global Information Society
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

47

contained in the reference paper. Worth $650

billion in 1997, the global telecommunications

market is now rapidly approaching one trillion

dollars in annual sales. Before the agreement

came into force in February, 1998, only 17 percent

of the worldís top 20 global markets were open

to U.S. firms; now, measured by annual sales,

U.S. companies have gained access to over

95 percent of global telecommunications

markets.42

The range of services and technologies covered

by the WTO Agreement on Basic Telecommunications extends from submarine cables to

satellites, from wide-band networks to cellular

phones, from business intranets to fixed

wireless for rural and underserved regions.

The agreement has three parts: market access,

investment and pro-competitive regulatory

principles. With respect to market access, the

agreement provides U.S. companies market

access for local, long-distance and international service through any means of network

technology, either on a facilities basis or

through resale of existing network capacity.

On investment, the agreement also ensures

that U.S. companies can acquire, establish or

hold a significant stake in telecom companies

around the world. In addition, most countries

adopted pro-competitive regulatory principles.

Based in large part on these commitments,

U.S. firms hold substantial investments in

operators in over three dozen countries;

operate the most extensive pan-European fiber

optic networks; are global leaders in deploying

technologies such as cable telephony and

internet telephony; are the largest investors in

almost every international submarine cable

consortium and global satellite system; and

lead in moving globally into value-added and

Internet services.

In December 2000, the United States outlined

its goals for integrating telecommunications

and e-commerce related services into the

ongoing WTO service negotiations. On the

premise that WTO Members seeking to benefit

from the growth opportunities of a networked

global economy will need to attract extensive

private investment to build an infrastructure for

e-commerce, the United States articulated market

access commitments that would encourage such

investment, including market access commitments in basic telecommunications, valueadded telecommunications services, distribution

services, computer services, and express

delivery services.

The importance to the growth of the Internet

and e-commerce of a competitive basic

telecommunications market is now appreciated

by most of our trading partners and thus

prospects for further liberalization are good.

In fact, the need for countries to compete for

foreign investment has provided an incentive

for countries such as Korea, Singapore, and

India to unilaterally liberalize, further improving

the global investment environment. The

benefits these countries seek are amply

demonstrated by the success of liberalized

markets; in Europe, for example, prices for

bandwidth are expected to decline by 50

percent a year for the next several years.43

These declines are stimulated by the enormous

capacity increases competitive markets have

stimulated; on the Atlantic submarine route

alone, capacity is expected to increase 200-

fold by 2001 compared with 1997, and similar

expansion is expected on trans-pacific routes.

USTR reviews annually the operation and

effectiveness of each trade agreement

regarding telecommunications products or

services. A major focus of these reviews is

countriesí compliance with their WTO

commitments. These reviews, and bilateral

discussions under Section 1377 of the

Omnibus Trade and Competitiveness Act of

1988 which have accompanied them, have

had a significant impact on addressing market

access complaints in countries such as Japan,

the United Kingdom, Israel, Germany, South

Africa, Peru, and Mexico:

 The United States successfully completed a

bilateral agreement with Japan, which has

improved substantially U.S. firmsí access to

Japanís $130 billion telecommunications

market. The agreement includes interconnection rate cuts of up to 50 percent and a

commitment to broad-based unbundling of

the network, a key step in stimulating highspeed Internet access service.

 Germany also took positive steps to address

the persistent problem of Deutsche Telekomís

backlog in processing interconnection

requests and is expected to take action this
3rd Annual Report U.S. Government Working Group on Electronic Commerce

48

year to reduce excessive licensing fees,

which the European Commission has

recognized as an impediment to entry.

 In South Africa, the monopoly provider agreed

to restore access to its network for competing

suppliers of value-added services.

 In Peru, the regulator introduced sharply

lower interconnection rates.

With Mexico, the second largest market for

international services from the United States,

bilateral discussions failed to resolve longstanding U.S. complaints. Consequently, the

United States initiated WTO dispute settlement

procedures, which commenced with bilateral

consultations. The U.S. seeks resolution of

three related issues: the lack of effective

disciplines over the former monopoly Telmex,

which is able to use its dominant position in

the market to thwart competition, including in

Internet services; the failure to ensure timely,

cost-oriented interconnection that would permit

competing carriers to connect to Telmex

customers to provide local, long-distance,

and international service; and finally, the failure

to permit alternatives to an outmoded system

of charging U.S. carriers above-cost rates for

completing international calls into Mexico.

No decision has yet been taken on constituting

a WTO panel to resolve the issue. Meanwhile,

Mexico has taken positive steps towards

resolving issues relating to interconnection

rates and competitive safeguards.

2. Promoting Duty Free

Cyberspace

In May of 1998, the United States won agreement at the WTO to establish a moratorium on

customs duties on electronic transmissions

and a work program to address e-commerce

issues in the WTO. Since then, the United States

has been working with the 137 WTO members

to formally extend the May 1998 electronic

commerce declaration, which includes a

moratorium on customs duties on electronic

transmissions and an extension of the work

program. The General Council decided on

July 17 of 2000 to continue a work program in

various WTO bodies.

Extension of the moratorium embodies a key

policy objective the United States has been

advocating globally ñ namely that governments

should refrain from imposing unnecessary

restrictions on electronic commerce that can

inhibit its growth. The benefits of such a

commitment to U.S. business and consumers

are enormous, given the rapid growth in both

international data flows transmitted electronically

and the value of the content embedded in

that data. An emerging consensus on the

moratorium reflects a recognition that imposing

customs duties on electronic transmissions

would be an inefficient way to raise revenue

and that the burden of instituting and complying

with such a mechanism would outweigh any

potential benefits and could discourage

investment in electronic commerce.

In addition, the United States also has worked

successfully outside the WTO to enshrine

support for the moratorium. The United States

has negotiated statements with twelve

countries, Australia, Chile, Colombia, Egypt,

Japan, Jordan, the Philippines, all of which

have memorialized the goal of maintaining the

current practice of not imposing customs

duties on electronic transmissions. The United

States gained international support for this

position at both the September 1999 APEC

Ministerial Meeting in Darwin, Australia, the July

2000 G-8 Summit meeting in Okinawa, Japan.

3. Protecting Against

Discriminatory Taxes in

the Global Environment

The President directed the Department of

Treasury and other agencies to work to ensure

that no new taxes are imposed in the United

States or around the world that discriminate

against Internet commerce, and that existing

taxes wherever they are should be consistently

applied.

This year, senior representatives of the Department of Treasury, the Department of Commerce

and USTR participated in the Congressional

Advisory Commission on Electronic Commerce

(ACEC). The Internet Tax Freedom Act, which

President Clinton signed into law on October

21, 1998, established this Commission.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

49

Unfortunately, the Commission was unable to

reach the Congressionally mandated

consensus on the significant issues

surrounding U.S. state and local taxation of

electronic commerce. There was, however,

agreement within the Commission on some

important issues. For example, most, if not all,

Commissioners agreed with the U.S. Government that there should be no taxes on Internet

access and that the state governments should

simplify their complicated sales tax and

telecommunications tax systems. There also

was consensus with respect to the handling

of international tax issues and tariff issues.

The Administration announced in May 2000

that it would support a two-year extension of

the moratorium on multiple and discriminatory

taxation if further time were necessary for

discussion and simplification efforts to proceed.

After the conclusion of the ACEC, twenty-six

States joined together to form the ìStreamlined

Sales Tax Projectî, to develop measures to

design, test, and implement a system that

radically simplifies sales and use taxes. The

project, which now involves over 30 states, has

produced draft model legislation that would

implement required legal simplifications and

has begun a pilot program to develop and test

technological solutions to administrative

problems. Both the draft legislation and the

pilot program will be available for private sector

comment and evaluation. The projectís

methods and goals are in accord with the

Administrationís statement submitted to the

ACEC, which urged the States to simplify their

sales and use tax system while engaging in a

dialogue with consumers.

Around the world, the Department of Treasury

continues to work within the OECD to develop

an international consensus regarding

implementation of the OECDís 1998 taxation

framework conditions, which the Department

of Treasury actively participated in formulating.

The OECD conditions (neutrality, efficiency,

certainty and simplicity, effectiveness and

fairness, and flexibility) stem from the principles

President Clinton set forward. Further, the

Department of Treasury and the OECD are

continuing outreach efforts to non-OECDmember countries, to keep non-OECD member

countries informed of the developments within

the OECD, with the goal of achieving a truly

global consensus regarding the tax treatment

of electronic commerce. The Department of

Treasury and the OECD have involved the

private sector in forming a global consensus

to ensure that any tax rules appropriately take

into account the technology and new business

models. One particularly sticky issue abroad

is how the tax structure should deal with

products, such as software, that are delivered

online, rather than in a more tangible form such

as a shrink-wrapped box purchased online or in

a store. The Administration is working with the

European Union (EU) to ensure that any such

taxation by EU-member states is consistent

with the OECD-agreed principle of neutrality.

On June 7, 2000, the European Commission

proposed new Value-Added Tax (VAT) rules

under which digitally delivered goods would not

be subject to EU VAT when exported out of the

EU and digitally delivered goods purchased by

EU consumers would be subject to EU VAT as

services, whether purchased from EU vendors

or others. In addition, the proposal imposes

certain compliance requirements on non-EU

sellers of digitally delivered goods. The proposal

requires that non-EU sellers of digitized goods,

such as U.S. businesses, to EU consumers

register in one EU country, collect VAT on all EU

sales under that countryís rules and rates, and

report and remit its VAT collections to that

countryís tax authorities.

The Administration has made clear that it has

serious concerns with the Commission proposal.

The proposal appears to violate the principle

of neutrality since the value-added tax on

electronically delivered products may be higher

than value added taxes on their physically

delivered functional equivalent. For example, it

appears that, in practice, the value-added taxes

applied to electronically delivered books and

newspapers may be higher than those applied

to sales of the same physical books and

newspapers. The Administration will continue

to work within the OECD and with EU-member

states to ensure that its concerns are

addressed (http://www.treas.gov/press/

releases/ps808.htm).
3rd Annual Report U.S. Government Working Group on Electronic Commerce

50

B. Legal and Regulatory

Environment

Creating a global seamless marketplace involves

both creating a legal environment that recognizes

and facilitates digital transactions across

borders and eliminating outdated regulations

that can impede the growth of e-commerce,

while protecting the public interest.

1. Facilitating

E-Commerce Through

Electronic Signatures

President Clinton directed the Secretary of

Commerce to work toward the development

of a uniform

commercial legal

framework that

recognizes, facilitates,

and enforces electronic transactions

both domestically

and internationally. An

essential component

of that uniform legal

framework was

established when

President Clinton

signed the Electronic

Signatures in

Global and National

Commerce Act (E-SIGN) into law on June 30,

2000 (http://www.ecommerce.gov/ecomnews/

ElectronicSignatures_s761.pdf). E-SIGN

represents a major policy achievement and

promotes electronic commerce by ensuring

the legal validity of electronic records and

transactions. In particular, it contains provisions

that ensure the legal validity of electronic

signatures and contracts, permit the electronic

delivery of legally-required notices and

disclosures, and allow for the satisfaction of

record retention requirements through

electronic means.

E-SIGN is technology neutral, and allows

contracting parties to choose the technology

for authenticating their transactions without

government intervention. It also ensures that

online consumers will have legal protections

equivalent to those in the off-line world, and

does not diminish the protections offered by

any federal or state law relating to the rights of

consumers. Consumers retain the choice to

do business and receive records on paper or

online. Also, before notices and disclosures

may be sent electronically, consumers must

give their consent and the business must verify

that the consumer will be able to access electronically the information that will be provided.

In addition, E-SIGN does not significantly

displace the traditional role of state law in the

area of commercial transactions. More

specifically, it applies to all transactions in or

affecting interstate or foreign commerce, but a

state may modify or supercede the provisions

of E-SIGN with regard to its own laws if it

adopts or enacts the Uniform Electronic

Transactions Act (UETA), or another law that is

technology-neutral and consistent with Titles I

and II of E-SIGN. UETA is a uniform state law

promulgated by the National Conference of

Commissioners on Uniform State Laws

(NCCUSL) in July 1999. To date, twenty-two

(22) states have adopted or enacted UETA,

and many others are considering it.

Both E-SIGN and UETA are consistent with the

basic principles identified in the Framework

for revising commercial law so that parties

may enter into legally enforceable electronic

transactions: parties generally should be free

to order the contractual relationship between

themselves as they see fit; rules should be

technology-neutral (i.e. the rules should neither

require nor assume a particular technology)

and forward looking (i.e., the rules should not

hinder the use or development of technology

in the future); existing rules should be modified

and new rules should be adopted only as

necessary or substantially desirable to support

the use of electronic technologies; and the

process should involve the high-tech

commercial sector as well as businesses that

have not yet moved online.

The United States continues to promote the

development and adoption of commercial

legal frameworks that recognize and enforce

electronic transactions on the basis of four

key principles: (1) eliminate paper-based legal

barriers to electronic transactions by implementing the relevant provisions of a 1996

Model Law on Electronic Commerce issued by

ìThe Electronic

Signatures in

Global and National

Commerce Act

will open up new

frontiers of economic

opportunity while

protecting the

rights of American

consumers.î

President Clinton

June 30, 2000
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

51

the United Nations Commission on International Trade Law (UNCITRAL); (2) reaffirm

the rights of parties to determine for themselves

the appropriate technological means of authenticating their transactions; (3) ensure any party

the opportunity to prove in court that a

particular authentication technique is sufficient

to create a legally binding agreement; and

(4) treat technologies and providers of

authentication services from other countries in

a non-discriminatory manner. This approach

continues to receive significant support from

the private sector.

The U.S. Government was successful in

including these principles in an important

Declaration on Authentication adopted by the

Ministers of the OECD in 1998. This year, the

United States has been working to ensure the

incorporation of these principles into the laws

of OECD Member Countries, including the

European Union Member States, and also has

been working with the OECD to produce a

comprehensive report to OECD Ministers on

these issues.

The United States also is actively involved in

promoting the adoption of these principles in

the Western Hemisphere. This year, we have

worked with the Joint Committee of Experts on

Electronic Commerce, a group within the Free

Trade Area of the Americas framework, to

provide recommendations to Ministers to help

expand the benefits of e-commerce in the

region. We will continue to participate in this

Committee in order to help increase and

broaden the benefits of electronic commerce

throughout the Americas.

In addition, the U.S. Government continues to

actively promote awareness and adoption of

these principles in bilateral and multilateral

discussions with our trading partners around

the world. In the past year, we also have been

successful in having these principles endorsed

in Joint Statements with the Philippines,

Colombia, Chile, and Jordan, adding to the

list of Joint Statements with numerous other

important trading partners. We will continue

to promote the adoption of these important

market-based principles as a means of

establishing a global legal framework that

recognizes, facilitates, and enforces electronic

transactions worldwide.

2. Reducing Barriers to

E-Commerce

The Administration has worked to identify and

eliminate barriers to the growth of e-commerce

in both the domestic

and global markets.

Potential barriers

range from outdated

regulations to burdensome customs

procedures and

non-competitive

transportation and

delivery services

markets overseas.

Domestic: The Department of Treasury and

its regulatory bureaus

are working to identify provisions of law and

agency regulations that may impose a barrier

to electronic transactions or otherwise impede

the conduct of commerce online, and to

recommend how such laws or regulations may

be revised to allow electronic commerce to

proceed while maintaining protection of the

public interest.

Electronic commerce and banking over the

Internet has attracted increasing attention

over the past several years from consumers

and financial services industry participants.

As a group, banks offering online transactions

account for almost 90 percent of national

banking system assets. While industry

estimates indicate about 7 percent of

households engage in Internet banking,

forecasts look for a 3- to 4-fold increase in

consumer usage of Internet banking in the

next several years.

Beginning in 1995, the Office of the Comptroller

of the Currency (OCC) undertook a comprehensive review of its interpretations, supervisory

guidance and regulations to search for areas in

which those rules might serve as an impediment

to the conduct of electronic activities by

national banks. The OCC also has engaged in

a process to update the way in which it reviews

applications for new activities and business

practices, with a view to encouraging safe and

sound bank involvement in both open and

ìE-commerce creates

enormous potential

for growth anywhere,

and it will continue

to do so, if we can

resist the temptation

to put up barriers to

this important part of

our new economy.î

President Clinton

January 29, 2000
3rd Annual Report U.S. Government Working Group on Electronic Commerce

52

closed computer system environments. The

Office of Thrift Supervision (OTS) also has been

engaged in activities similar to those outlined

for the OCC below. OTS rules effective at the

beginning of 1999 streamlined and updated its

regulations related to electronic operations.

In February 2000, the OCC formally requested

public comment about laws and regulations

that impose barriers to safe and sound bank

participation in electronic activities. This

information is helping the OCC to determine

which regulations and interpretive positions

should be revised to facilitate and support

emerging lines of business and the use of

technology in banking, and eliminate needless

barriers. OCC also has issued safety and

soundness risk management guidance to

financial institutions on a variety of e-commerce

and e-finance activities including Internet

banking, security, privacy, and technology

risk management.

Through extensive legal and supervisory

analysis, the OCC has determined that banks

may legally provide a variety of Internet-related

services to their retail and business customers.

Various interpretative rulings and corporate

applications have enabled national banks to,

for example: operate Internet-only banks,

operate virtual malls, provide digital certification

to support electronic business, provide

commercial and governmental website hosting

services, provide an electronic marketplace

for non-financial products over the Internet,

provide electronic bill presentment and

payment (EBPP), operate an electronic toll

collection system on behalf of a public

authority, provide for merchant processing of

credit cards via the Internet, invest in entities

that provide stored value for electronic

transactions, and provide full Internet access

service. By removing regulatory uncertainty

surrounding these new and innovative activities

of banking organizations, these rulings have

thus encouraged e-commerce in the banking

industry, a very important sector of the U.S.

economy.

In order to evaluate proposals for new Internet

bank charters more effectively and efficiently,

the OCCís licensing department is developing

an Internet Banking Chartering Booklet for the

Comptrollerís Corporate Manual. The booklet

will provide formal guidance for applicants

and licensing staff covering the applications,

policies and procedures involved in approving

de novo charters for Internet banks. This action

should remove a significant impediment to the

growth of electronic financial services by clarifying

and streamlining the procedures under which

they will be evaluated and approved.The OTS,

in a similar vein, this year began providing

thrifts with sophisticated new software to

facilitate their electronic filing of all regulatory

reports they make to their supervisory agency.

International: The State Department, working

closely with other U.S. agencies, the U.S.

private sector and foreign governments,

launched an initiative in 2000 to address as

a package several significant barriers in the

international e-commerce value chain. With

strong private sector cooperation, the State

Department has identified costly telecommunications services, non-competitive transportation

and delivery services markets, cumbersome

customs procedures, weak or non-existent

electronic payment systems infrastructures,

and onerous merchandising restrictions as key

obstacles to electronic commerce. These

barriers are both discouraging U.S. exporters

and hindering other countries from participating

fully in the global information economy. In fact,

there is evidence that the majority of U.S. etailers are so discouraged by these barriers that

they are refusing to ship products outside of

the United States. Many foreign companies

also have found that the same barriers prevent

them from participating fully in cross-border

supply chains and instituting just-in-time

logistics practices that can reduce costly

warehousing and increase inventory velocity.

A cross-sectoral approach to reform can help

create digital opportunities for developed and

developing countries and draw them into the

global new economy.

As a result, numerous foreign governments

have requested U.S. Government and private

sector advice and assistance. In response, the

State Department, in coordination with other

relevant agencies, is encouraging governments

to undertake ìcross-sectoralî reforms that

address the identified sectors together and

produce synergistic benefits for a countryís

e-commerce environment. The cross-sectoral

concept was incorporated into the G-8
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

53

Leadersí Okinawa Charter on Global Information

Society, a joint communiquÈ with Jordan, and

other bilateral documents. Multilateral institutions

and organizations, including the Asia-Pacific

Economic Cooperation and the Trans-Atlantic

Business Dialogue, have discussed crosssectoral issues and are working to address them.

3. Intellectual

Property Protection

Protection of intellectual property is another key

element of allowing electronic commerce to

flourish. Without it, businesses will be reluctant

to make the investment in online products and

services. Sellers must know that their intellectual property will not be stolen and buyers

must have confidence that they are obtaining

authentic products.

Copyright: President Clinton directed the

Department of Commerce to work to achieve

ratification of the World Intellectual Property

Organization (WIPO) Copyright Treaty and the

WIPO Performances and Phonograms Treaty.

The two WIPO treaties were negotiated by

the Administration and adopted at the WIPO

Diplomatic Conference in December 1996. The

treaties will ensure that international copyright

rules keep pace with technological change by

setting new international standards for protection

of copyrighted digital content, including computer

programs, movies, musical performances, and

sound recordings. They also afford important

protection against piracy for U.S. rights holders

in the areas of music, film, computer, books,

software, and other information and entertainment products. Given the central importance

of intellectual property in the digital economy,

bringing these treaties into force will contribute

significantly to economic vitality.

The United States ratified the treaties following

the Senateís advice and consent, after the

enactment of the Digital Millennium Copyright

Act, which modified U.S. copyright law to

conform to the new WIPO treaties. Former

Secretary of Commerce William M. Daley

deposited the U.S. instrument of ratification

with WIPO on September 14, 1999. The law

also included provisions that limit the liability

of telecommunications companies and Internet

service providers. The legislation will promote

electronic commerce over the Internet and other

networking environments by ensuring accountability and enforcement of copyright law without

imposing excessive or unforeseeable liability

for intellectual property infringement.

The United Statesí implementation and ratification

of the WIPO treaties comes at a time when

countries are examining how best to update

their copyright laws to meet the challenges of

the digital age. The treaties will come into force

when 30 countries ratify them. As of November,

2000, 21 countries, representing all geographical

regions of the world, have ratified the WIPO

Copyright treaty and 19 have ratified the

Performances and Phonograms treaty. The

European Union is working to issue a directive

for its member countries to implement the

Treaties which is expected to be finalized in

mid 2001. The U.S. Government is working to

encourage others to ratify and implement the

Treaties, taking an active role through trade

negotiations, speeches and participation in

conferences on intellectual property and WIPO

meetings or programs promoting intellectual

property protection.

In these settings, U.S. representatives have

explained the features of the DMCA and its

approach to protection of anti-circumvention

devices and systems, copyright management

information, and limitations on liability of service

providers. For example, for the past two years,

the U.S. Patent and Trademark Office (USPTO)

has co-sponsored with WIPO a major conference

for African states on the protection of intellectual

property in the Digital Age (in Kenya in 1999

and in Senegal in 2000). At each conference,

USPTO officials have made presentations on

the two Treaties and emphasized the

importance of African states ratifying the

Treaties and adapting their laws to address

e-commerce issues such as limitations on

liability for service providers. During the past

18 months, the Department of Commerce ës

Commercial Law Development Division (CLDD)

has held seminars on protection and development of intellectual property in Lagos, Nigeria;

Gaborone, Botswana; and Windhoek, Namibia.

In all of these meetings, USPTO officials as

well as participants from USTR and the private

sector officials have emphasized the importance

of states ratifying the Treaties. In fact, the CLDD

includes promotion of the WCT and WPPT in all

its intellectual property rights programs.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

54

Explanation, discussion, and promotion of the

Treaties and the approach to implementation

in the DMCA is also a major element of the

USPTOís Visiting Scholars Program and the

Copyright Officeís annual International Copyright Institute. Each year, these Washingtonbased programs attract dozens of government

officials from a variety of developing and

emerging economies. In 2000, the USPTO

expanded its Visiting Scholars program to

include a new spring session in addition to the

traditional two week session each fall; this has

doubled the number of foreign government

officials exposed to the new copyright Treaties

through this program.

The U.S. Government also is promoting the

Treaties through activities and discussions in

the WTO, the Free Trade Area of the Americas

(FTAA), and in bilateral meetings and negotiations with countries ranging from China to

Jordan. In the WTO, we also have encouraged

countries to ratify the Treaties through TRIPs

Council discussions related to electronic

commerce. In connection with other work on

electronic commerce in the WTO, we also

have held discussions with other countries

concerning appropriate limitations on liability

of Internet service providers. In the FTAAís

Negotiating Group on Intellectual Property and

the Government and Private Sector Committee

of Experts on Electronic Commerce, we have

proposed that members consider ratification

and implementation of the WIPO Treaties by

countries in the Hemisphere. Discussions in

the FTAA Committee of Experts on Electronic

Commerce also have included the matter of the

establishment of appropriate limitations on

liability for service providers. In bilateral

negotiations, for example, the U.S. Government

has included accession and implementation of

these treaties in negotiations for a Free Trade

Agreement with Jordan. The importance of

adherence to the two treaties also was discussed in briefings conducted by Department

of Commerce team for Chinese officials in

Beijing and Shanghai in the fall.

In addition, the U.S. Government is encouraging

other countries to join the Treaties by using

the Special 301 review process conducted by

USTR. This objective is consistent with the

mandate from Congress to seek adequate and

effective levels of protection for intellectual

property by our trading partners through promotion of the highest international standards.

The standards in the WIPO Treaties meet these

criteria; therefore, the Administration continues

to encourage countries to ratify and implement

the WIPO treaties through the Special 301 process.

To further promote the Treaties, the State

Department sent cables to the U.S. embassies

explaining the Treaties and their benefits and

requesting that they consult with their host

governments and encourage them to join.

Patents: Protecting patents are another vitally

important part to safeguarding intellectual

property. The USPTO embarked on an

ambitious program to make sure that its

knowledge and understanding of the

computer industry is on the cutting edge.

The USPTO continues to dedicate substantial

resources to assembling a more complete and

comprehensive collection of computer-related

publications, as well as providing patent

examiners with better access to ìprior artî

literature. The USPTO recently established an

ìElectronic Information Centerî that provides

examiners in computer-related technologies

with access to over 300 databases that contain

business and financial information. In addition,

the USPTO is expanding its efforts to classify

patent and nonpatent literature to maximize the

ability of examiners to conduct thorough patent

searches. Moreover, the USPTO is working

continually to upgrade the skills and education

of its examiners.

In order to address the challenges presented

by business method patent applications, the

USPTO established a new action plan. This is

a continuous quality improvement plan that

includes the following: partnering with affected

industries; enhancing technical training of

examiners; establishing mandatory search

requirements of non-patent literature collections;

revising examination guidelines; improving

quality oversight through a ìsecond levelî

review of applications by senior examiners;

and conducting roundtable conferences with

all affected stakeholders. The foundations of

this plan are based upon proven approaches

for enhancing the quality of the examining

process. This will establish a solid framework
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

55

that provides the flexibility necessary to cope

with the challenges presented by this emerging

area of technology. Already, many of these

steps have been or are being implemented; for

example, by October 2000, hundreds of

business method patent applications have

gone through the second level review process,

resulting in over two dozen being subject to

further examination.

In addition to quality initiatives, the USPTO

has taken significant strides to ensure that the

benefits of the electronic age flow to patent

applicants and the public at large. The USPTO

continues to improve electronic access to

patent data. The USPTO website allows the

public to access, free of charge, the full text

of patents issued since 1976. In addition, the

USPTO plans to introduce electronic filing of

patent applicants.

In the international arena, the USPTO continues

to engage other Patent Offices throughout the world

in discussions on the protection of emerging

technologies, particularly computer-related

inventions, with an aim towards establishing a

uniform playing field that encourages both

innovation and investment worldwide.

C. Understanding the

Digital Economy

The Administration recognizes the importance

of understanding the changes in our economy

being brought about by the new digital economy.

This information is key to promoting the continued

growth of the Internet and e-commerce.

Responding to a Presidential directive, several

agencies, including the Department of Commerce,

are working to analyze those changes.

In the last year, substantial progress has been

made in advancing our understanding of the

Digital Economy, further strengthening our

conviction that we have entered into a ìnew

economyî. The U.S. economy continues to

enjoy an extraordinary period of prosperity,

marked by low unemployment, low inflation,

and strong economic growth. A remarkable

feature in this expansion has been the

acceleration of labor productivity since 1995

to twice the rate of the 1973-1995 period

(http://www.esa.doc.gov/de2000.pdf).44

The Council of Economic Advisorsí (CEA) 2000

Annual Economic Report of the President

explores the sources of this remarkable rise

in labor productivity growth over the last four

years and its link to information technology.

The report explores how the Internet and

information technology (IT), more generally,

are changing business behavior by improving

management of information flows, facilitating

online transactions and impacting firm and

market structure.

In June 2000, the Department of Commerce

released its Digital Economy 2000 report. This

report, the third in a series of annual reports on

the digital economy, examines the evolution of

electronic commerce and the role of IT-producing

industries in driving growth, reducing inflation,

increasing productivity, and increasing jobs.

The report contains two new sections this year,

one exploring international trade of IT goods

and services and one that considers evidence

for the conclusion that we have entered a

new economic era. Taken as a whole, the

report supports the conclusion that we have

indeed entered into a new economic era, where

individuals, businesses, and other organizations

are imaginatively employing IT and the Internet

to add to quality of life and improve business

processes.

The Department of Commerce, and in particular,

its two statistical agencies, the Bureau of the

Census and the Bureau of Economic Analysis

(BEA), is taking a leadership role in measuring

the digital economy. Key activities over the past

six months have included the development of

measurement definitions and concepts, the

introduction of the first official measures of

electronic commerce, and the development of

initiatives to better reflect the digital economy in

composite measures of economic activity.

Given budget constraints, Censusí current

e-commerce measurement activities have been

necessarily limited, for the most part, to adding

questions to selected surveys. These initial

collections are very significant, however,

and will provide baseline measures of some

e-commerce activities and help shape future
3rd Annual Report U.S. Government Working Group on Electronic Commerce

56

and more comprehensive

measures of the digital

economy. Specific

measurement activities

include:

 Quarterly estimates

of e-retail activity

published;

 E-commerce questions

added to the annual

surveys of retail trade,

wholesale trade,

accommodations and

food services, and

the service industries;

and

 Information requested

from manufacturers

on online sales and

purchases and current and future plans to

use selected electronic business processes.

To help guide future work, Census recently

issued a discussion paper that develops

principles for identifying information critical to

measuring the size and evaluating the potential

effects of the electronic economy, relates that

information to current data collection programs,

and notes relevant measurement issues (http://

www.census.gov/econ/www/ebusinessC.pdf).

The National Science Foundation (NSF) has

created and posted a pilot informational site to

serve as a reference source for the implications

of information technologies (http://srsweb.nsf.gov/

it_site/it/infotech.htm). The site already includes

searchable bibliographies on the social and

economic implications of IT and a summary

literature review about computer use in the

home. Literature reviews about the influence

of information technologies on additional

aspects of our work and lives (e.g., community,

distance education, learning in K-12, learning in

college, distributed work, and occupations and

earnings) will be released in the future.

The U.S. Department of Commerce co-hosted

a conference that examined how various sectors

of the economy are changing with and because

of e-commerce. Leaders from industry, academia

and government met on September 26 and 27,

2000 to discuss the economic impact of the

Internet and other information technologies on

the United States and the world (http://

osecnt13.osec.doc.gov/public.nsf/docs/

7C7E85CA300FF4B98525695B0066F58A).

ìThe E-Business Transformation: Sector

Developments and Policy Implications,î

explored the changing terms of competition

in the economy, and how policy decisions are

shaping the future of the new economy here

and abroad. It follows up on last yearís

conference, ìUnderstanding the Digital

Economy ó Data, Tools and Research,î which

focused on the state of research on the digital

economy and what is needed to monitor its

future development.

The FTC examined the development of businessto-business (B2B) electronic marketplaces in

a two-day public on June 29-30, 2000. B2B

markets, numbering nearly 2000 presently

and expected to grow in significance, are

connecting businesses in real time, raising

efficiency, and lowering prices within business

to business commerce. Over 600 people

participated in the workshop with a panel of

65 antitrust practitioners, economists, and

legal scholars to discuss the evolving markets,

especially as they involve B2Bs formed and

operated by competitors.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

57

In October, the FTC released a report, ìEntering

the 21st Century: Competition Policy in the World

of B2B Electronic Marketplaces,î addressing

both the benefits and concerns regarding B2B

(http://www.ftc.gov/opa/2000/10/b2breport.htm).

The report examines several features of B2B

marketplaces and their potential for delivering

improved business efficiency and outlines

how the new B2B technology may impact

traditional antitrust questions. The report

notes the potential power of B2B e-commerce

to create significant efficiencies. Examples

of potential benefits may include reducing

transaction costs, generating volume-related

scale economies

through combining

orders from multiple

purchasers, improving

inventory management,

establishing ìreal-timeî

communications and

transactions, improving

speed and ease of global

business, heightening

accuracy and reducing

waste, and facilitating

bidding by a broad

spectrum of potential

suppliers.

The desire to understand and measure the

digital economy is shared globally. The United

States is working with our trading partners, both

individually and in the OECD and other venues,

to harmonize data definition and collection

efforts. In addition, the OECD recently published

its trademark biennial publication the Information

Technology Outlook (http://www.oecd.org). A

variety of other projects are also underway to

better understand the global digital economy,

such as a two-year study of the drivers of economic

growth (The Growth Project), an examination of

the digital divide, and a study of Information

and Communication Technology (ICT) skills

and employment.

Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

59

IV. Facilitating the Growth of the Internet

he economic engine that e-commerce Thas become can only travel as fast and

as far as the tracks we set before it will

carry it, and those tracks are the Internet. The

Administrationís accomplishments in stimulating

the development of the Internet are legion.

From its early work on the National Information

Infrastructure, the Administration has cast itself

as facilitator as the private sector has taken the

role of designing and building this new network.

Progress in three vital areas of Internet development is helping ensure that the Internet will

continue to support thriving e-commerce.

A. Building High Speed

Tracks for High Bit-Rate

Internet Access

As e-commerce grows, the cargo that needs

to travel the Internet grows also. Marketing and

most professional applications require the

transportation of huge data files. The delivery

of new online products, such as movies-ondemand and subscription television, will require

even greater delivery speeds. Websites market

products effectively by incorporating graphics

and high definition images. Products delivered

online, from audio and video entertainment to

computer software, require faster transmission

rates. Browsing a website is becoming so

tedious at voice grade modem access rates

that many users give up before they find

something they want. The answer is broadband

access. Broadband access brings users into

virtual contact with each other and improves

the online experience as no other enhancement

can and will allow e-commerce to realize its full

potential. The Department of Commerce, the

Federal Communications Commission, and

the Department of Agriculture have played

important roles in promoting this access.

1. Competition is

Driving Investment

The Administration has long believed that

fostering competition in all telecommunications

markets is the best way to promote widespread

deployment of broadband services. The Telecommunications Act of 1996 put competition

at the forefront of national telecommunications

policy, and the results have been network

modernization at an unprecedented rate.

Broadband access to the Internet requires

both a high capacity backbone with adequate

access points, and local distribution from those

points of access to the users. Competition is

helping achieve this high-speed telecommunications capability, today called ìbroadband

accessî, on both fronts.

The Internet Backbone: Competition has promoted Internet backbone growth. Investment

in Internet backbone is proceeding at a rapid

pace spurred largely by market forces unleashed

by the breakup of the Bell System and the rapid

increase in demand for data services. Interexchange carriers, cable systems, electric

utilities, and municipalities have all deployed

backbone facilities.

The number of fiber optic route miles deployed

in the United States exceeds 200,000 this year,

an increase of more than 100 percent since

1995.45 Long-haul trunking companies have

invested billions of dollars to boost capacity

and improve their networks. MCI quadrupled

the speed of its Internet backbone in 1996 and

doubled that capacity in 1997.46

Local Broadband Access: Most large and many

mid-sized businesses have long been able to

find and afford broadband Internet access, but
3rd Annual Report U.S. Government Working Group on Electronic Commerce

60

this year has seen huge gains in access

availability to small businesses and

residential users.

Competition has fueled this growth.

Competitive local exchange carriers have

invested more than $30 billion since 1996 to

construct broadband networks.47 Incumbent

local exchange carriers have responded by

increasing their investment in broadband

access facilities. Verizon has announced it will

spend $1 billion annually until 2005 to extend

fiber optic transmission

facilities far deeper into its

distribution network so it

can bring broadband over

digital subscriber line

(DSL) technology.48 SBC

Communications has

initiated ìProject Prontoî,

a three-year, $6 billion

network upgrade that will

make broadband service

available to 80 percent

of its subscribers by

2002.49 The Federal

Communications

Commission estimates

that potentially approximately 80 percent of U.S.

homes and businesses

can be reached over local

exchange carrier facilities using DSL technology

barring other impediments to DSL deployment.

Analysts predict that DSL services will actually

be available to 36 percent

of U.S. homes by yearend 2000, increasing to

65 percent by 2002.50

The Administration has

advocated policies that

ensure that all competitors,

using all technologies,

can enter these markets.

Cable television

companies have invested

$36 billion since 1996 to

upgrade their distribution

facilities, in large part to

enable them to provide

broadband access over

cable modem. Analysts

project that by the end of

this year, cable modem

will be available to over

50 percent of U.S.

households, and that

figure will increase to 80 percent by 2002.51

The Federal Communications Commission

has proceeded with redrafting rules for and

licensing the Multipoint Multichannel

Distribution System and Local Multichannel

Distribution System radio spectra for use in

two-way broadband access systems. Two-way

satellite high bit-rate (500 kilobits per second
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

61

downstream, 150 kilobits per second upstream)

access is a reality now with the recent launch

of the first dedicated, consumer-focused

Internet satellite.52

Competition also can occur over a single wire,

and the Administration has promoted policies

to facilitate this. On the wireline local exchange

carrier side, the Federal Communications

Commission has taken the lead in opening

access markets. In December 1999, the

Federal Communications Commission required

incumbent local exchange carriers, effective

June 2000, to make available to competitors

the high frequency portion of their wires,

enabling competitors to offer DSL services

on an equal footing as the incumbents.53

In August 2000, the Commission began

rulemaking to ensure that competing

broadband service providers will have fair

access to new broadband distribution networks

that many incumbent local exchange carriers

are constructing.54 In October 2000, the

Commission announced new regulations,

which give competing carriers greater

opportunities to provide broadband and other

services in commercial, multi-tenant buildings.55

Finally, the Commission has authorized Verizon

and SBC Communications to provide long

distance services in New York and Texas, which

will test the companiesí claims that allowing

them to market long distance service will

spur deployment of broadband services

and facilities.56

Considerable attention continues to be focused

on the issue of ìopen accessî to broadband

over cable. An open access policy would

require cable operators to make their cable

modem services available to unaffiliated ISPs,

thereby enabling cable subscribers to select

from among multiple ISPs. The courts have

addressed open access, with the Federal

Communications Commission following with a

formal inquiry into the open access issue.57

The open access issue also has arisen in the

governmentís review of the proposed AOL/

Time Warner merger.58 Cable television

providers are beginning to deal with open

access issues. AT&T has commenced or

agreed to begin open access trials in several

communities.59 Time Warner has signed an

agreement with Juno Online Services, although

the terms of the agreement are not yet available.

The Administration continues to maintain the

view it has previously articulated on the issue of

open access:

At the heart of this issue is consumer choice

and competition at all levels of the marketplace. We believe that competition should be

encouraged in all markets and support the

principle that customers should have choice

in both their content and their Internet access

provider. Our Administration has long

recognized the importance of the open

characteristics of the Internet. Anyone with a

laptop computer and a modem can publish

on the Internet, making it much easier for

people to be producers as well as consumers

of information. The Internet allows people to

engage in ìmany-to-manyî communication

as opposed to solely ìone-to-manyî communication. This has created an explosion in

the number of communities that are based

on shared interests as opposed to geography.

Moreover, the decentralized nature of the

Internet accelerates innovation and entrepreneurship. Anyone with a good idea for a

new application can post it on the Internet,

where it can spread like wildfire. We must

maintain what is special, valuable and unique

about the Internet, even as it evolves to

support broadband applications. The

Administration hopes that the continued

promotion of pro-competitive policies and

market forces will achieve these goals.60

The rate of growth in the small business ñ

residential sector is so high it is difficult to

measure. The Federal Communications

Commission estimates that about 1 million

residential customers were receiving broadband services at year-end 1999. That was a

penetration rate of about one percent or three

times the rate of the previous year. An October

2000 FCC Report indicates that as of June

2000 there were approximately 4.3 million high

speed lines connecting homes and small

businesses.61 The Bureau of the Census

August 2000 Current Population Survey

indicates that 4.4 percent62 of U.S. households

have ìhigh-speedî Internet access, a category

composed predominately, though not

exclusively, of broadband access.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

62

2. Where Competition

Does Not Drive

Broadband Access,

Special Attention is Needed

The Commission found in its second Section

706 Report that broadband services are being

deployed in a timely fashion, but it nonetheless

recognized that certain people and groups,

including low-income consumers, those living

in rural areas, minority households, Native

Americans, and persons with disabilities, ìare

particularly vulnerable to not having access to

advanced services.î63 That conclusion is in

accord with the findings of a joint report by the

National Telecommunications and Information

Administration (NTIA) and the Department of

Agricultureís Rural Utilities Service (RUS),

which assessed deployment of advanced

telecommunications services in rural America

and compared that to access in more densely

populated areas.64 The NTIA/RUS study found

that cable modem and DSL are not being

deployed in rural areas as fast as they are in

higher density cities and suburbs.65 Recent

Census data reinforces those findings: In

August 2000, approximately 5 percent of all

urban households had high-speed Internet

access, versus only 2.8 percent of rural homes.66

Ensuring that broadband networks reach all

Americans is an important goal of the

Administration. We have therefore supported a

range of initiatives such as the e-rate program,

instituted in 1997 under the Telecommunications

Act of 1996. As of the fall of 1999, 95 percent of

U.S. public schools, and 63 percent of public

school classrooms, had Internet access. In

addition, 63 percent of public schools had

dedicated connections to the Internet, which, in

most cases, are broadband.67 This year, the

Administration has proposed several new

programs to increase the availability of broadband services to under served areas. These

programs are discussed above in the digital

equality section of this report.

3. Advanced Mobile

Communications/Third

Generation Wireless

Systems

The Administration recognizes that we are on

the verge of a new generation of personal

mobile communications. Third generation

wireless technologies will bring high-speed

Internet access to hand-held devices.68 Higher

speeds and new technologies will lead to new

audio, video, and other applications becoming

available through portable devices, leading

to what many are calling ìmobile-commerceî

(m-commerce) that people will use in ways

that are unimaginable today. Moreover, an

international effort is underway to make it

possible for the next generation of wireless

phones to work anywhere in the world.

The U.S. Government has always played a

crucial role in the development of wireless

services. To foster the development of cellular

telephone service, the U.S. Government made

available radio frequency spectrum that had

previously been used by other commercial

and government services. For the second

generation ó digital cellular and PCS ó the

U.S. Government allocated spectrum in bands

occupied by private sector users, and ensured

competition by awarding numerous licenses,

while maintaining technology neutrality. In less

than 20 years, the U.S. wireless industry has

blossomed from being virtually non-existent to

one with over 100 million subscribers. Globally,

subscribers are expected to exceed 600 million

subscribers by year-end 2000.69

The Clinton-Gore Administration also has placed

a high value on promoting Internet access.

Government support for the development of

third generation wireless systems will help

combine the wireless revolution with the

Internet revolution. As part of these efforts,

radio spectrum must be made available for this

new use. The United States has already been

active by, among other things, participating at

the World Radiocommunication Conference

2000 (WRC-2000) earlier this year. The

United States endorses the principles adopted
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

63

at WRC-2000, e.g, that: (1) governments may

choose spectrum from any one or all of the

bands identified for third generation mobile

wireless (3G); (2) governments have the

flexibility to identify spectrum if and when they

choose; and (3) no specific technology will be

identified for third generation services. This

result will allow deployment of the best technologies and permit the United States to move

forward with rapid deployment of advanced

communications services such as 3G.

In the United States, Federal Government

agencies and the private sector are working

together to provide advice to NTIA and FCC

on what spectrum could be made available for

third generation wireless systems. On October

13, 2000, President Clinton signed an

Executive Memorandum directing Federal

Agencies to work with the FCC and the private

sector to identify radio spectrum needed for

advanced communications services such as

3G. To meet this goal, the President directed

the Secretary of Commerce to develop a plan

by October 20, 2000, in cooperation with the

FCC, the Department of Defense, and other

Federal Agencies, setting forth the necessary

steps that will result in licensing of third

generation wireless systems by September 30,

2002. The President also directed the Secretary

of Commerce to work cooperatively with the

FCC to lead a government-industry effort,

through a series of regular public meetings and

workshops, to work cooperatively with all

stakeholders to develop recommendations and

plans for identifying spectrum for third

generation wireless systems consistent with the

basic principles adopted at the WRC-2000.

U.S. Government agencies are making swift

progress in implementing the Presidentís

directive. NTIA and the FCC issued interim

reports on November 15, 2000 on current

spectrum uses and potential for reallocation or

sharing of the bands identified at WRC-2000

that could be used for third generation wireless

systems (http://www.ntia.doc.gov/ntiahome/

threeg/index.html and http://www.fcc.gov/3G/).

NTIA is currently working with the FCC in

cooperation with industry representatives and

others in the private sector to develop

recommendations and plans for identifying

spectrum for third generation wireless systems

consistent with the WRC-2000 agreements, which

may be implemented by the U.S. Government.

In addition to the NTIA-FCC outreach effort to

industry, the FCC expects to commence a notice

of proposed rulemaking by January 2001 to

solicit public comment on its interim report.

After the notice is released, the public may file

comments on the proposals that the FCC will

develop for allocating additional spectrum for

advanced communication services, such as

3G. The FCC expects to issue a Report and

Order allocating new spectrum for advanced

communication services by July 2001 and

anticipates auctioning newly allocated spectrum

by September 2002.

One of the guiding principles for this effortís

formulation and decision-making process will

be the goal of supporting industry efforts to

harmonize spectrum allocations regionally

and internationally. Our effort will be to achieve

this goal as far as practicable, based upon

market demand and national considerations,

including national security and international

treaty obligations. Industry has an opportunity

to participate actively in the on-going policymaking process and in the FCCís upcoming

rule-making proceeding.

B. Making Sure Every Train

Runs on Every Track ñ

Standards to Facilitate

Competition, Compatibility

and Functionality

In President Clintonís July 1, 1997 Directive on

Electronic Commerce, the President directed

the Secretary of Commerce to support private

sector development of Internet standards,

and the U.S. Trade Representative to oppose

foreign efforts to use e-commerce standards

as trade barriers.

The Department of Commerceís National

Institute of Standards and Technology (NIST)

has provided technical support and coordination
3rd Annual Report U.S. Government Working Group on Electronic Commerce

64

of industry-led e-commerce standards

development in the following fields:

 Encryption. Encryption of e-commerce information is essential, and the new Advanced

Encryption Standard (AES) is nearing

completion. The Third AES Candidate

Conference was held on April 13-14, 2000,

and was attended by 250 representatives

from more than 25 countries. Final selection

of the new AES is expected this fall.

 Software Conformance Testing. In higherlevel e-commerce applications, software

developers and users need to have the

ability to evaluate new eXtensible Markup

Language (XML) software products for their

ability to manipulate, create, and exchange

information. NIST, working with the Organization for the Advancement of Structured

Information Standards and the World Wide

Web Consortia, has produced a conformance

test suite that is available free of charge at

the following NIST web address: http://

www.nist.gov/xml.

 Supply Chains. The NIST Internet Commerce

for Manufacturing (ICM) project contributes

to reducing industry risk in evaluating and

adopting e-commerce technologies and

practices. The ICM has developed a testbed

for potential manufacturing standards for ecommerce systems and supply chains. In a

related effort, the NIST Electronic Commerce

of Component Information (ECCI) project is

working with industry to develop standards

for the exchange of technical information

about electronic components throughout the

supply chain. Working with the Silicon

Integration Initiative and RosettaNet

Consortia, NIST has developed reference

implementation software, which is expected

to accelerate the adoption of the standards.

 Biometrics. Biometrics is technology that

automatically recognizes a person using

distinguishing traits, and it has important

implications for e-commerce. NIST co-chairs

the Biometric Consortium, which serves

as the governmentís focal point for the

development, testing and application of this

technology. NIST hosted the Biometric

Consortium 2000 Conference on September

13-14, along with the National Security

Agency, the Department of the Armyís

Biometrics Office, and the General Services

Administrationís Office of Smart Card Initiatives

(www.nist.gov/itl/div895/isis/bc/bc2000).

 Interactive Television. Interactive Television

is the convergence of TV and the Internet,

and is expected to have a profound effect on

e-commerce. It promises to bring conventional

television viewers, who may not have

enthusiasm for computers, the benefits of

e-commerce in an environment in which they

are comfortable. Within the Society of Motion

Picture and Television Engineers, an internationally recognized industry body, NIST

is helping develop the Declarative Data

Essence Standard for Interactive Television.

 E-commerce Standards Roadmap. NIST is

developing a web-based standards roadmap

of existing and emerging e-commerce

standards and activities. This roadmap fills

a great void, because as e-commerce has

developed, there has been no recognized,

easy to use and unbiased source of

information regarding standard applications.

The prototype of this roadmap is expected

by the year-end 2000.

C. Letting the Private Sector

Name the Destinations ñ

Domain Name

System Privatization

One of the best examples of the Administration

encouraging private sector leadership in

Internet management is in the area of domain

name administration. The Internet Corporation

for Assigned Names and Numbers (ICANN)

(http://www.icann.org) has conducted its first

worldwide membership drive and online

elections. The activities undertaken this year

have moved us closer to completing the

transition to private sector management of

Internet names and addresses. Over the past

twelve months ICANN has:
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

65

 Conducted its first elections for At-Large

members of its Board of Directors, with five

directors taking their seats at the November

2000 ICANN meeting. The process registered

over 158,000 users from around the world to

participate in ICANNís At-Large membership.

 Implemented a process to select new Internet

top level domains (TLDs). At its July meeting

in Yokohama, Japan, ICANN adopted a

policy to introduce new TLDs in a measured

and responsible manner. After receiving

extensive public comments on over 45 TLD

proposals, ICANN selected seven new TLDs

to move towards implementation. The

selected TLDs are .info, .biz, .name, .pro,

.coop, .museum, and .aero. ICANN

anticipates that it will complete the necessary

contractual negotiations and recommend

implementation of the new TLDs by the first

quarter of 2001.

 Measured its own effectiveness. Vigilant in

its efforts to self-evaluate and build on its

experience, ICANN continually reviews its

operations, processes, and structure. As

part of these efforts, ICANN is undertaking

studies of its membership structure, advisory

bodies, the new TLD process, and the

Uniform Domain Name Dispute Resolution

Policy (UDRP) that was adopted to resolve,

in a non-binding manner, domain name

disputes arising from cybersquatting.

 Continued to work with

the Department of

Commerce to increase

security and stability of

the Internet root server

system. ICANNís Root

Server System Advisory

Committee is working

towards completion of

a plan to enhance the

security and operations

of the Internet root

server system through

implementation of

procedural and

architectural

modifications.

 Increased competition

in domain name

registration. ICANN

continues to develop

a robust domain name registration

environment through its ongoing registrar

accreditation efforts. To date, ICANN has

accredited over 120 registrars to register

names in the .com, .net, and .org domains,

representing over a 100 percent increase in

the number of accredited registrars since

this time last year. This globally competitive

registration environment brings users greater

choice, lower prices, and new, innovative

services.

The November 1998 Memorandum of Understanding (MOU) between the Department of

Commerce and ICANN called for the historic

privatization of domain name administration to

be completed by September 30, 2000. While

extensive progress has been made to date,

some tasks contemplated under the MOU

remain to be completed. As such, a one-year

extension of the MOU been mutually agreed

upon by the Department and ICANN.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

66

New Top Level Domain Names

In November, the Internet Corporation for Assigned Names and Numbers (ICANN) met to

select new top level domains (TLDs) for addition to the global Internet. ICANNís selection

followed a public consultation and review process, including discussion at an open, public

forum that took place during the meeting. The following new TLDs were selected from some

47 applications:

 .info ñ an open, general purpose domain

 .biz ñ for businesses

 .name -ñ for individual persons

 .pro ñ for professionals (such as doctors and lawyers)

 .museum ñ for museums and related institutions

 .aero ñ for the airline and air travel information

 .coop ñ for cooperative businesses

The new TLDs selected by ICANN represents the first significant expansion of global-use

identifiers since the creation of the domain name system and promises to bring Internet

users around the world new and innovative services, greater choice, and a richer Internet

experience. Further, the diversity of the new TLDs selected provide a glimpse at how the

domain name system of the future may be structured and enhanced. The information and

experience gathered from this process and gained through actual operation of the new TLDs

on the Internet will provide ICANN with guidance on how to approach TLD expansion in the

future. The new TLDs are expected to be available online early in 2001.

The Department of Commerce also has issued

a Request for Comment on a draft statement of

work for the management and administration of

the .us domain. During the coming months,

the Department intends to issue a request for

proposals for .us administration services.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

67

Conclusion

his report catalogs our achievements over Tthe last year. We believe there have been

many. Among others, we have strengthened

protections for consumers, for children and for

our most sensitive information, and have made

the Internet a safer, more secure place. We

have established explicitly the legal validity

of electronic signatures. We have enhanced

protections for intellectual property rights. We

have fought successfully to preserve the neutral

and non-discriminatory taxation of commerce

over the Internet. We have worked to continue

the existing WTO moratorium on customs duties

on electronic transmissions. We have further

globalized and privatized technical management of the domain name system.

But we have done much more. Last year,

President Clinton and Vice-President Gore

directed us to pursue three new initiatives

designed to take us beyond bits and bytes,

and to use information technology to improve

the lives of our citizens. One directive challenged

us to help all Americans gain access to and

master the computers and Internet access

needed to participate in the Information

Revolution. Another challenged us to use

information technologies to enrich the lives of

our citizens through applications such as

distance-learning and tele-medicine. The final

directive challenged us to use information

technologies to make our government, more

accessible, accountable, efficient and responsive.

We have delivered. We have succeeded in

expanding digital opportunity and building

digital equality. We have mobilized the resources

of government and our partners in the business

and non-profit community to enhance the lives

of all Americans through digital technology.

And we have launched government into the

Information Age.

These successes, however, may obscure a

more significant triumph. Perhaps the most

durable achievement of the last several years

has been the growing domestic and global

consensus about the principles that have

driven Administration policy in this area. This

consensus is reflected in a growing body of

bilateral joint statements on e-commerce and

in multilateral understandings like the G-8

Okinawa Charter on the Global Information

Society. Principles of private sector leadership,

support for self-regulatory mechanisms, minimal

government intervention and the avoidance of

unnecessary barriers have not only maximized

innovation but increased our citizensí welfare.

We are at the dawn of the Digital Revolution.

This report is simply a snapshot of this

Administrationís efforts to promote and

encourage aspects of this revolution. New

technologies and new services await us. So

do fresh challenges. The advent of mobile and

ubiquitous broadband Internet, for example,

promises to transform our daily life. The

creativity, energy and resources of the private

sector will benefit and inspire us, and, not

incidentally, test the ability of governments

to formulate appropriate policy responses.

Around the world, new policy issues will arise

unanticipated. So far, we can count our journey

a success. The ClintonñGore Administration

has created an approach to information policy

that we believe will prove enduring, relevant

and constructive in addressing both the opportunities and the challenges that lie ahead.

Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

69

Acknowledgements

any individuals and their respective Magencies contributed a great deal of

time and effort to this report. We

very much appreciate each of their important

contributions. In particular, the Electronic

Commerce Working Group would like to thank

the following people, many of whom serve or

have served as members of the Working Group.

In alphabetical order, contributors include:

Don Abelson, Gary Allan, Greg Baer, Julie Basile,

Mark Bender, Michael Beresik, Alan Berube,

Roger Bezdek, Jason Bordoff, Larry Brandt,

Art Brodsky, Patricia Buckley, Becky Burr,

Kathleen Cahill, Jack Cam, Ed Cameron,

Norma Campbell, Mayi Canales, Kelly Carnes,

Greg Carnill, Geoffrey Chapman, Todd Chapman,

Dan Chenok, Audrey Choi, Michael Crowley,

Bill Curtis, Laureen Daly, Fred Davidson, Delia

Davis, Kevin DiGregory, Betsy DíJamoos,

Ed DuMont, Jennifer Duncan, Michelle Enger,

Karen Freeman, Sharon Freeman, Adam

Golodner, Rich Guida, Alastair Fitzpayne,

George Haddow, Kelli Hagen, Don Hammond,

Sheri Harris, Anthony Haynes, Brian

Hengesbaugh, Brian Hensal, Katie Hirning,

Dieter Hoinkes, Maxie Hollingsworth, Lynn

Jennings, Tom Kalil, Russell Kile, Charlotte

Knepper, Jim Kohlenberger, Wendy Lader,

Adrienne Lavallee, Fred Lee, Malcom Lee,

Kelly Levy, Glynis Long, Sarvesh Mahajan,

Steve Mahaney, Demetrios Marantis, Elliot

Maxwell, Jim McConnaughey, Tom McGinnis,

Jonathan McHale, Chris McLean, Anthony

Meyer, Mary Mitchell, Martin Moe, John Moeller,

Sabrina Montes, Mark Montgomery, Jeff Moon,

Michael Mundaca, Michelle ONeill, Derrick

Owens, Phil Paparodis, Bob Pepper, Andrew

Pincus, Dena Pushkin, Kate Rodriguez,

Greg Rohde, Karen Rose, Barbara Rosenfeld,

Dana Rosenfeld, Lisa Rosenthal, Brenton Ross,

Peter Rundlet, Barry Scanlon, Clinton Schaff,

Ken Schagrin, Andrew Schneider, Patty Sefcik,

Pat Smith, Christina Speck, Tom Stack,

Anne Stauffer, Lauren Steinfeld, Bob Stoll,

Harry Sullivan, Jim St. Pierre, Mary Streett,

Peter Swire, Linda Thibodeaux, Jean Veta,

Carol Wacey, Jim Wasilewski, Barbara Wellbery,

Jacqueline Williams, Jonathan Womer and

Ray Woolburn. If we have inadvertently left

anyone out, we extend our sincere apologies

and want you to know that your efforts also are

very much appreciated.

The Working Group consists of representatives

from the White House and the principal Federal

agencies involved in electronic commerce,

including the Departments of Commerce,

Treasury, State, Justice, Agriculture, Interior,

Veterans Affairs, and Health and Human

Services, the U.S. Trade Representativeís

Office, the General Services Administration,

the Small Business Administration, the Federal

Communications Commission, the Federal

Trade Commission, the Consumer Safety Board,

the Environmental Protection Agency, the

Federal Emergency Management Agency, the

National Science Foundation, and the Social

Security Administration.

Under the leadership of Vice President Gore,

the Working Group strives to implement the

Administrationís strategic vision to promote the

growth of electronic commerce and allow its

social and economic benefits to reach all people.

The Chair of the Electronic Commerce Working

is David Beier, Chief Domestic Policy Advisor

for the Vice President. The Vice Chair is Sally

Katzen, Counselor to the Director, Office of

Management and Budget. Elizabeth Echols is

the Executive Director of the Working Group.

Ron Keohane is Senior Advisor to the Working

Group and Director of the Secretariat for

Electronic Commerce at the Department of

Commerce. Andrew Weinschenk is Senior

Advisor to the Working Group and Director of

Information Policy, Economic and Business

Bureau, at the Department of State.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

70

This report can be cited as ìLeadership for the

New Millennium: Delivering on Digital Progress

and Prosperity,î U.S. Government Working

Group on Electronic Commerce, 3rd Annual

Report, 2000. For further information, please

visit our website at http://www.ecommerce.gov.

The appearance in this report of any product,

trademark, or copyright image does not constitute

any endorsement by the U.S. Government.

All products, trademarks, and copyrights used

by permission.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

71

Appendices ñ Presidential Directives

July 1, 1997

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT: Electronic Commerce

The invention of the steam engine two centuries ago and the subsequent harnessing of electricity

for communications ushered in an industrial revolution that fundamentally altered the way we work,

brought the worldís people closer together in time and space, changed the way we organize our

economies, and brought us greater prosperity.

Today, we are on the verge of another revolution. Inventions like the integrated circuit, the computer,

fiber optic cable, and the Internet are changing the way we work, learn, and communicate with

each other.

Students and teachers can have immediate access to the worldís information from their classrooms;

doctors can administer diagnoses to patients in remote parts of the globe from their offices; and

citizens of many nations are finding additional outlets for personal and political expression.

As the Internet empowers citizens and democratizes societies, it is also changing the way business

is conducted: entrepreneurs are able to start new businesses more easily by accessing the Internetís

worldwide network of customers; world trade involving computer software, entertainment products,

information services, professional consulting, financial services, education businesses, medical

diagnostics, advertising, and technical services is increasing rapidly as the Internet dramatically

lowers costs and facilitates new types of commercial transactions; engineers, product developers,

and managers thousands of miles apart can collaborate to design and manufacture new products

more efficiently; businesses can work more efficiently with their suppliers and customers; consumers

have greater choice and can shop in their homes for a wide variety of products from manufacturers

and retailers all over the world, and they will be able to view these products on their computers or

televisions, access information about the products, and order and pay for their choices, all from their

living rooms.

According to several estimates, commerce on the Internet will total tens of billions of dollars by the

turn of the century and could expand rapidly after that, helping fuel economic growth well into the

21st century.

For this potential to be realized, governments must adopt a market-oriented approach to electronic

commerce, one that facilitates the emergence of a global, transparent, and predictable environment

to support business and commerce.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

72

Government officials must respect the unique nature of the medium and recognize that

widespread competition and increased consumer choice should be the defining features of the

new digital marketplace.

Many businesses and consumers are still wary of conducting extensive business over the Internet

because of the lack of a predictable legal environment governing transactions. This is particularly

true for international commercial activity where concerns about enforcement of contracts, liability,

intellectual property protection, privacy, security, and other matters have caused businesses and

consumers to be cautious.

Many companies and Internet users are also concerned that domestic or foreign governments will

impose extensive regulations on the Internet and electronic commerce including taxes and tariffs,

restrictions on the type of information transmitted, control over standards development, licensing

requirements, and extensive regulation of Internet service providers. Indeed, signs of these types of

commerce-inhibiting actions already are appearing in many nations.

Governments can have a profound effect on the growth of electronic commerce. By their actions,

they can facilitate electronic trade or inhibit it. Knowing when to act and ó at least as important ñ

when not to act, will be crucial to the development of electronic commerce.

Today I have approved and released a report ó ìA Framework For Global Electronic Commerceî ó

outlining the principles that will guide my Administrationís actions as we move forward into the new

electronic age of commerce. This report articulates my Administrationís vision for the emerging

digital marketplace by declaring a set of principles, presenting a series of policies, and establishing

an agenda for international discussions and agreements to facilitate the growth of electronic

commerce. I expect all executive departments and agencies to review carefully the principles in

this framework and implement appropriate policies.

Accordingly, I am hereby directing that executive department and agency heads should be guided in

any future actions they take related to electronic commerce by the following principles:

ó For electronic commerce to flourish, the private sector must lead. Therefore, the Federal

Government should encourage industry self-regulation wherever appropriate and support private

sector efforts to develop technology and practices that facilitate the growth and success of the

Internet.

ó Parties should be able to enter into legitimate agreements to buy and sell products and services

across the Internet with minimal government involvement or intervention. Therefore, the Federal

Government should refrain from imposing new and unnecessary regulations, bureaucratic

procedures, or taxes and tariffs on commercial activities that take place on the Internet.

ó In some areas, government involvement may prove necessary to facilitate electronic commerce

and protect consumers. Where governmental involvement is necessary, its aim should be to support

and enforce a predictable, consistent, and simple legal environment for commerce.

ó The Federal Government should recognize the unique qualities of the Internet including its

decentralized nature and its tradition of bottom-up governance. Existing laws and regulations that

may hinder electronic commerce should be revised or eliminated consistent with the unique nature

of the Internet.

ó The Internet is emerging as a global marketplace. The legal framework supporting commercial

transactions on the Internet should be governed by consistent principles across State, national, and

international borders that lead to predictable results regardless of the jurisdiction in which a particular

buyer or seller resides.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

73

I also direct the relevant agencies as identified in ìA Framework For Global Electronic Commerceî to

pursue the following policies:

1. I direct the U.S. Trade Representative to work with foreign governments to secure agreement

within the next 12 months that all products and services delivered across the Internet will not be

subject to tariffs and that all equipment from which the Internet is built will also not be subject to

tariffs.

2. I direct the U.S. Trade Representative to work with foreign governments to enforce existing

agreements and secure new agreements to make electronic commerce a seamless global

marketplace. This will include enforcing provisions of the recently concluded World Trade

Organization (WTO) Telecommunications Services Agreement; ensuring that product testing,

certification, and approval processes do not unnecessarily restrict trade; ensuring that service

providers have nondiscriminatory access to customers worldwide; and other measures that

ensure a free flow of commerce.

3. I direct the Secretary of Commerce to seek the protection of copyright in the digital environment

by working to achieve ratification in the United States and overseas within the next 12 months of

the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO

Performances and Phonograms Treaty.

4. I direct the Secretary of Commerce to update and make more efficient our system for protecting

patentable innovations to meet the needs of the fast-moving electronic age and to seek

agreements with other governments to protect patentable innovations worldwide.

5. I direct the Secretary of Commerce to support efforts to make the governance of the domain

name system private and competitive and to create a contractually based self-regulatory regime

that deals with potential conflicts between domain name usage and trademark laws on a global

basis.

6. I direct the Secretary of the Treasury to work with State and local governments and with foreign

governments to achieve agreements that will ensure that no new taxes are imposed that

discriminate against Internet commerce; that existing taxes should be applied in ways that avoid

inconsistent national tax jurisdictions and double taxation; and that tax systems treat

economically similar transactions equally, regardless of whether such transactions occur through

electronic means or through more conventional channels of commerce.

7. I direct the Secretary of Commerce to work with the private sector, State and local governments,

and foreign governments to support the development, both domestically and internationally, of a

uniform commercial legal framework that recognizes, facilitates, and enforces electronic

transactions worldwide. I further direct the Secretary of Commerce within the next 12 months to

seek to gain agreement with the private sector, State and local governments, and foreign

governments, both domestically and internationally, on common approaches for authentication

of electronic transactions through technologies such as digital signatures.

8. I direct the Secretary of Commerce and the Director of the Office of Management and Budget to

encourage private industry and privacy advocacy groups to develop and adopt within the next

12 months effective codes of conduct, industry developed rules, and technological solutions to

protect privacy on the Internet consistent with the Privacy Principles issued by the Information

Infrastructure Task Force (IITF) Privacy Working Group. I further direct the Director of the OMB to

develop recommendations on the appropriate role of government consistent with ìA Framework

For Global Electronic Commerce.î I further direct the Secretary and the Director to ensure that

means are developed to protect the privacy of children.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

74

9. I direct the Secretary of Commerce to encourage the development and adoption within the

next 12 months by industry of easy to use and effective rating systems and filtering technologies

that empower parents, teachers, and other Internet users to block content that is inappropriate

for children.

10. I direct the Secretary of Commerce to support private sector development of technical standards

for the Internet and the U.S. Trade Representative to oppose efforts by foreign governments to

impose standards or to use standards for electronic commerce as non-tariff trade barriers.

11. I direct the Secretary of the Treasury to cooperate with foreign governments to monitor newly

developing experiments in electronic payment systems; to oppose attempts by governments to

establish inflexible and highly prescriptive regulations and rules that might inhibit the development

of new systems for electronic payment; and as electronic payment systems develop, to work

closely with the private sector in order to keep apprised about policy development and ensure

that governmental activities flexibly accommodate the needs of the emerging marketplace.

12. I direct all executive departments and agencies to promote efforts domestically and internationally

to make the Internet a secure environment for commerce. This includes ensuring secure and

reliable telecommunications networks; ensuring an effective means for protecting the information

systems attached to those networks; ensuring an effective means for authenticating and

guaranteeing confidentiality of electronic information to protect data from unauthorized use;

and providing information so that Internet users become well-trained and understand how to

protect their systems and their data.

13. I direct the Administrator of General Services to move the Federal Government into the age of

electronic commerce by expanding ìGSA Advantage,î its online shopping service for the

Federal community to cover four million items by 12 months from now.

I am asking the Vice President to lead an interagency group coordinating the U.S. Governmentís

electronic commerce strategy. Further, I am directing that executive department and agency heads

report back to the Vice President and me through this interagency group every 6 months on their

progress in meeting the terms of this directive.

WILLIAM J. CLINTON
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

75

November 30, 1998

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT: Successes and Further Work on Electronic Commerce

The Internet and electronic commerce have the potential to transform the world economy. The

United States Government is committed to a market-driven policy architecture that will allow the

new digital economy to flourish while at the same time protecting citizensí rights and freedoms.

Today my Administration has released a report that details the significant progress made on the

implementation of my Directive on Electronic Commerce of July 1, 1997, and its accompanying

policy statement, ìA Framework for Global Electronic Commerce.î The electronic commerce working

group that has coordinated the United States Governmentís electronic commerce strategy has

accomplished a great deal. I am proud of its significant achievements. Governments and private

sector organizations around the world now recognize the importance of the Internet and electronic

commerce and the viability of the approaches contained in the 1997 report as a means of ensuring

future economic success. I am optimistic that the progress realized to date will be continued during

the next year.

In order to complete implementation of my July 1, 1997, directive by January 1, 2000, I direct that

work continue in the 13 areas listed therein.

In addition, new areas have emerged during the past year that deserve particular attention. To ensure

progress in these areas, I hereby direct as follows:

Section 1. The Secretary of Commerce, in appropriate consultation with the Federal

Communications Commission, shall encourage the deployment of advanced telecommunications

capabilities for all Americans while preserving the vibrant and competitive free market that exists for

the Internet and other interactive computer services. These agencies shall work with the Office of the

United States Trade Representative to help ensure the elimination of foreign trade barriers to the

deployment of advanced telecommunications capabilities.

Section 2. The Secretary of Commerce, in appropriate consultation with the Federal Trade Commission

and other relevant agencies, shall foster consumer confidence in electronic commerce by working to

ensure effective consumer protection online. This shall include exploring opportunities for global

cooperation to enforce consumer protection laws and facilitating partnerships between industry and

consumer advocates to develop redress mechanisms for online consumers. These agencies shall

work with the Office of the United States Trade Representative to help avoid the creation of foreign

trade barriers while protecting the interests of consumers.

Section 3. The Secretary of State, in appropriate cooperation with the Agency for International

Development, the Secretary of Commerce, the Federal Communications Commission, the Overseas

Private Investment Corporation, and other relevant agencies, shall initiate a program to help

accelerate the spread of the Internet and electronic commerce to developing countries. This shall

include a demonstration of successful models for development in a small number of interested
3rd Annual Report U.S. Government Working Group on Electronic Commerce

76

countries and should highlight and create incentives for public/private sector partnerships to serve as

a catalyst for successful private action. The Secretary of State should seek the cooperation of the

World Bank and other multilateral organizations in initiating this program.

Section 4. The Assistant to the President for Economic Policy, in appropriate consultation with the

Secretaries of Commerce, the Treasury, Labor, and other relevant agency heads, shall analyze the

economic impact of the Internet and electronic commerce in the United States and internationally.

This shall include convening a conference of experts from the public and private sectors to assess

the impact of investments in information technology and the influences of electronic commerce and

related technologies on the economy. These experts shall consider new indicators for the information

economy, new types of data collection, and new research that could be undertaken by organizations

in the public and private sectors. To broaden public understanding of the impact of electronic

commerce, the Department of Commerce shall publish a follow-up report to the ìEmerging Digital

Economyî report it issued this year.

Section 5. The Secretary of Commerce and the Administrator of the Small Business Administration

shall develop strategies to help small businesses overcome barriers to the use of the Internet and

electronic commerce. The initiative shall consider the need to train Federal Government employees

who have contact with small businesses on the use of the Internet and electronic commerce; identify

commonly used Government products and forms that should be moved to the Internet to enable

small business to use the Internet to interact with the Government; and develop an outreach plan to

enhance electronic access to information and services that can assist small businessesí

development using the Internet and electronic commerce.

Section 6. The directives in sections 1-5 of this memorandum and my July 1, 1997, directive shall be

conducted subject to the availability of appropriations and consistent with the agenciesí priorities

and my budget.

Section 7. The Vice President shall continue his leadership in coordinating the United States

Governmentís electronic commerce strategy. Further, I direct that heads of executive departments

and agencies report to the Vice President and me through the Electronic Commerce Working Group

in 1 year on their progress in meeting the goals of the July 1, 1997, directive as well as their

accomplishments under this memorandum.

WILLIAM J. CLINTON
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

77

December 9, 1999

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT: Narrowing the ìDigital Divide:î Creating Opportunities

for All Americans in the Information Age

Information tools, such as the personal computer and the Internet, are increasingly important to

economic success and full participation in all aspects of American society. People with computers

and Internet access can use these tools to find a job, acquire new skills, start a small business,

get lower prices for goods and services, and become more informed citizens.

Currently, not all Americans are enjoying the benefits of the Information Age tools. In July 1999, the

National Telecommunications and Information Administration issued a report, Falling Through the

Net: Defining the Digital Divide, which found a growing gap between those with access to these

tools and those without. Black and Hispanic households are only two-fifths as likely to have Internet

access as white households. Households with incomes of $75,000 and higher, in urban areas, are

more than twenty times as likely to have access to the Internet as households at the lowest income

levels, and more than nine times as likely to have a computer at home. As information technology

plays an ever-increasing role in Americansí economic and social lives, we cannot afford to leave

anyone behind.

Fortunately, competition and advances in technology are driving down the cost of computers and

Internet access, which will make these new Information Age tools affordable for more Americans.

I believe that we should set a national goal of making computers and Internet access available for

every American. Furthermore, we should explore ways of using technology to expand the economic

opportunities for those Americans who have not yet enjoyed the benefits of our prosperity.

Accordingly, I am directing executive departments and agencies (ìagenciesî) to take the following

specific actions to help Americans benefit from advances in information technology:

1. The Secretary of Commerce shall work with the private sector and others to develop a national

strategy for making computers and the Internet accessible to all Americans, with the goal of

significantly narrowing the ìdigital divide.î

2. The Secretary of Commerce shall continue to measure the level of connectivity of Americans to

telecommunications and information tools, and report periodically on the relationship of income,

education, race, gender, geography, and age to Americansí access to these tools.

3. The Secretaries of Education, Housing and Urban Development, Health and Human Services,

Labor, and Commerce shall:

 (a) expand our growing network of Community Technology Centers to provide access to

technology for low-income Americans; and

 (b) encourage the development of information technology applications that would help enable

low-income Americans to start and manage their own small businesses.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

78

4. The Secretaries of Education, Labor, and Commerce shall work with the private sector to

upgrade the information technology skills of Americaís workforce, particularly workers living in

disadvantaged urban and rural communities.

5. The Secretary of Commerce, the Secretary of Education, and the Secretary of Housing and

Urban Development shall highlight and disseminate the lessons learned from their grant

programs and educational technology initiatives, with an emphasis on underserved citizens,

to increase the number of communities across the Nation that could reap the benefits of

information technologies for their residents.

6. Items 1-5 of this memorandum and my July 1, 1997, and November 30, 1998, memoranda shall

be conducted subject to the availability of appropriations and consistent with agenciesí priorities

and my budget, and to the extent permitted by law.

7. The Vice President shall continue his leadership in coordinating the United States Governmentís

electronic commerce strategy. Further, I direct that the heads of executive departments and

agencies report to the Vice President and to me on their progress in meeting the terms of this

memorandum, through the Electronic Commerce Working Group (ECWG) in its annual report.

To the extent that substantial new policy issues emerge, the analysis and action on those

policies will be coordinated in a manner consistent with the responsibilities of the ECWG, the

National Economic Council, and the Domestic Policy Council, as appropriate.

WILLIAM J. CLINTON
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

79

December 17, 1999

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT: Electronic Government

My Administration has put a wealth of information online. However, when it comes to most Federal

services, it can still take a paper form and weeks of processing for something as simple as a change

of address.

While Government agencies have created ìone-stop-shoppingî access to information on their

agency web sites, these efforts have not uniformally been as helpful as they could be to the average

citizen, who first has to know which agency provides the service he or she needs. There has not

been sufficient effort to provide Government information by category of information and service ó

rather than by agency ó in a way that meets peopleís needs.

Moreover, as public awareness and Internet usage increase, the demand for online Government

interaction and simplified, standardized ways to access Government information and services

becomes increasingly important. At the same time, the public must have confidence that their online

communications with the Government are secure and their privacy protected.

Therefore, to help our citizens gain one-stop access to existing Government information and services,

and to provide better, more efficient, Government services and increased Government accountability

to its citizens, I hereby direct the officials in this memorandum, in conjunction with the private sector

as appropriate, to take the following actions:

1. The Administrator of General Services, in coordination with the National Partnership for

Reinventing Government, the Chief Information Officersí Council, the Government Information

Technology Services Board, and other appropriate agencies shall promote access to

Government information organized not by agency, but by the type of service or information that

people may be seeking; the data should be identified and organized in a way that makes it

easier for the public to find the information it seeks.

2. The heads of executive departments and agencies (agencies) shall, to the maximum extent

possible, make available online, by December 2000, the forms needed for the top 500

Government services used by the public. Under the Government Paperwork Elimination Act,

where appropriate, by October 2003, transactions with the Federal Government should be

available online for online processing of services. To achieve this goal, the Director of the Office

of Management and Budget shall oversee agency development of responsible strategies to

make transactions available online.

3. The heads of agencies shall promote the use of electronic commerce, where appropriate, for

faster, cheaper ordering on Federal procurements that will result in savings to the taxpayer.

4. The heads of agencies shall continue to build good privacy practices into their web sites by

posting privacy policies as directed by the Director of the Office of Management and Budget and

by adopting and implementing information policies to protect childrenís information on web sites

that are directed at children.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

80

5. The head of each agency shall permit greater access to its officials by creating a public

electronic mail address through which citizens can contact the agency with questions,

comments, or concerns. The heads of each agency shall also provide disability access on

Federal web sites.

6. The Director of the National Science Foundation, working with appropriate Federal agencies,

shall conduct a 1-year study examining the feasibility of online voting.

7. The Secretaries of Health and Human Services, Education, Veterans Affairs, and Agriculture, the

Commissioner of Social Security, and the Director of the Federal Emergency Management

Agency, working closely with other Federal agencies that provide benefit assistance to citizens,

shall make a broad range of benefits and services available though private and secure electronic

use of the Internet.

8. The Administrator of General Services, in coordination with the Secretary of the Treasury, the

Secretary of Commerce, the Government Information Technology Services Board, the National

Partnership for Reinventing Government, and other appropriate agencies and organizations,

shall assist agencies in the development of private, secure, and effective communication across

agencies and with the public, through the use of public key technology. In light of this goal,

agencies are encouraged to issue, in coordination with the General Services Administration, a

Government-wide minimum of 100,000 digital signature certificates by December 2000.

9. The heads of agencies shall develop a strategy for upgrading their respective agencyís capacity

for using the Internet to become more open, efficient, and responsive, and to more effectively

carry out the agencyís mission. At a minimum, this strategy should involve:

 (a) expanded training of Federal employees, including employees with policy and senior

management responsibility;

 (b) identification and adoption of ìbest practicesî implemented by leading public and private

sector organizations;

 (c) recognition for Federal employees who suggest new and innovative agency applications of

the Internet;

 (d) partnerships with the research community for experimentation with advanced applications;

and

 (e) mechanisms for collecting input from the agencyís stakeholders regarding agency use of

the Internet.

10. Items 1-8 of this memorandum and my July 1, 1997, and November 30, 1998, memoranda shall

be conducted subject to the availability of appropriations and consistent with agenciesí priorities

and my budget, and to the extent permitted by law.

11. The Vice President shall continue his leadership in coordinating the United States Governmentís

electronic commerce strategy. Further, I direct that the heads of executive departments and

agencies report to the Vice President and to me on their progress in meeting the terms of this

memorandum, through the Electronic Commerce Working Group in its annual report.

WILLIAM J. CLINTON
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

81

December 17, 1999

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT: Use of Information Technology to Improve Our Society

The Internet and other information and communications technologies are changing the way we work,

learn, communicate with each other, and do business. These technologies are shaping our economy

and our society in the same way that the steam engine and electricity defined the Industrial Age.

In recent years, information technology has driven the U.S. economy. Businesses are scrambling to

use the Internet to increase productivity, boost exports, cut the time required to develop new products,

and forge closer relationships with customers and suppliers. My Administration has pursued a

market-led approach to global electronic commerce that relies whenever possible on private sector

leadership and seeks to eliminate legal and regulatory barriers to electronic commerce while

protecting the public interest.

The Internet has the potential to enhance civil society as well as to boost commerce. Used creatively,

the Internet and information technology can be a powerful tool for tackling some of our toughest

social challenges as well as fostering economic growth. Information technology can and is being

used to make it easier for working adults to acquire new skills, increase access to healthcare in

isolated rural communities, improve the quality of life for people with disabilities, and strengthen

our democracy.

My Administration has led the effort to explain and support the commercial and societal benefits of

information technology to the American people. However, we can and must do more. To that end, I

am directing executive department and agency heads in this memorandum to take certain actions.

As they carry out these actions, they should:

(a) adopt policies that will remove barriers to private sector investment in Internet applications;

(b) explore partnerships with companies, State, local, and tribal governments, and other entities,

such as nonprofit organizations and universities;

(c) explore innovative mechanisms for fostering a national discussion on the potential of the

electronic society;

(d) consider other policies to promote the electronic society, such as the establishment of

national goals; and

(e) review the recommendations of the Presidentís Information Technology Advisory Committee,

particularly as they relate to support for information technology applications with broad

societal benefits.
3rd Annual Report U.S. Government Working Group on Electronic Commerce

82

Therefore, to further promote the broader social benefits of the Information Age to the American

people, I direct the officials in this memorandum to take the following actions:

1. The Secretary of Health and Human Services shall identify additional steps that can be taken to

promote expanded access to higher quality, cost-effective health care to underserved rural

communities and inner city clinics, and other health-care applications of information technology.

2. The Secretary of Education shall support and encourage States and local communities to

make ìschool report cardsî available on the Internet. The Secretary of the Interior shall make it

possible for ìschool report cardsî on Bureau of Indian Affairs schools and tribally controlled

schools to be available on the Internet.

3. The Secretaries of Education and Labor shall work with States and institutions of higher education

to remove legal and regulatory barriers to high-quality distance learning, to increase awareness

of the availability of distance learning as an alternative means of education and training, and to

find ways to promote the earning of credentials through distance learning. The Secretary of Education

shall assist the Tribal Colleges and Universities in developing associate and baccalaureate

programs in information technology, using innovative distance learning technology.

4. The Secretary of Education shall propose the next phase of my Administrationís Educational

Technology Initiative. The next phase should address teacher training, the integration of

technology in the curriculum, the evaluation of technology, the market for educational software

and web content, the need for more multimedia computers in the classroom, and the need for

investments in educational technology research and development.

5. The Secretary of Labor shall determine how telecommuting might be used to help more disabled

Americans get jobs and to provide jobs for Americans located in geographic regions outside

traditional commuting areas, including isolated tribal communities.

6. The Secretary of Education and the Director of the National Science Foundation shall develop

a research agenda for making the Internet and information technology more usable by persons

with disabilities. The Secretary of Commerce shall encourage the private sector to make web

content, software, and development tools more accessible for people with disabilities by

adopting technical standards consistent with the Web Accessibility Initiative.

7. The Administrator of the Environmental Protection Agency shall develop a national strategy

for promoting environmental applications of information technology (such as disseminating

information about manufacturing techniques that reduce pollution, and increasing the timeliness

of environmental information).

8. The Secretary of Agriculture shall identify services that can be delivered electronically to rural

Americans (such as the results of Federally funded research at our Nationís land-grant universities),

and develop the policies needed to promote the availability of advanced telecommunications

services in rural and tribal communities.

9. The Secretary of Commerce shall identify policies that will encourage more effective use of

information technology by nonprofit organizations.

10. The Secretary of the Treasury, in coordination with appropriate Federal agencies and private

sector stakeholders, shall identify policy initiatives that promote greater access to financial

services through the use of information technology.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

83

11. The Secretary of the Interior shall identify policies that will accelerate the use of unclassified

geospatial information systems at the State, local, and tribal level.

12. The Director of the Federal Emergency Management Agency shall work with research universities

and the private sector to apply advances in information technology to managing the consequences

of natural and man-made disasters.

13. The Secretary of the Smithsonian Institution, the Director of the National Science Foundation,

the Director of the National Park Service, and the Director of the Institute of Museum and Library

Services shall work with the private sector and cultural and educational institutions across the

country to create a Digital Library of Education to house this countryís cultural and educational

resources.

14. The Attorney General shall work with Federal, State, local, and tribal law enforcement agencies

to use information technologies to make our Nationís communities safer.

15. Items 1-14 of this memorandum and my July 1, 1997, and November 30, 1998, memoranda

shall be conducted subject to the availability of appropriations, consistent with the agenciesí

priorities and my budget, and to the extent permitted by law.

16. The Vice President shall continue his leadership in coordinating the United States Governmentís

electronic commerce strategy. Further, I direct that the heads of agencies report to the Vice

President and to me on their progress in meeting the terms of the memorandum, through the

Electronic Commerce Working Group (ECWG) in its annual report. To the extent that substantial

new policy issues emerge, the analysis and action on those policies will be coordinated in a

manner consistent with the responsibilities of the ECWG, the National Economic Council, and

the Domestic Policy Council, as appropriate.

WILLIAM J. CLINTON

Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

85

(1) Internet Software Consortium,

ìInternet Domain Name Survey,î

July 2000 (www.isc.org/ds).

(2) Pegasus Research International,

ìWorldwide Growth in Net Usage,î

1 Dec. 2000 (www.pegasusresearch.net/

metrics/growthww.htm).

Pegasus Research International,

ìU.S. Web Users,î 1 Dec. 2000

(www.pegasusresearch.net/metrics/

growthus.htm).

(3) U.S. Internet Council and ITAA Inc.,

ìState of the Internet,î April 2000,

(http://www.usic.org/).

(4) Pegasus Research International,

ìU.S. Web Users,î 1 Dec. 2000

(www.pegasusresearch.net/metrics/

growthus.htm).

(5) Id.

(6) NUA Internet Surveys quoting IDC

Research, 5 Oct., 1999

(http://www.nua.ie/surveys/

?f=VS&art_id=905355321&rel=true);

inernet.com, ìInternet Appliance Market

Worth $5.6 Billion by 2005,î 15 Dec.

1999 (http://cyberatlas.internet.com/

big_picture/hardware/article/

0,1323,5921_260351,00.html).

(7) The Progress & Freedom Foundation,

ìThe Digital Economy Fact Bookî

(2nd ed. 2000), at 15 (citing eTForecasts)

(hereinafter ìThe Digital Economy

Fact Bookî).

Endnotes

(8) Id. at 14.

(9) Id. at 15.

(10) National Telecommunications and

Information Administration, ìFalling

Through the Net: Toward Digital

Inclusion,î Oct. 2000, at xv (hereinafter

ìFalling Through the Net 4î).

(11) Id. at xvi.

(12) Id. at xvi.

(13) Id. at xvi.

(14) Id. at xvi.

(15) Id. at xvi.

(16) Id. at xvi.

(17) World Information Technology and

Services Alliance, ìDigital Planet 2000,î

November 2000, at 18

(http://www.witsa.org).

(www.cisco.com/warp/public/779/

govtaff/factsNStats/Internet_Usage.html).

(18) Childrenís Television Workshop/

U.S. National School Boards Foundation,

 ìSafe and Smart Research and Guidelines for Childrenís Use of the Internet,î

March 2000 (http://www.nsbf.org/safesmart/br-overview.htm).

(19) Pew Internet & American Life, ìThe Online

Healthcare Revolution: How the Web helps

Americans take better of themselves,î 26

Nov. 2000 (www.pewinternet.org/reports/

toc.asp?Report=26).
3rd Annual Report U.S. Government Working Group on Electronic Commerce

86

(20) Pew Research Center, ìTracking Online

Life: How Women Use the Internet to

Cultivate Relationships with Family and

Friends,î 10 May 2000, at 2 (http://

www.pewinternet.org/reports/reports.asp?

Report=11&Section=ReportLevel1&Field=

Level1ID&ID=9).

(21) Lynn Scarlett, Reason Public Policy Institute,

ìIsnít OSHA About Worker Safety?,î

7 Jan. 2000 (http://www.rppi.org/opeds/

osha.html).

(22) Slate Magazine, 10 and 28 Feb. 2000

(http://www.cisco.com/warp/public/

779/govtaff/factsNStats/

DigitalDemocracy.html#CITIZEN

PARTICIPATION).

(23) Nua Internet Surveys (citing Activmedia),

ìEstimated Sales Generated by the

WWW,î 1995 (www.nua.ie/surveys/

analysis/graphs_charts/1995graphs/

projsales.html).

(24) Boston Consulting Group, March 2000

(http://www.bcg.com/new_ideas/

new_ideas_subpage1.asp).

(25) Digital Economy Fact Book at 65

(citing eMarketer).

(26) Id. at 63.

(27) ìBehind the Numbers: The Mystery of Bto-B Forecasts Revealed,î The Standard,

21 Feb. 2000.

(28) National Association for Business

Economics, ìSpecial Survey,î April 2000

(http://www.nabe.com/publib/

ecomsum.htm).

(29) NUA Internet Survey (citing IDC Research),

ì500 Million Online Globally by 2003,î 5

Oct., 1999 (http://www.nua.ie/surveys/

?f=VS&art_id=905355321&rel=true).

(30) Economics and Statistics Administration,

ìDigital Economy 2000,î June 2000, at

45 (hereinafter ìDigital Economy 2000î).

(31) Clifton Chow et al, ìWho Goes There?:

Longitudinal Case Studies of Twelve

Users of Community Technology

Centers,î April 2000 (www.ctcnet.org/

public.html); Clifton Chow et al, ìImpact

of CTCNet Affiliates: Findings from a

National Survey of Users of Community

Technology Centers,î July 1998

(www.ctcnet.org/publics.html).

(32) Id.

(33) National Center for Education Statistics,

ìStats in Brief: Internet Access in Public

Schools and Classrooms, 1994-1999,î

Feb. 2000.

(34) National Telecommunications and

Information Administration, ìCommunity

Connections: Preserving Local Values in

the Information Age,î Sep. 2000 (http://

www.ntia.doc.gov/otiahome/top/

publicactionmedia/comm_conn/

community_connections_illus.html).

(35) Falling Through the Net 4 at 1.

(36) U.S. Small Business Administration,

Office of Advocacy, ìSmall Business

Expansions in Electronic Commerce,î

June 2000.

(37) ìB-to-B May Hit $7.3 Trillion by 2004,î

The Standard (Jan. 27, 2000) (http://

www.thestandard.com/article/display/

0,1151,9180,00.html).

(38) Identity Theft and Assumption

Deterrence Act of 1998, Pub.L. 105-318.

(39) See www.ogc.doc.gov/ogc/legreg/

testimon/106s/pincus518.htm. Fair

information practices form the basis for

the Privacy Act of 1974, the legislation

that protects personal information

collected and maintained by the

United States government. Principles

of fair information practices include

awareness, choice, appropriate levels

of security, data integrity, consumer

access to their personally identifiable

data, and accountability.
Leadership for the New Millennium: Delivering On Digital Progress and Prosperity

87

(40) Cookies are small bits of software placed

on a web userís hard drive. For persistent

cookies, which can track users over

time and across web sites, there is a

presumption against their use on

Federal websites unless there is clear

and conspicuous notice, a compelling

need to gather the data on the site;

appropriate and publicly disclosed

privacy safeguards for handling of

information derived from cookies, and

personal approval by the head of the

agency. See Mem. M-00-13, 22 June

2000 (www.whitehouse.gov/OMB/

memoranda/m00-13.html).

(41) A white paper describing PDD-63

is available at www.ciao.gov/

CIAO_Document_Library/paper598.html.

(42) Legg Mason Precursor Group,

ìThe Building Blocks of Growth in the

ëNew Economy,íî Spring 2000, at 6.

(43) Telegeography, ìInternational Bandwidth

2000,î 2000.

(44) Digital Economy 2000 at 59.

(45) Deployment of Advanced

Telecommunications Capability, (FCC CC

Docket No. 98-146) (Second Report), at

18, 21 Aug. 2000 (http://www.fcc.gov/

Bureaus/Common_carrier/orders/2000/

fcc00290.pdf) (hereinafter ìSecond

Section 706 Reportî).

(46) Deployment of Advanced

Telecommunications Capability, (FCC

CC Docket No. 98-146) (Report), 2 Feb.

1999 (http://www.fcc.gov/Bureaus/

Common_carrier/orders/1999/

fcc99005.wp) (hereinafter ìFirst Section

706 Reportî).

(47) Association for Local Telecommunications

Services, ìThe State of Competition in

the U.S. Local Telecommunications

Marketplace,î Feb. 2000, at 4.

(48) Morgan Stanley Dean Witter, ìThe

Broadband Report,î May 2000, at 8

(hereinafter ìMSDW Broadband Reportî).

(49) SBC Communications, Inc., ìSBC

Launches $6 Billion Broadband

Initiative,î 18 Oct. 1999 (http://

www.sbc.com/News_Center/

1,3950,31,00.html?query=19991018-1).

(50) MSDW Broadband Report at 8. In

October 1999, the FCC Cable Services

Bureau cited projections that 78 million

Americans would have access to

broadband technology by 2008. Federal

Communications Commission,

ìBroadband Todayî Oct. 1999 (citing

John Schwartz, ìHow Much Room in

the Fat Pipe?î The Washington Post,

19 Sept. 1999: 01).

(51) MSDW Broadband Report at 8. In

February 1999, the FCC estimated that

63 percent of all cable systems would be

broadband-ready by 2001. First Section

706 Report at 18.

(52) ìStarBand Communications Launches

Nations First Consumer Two-Way High

Speed Internet Service Via Satellite,î

Starband Press Release, 6 Nov. 2000

(www.starband.com/whoweare/pr/

110600.htm).

(53) Deployment of Wireline Services Offering

Advanced Telecommunications

Capability, (FCC CC Docket No. 98-147)

(Third Report and Order), 1999

(www.fcc.gov/Bureaus/Common_carrier/

Orders/1999/fcc99355.doc).

(54) Deployment of Wireline Services

Offering Advanced Telecommunications

Capability, (FCC CC Docket No. 96-98)

(Order on Reconsideration), 2000.

(55) Promotion of Competitive Networks in

Local Telecommunications Markets,

(FCC WT Docket No. 99-217) (First Report

and Order), 2000.

(56) Application of SBC Communications Inc.

et al., (FCC CC Docket No. 00-65)

(Memorandum Opinion and Order), 2000

(www.fcc.gov/Bureaus/Common_carrier/

Orders/2000/fcc00238.doc); Application

of Bell Atlantic New York (Memorandum

Opinion and Order), 1999 (www.fcc.gov/

Bureaus/Common_carrier/Orders/1999/

fcc99404.doc).
3rd Annual Report U.S. Government Working Group on Electronic Commerce

88

(57) Inquiry Concerning High-Speed Access

to the Internet Over Cable and Other

Facilities (FCC GN Docket No. 00-185)

(Notice of Inquiry), 2000.

(58) Arian Cha & Christopher Stern,

ìAgencies Hovering Over AOL Deal,î

The Washington Post, 9 Sept. 2000: E01

(www.washingtonpost.com/wp-dyn/

articles/A18300-2000Sep5.html).

(59) ìMassachusetts Coalition for Consumer

Choice and Competition on the Internet

and AT&T Agree on Plan for Consumer

Choice of ISPs in Massachusetts,î

AT&T Press Release, 27 June 2000

(www.att.com/press/item//

0,1354,3037,00.html); ìAT&T Broadband

To Launch Trial of Multiple Internet

Providers,î AT&T Press Release,

7 June 2000 (www.att.com/press/item/

0,1354,2951,00.html).

(60) Towards Digital Equality, U.S.

Government Working Group on

Electronic Commerce, 2nd Annual

Report (1999), at 16.

(61) High speed lines can provide over 200

Kbps in at least one direction. FCC,

ìFederal Communications Commission

Releases Data on HighñSpeed Services

for Internet Access,î News Release,

October 31, 2000 (www.fcc.gov).

(62) Falling Through the Net 4 at 24.

(63) Second Section 706 Report (2000) at 6.

(64) National Telecommunications and

Information Administration and Rural

Utilities Service, ìAdvanced

Telecommunications in Rural America:

The Challenge of Bringing Broadband

Service to All Americans,î Apr. 2000,

(www.ntia.doc.gov/reports/

ruralbb42600.pdf).

(65) Id. at 17-23.

(66) Falling Through the Net 4 at 24.

(67) National Center for Education Statistics,

ìInternet Access in U.S. Public Schools

and Classrooms: 1994-1999,î Stats in

Brief, Feb. 2000 (nces.ed.gov/pubs2000/

2000086.pdf).

(68) The development of so-called ìthird

generationî wireless services represents

a trend towards high-speed, broadband

services, similar to what is being seen for

wired services. Depending on the system

and how it is configured, however, data

rates for such wireless services, may not

be as fast as what can be achieved for

wired services, and therefore may not

all meet the definition of ìbroadbandî

services as defined by the FCC or

others. For example, IMT-2000 protocols

developed through the International

Telecommunication Union have

estimated speeds of 144 kps for high

mobility (e.g., vehicular) traffic, 384 kps

for pedestrian traffic, and 2 mps or

higher for fixed (e.g., indoor) traffic. Third

generation services, however, represent

a significant increase in capacity over

what is available today, and offer an

alternative means of obtaining Internet

and other data services.

(69) Cellular Telephone Industry Association

(www.wow-com.com); Electronic Trend

Publications, ìThe Worldwide Wireless

Network,î July 2000.