Another major enforcement issue is identifying the state, country or countries that have tax jurisdiction over income generated by electronic transactions. Electronic commerce permits a foreign person to engage in multiple business transactions with customers in the United States without ever having entered the country. I recently met John Chambers, CEO of Cisco Systems Inc., and he said something that caught my attention. He implored me, as a regulator, to understand the issues of taxation and regulation before acting. I cannot overstate how difficult it is to heed his advice, although I think his suggestion is most applicable to all of us here today.
People are most comfortable with what they know.
And in this case, what we know is ill-suited to the world that is being shaped by the Internet economy. Privacy Let me give you an example, using the very important topic of Internet privacy, of how Washington, D.C. works. Internet privacy has been a hot topic at the FTC for the better part of three years. Yet as concerns about privacy have become a part of public consciousness, industry has stepped up to the plate and taken leadership in promoting self-regulatory solutions. But the debate in Congress is taking a very different path.