Web Techniques Magazine
September 1997
Volume 2, Issue 9

Doing Justice to the Web

What the Internet Did Over
Summer Vacation

By Catherine Sansum Kirkman
ckirkman@wsgr.com

Unlike many of its enthusiasts, the Internet did not go on vacation this summer. While you were (hopefully) swimming in the ocean or boating on the lake, a number of hot topics came to a boil on the legal front: a choking regulatory scheme proposed by your local telephone company to assess per-minute long-distance charges for Internet usage; proposed federal legislation to regulate spamming; the ongoing controversy over who should be entitled to register domain names; and a bid by industry giants to capture the so-called privacy market.

No Internet Long-Distance Charges

Your local telephone company recently lost out in its efforts to bill your Internet account for long-distance charges. The local exchange carriers (LECs) were very worried about the network congestion you might experience while surfing the Internet. To help you, they wanted to raise the rates for Internet usage of the public switched network. The LECs petitioned the Federal Communications Commission (FCC) for a change in the pricing structure that they are allowed to charge Internet service providers (ISPs). The FCC ruled, however, that the LECs will not be permitted to impose interstate per-minute access charges on ISPs. So for now, at least, these charges will not be passed on to you, although the LECs will probably make a play at the state level.

Back in 1983, long before most could foresee the Internet explosion, the FCC decided that ISPs could use LEC facilities to originate and terminate interstate calls without paying interstate access charges. As a result, ISPs can purchase services from LECs under the same intrastate tariffs available to end users. They pay business-line rates and the appropriate subscriber-line charge, rather than interstate access rates, even for connections that cross state boundaries. Given the ISPs' high volume of usage, business-line rates are significantly lower than the equivalent interstate access charges. ISPs typically pay LECs a flat monthly rate for their connections regardless of usage.

The FCC ruled that maintaining the existing pricing structure avoids disrupting the still-evolving information-services industry. In fact, a proposed Senate resolution attributed the success of the Internet to its responsiveness to technical challenges, unencumbered by preconceptions imposed by the regulatory environment, and concluded that:

...imposition of telephone access charges by regulation would inhibit the development of the Internet and discourage the use of the Internet at a time when the national policy should be to promote the development of advanced telecommunications networks such as the Internet.

The FCC also said that ISPs should not be subjected to an interstate regulatory system designed for interexchange voice telephony solely because ISPs use LEC networks to receive calls from their customers. The FCC doubted whether ISPs use the network in the same way as long-distance, interexchange carriers (IXCs), noting that many characteristics of ISP traffic (such as large numbers of incoming calls) are shared by other classes of business customers. To address the LECs' concerns about network congestion, the FCC will focus on solutions like new network configurations and technologies, instead of rate increases.

Federal Anti-Spam Legislation

The Unsolicited Commercial Electronic Mail Choice Act of 1997, a bill to regulate the transmission of junk email, was introduced by Senator Frank Murkowsi (R-AK) and referred to the Senate Commerce Committee. The bill would require unsolicited commercial email to be readily identifiable and filterable by individuals and ISPs.

The bill would require any person who transmits an unsolicited Commercial Electronic Mail message to use the term "advertisement" as the first word of the subject line of the message, and to display prominently in the body of the message the name, physical address, email address, and telephone number of the person initiating the message. "Commercial Electronic Mail" would include any email that contains an advertisement, a solicitation for the use of a toll-free or 900 number, or a list of one or more Web sites that contain advertisements or telephone solicitations.

The Federal Trade Commission (FTC) would have authority to impose civil fines of up to $11,000 per violation and/or to bring legal action in federal court to recover this amount. The FCC would be permitted to assist the FTC in carrying out its enforcement duties. The Attorney General of each state could sue for an injunction or for damages on behalf of its residents. In addition, any injured party could seek injunctive relief and sue for damages of up to $5000 per violation, plus costs and attorneys' fees, along with any other state-law remedies.

The bill would exempt ISPs unless they actually initiated the transmission. If the FTC determined that an ISP's facilities were used to initiate a violating transmission, the ISP would be required to terminate the violator's account. If an ISP received more than 100 individual complaints about a potential violation, it would have to forward the complaints to the FTC. ISPs would also have to make available to subscribers a system permitting them to block the receipt of any email containing the term "advertisement" in its subject line. Also, on its own initiative, any ISP could block the receipt through its service of any email containing the term "advertisement." Any person receiving a transmission of junk email could demand by reply email that the transmissions be stopped. The transmitter would have to cease and desist within 48 hours after receipt of the request.

Most Internet users recoil against regulation, but perhaps the time has come to address junk email. A lawsuit filed recently in Austin, Texas claimed that the use of false return addresses on junk email, and the resulting effect on the people who actually own those addresses, is a nuisance, trespass, and conversion under the law. Most victims of junk email have neither the time nor resources to sue, and may not be harmed beyond the annoyance level, but according to Gene Crick, president of the Texas Internet Service Providers Association:

Increasingly, "spammers" are using false return addresses to avoid taking full responsibility for the harm caused by their unsolicited commercial email. These forgeries dump huge volumes of unwanted junk mail onto Internet companies and their customers.

Domain-Name Registration Update

Back in May, a conference was held in Geneva to revamp the system of Internet domain-name registrations. The conference, called "Internet Domain Names: Information Session and Meeting of Signatories and Potential Signatories of the Generic Top Level Domain Memorandum of Understanding," or gTLD-MoU, for short, was sponsored by the Internet Ad Hoc Committee (IAHC) and organized by the Internet Society and the International Telecommunications Union. A Memorandum of Understanding (MoU) embodying the new IAHC plan was approved by eighty-eight organizations attending the conference, most of whom were potential domain-name registrars.

However, the signing of the MoU represented not the end, but only the opening of a new chapter, in the controversy over who should have the right to be a domain-name registrar. The European Union expressed reservations about the plan, and the U.S. State Department questioned whether nongovernmental entities should control the administration of the Internet.

Much of the controversy exists because the present domain-name registrar, Network Solutions Inc. (NSI), would be required to relinquish its monopoly over registering the most popular generic top-level domains (gTLDs). The IAHC plan provides that registration of .com, .net, and .org would be shared upon conclusion of the cooperative agreement between NSI and the United States National Science Foundation (NSF), which now allows NSI to act as the sole registrar for these gTLDs. The NSF has decided not to renew NSI's exclusive contract, which will expire in March 1998.

As I mentioned in my May 1997 Web Techniques column, the IAHC reform plan also created a stir because it would increase the number of names available to specify Internet locations, by adding seven new gTLDs. The new fields of use would be .firm for businesses or firms, .store for businesses offering goods for sale, .web for entities emphasizing activities related to the Web, .arts for entities emphasizing cultural/entertainment activities, .rec for entities emphasizing recreation/entertainment activities, .info for entities providing information services, and .nom for individual or personal nomenclature.

Not surprisingly, NSI is opposed to the IAHC plan, along with a number of ISP groups such as CIX, the Commercial Internet Exchange. Network Solutions' alternative proposal for domain-name registrations would conveniently allow NSI to continue as the sole registrar of .com, .net and .org (based on a first-come, first-served rationale).

In June, the interim Policy Oversight Committee (iPOC) for domain-name registrations, established pursuant to the MoU, backed off the original IAHC plan that limited the number of newly authorized domain-name registrars to twenty-eight, drawn from seven global regions. The iPOC acknowledged general criticism of this limit and the related lottery process, and floated an alternative approach, whereby it would retain the financial and technical qualifications to become a registrar without limiting the potential number of registrars. Thus, under the plan, anyone satisfying the qualification requirements could become a registrar.

Meanwhile, opposition to the IAHC plan had mobilized. One of the dissenters, the Association for Interactive Media (AIM), formed an alternative forum called the Open Internet Congress, and labeled the MoU a "cleverly disguised agreement that effectively assigns permanent control over the Internet to a few groups." In response to complaints from Network Solutions and the ISP community, as well as a general fear of impending chaos in the domain-registration process, the White House decided to step in and act as referee. Most people breathed a sigh of relief, because although Network Solutions is the only game in town, it makes the trains run on time. The President's Office of Management & Budget organized a task force to look at the issue and take comments from the Internet community. Let's hope this gets resolved before next March!

(For more background on the IAHC plan, see my May column.)

Your Privacy Online

The President's Office also released a discussion paper titled "Options for Promoting Privacy on the National Information Infrastructure," prepared by the Information Policy Committee of the National Information Infrastructure Task Force.

The paper discusses the laws and policies affecting information privacy in government records, communications, medical records, and the consumer market. The paper discusses the "intriguing possibility" that "privacy could emerge as a market commodity in the Information Age," and goes on to discuss how the government could facilitate development of a "privacy market." It also discusses options that involve creation of a federal privacy entity. The Options Paper is available at www.iitf.nist.gov/ipc/ipc-pub.html.

In an apparent bid for this so-called privacy market, Firefly Network Inc. has agreed to cooperate with Netscape and Microsoft on a standard for privacy on the Web. Firefly bases its efforts on the Open Profiling Standard (OPS) for privacy in the exchange of information between individuals and Web sites. The design of OPS is motivated by three guiding principles for the trusted exchange of profile information:

Informed consent from the individual so that permission is granted in advance to collect and use personal information.

Value exchange so that the individual is offered something by the party collecting personal information.

Control by source, so that the party gathering profile information about individuals also controls permission for its dissemination.

For Netscape and Microsoft to cooperate on anything, there must have been a compelling reason. Perhaps it was the fact that the World Wide Web Consortium (W3C) announced the new W3C Platform for Privacy Preferences (P3) Project. This privacy standard sounds like it was designed by Ralph Nader. P3 allows Web sites to describe their privacy practices and allows end users to set policies about the collection and use of their personal data. If there is a match between the Web site's practices and the user's preferences, a seamless connection to the site is established. If there is no match, the end user is notified of the difference and is offered other access options to select an acceptable privacy environment. P3 also enables users to download recommended settings established by organizations such as industry associations and consumer-advocacy groups.

Stay tuned to this space for more on these topics as they unfold, as well as for the latest on Internet laws and lawsuits-the Internet does not stop for Thanksgiving or Christmas holidays either!


Catherine is a cyberspace attorney with the law firm of Wilson Sonsini Goodrich & Rosati in Palo Alto, CA, and is solely responsible for the content of this column. She can be contacted at ckirkman@wsgr.com.
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