By JERI CLAUSING

Worries About Internet Crime Spark Legislative Blitz >p> America Online Takes New Opinions to Capitol Hill; E-Commerce Delegation in Europe

ASHINGTON -- Lawmakers will open a new round of hearings addressing recent attacks on Web sites Tuesday, with civil libertarians warning them to be careful when looking for solutions in a frenzy of legislation.

Jim Dempsey, senior staff counsel for the Center for Democracy and Technology, plans to tell a joint House and Senate oversight panel that some of the proposed laws could trample on the privacy of Internet users.

Among the proposals being discussed by some House members is a bill that would make it easier for companies to provide information to the government about electronic attacks and security issues by exempting that data from the Freedom of Information Act. Some companies are concerned that without this exemption, their proprietary data could be released to the public. But advocates are worried about providing exemptions to a law designed to insure that the government is accountable to the people.

The Federal Bureau of Investigation is using the hacker scare to try to find a sponsor for the Cyberspace Security Act. The proposal it has drafted would set legal standards under which law officers could gain access to codes used to unscramble encrypted digital communications.

The proposed legislation "is fraught with problems and could reopen the encryption debate," the Center for Democracy and Technology said in an e-mail bulletin late Friday. "It has no connection with the denial of service attacks (no connection with Internet security, period), but the FBI has been shopping it in recent weeks as a response to the attacks."

Dempsey said the bill is just one example of the bad laws that could get passed amid an Internet security frenzy on Capitol Hill.

"The fear is of the Christmas tree effect, that something that may start out modest and focus on narrow changes in the law becomes a Christmas tree as members in both the House and Senate rush forward to hang their own ideas on it," Dempsey said. "Not only do we fear that some bad laws will be included, but that the privacy side of the equation will be ignored."

Dempsey pointed out that fears of privacy invasions are the biggest concerns people have about using the Internet. "So if the concern here is trust, which it is, and the denial of service attacks undermine trust in the Internet, the way to solve that is not to give more power to the government," he said.

America Online Takes New Opinions to Capitol Hill

Once leaders in the fight to force cable companies to open their high-speed Internet lines to competitors, America Online and AT&T quickly changed their tune once they bought their own cable companies.

The mutating positions of these giants were detailed in a report released by consumer groups on Monday, a day before the first of two hearings this week by key Senate committees examining the pending merger of AOL and Time Warner.

Steve Case, chairman and chief executive of AOL, and Gerald Levin, chief executive of Time Warner, are scheduled to testify on Tuesday afternoon before the Senate Judiciary Committee. At the hearing, the two are expected to outline how the merged company will deal with competitors seeking access to its high-speed lines. The executives are scheduled to return to Capitol Hill Thursday for a hearing before the Senate Commerce Committee.

No other witnesses are scheduled for Tuesday's hearing. But the Consumer Federation of America, Consumers Union and the Media Access Project hope their report will prompt lawmakers to ask some key questions about the implications of the AOL-Time Warner merger for consumers.

The report analyzes filings the companies made with the Federal Communications Commission, the Canadian Radio-Television and Telecommunications Commission and the City of San Francisco to push governments to force cable companies to open their high-speed networks to competitors. It contrasts the detailed legal arguments from those documents with more recent public statements.

In the case of AOL, the report says, the Virginia company aggressively lobbied city commissioners in San Francisco to adopt open access and to give private parties, as well as the city and county, the right to sue the cable operator if access was denied. At the federal level a few months earlier, AOL had urged the FCC to impose the open access obligations on AT&T.

All of that changed once AOL and Time Warner announced merger plans. The report quotes AOL's Case as saying, "We always hoped [open access] would come through the marketplace, rather than having to get government involved." And Time Warner's Levin said the two companies were "going to take the open-access issue out of Washington, out of city hall, to the marketplace."

While noting that this is far from the first time that a company has flip-flopped on a position after a merger or acquisition, the report says the cases are "unique given what AOL and AT&T are seeking from policymakers: a trust-me, hands-off approach to open access."

"They claim they can be trusted to do what they previously claimed could only be accomplished through regulation," the report says. "By saying 'trust us,' they have made their honesty an issue."

Consumer groups are concerned about the open-access issue because they want to insure that cable customers are able to choose the types of services and content they receive over their high-speed Internet connection, instead of being forced to use what is provided by their cable company.

E-Commerce Delegation in Europe

For the second year in a row, Representative Bob Goodlatte spent his President's Day break in Europe, meeting with officials there about key electronic commerce issues.

At an international conference in London, Goodlatte and fellow members of the Congressional Internet Caucus debated Internet taxes with representatives of more than 25 other countries.

Goodlatte and other members of the Congressional delegation expressed skepticism about a proposal from representatives of some European Union nations that would apply their existing value-added taxes to digital goods sold online. Whether and how that tax, which averages about 20 percent in most European nations, should be applied in cyberspace is the subject of an upcoming white paper by the European Union.

Goodlatte and Rick Boucher, both Republicans from Virginia, also promoted the United States' stance on self-regulation of data privacy issues during testimony before the European Parliament in Brussels.

At the end of the week, the group traveled to Geneva for meetings with the World Trade Organization and the World Intellectual Property Organization.

The CAPITAL DISPATCH column is published weekly, on Tuesdays. Click here for a list of links to other columns in the series.

http://www.nytimes.com/library/tech/00/02/cyber/capital/29capital.html

-- Jen Bunker (jen@bunkergroup.com), February 29, 2000