FC: Michael Geist: Internet law, six years ago and today

From: Declan McCullagh (declanat_private)
Date: Mon Jun 30 2003 - 21:53:02 PDT

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    Date: Mon, 30 Jun 2003 08:22:55 -0400
    To: declanat_private
    From: Michael Geist <mgeistat_private>
    Subject: Internet Law - What A Difference Six Years Make
    
    
    Declan,
    
    Of possible interest for Politech -- my regular Toronto Star Law Bytes 
    column reflects on the contrast in Internet law in the summer of 1997 
    compared with the summer of 2003.  In 1997, Internet governance was defined 
    by a self-regulatory ethos, an Internet tax moratorium was on the way, and 
    the U.S. Supreme Court struck down the CDA.  Fast forward to the past week, 
    where last week's ICANN meeting illustrated that governments are no longer 
    content to sit on the governance sidelines, the EU launches VAT collection 
    on digital downloads tomorrow, and last week the same Supreme Court upheld 
    the Childrens' Internet Protection Act.
    
    MG
    
    <http://shorl.com/gedesagrogaste> [Toronto Star]
    
    Tax holiday expiring, regulators aspiring on Web
    
    Michael Geist
    
    The Internet in the summer of 1997 enjoyed a sense of seemingly unlimited 
    potential and limited controls. While businesses and individuals flocked 
    online, government ran away from regulating the Internet, adhering to a 
    self-regulatory philosophy that dictated a hands-off approach.
    
    For example, rather than using governments and international organizations 
    to administer the domain name system, the U.S. government created the 
    Internet Corporation for Assigned Names and Numbers (ICANN), a California 
    non-profit corporation that was tasked with the responsibility.
    
    On matters of Internet taxation, the U.S. enacted the Internet Tax Freedom 
    Act, which established a moratorium on new Internet taxes. In fact, even 
    when the U.S. Congress sought to regulate obscenity on the Internet through 
    the Communications Decency Act, the U.S. Supreme Court struck down the law 
    as unconstitutional.
    
    Fast-forward to the summer of 2003 and it becomes clear just how much 
    Internet law has changed. Governments are no longer content to sit on the 
    sidelines on Internet governance matters, Internet taxation is here, and 
    the U.S. Supreme Court last week upheld a law that mandates software 
    filters for publicly-funded libraries in an effort to curb children's 
    access to online pornography.
    
    Internet governance issues took centre stage last week in Montreal as the 
    global domain name community gathered for the first ICANN meeting held in 
    North America in several years. With over 500 delegates from around the 
    world, all stakeholder interests were present including domain name 
    registrars, country-code domain names such as the host Canadian Internet 
    Registration Authority, business interests, the intellectual property 
    community, and Internet users.
    
    In the emerging hierarchy of interests, the group that sits at the top is 
    government. Governments participate in Internet governance matters through 
    the Governmental Advisory Committee (GAC), a committee originally 
    established to provide governments with an avenue to provide feedback and 
    advice to ICANN.
    
    The Montreal meeting featured a newly aggressive GAC as representatives 
    questioned ICANN on its implementation of recent World Intellectual 
    Property Organization recommendations on dealing with disputes involving 
    country name domains (such as Canada.com). Rather than asking ICANN where 
    the policy sits, the GAC inquired why it wasn't yet implemented. This 
    approach heralds a new dynamic in Internet governance where government 
    moves from merely providing advice to actively proposing and defining policy.
    
    The change in approach is similarly in evidence on the Internet taxation 
    front. Starting tomorrow, the European Union will require non-E.U. firms 
    selling digital products into the E.U. via the Internet to collect Value 
    Added Tax (VAT) on behalf of E.U. member countries.
    
    While U.S. interests have argued strongly against the measure, the E.U. 
    points to simple tax fairness, noting that the current tax-free position 
    enjoyed by non-E.U. companies places them at a competitive advantage over 
    their European counterparts. In response to the requirement, large U.S. 
    e-commerce companies such as eBay have instituted new mechanisms to collect 
    the applicable taxes.
    
    With the E.U. in the lead, it appears likely that other countries will soon 
    follow. Dozens of U.S. states have been working toward a unified system of 
    sales tax collection that will allow for the collection of sales taxes on 
    Internet-based sales and the Canadian government will presumably engage in 
    similar efforts to apply the GST to online sales sometime soon.
    
    The gradual change in approach to Internet law is best illustrated by last 
    week's U.S. Supreme Court case. In its 1997 Communications Decency Act 
    decision, the court unanimously struck down provisions found in the statute 
    that dealt with online obscenity. The message at that time was clear - it 
    would not support overbroad legislation that could severely impinge free 
    speech and access to content on the Internet.
    
    While last week's decision involved a far more sophisticated and limited 
    piece of legislation, the Children's Internet Protection Act was struck 
    down earlier by a trial court and appellate court on constitutional 
    grounds. A divided Supreme Court reversed those decisions by upholding the 
    law, subject to the condition that libraries provide adult patrons with 
    unfiltered Internet access should they request it.
    
    The most telling aspect of the decision was how the majority of the court 
    thought that requiring libraries to filter Internet content was completely 
    unremarkable. The majority pointed out that the U.S. Congress has 
    established other programs that tie library support to particular policies 
    and it saw little difference between those programs and the Internet 
    filtering requirement. The majority was not troubled by fears of filters 
    "overblocking" content, a frequent criticism of software filter programs 
    that are often unable to distinguish between pornographic or hate sites and 
    those devoted to sexual education or anti-racism.
    
    The U.S. decision caught many observers by surprise, since they have been 
    lulled into the sense that the Web was somehow beyond traditional 
    regulation. The past week's events in Montreal, Europe, and Washington 
    suggest that that is no longer the case as governmental regulation of 
    Internet is actually becoming increasingly the rule, rather than the exception.
    ------------------------------------------------------------------------
    Michael Geist is the Canada Research Chair in Internet and E-commerce Law 
    at the University of Ottawa and technology counsel with law firm Osler 
    Hoskin & Harcourt LLP. He is online at http://www.lawbytes.ca and 
    http://www.osler.com (mgeistat_private).
    
    
    
    
    
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