Rep. Rick Boucher's Summary of HR 1685 IH.
Internet Growth and Development Act of 1999.

Date: May 6, 1999.
Source: Rep. Rick Boucher (D-VA).


The Internet Growth and Development Act of 1999 is a comprehensive legislative treatment of the major challenges which confront the Internet today:

• It accelerates broadband deployment for higher speed Internet connections both within the “last mile” and within the Internet backbone.

• It enhances electronic commerce by authorizing properly authenticated electronic signatures and assuring that no party to a commercial transaction can disavow the transaction due to the absence of a physically written signature.

• It encourages a greater entrusting of sensitive information online by requiring that all web sites post their policies with respect to the collection of information from web site visitors, state the use of that information and whether or not it is disseminated beyond the web site.

• It gives legal voice to the policies of Internet Service Providers which seek to protect the functioning of their facilities from barrages of unsolicited electronic mail advertisements. This bulk commercial e-mail or “spam” can significantly slow down, degrade or even halt the flow of information through the facilities of Internet access providers.

• It assures that all platforms providing transport to the Internet remain open and accessible to all Internet Service Providers so that each person may have an unrestricted choice among Internet Service Providers.

A more detailed description of each of these provisions follows.

I. Authorization of Electronic Signatures

There are currently a variety of legal requirements for writings as a condition of the enforceability of various kinds of contracts. Accordingly, in certain circumstances under the current law, some contracts could be repudiated by a contracting party if his physical written signature is not provided as a part of the contract. To encourage electronic commerce in the absence of written signatures, the bill provides that if a contracting party’s electronic signature is properly authenticated by a third party through the use of reliable means, that party may not repudiate the contract based upon the absence of his physical written signature.

II. Giving Full Legal Voice to the Anti-Spam Policies of Internet Service Providers

Unsolicited electronic mail advertisements when sent in bulk can seriously degrade the performance of the Internet and clog the facilities of Internet Service Providers. Many Internet Service Providers have developed anti-spam policies, and this provision of the legislation would give those policies legal effect. Any person who has actual notice of the electronic mail service provider’s policy on unsolicited electronic mail advertising and who also knows that the service provider’s facilities would be used in the dissemination of the unsolicited electronic mail will be liable to the service provider for any actual loss it suffers or for liquidated damages in the amount of $50 for each electronic mail message initiated or delivered in violation of the policy, up to a maximum of $25,000 per day along with reasonable attorney’s fees.

The bill also makes it a criminal offense intentionally to falsify Internet domain, header information, date or time stamps, originating e-mail addresses or other e-mail identifiers or intentionally to sell or distribute any computer program which is designed or produced primarily for the purpose of concealing the source or routing information of bulk unsolicited electronic mail. This provision strikes at the practice of bulk e-mailers who through the use of specially designed software change the origination information in e-mail messages as each small cluster of messages is sent. That practice is used to defeat the blocking software of Internet Service Providers which deflects from their facilities large volumes of messages originating from a single source.

III. A New Privacy Right for Internet Users

In response to the growing practice of web site operators of collecting information from web site users either directly through a registration form or indirectly through the implantation of a “cookie” on the user’s hard disk, the bill requires that all web site operators post their information collection and use policies in a conspicuous manner so that web site users will be informed of the information which is collected and the use to which that information is put and have an opportunity to exit the web site without any information being collected if the visitor objects to that collection and use of information. The provision will be enforced by the Federal Trade Commission.

IV. Acceleration of Broadband Deployment

1. The bill requires all local telephone companies within 180 days of the effectiveness of the legislation to file plans with state public service commissions for the deployment of broadband services in all local exchanges where the deployment of the broadband service is both technologically feasible and economically reasonable. The bill defines “broadband service” as services providing a data rate of at least 200 kilobits per second. This data rate encompasses Digital Subscriber Line (DSL) and more advanced services. The definition is not intended to include ISDN services. In view of the fact that DSL services at the present time reach only 50,000 households nationwide, this provision is inserted to spur the deployment of DSL in all telephone exchanges nationwide where there are no technical barriers and where the provision of the service is economically reasonable.

2. Following the acceptance of the plan required in the previous paragraph and upon the provision of reconditioned loops capable of facilitating an entry of a DSL competitor in 70% of the lines within a local exchange, the provision of DSL services within that local exchange will no longer be subject to price or rate of return regulation.

3. Upon the commitment by a telephone company to make reconditioned loops suitable for the provision of DSL service by a competitor available to competitors immediately in those exchanges in which the telephone company is presently offering DSL services and within 120 days of the receipt of a request for reconditioned loops in those exchanges in which the telephone company is not offering DSL services, the telephone company may avoid the unbundling and discounted resale requirements contained in sections 251(c)(3) and 251(c)(4) of the Communications Act. This provision is designed to ensure the more rapid availability of reconditioned loops to companies seeking to offer DSL services in competition with the incumbent telephone company.

4. To assure an increase in Internet backbone capacity and to stimulate competition in the offering of backbone services, the bill enables Bell Operating Companies to carry across LATA boundaries data to the extent that the data is not a voice-only service, whether or not the Bell Operating Company had obtained approval to offer interLATA services under section 271 of the 1996 Act. This provision would continue the prohibition on the delivery across LATA boundaries of voice-only long distance traffic until the Bell company receives approval for the delivery of that service under Section 271; however, data which is other than a voice-only service could be delivered immediately across LATA boundaries. The enactment of this provision would strongly stimulate investment in the Internet backbone and competition among Internet backbone providers.

V. Consumer Choice of Internet Access Providers Assured

Under current law, telephone companies which offer both transport and Internet access services are prohibited from bundling those services and offering them to customers for a single price. Telephone companies may offer both services, but they must give their transport customers a choice of whether to purchase Internet access service from the telephone company or from another provider of Internet access services.

Cable television companies, who are beginning to deploy cable modem services, need not comply with this customer choice guarantee. Not surprisingly, the practices of the large cable companies in deploying their cable modem services is to bundle the transport along with their affiliated Internet access services. One price is then charged for the package of transport and Internet access, and the customer does not have a choice of declining to accept the transport provider’s Internet access service in favor of that offered by another Internet access provider. The legislation assures that just as telephone company transport platforms are open today, all platforms offering Internet transport in the future will be open as well. Under the bill, a presumption of a violation of the Sherman Act is established if a broadband access transport provider discriminates in favor of its own Internet access service and against the Internet access service of a competitor.

There are more than 2,000 Internet Access Providers nationwide. The vast majority of these ISPs are start-up companies who have brought a new level of entrepreneurship to the telecommunications industry. Many of them will become the competitive local exchange carriers who will offer competition not only in the provision of Internet access but in the offering of local telephone service and other telecommunications services. As cable modem services are deployed by cable TV companies, the broad bandwidth of those services will surely attract a large clientele, much of which will be the existing customer base of independent ISPs. If the cable TV companies are permitted to force their cable modem customers to purchase their affiliated Internet access services as a condition of subscribing to their high speed transport service, many of the independent ISPs will be foreclosed from a large portion of their existing customer base and from market growth opportunities. The legislation assures that this anti-competitive practice will not occur and that all Internet transport platforms in the future will be open, much as telephone company transport platforms are open today.