Ira Magaziner Addresses Policy Conference

(May 12, 1998)  Ira Magaziner, Senior Advisor to President Clinton for Policy Development, addressed a gathering of academics, IT professionals, and government officials regarding the administration's policies on privacy, blocking software, domain names, encryption, Internet taxation, and other issues.

Magaziner spoke Monday in Washington DC at the Policy '98 Conference, sponsored by the Association for Computing Machinery.   The conference began on Sunday, and will finish up on Tuesday.

Magaziner chairs a joint National Economic Council and National Security Council initiative to increase U.S. exports.  In January he released the controversial "Green Paper," a preliminary draft of the administration's policy on the Internet and privatization of the domain name registration system.  During the first Clinton administration, he managed the Clintons' health care initiative.

Four Principles for Government Regulation of Information Technology

Magaziner listed and explained the four principles that guide this administration's handling of information technology issues.

First.  "This is something that should be privately lead, not government lead, because governments are inflexible."

Second.  "In the economic sphere, it should be a market driven environment, not a regulated environment."  He cited as an example that "we traditionally regulated telecommunications and broadcast.  But we think that the Internet, and this new converging environment that is coming together with the Internet broadcasting telephony ... that we should allow it to be a market driven environment, not a regulated environment."

Third.  "When the government does need to act, that we act in a minimal and transparent way -- that we not pass omnibus legislation, but rather just act in ways that are clearly necessary."

Fourth.  "We need to respect the nature of the medium in whatever we do."  He elaborated that, "any policy that is tied to a particular technology will be outmoded before it is enacted.  Hence, we need to have technology neutral policies."

Encryption

Having announced these principles, Magaziner admitted in the question and answer session that the government has violated them in its regulation of private sector encryption.

"I think encryption is the one area where the policy we are following is not consistent with the principles."  He explained that there was a division in the administration between the commerce side and the law enforcement side.

Privacy

Magaziner advocated a minimal government role in protecting privacy on the Internet.   "We believe very strongly that people should be able to control their own privacy on the Internet."  He added that the problem with regulations is that with so many websites, and many of them located offshore, monitoring and enforcement would be difficult.

"Instead, what we think works better ... is that there are codes of conduct set up by industry groups, and consumer groups together."  Magaziner suggested that the basic principles to be adopted would be that "A seller or website owner should notify a buyer or a visitor of what is going to be done with information that is collected.   The buyer or visitor should have the ability to say no. ... The seller is bound to accept that. ... And then websites that conform to that conduct can display a seal."

According to Magaziner, this "leaves the choice with the individual about the protection of their own data."  The only role of government, in this case the FTC or Department of Justice, would be to monitor complaints about the use of the seal, and prosecute violators.

Blocking Software

Magaziner endorses the private use of blocking software.  "What you want to try to do is empower people to protect themselves."  He added that "the best thing that you can do, for example, with content issues, is to try to develop filtering software, that can be chosen by people, in some way or another, according to their own value systems."

However, Magaziner was silent on whether public schools or libraries should be required, or allowed, to use blocking software.  Nor did he comment on any pending legislation requiring the use of blocking software in certain public schools.

He added that, "you should be able, when you sign up for an internet service, to just check some boxes for organizations that have filtering software that might correspond to your own values." 

Domain Name Report

The final report on the domain name registration system should come out late this week or early next week.  "It is going through the clearance process," said Magaziner.  He would not say what was in it, because it constitutes a Commerce Department rule making.  However, he did say that "it is our intention to privatize the technical management of the Internet."

Internet Tax Freedom Act

"There should be no discriminatory taxes on the Internet," Magaziner responded to a question.  He also stated that "the Internet should be a duty free zone."  He did not comment on which of the many versions of the Internet Tax Freedom Act he thought ought to be enacted.

Information Technology in the U.S. Economy

Magaziner also reviewed the role of the information technology sector on the overall U.S. economy.  Speaking to the IT professionals in the auditorium, he said that "the technical developments that you and other have brought are going to bring about an economic transformation that are at least as significant as the Industrial Revolution was."

He pointed out the disparate beneficial impact of this sector.   "Information technologies are representing over one third of the real growth" of the U.S. economy.   Also, he stated that last year's inflation rate of 2.1 % would have been 3.2%, but for dropping prices in the computer industry.

Magaziner also predicted continued rapid growth of Internet use, and Internet commerce.   He estimated that Internet commerce will exceed $300 Billion by 2002.  By just next year, 20% of all book sales will take place over the Internet.

But this transformation has negative, as well as positive, effects.  The downside would include "if the Internet itself becomes only a commercial vehicle -- it becomes so dominated as a commercial vehicle -- that loses the value as a research vehicle (and for) social interaction."  The other problems are "privacy violations" and "children having access to the kinds of material their parent don't want them to have access to."