The Voice of the eCommerce Industry

"Community Conscious" Internet Service Providers

Tennessee has a proposal to create a "Tennessee community conscious Internet provider" seal to be awarded by the consumer affairs division. A bill introduced in the Tennessee General Assembly - HB 2530 - would award a seal to ISPs that:

1) retain IP addresses for 2 years;

2) take down communications that are obscene or harmful to minors;

3) prohibit customers from publishing communications obscene or harmful to minors; and

4) comply and cooperate with law enforcement requests and court orders.

Granted, Tennessee is the "volunteer state", but if this bill were to pass would ISPs really participate?

Note how the bill links "obscenity" - which is not protected speech under the 1st Amendment - with material harmful to minors -  which could be almost anything, most of which would be protected speech.

This is a trend we're seeing--using child porn and child online safety as a "trojan horse" into regulating the online behavior of everybody through rules on ISPs. Adam Thierer calls it "deputizing the middleman" -- an apt phrase for the kinds of policing that ISPs may be doing in the future based on the regulatory and market pressures they're seeing today.

Hawaii has a bill pending that would make it a felony for ISPs to knowingly fail to report subscribers who acquire, possess, solicit or transmit images of child pornography.

Forget a "seal of approval" - may as well just throw ISPs a badge.

-Braden

Does Tennessee Really Want to Treat Concert Fans as Criminals?

The Tennessee General Assembly is trying to pass legislation to make it a criminal offense for any Tennessean to re-sell a concert ticket for more than $3 above face value.

This legislation is driven entirely by a mistaken reaction to the extraordinary demand for Hannah Montana tickets on a recent concert tour.  As we’ve detailed in postings here and in a letter to Tennessee legislators, the problem lies not with ticket resale, but with the promoters and the hyped-up demand they create by limiting ticket availability.

Hannah Montana has left town, but if legislators still feel the need to address imbalances in supply and demand for tickets, better to study the business practices of the primary market for concert tickets.

Without the secondary ticket market, many Tennesseans will never see their favorite sports team, show or band.  We encourage Tennessee to respect the laws of supply and demand and not try to make criminals out of fans who re-sell their tickets.

ICANN looking at keeping domain name registration fee

Abusive “tasting” of potentially lucrative domain names should be stopped immediately, ICANN board members said in a Jan. 23 resolution made public this week and is considering a proposal to keep the annual fee it charges registries even if the domain name is forfeited during the 5-day grace period.  ICANN aims to discourage the practice because the imposition of a fee would make it a lot more expensive for domain tasters.

All Eyes on the Internet

According to Washington Internet Daily (subscription only), ICANN should continue a join project agreement (JPA) with the Department of Commerce to prevent "governmental interference" in the domain name system, said the Center for Democracy and Technology in comments filed with NTIA. The JPA is up for midterm review by NTIA, and ICANN has said U.S. oversight should end. CDT said it wants an independent ICANN, but added that it's "premature" to end the JPA, since several countries want to control the DNS to a far greater extent than the U.S. has.

An Estonian court has fined a man in the only conviction linked to last year’s cyber attacks on official web sites during riots over the relocation of a Soviet-era war memorial. The 20-year-old was fined for organizing the disruption of the server for the web site of the ruling-coalition-leading Reform Party.

A USA Today story talks about Cybercrooks – phishing specialists - putting finer touches on scams to trick people into divulging sensitive personal data on fake Web pages. Meanwhile, top-level crime rings are getting stealthier and more efficient at herding millions of compromised PCs, referred to as bots, into networks that they deploy to steal data, commit extortion and spread spam.

Beefing up cyber security is a top priority for President Bush, as he is expected to unveil a budget plan next week to include a $6 billion system aimed at protecting U.S. communication networks from attacks by terrorists, spies and hackers, The Wall Street Journal (subscription only) reports.

Protecting kids online

Today Virginia is joining a national effort to provide state money to help combat online crimes against children.  The Virginia proposal would set aside $18 million over the next two years to law enforcement task forces throughout the state.  Congress is considering a bill that would pump $100 million into enforcing laws on online crimes against children. The House passed the bill, but the Senate has not acted.

Speaking of online safety, the USA Today editorialized that more safeguards are needed to protect minors from online predators on social networking sites. They suggest better age verification software and cross-referencing drivers’ license database.

Scalping, the French taxing the Net and a directive from New Hampshire

A woman in Oregon is suing StubHub and eBay, saying both companies violated the city of Portland's little-enforced anti-scalping law. According to the lawsuit, she wants to ensure consumers have fair access to affordable seats at their favorite shows.

The European Union telecommunications commissioner distanced herself Monday from a proposal by French President Nicolas Sarkozy to impose a tax on Internet and mobile phone access, saying it might not be the best way to expand access to new media.

An editorial in the Nashua Telegraph suggests that parents can do more to help protect their kids online by installing blocking and filtering software.

Preparing for cyber attacks is big business

Cyber-espionage directed by foreign governments is listed among the top 10 cyber menaces on SANS Institute’s annual report. Coupled with the volume and sophistication of cyber attacks, information security is a top priority for the US government.  In fact, the CIA director has proposed a new Cyber Security Policy, to track cyber threats on both government and private networks.

Cybersquatters look for easy prey

Washington Internet Daily (subscription only) wrote that that top U.S. online retailers are at risk of brand damage from poor domain registration practices, according to a report by the American E-commerce Brands report said. The report also found:

·         More than 2/3 of online retailers have at least one domain suffix related to their brand names, operated by a cybersquatter.

·         Fewer than half of domains related to retail have been registered by company officials, leaving them vulnerable.

·         Failure to register domain names of well-known brands has proved a favored route in for cybersquatters, who are profiting from these brands lack of online protection.

Rhode Island Reacts to Hannah Montana Hype

Hannah Montana performed in Providence last month, but her wake continues to reverberate in the halls of the Rhode Island General Assembly. Companion bills in the House and Senate would single out online ticket transactions for greater regulation in a state that already has one of the most restrictive ticket scalping laws in the country.

Yesterday I traveled to Providence to testify before the House Corporations Committee on H 7090 and H7091. These bills would add new rules that mostly apply to the online buying and selling of tickets. Essentially I was there to ask: why pick on e-commerce?

Hannah Montana is the Disney Channel sitcom on which Miley Cyrus plays Miley Stewart, an ordinary teenager with secret pop superstar identity. Her father is country singer Billy Ray Cyrus, of "Achy Breaky Heart" fame. And due to the popularity of the live shows, tickets have been hard to come by, producing achy breaky hearts in children across the country and irate parents that call their state legislator and demand action. Upon hearing about $60 tickets selling for $600 on the secondary market, legislators want to blame websites like eBay and StubHub.

But the tickets market is not so simple. Ticket resellers are not to blame for the limited supply of tickets and large demand from consumers. Hannah Montana is really about how tickets are issued, allocated, distributed and sold in the primary market, not how tickets are thereafter resold. And as in all markets, if demand exceeds supply and prices are initially fixed at a relatively low level, a secondary market will develop.

At yesterday's hearing, some legislators thought that it was StubHub itself that was purchasing large blocks of tickets and then reselling for large sums on its site. The reality of course is that sites like eBay and StubHub are mere exchanges that serve as platform for buyers and sellers to meet and transact.  Eric Baker, co-founder of StubHub, explains more in a great op-ed about why anti-ticket reselling laws harm consumers, not help them as many legislators believe.

The bills were tabled for further study, thankfully. If after Hannah Montana leaves town legislators in Rhode Island and elsewhere feel the need to address imbalances in the supply and demand for tickets, they should study the "engineered scarcity" (when limited supply drives publicity that in turn stimulates demand) business practices of the primary market before restricting ticket resales.

-Braden

NetChoice Voices Concerns About the Private Sector Role in ICANN

The US government is in the final stages of a long-term plan to transition its internet management role to ICANN, who has spent a decade building an independent, private sector organization. However, there are serious threats that should give the US government pause before it cuts the cord with ICANN.

Currently, the Commerce Department is hosting an open comment period as it nears a mid-term review of the agreement (called the Joint Project Agreement, or JPA) to transition ICANN to a fully independent organization.  As part of this open commentary, we submitted an initial document that focused on the importance of preserving private sector leadership of the global Domain Name System in the post-JPA world. 

We believe there is a very real threat that national governments could displace the private sector from its historical role as manager of the Internet’s domain name system.  Russia is currently leading an effort to move ICANN under the United Nations with support from China, Iran, and other nations with Internet censorship ambitions.

While a completely independent ICANN is our ideal, without the USG’s current oversight role, ICANN could conceivably be “captured” by the governments that are today ICANN’s harshest critics – a scenario that no one wants.  Until we can find a viable long-term solution to this threat, we believe that ICANN will not have met its most critical obligation under the JPA.

To see the entire letter we submitted today, please go to here.