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America Is Online, and There's No Turning Back.

At comet-like velocity, the Internet is propelling us into a new world of electronic products, transactions, services and communications.

More than 100 million Americans currently cruise the Net. Through this worldwide portal, we have virtually unlimited access to information and staggering new business and educational opportunities. It's no wonder the Internet is dramatically reshaping the way we live, work, play and interact with one another.

The global nature of the Internet also raises jurisdictional issues that remain unresolved. States seek to regulate the Internet to protect their own citizens, but must do so without impeding interstate commerce. Legislatures have an interest in protecting consumers from fraud and abuse. They're also hearing about problems like burdensome unsolicited junk mail. They have an interest in protecting children from harmful on-line materials. But enforcing existing laws can prove difficult or impossible in an environment where physical presence is irrelevant--criminal operations that are shut down in one state or country can simply set up shop in another.

For state lawmakers, these changes create a whole new landscape for public policy. In commercial law, policymakers are examining existing rules on paper-based information and transactions to determine how best to include electronic information and agreements. New questions about security and privacy need to be resolved to increase consumers' confidence in electronic commerce. And questions about whether and how to tax Internet transactions have serious ramifications for state budgets.

The Internet holds great potential for improving the delivery of government services and providing instant access to resources. States provide license renewals, tax filings, applications for benefits and more through the Internet. And many state agencies use the Internet to provide information about services and products. They also publish a variety of public information on the Net, such as nursing home facts, lists of licensed physicians or even the names of sex offenders.

Every state legislature provides access to bills and other legislative information through the Internet, and almost half the states broadcast legislative proceedings for all to watch through the Web.

Not only is the Internet radically altering the lives of citizens, its unparalleled growth is influencing the shape of the information and telecommunications industries. Transporting data, voice and images is a fundamental requirement of the expanding cyberworld. Companies in the business of providing these capabilities are competing to provide an array of options. And merger mania has set in. New corporate entities and partnerships that combine entertainment, long-distance, local wireless, cable and computer capabilities are being formed eve day. Companies are competing to give consumers the best in cable television, access to the Internet, movies and entertainment, telephone equipment and various kinds of telephone services.

The tremendous growth in consumer choices and advances in technology give rise to some brand new issues. State legislators are now debating the merits of whether access by competitors to high-speed Internet lines owned by cable television companies should be forced or optional. And lawmakers are trying to determine how best to eliminate regulatory barriers and encourage competition in an environment where advances in technology occur at an unprecedented pace.

What is the role of state legislatures in this new landscape? Policymakers can encourage growth and competition and offer safeguards for citizens. But, with the pace of change intensifying, can government keep up?

The challenge for state legislators is how to expand current laws to accommodate the growing electronic environment, while preserving the fundamental rights and protections rooted in existing law.


Government is providing more information and offering more services through the Internet, but recent studies indicate that not everyone has access to these benefits.

A December 1999 U.S. Department of Commerce report, "Falling through the Net: Defining the Digital Divide," finds that the number of Americans who used the Internet has grown rapidly. But the study also finds a gap in Internet access between whites and blacks and Hispanics. Rural areas and central cities also fall behind. Other recent studies, however, including those done by Forrester Research and Cheskin Research, indicate that the racial gap may be harrowing with blacks and Hispanics increasing their Internet use and computer purchases at a faster rate than the general population.

Many high-tech companies, nonprofit organizations, foundations and community groups are actively pursuing programs to address the digital divide. Scholarships, job training programs, donations of telecommunications lines or computer equipment and neighborhood technology centers are just a few of the initiatives under way. The Benton Foundation sponsors a Web site ( that provides information about many of these efforts.

President Clinton has also announced a number of federal initiatives and partnership of help close the gap between technology "haves and have-nots." These initiatives are summarized at

An increasing number of states are considering these issues. The California senate conducted committee hearings on the topic, and Virginal Governor James Gilmore has announced a statewide effort. A number of states have enacted legislation to improve rural Internet access. Colorado passed the rural Technology Enterprise Zone Act in 1998 to provide tax credits to companies that invest in improving Internet access in rural areas. Utha in 1999 established a Rural Telecommunications Task force to review and make recommendations on ways to aid development of advanced communication services.

Several states, including Delaware, Maryland, Minnesota and Virginia, are working to build high-speed networks to provide Internet access for their citizens. This year, illinois passed the Eliminate the digital Divide Act, which will provide $1 million in grants to schools and other community-based organizations for the purchase of telecommunications services computer equipment and software.


Along with the benefits of the Net comes the downside--thousands of unsolicited messages known as spam.


Spam (unsolicited commercial e-mail) is more than just an annoyance, it costs businesses and consumers.

Spam usually refers to large quantities of unsolicited commercial advertisements sent by e-mail. Spain is not always just the usual business advertising, either. It often consists of chain letters, get-rich-quick propositions or fraudulent schemes and advertisements for pornographic Web sites. Unlike other types of advertising, there is almost no cost to the sender, so even a small return can mean profit.

For Internet service providers, bulk e-mailings slow down systems and cause slower Internet access for their users. Providers have to upgrade systems to deal with the increased traffic and often have to hire staff just to deal with problems related to junk mail. These costs are passed along to subscribers and are estimated to range from 10 percent to 30 percent of a user's monthly bill. Most Internet users pay a flat fee for access. But for those who pay on a usage basis, the time spent reading or deleting junk mail means they actually pay for ads that come to their mailbox.

Spammers also can make it look as though a message is coming from a legitimate business or organization by using another group's site to relay the e-mail or otherwise falsify the message address. This not only hurts the reputation of the legitimate organization, but also can cause providers or Internet users to block any subsequent messages from that group. For example, a genealogical mailing list that served as a research resource for those seeking information about their ancestors was shut down because of junk e-mail. A spammer had used the mailing list as a fake return address for thousands of junk e-mails.


These concerns have led congress to introduce several anti-spam bills, and several state legislatures to enact similar laws. At least 14 states passed anti-spam bills from 1997 through 1999, and at least 16 more have introduced bills this year.

Nevada, Washington and California were the first states to pass anti-spam laws, followed by 11 more in 1999--Connecticut, Delaware, Illinois, Iowa, Louisiana, North Carolina, Oklahoma, Rhode Island, Tennessee, Virginia and West Virginia. Most of these laws allow Internet users or providers to sue spammers who don't abide by the law, but some states also provide criminal penalties for certain types of abuses.

Most of the laws target spammers who misrepresent, falsify or forge the point of origin or the routing information of messages. Several states also prohibit the sale or distribution of software that is primarily designed for this type of falsification.

Iowa, Nevada, Rhode Island, Tennessee and West Virginia require senders to include certain information, such as a toll-free telephone number or valid e-mail address, in the message so that recipients can decline any future messages. Critics feel, however, that these types of provisions can actually legitimize spam, since an advertiser could continue to send spam legally as long as the identifying information is in the message.

California and Tennessee require senders to include a label on e-mail ads--ADVT:--in the subject line of a message to indicate whether it contains an advertisement. They are also targeting spammers who send "teaser" ads for adult-oriented or porn sites, by requiring them to include the label ADVT: ADLT in the subject line. Similar labeling legislation passed the Colorado legislature in March 2000 and has been sent to the governor.

Most states have specified that the laws apply only to spam that is sent to or generated from locations within the state. However, King County superior court in Seattle has struck down a Washington state law that has such a provision, ruling it in violation of the Commerce Clause. Other challenges to state spam laws have been filed or are expected.

Even without state anti-spam laws, however, some providers have had success suing spammers using existing laws relating to trespass, unfair trade practices or computer fraud. When a company called Cyber Promotions sent bulk unsolicited commercial email through CompuServe's networks without consent and after repeated demands that they stop, Cyber Promotions was found to have "trespassed" against CompuServe.

Network administrators and Internet users also have tools for fighting spam. Filtering software and other technical fixes can be used to discard or refuse all messages from a particular address. Users can also take other measures to avoid being spammed, although it may mean limiting their Internet use.

Spammers often use special software to automatically gather e-mail addresses from chat rooms and newsgroups. And some Web sites sell e-mail addresses gathered when users register for their site. So users should read any privacy policy posted on the site.


"The Web has developed largely free of government subsidies and interference, and there's no reason why government should now try to be a traffic cop on the Internet. It's a free speech issue. I see no reason why government should say how an advertisement should be written or labeled on the Internet. Government doesn't require advertising labels in print or television. The market provides plenty of recourse for citizens. I can find a provider whose rules can protect me from spam. I don't need government to protect me."--Colorado Senator John Andrews, who opposed anti-spam legislation in his state.

"Since more and more people are going online, it's important that consumer rights are protected on the Internet and that we have recourse against false and offensive material. I am delighted with the fact that our attorney general is aggressively appealing the King County superior court ruling that recently declared our landmark legislation as unconstitutional. I'm very confident that it will be upheld by our supreme court. It is an absolutely vital foundation for our efforts to control abuses and cyber-hijacking."--Washington Representative Roger Bush, sponsor of the 1999 anti-spam legislation.

Pam Greenberg, NCSL


While the Internet can be a valuable learning tool, it also has its pitfalls. Policymakers try to protect kids without infringing on the Constitution.


Most Americans believe the Internet is a valuable resource for their children and that children who have access have a distinct advantage over those who do not.

Yet most citizens fear for their children online. They worry about predators making contact and are concerned about how easy it is for kids to find pornography and other harmful information. And most believe that government hasn't done enough to protect children from the dangers of the Internet.

Congress and the states have tried. It's against federal law to post obscenity and child pornography on the Internet. It is illegal to use the Net to persuade a minor to engage in sexual activity, post a child's name on the Web or exchange e-mail about them for criminal sexual purposes.


States have also passed laws to address Internet crimes. A New York law, for example, prohibits sending indecent materials through any computer system to minors for the specific purpose of inducing them to engage in sexual acts.

The law was tested in a case involving 51-year-old Thomas Foley. Foley started on-line chat with "Aimee," who said she was a 15-year-old girl. He sent her sexual photos and attempted to arrange a meeting. Aimee turned out to be an undercover officer working for the state's Computer Crime Unit, and Foley was charged with a felony offense.

The New York law has so far held up to the legal challenges based on First Amendment and Commerce Clause grounds. At least 15 other states have since passed similar laws, although there are still some legal challenges pending in other jurisdictions.

State obscenity and child pornography laws as applied to the Internet have not been the focus of legal challenges. Child pornography and obscene speech, unlike indecent speech, are not protected by the First Amendment.

Some states, however; have tried to expand laws to prohibit sending or displaying "indecent" or "harmful" Internet materials to minors. The Supreme Court has ruled that these kinds of communications can be limited when the government has a "compelling interest" and if it is the "least restrictive" means available to solve the problem.

Court decisions have struck down Internet indecency laws in Michigan, New Mexico, New York and Virginia on First Amendment or Commerce Clause grounds. Because Internet users have no way of knowing whether a child in those four states might download information he or she has posted and whether the information could be considered indecent or harmful to minors, courts have found that these laws stifle free expression.

Courts also have decided that the laws violate the Commerce Clause, even in the absence of federal regulation, because they concern interstate commerce and seek to regulate conduct outside of state borders. Other less restrictive means of protecting children from harmful materials online exist, such as parental supervision or filtering or blocking software.

At least 12 states--Arizona, Arkansas, California, Kentucky, Louisiana, Maryland, Michigan, New Hampshire, Ohio, Pennsylvania, South Dakota and Virginia--have passed laws to require public libraries or schools to adopt policies that would protect minors from access to harmful materials. Legislation of this type has been introduced in at least 14 states this session, including some bills that would require public libraries to use filtering software.

However, a U.S. district court ruling, while limited in its jurisdiction, highlights possible challenges some of these laws may face.

In 1997, the board of trustees of the Loundoun County (Virginia) Public Libraries adopted an Internet policy that required libraries to block access to e-mail, chat rooms and pornography. A group of residents of Loudoun County--known as Mainstream Loudoun--filed suit, alleging that use of the software violated their First Amendment right to freedom of speech. The library trustees responded by noting that blocking Internet sites was no different than refusing to borrow from a large interlibrary loan system, from which the local library was not a borrower. Mainstream Loudoun, however, described the. Internet as more like a large set of encyclopedias in which the library had blacked out portions of the text.

The district court held that the policy violated free speech and was unconstitutional. The court seemed to imply, however, that filtering in libraries might be constitutional if adults had different terminals than children or if they could turn off the filtering software. In addition, some states have changed their laws by tying filtering requirements to continued public funding of the libraries and schools


"This law is not about infringing upon free speech, it is about protecting our children. Parents still need to be cognizant of their children's activity on the Internet; but we are sending a strong message to predators that their actions will not be tolerated. I'm frustrated that the courts do not recognize the need for these protections and I encourage Congress to address the issue as a nationwide problem."--Senator Beverly Hammerstrom, author of Michigan's 1999 law that was struck down by a U.S. district court.

"Three district courts and one court of appeals have struck down state indecency laws on Commerce Clause or First Amendment grounds or both. It puzzles me why states would continue to pass these laws. We're also skeptical of filtering laws. There's enormous evidence that they are flawed. They both overblock and underblock, and most don't identify what or how they block. If legislators are considering filtering or blocking laws, they should be considering requiring filtering software to identify what it blocks."--Chris Hanson, senior national staff counsel, American Civil Liberties Union.

Pam Greenberg, NCSL


CDA--The Communications Decency Act passed by Congress in 1996 and struck down in 1997 by the U.S. Supreme Court in Reno vs. ACLU, made it illegal to knowingly send or display obscene, indecent of patently offensive online materials to minors. The provisions relating to indecent and patently offensive materials were held to be a content-based restriction on speech violating the First Amendment.

COPA--The Child Online Pornography Act, sometimes called CDA II, was passed in 1998. It prohibits commercial Web sites from knowingly making harmful materials available to minors. Congress attempted to draft the statue narrowly enough to avoid the constitutional flaws of the CDA. It provides a more specific definition of "harmful to minors," restricting the law's application to commercial Web sites only and providing for good faith efforts to keep the materials from minors. A federal district court, in ACLU vs. Reno II, however, issued a preliminary injunction against COPA's enforcement on First Amendment grounds. The government has appealed the injunction, and a decision is pending.

CPPA--The Child Pornography Prevention At, passed by Congress in 1996, expands the definition of illegal child pornography to include visual depictions that are or appear to be of a minor engaging in sexually explicit conduct. The law covers the creation and distribution of sexual images involving minors that are modified or created by computer graphics programs. Two federal district courts have reached different decisions on the law--one found it passed constitutional muster, the other found it to be unconstitutionally vague and overly broad. Appeals are pending in both cases. Several states, including California, Illinois, Kansas, Maryland, Minnesota, Maine, Montana, North Carolina and Texas, have passed similar laws.


Companies are racing into high-tech markets combining phone, cable and the Internet, and creating zillions of choices for the consumer.


Big and small, companies across the nation are lining up to become a one-stop source for all your cable television, Internet access, and local and long-distance telephone services. It's a contest to offer consumers the most services with the best technology.

Telecommunications giants and industry newcomers are rushing to merge with each other--SBC Communications (formerly Southwestern Bell) with Pacific Telesis, Bell Atlantic with NYNEX, AT&T with TCI. Qwest Communications, the broadband Internet communications company, and US WEST Communications are expected to merge sometime this year and a deal is in process to merge AOL and Time-Warner. MCI WorldCom and Sprint Corporation have agreed to merge. Bell Atlantic and GTE have picked the name Verizon for the new company to be formed with their proposed merger. And companies are trying to get access to equipment and services owned by their competitors, including the Internet, at an alarming rate.

Never before have the once clear lines of who offers what been so confusing. The jury is out as to whether all of these events will in fact stimulate innovation, speed the development of new and better technologies and services, and make telephone and cable television services cheaper. In fact, the availability and choices that consumers have is limited and depends largely on where people live, Rural areas lag behind urban areas and true competition has not arrived in many parts of the country.

Many of the changes in the telecommunications landscape are due to the historic Telecommunications Act of 1996. The legislation represents the most comprehensive overhaul of the nation's telecommunications laws in more than 60, years. The act drastically alters the entire industry, including cable television services, eliminates regulatory barriers and encourages competition. In short, it attempts to address the realities of today's marketplace.

Among its many provisions is one that requires telephone companies to open their networks to competitors. It allows Bell companies entry into long-distance markets whenever local service becomes competitive, and it eliminates the ban on telephone companies providing video service. A telephone company may now provide service as a traditional cable operator or through an "open video system" in which two-thirds of channel capacity must be available to other programmers on a common-carrier-like basis.


The United States is the only country to, use a dual scheme (federal and state) for regulating telephone services. The first states began regulating telephone companies in 1907. The Telecommunications Act of 1996 retained the role of the states to "preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services and safeguard the rights of consumers."

However, the federal act eliminates state prohibitions against local telephone competition.

Virtually every state that was in session in 1999 considered some form of telecommunications legislation. More than 110 laws--many on competition--were enacted. For example, in Oregon the state public utility commission must now report annually to the governor and the legislature on the status of competition and regulation in the telecommunications industry. A new Minnesota law authorizes the state public utilities commission to enforce anticompetitive regulations by issuing penalty orders. And in Delaware, a new law grants authority to the, city of New Castle to manage and operate wired and wireless telecommunications and other communication services systems, along with steam, manufactured gas, natural gas, heat, power and heating oil.


"I hope that the 2001 Legislature will pass comprehensive reform that encourages investment, enables competition and gives consumers more choices at lower prices. We may also have to empower municipalities to get in the telephone and other telecommunications businesses since there hasn't been new investment in many communities."--Minnesota Senator Steve Kelley, vice chair, Minnesota Jobs, Energy and Community Development Committee.

"Alaska has enacted legislation that takes into consideration the rapid growth in telecommunications technology. Telecommunications mergers and great advances in the technology will benefit our state very likely more than any other because of our inaccessibility and difficult climate conditions."--Alaska Representative Jeannette James.

"I'm optimistic about the industry focus on one-stop shopping, consolidated pricing and broad-band rollout, especially for the more populous areas. But in spite of all of the recent advances, most phone customers still remain with their old companies. Few actually have a choice. Large and medium-sized businesses in cities have more alternatives, but the vast majority of residential and small business users do not."--Brad Ramsay, National Association of Regulatory Utility Commissioners, Washington, D. C.

Robert D. Boerner, NCSL


Bell Operating Companies (BOCs)--Twenty-two local companies were organized into the seven regional Bell operating companies following the 1982 decision that forced the divestiture of AT&T. At divestiture, they were: Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell and US WEST.

Convergence--The merging of distinct communications technologies into a single electronic, computer-driven, environment.

Divergence--The offering of several telecommunications services by one provide. "Plain old telephone service" describes the tele-communications industry of the 1950s, but today's divergent environment includes the transmission of voice, data and images, not just voice.


Discovery of the adventages of broadband Internet lines owned by cable companies has ignited a debate over who should have access to them. Broadband lines provide a connection to the Internet up to 100 times faster than conventional dial-up.

The access dilemma may be the most important telecommunications development issue of the decade Should cable companies be "forced" to give access to the lines? Those who say yes believe it will stimulate competition, one of the stated goals of the Telecommunications Act of 1996.

States and municipalities are now debating whether access must be required through regulation or whether this poses a threat to the integrity of the Internet, as opponents argue. The Federal Communications Commission wants to be the sole regulator in this arena.

At least nine states, Delaware, Idaho, Illinois, Kansa, Maryland, Michigan, Ohio, Vermont and Virginia, debated legislation in 2000 that would require current providers of broadband to offer access to other Internet service providers.

In addition to forcing access, most of the legislation lawmakers are looking at would allow civil suits against cable operators and service providers who deny access. A bill in Kansas includes a penalty of $500,000 per day (not to exceed $10 million).

Localities in Florida and Oregon have passed their own open access laws So far, they've held up in court. A federal district court judge dismissed most of a cable television company's lawsuit that challenged Broward County, Fla.'s, requirement that it share its lines. And Portland, Ore., has successfully sued AT&T to open its network to local competitors.
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Author:Boerner, Robert D.
Publication:State Legislatures
Article Type:Brief Article
Geographic Code:1USA
Date:Jun 1, 2000
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