Internet News

edited by Amy Dunlop

Clinton on E-Biz: No New Taxes (Yet)

The Clinton administration's proposals for Internet commerce evoke the specter of George Bush during the '92 campaign: "Read my lips . . . no Internet taxes." That's the message from the interagency group chaired by Clinton's senior adviser Ira Magaziner. Its "Framework for Global Electronic Commerce," in draft form on the Web at, presents a largely predictable list of principles on which the government should build policy regarding Internet commerce and asks for comments from the Web community. The Framework, a sort of unified Internet business plan, is the latest version of a document that the administration has been floating around companies and trade group for months.

The central tenet: "The Clinton administration firmly believes that all parties can gain from a nonregulatory market-oriented approach to electronic commerce," according to its executive summary. To that end, Magaziner's inter-agency group declares the Internet a duty-free zone. "This principle should be negotiated quickly so that it can be established before nations impose tariffs and before vested interests form to protect those tariffs," the Framework says. It estimates that global Internet trade now accounts for well over $40 billion of U.S. exports alone.

The Framework document is broadly divided into three areas: financial issues such as customs, taxation, and electronic payment; legal issues such as intellectual property and security; and market-access issues such as content and the telecommunications infrastructure. There aren't many surprises here. Besides disavowing taxes, the group pledges negotiation with foreign countries on copyright law, the free flow of information, and content deregulation. Meanwhile, issues such as electronic banking and technical standards will be left to the private sector. "Technology is moving too rapidly for governments to try to establish technical standards to govern the Internet," the Framework says wisely.

Major players in the online industry have already started voicing their concerns. Lawyers from the Software Publishers Association (SPA), a trade group that represents software companies, met with Magaziner and asked why the Framework was silent on the issue of local taxes. "State and local governments will decide whether the growth of electronic commerce will be retarded," says Mark Nebergall, an attorney for the SPA. Nebergall says Magaziner was "extraordinarily well-versed" on the issue and promised that the silence would soon be broken.

Encryption is sure to be another controversial element of the Framework. For years, the government has claimed security interests force it to regulate strong encryption. The current proposals don't reverse that policy. Lawyers for the SPA raised the issue with Magaziner. "We reiterated that U.S. companies are at a severe disadvantage," says David Byer, the SPA director of government affairs. "He certainly understood where we were coming from but offered us no answers."

The comment section at the Framework's Web site was empty two weeks before the deadline for input. But as more Internet businesses and users learn about the proposals, they're sure to start weighing in with some good, old-fashioned Internet vitriol. Forty billion dollars in online commerce is a large pie, and no one is likely to let the principles put forth by Magaziner and Co. go unquestioned--especially those no-tax promises that sound eerily familiar.

--Brad Stone

The Shakeout Begins: Big ISPs Pull Back

No more sleeve-tugging newbies allowed! That's the general message Netcom, PSINet, and are sending as they refuse to provide membership to new individual dial-up users, or, as Netcom puts it, "curiosity seekers."

"Beginning probably March first, we'll no longer be taking new $19.95 flat-rate customers," says Ben Slick, vice president and general manager of Netcom On-Line Communications Services. Slick says Netcom's 571,000 current dial-up users are "productivity seekers" rather than "curiosity seekers," and Netcom has decided against building the infrastructure required to get late adopters or "laggards" up and running. Current subscribers can continue at the $19.95 rate, but Netcom hopes to lure them to a higher tier of service packages. sold its Internet access business to Epoch Networks (formerly HLC). "We realized the winners of the access game are the facilities-based telcos," said Scott Chasin, director of business development for, which intends to profit from the access provider shakeout by marketing its NetAddress, a permanent-e-mail-address service.

PSINet found itself overwhelmed by demands on customer service and billing during its 12-month foray into the flat-rate consumer dial-up service with its Pipeline USA offering. So the company sold its U.S. subscriber base to Mindspring and now retains 17,800 corporate customers and collects royalties from the 22 consumer ISPs that serve customers over its 240 points of presence.

"None of the players in the $19.95 consumer market are making any money and probably won't be for a long time because of high turnover among consumer customers," said Brian Meys, manager of corporate communications for PSINet.

Although these major players have left the consumer-access market, others remain to dominate it. "Smaller ISPs will find it increasingly difficult to compete with the largest companies like Sprint and AT&T, unless they have a niche that can't be matched," said Meys.

Some small providers say they are comfortable providing dial-up service. John Prinzo, director of marketing for Thor Net Services Inc. in Oklahoma City, calls its 1,000 individual dial-up customers Thor's "bread and butter."

Eskimo North, a 4,000-member local provider in Seattle, has seen a steady increase in revenue derived from nondial-up services, but will continue to serve the dial-up market for the time being, according to owner Robert Dinse. "I had pretty much thought we'd end up losing all our dial-up access to telcos," said Dinse, "but to date they have been sufficiently incompetent to take away a substantial portion of that market."

--Rebecca Rohan

Digital Signatures Move Forward at W3C

Someone doesn't like Jayne Hitchcock. The Maryland-based author appeared to have posted her name, phone number, and address--along with a racy message--to Usenet newsgroups and mailing lists. But Hitchcock never sent the message. Unfortunately, there's no surefire way of knowing whether a message online is from its alleged author or a digital forger.

The World Wide Web Consortium (W3C) is working on a solution--seeking to find a way to guarantee that online documents and active Web content such as Java applets and ActiveX controls are actually from their apparent authors.

Private firms have long been working toward similar goals. Microsoft's Authenticode and JavaSoft Java Archive (JAR) are two such efforts. VeriSign and other vendors have developed digital-signature systems for e-commerce transactions, and software like PGP allows users to attach their own digital signatures (see p. 26). Now, with its Digital Signature Initiative (DSig), the W3C is attempting to define a standard that can be implemented by the entire Internet community.

It's a lofty goal, but an achievable one, according to the W3C. DSig has the active support of such traditional adversaries as Microsoft, Netscape, and Sun. DSig project manager Philip A. DesAutels said the working group was "coming to closure on the architecture and prototype specifications." He said he expected implementation by early February. Considering that DSig really got moving only last October, its progress is remarkable.

Hitchcock's problem is not the first of its kind, but if DSig lives up to its promise, it may be the last.

--Steven J. Vaughan-Nichols

SET in Your Wallet

Two recent announcements promise to bring us closer to everyday financial transactions on the Internet. Europay International, MasterCard, and Visa have agreed on a common standard for Internet commerce. They'll link a chip-card standard (called EMV) to Secure Electronic Transactions (SET) specifications. (Further information can be found at http:// This means that credit cards can be embedded with a chip that will store electronic cash and information. The cards will function as debit cards for in-person purchases as well as secure online buys.

Following that announcement, Microsoft, Intuit, and CheckFree said they were working toward a unified specification called Open Financial Exchange that will allow banks and other financial institutions to exchange financial data over the Internet with users of software such as Quicken and Microsoft Money, as well as allow access to online banking and brokerage services. A draft of the plans can be seen at

--Amy Dunlop

Is Anybody Out There?

One of the more popular features on America Online is a buddy list that will let you know when your friends or co-workers log on so you can hold online chats. Mirabilis is bringing the concept to the public Internet with ICQ. The software assigns each user a unique code. When you connect to the Net with the software running, your code is sent to the company's servers. Anyone who has your code in their own personal configuration will receive a notice that you're available for a one-on-one chat.

The code can shield your identity since you do not need to publish your e-mail or IP address. When you want privacy, you can turn on a "do not disturb" option. ICQ can penetrate firewalls. Windows 95 and NT 4.0 versions are out with a Macintosh version to come.

--Susie Davis

Directories With a Focus

IdeaList displays more than 8,000 Web sites for nonprofit organizations worldwide. They're categorized into specific fields such as urban renewal, community, disability, environment, and education. Users can search by country, state, or subject. Organizations without their own Web sites can have mission statements and descriptions listed for free.

A Business Compass is an Internet directory that profiles Web sites in 44 industries, from accounting to travel. It differs from other search engines by pinpointing especially useful parts within a Web site and offering a link directly to that page. A Business Compass is aimed at researchers who want to know why a Web site will be helpful to them before they try to navigate it.

The Annual Report Gallery allows you to browse through company annual reports in Adobe Acrobat (good for offline browsing) or text format. Included are links to E*Trade,, and E-Schwab Online Investing. Companies can be listed for $695. At press time, the site held reports for 70 companies, with plans for more.

TotemPole from Zeek Interactive is a search engine for Web sites of well-known brand names. Calling itself the "Guide to the Corporate Web," it is like the Yahoo directory but focuses on branded products. TotemPole offers a review for each Web site and has picked 57 "Eagle sites" that are considered "truly visionary" but not necessarily informative.


Dialing for E-Mail

We've been hearing about "Internet appliances" for what seems like forever, but few had been spotted until the recent Consumer Electronics Show in Las Vegas. Among those was Navitel Communications' TouchPhone, a telephone-based I-appliance. The device combines a full range of phone functions (including voice mail, call waiting, and caller ID) with a 28.8-Kbps modem, compact slide-out QWERTY keyboard, monochrome touch screen, and, above all, an IP address to provide both Web browsing and e-mail capabilities. The TouchPhone will come equipped with a microprocessor, RAM, the Microsoft Windows CE operating system, and Microsoft's Pocket Inter-net Explorer. (When Micro-soft upgrades Pocket Explorer with a Java virtual machine, the TouchPhone will make this available and thus gain full support for Java applets.)

In addition to integrating voice and text messaging, the Navitel phone includes software like address-book management, calendaring, and scheduling. A built-in PCMCIA (PC card) slot enables Ethernet or ISDN connectivity. Limited commercial distribution began in March and volume shipments are expected in May. At press time, pricing was expected to be about $500 list, but lower on the street.

--Ted Stevenson

High Noon for the CDA

The Communications Decency Act (CDA), which seeks to criminalize "indecent" material on the Internet because it might be viewed by children, finally gets its hearing before the U.S. Supreme Court. Oral arguments in the case, formally Reno v. ACLU, were scheduled to begin the morning of March 19, with each side allotted a half-hour to present their arguments. The Department of Justice says its motivation is to champion free speech and protect unsuspecting children. The ACLU says free speech will be protected only by stopping the government's efforts.

Can parties with bipolar goals both be fighting on behalf of the First Amendment? In its first brief, filed Jan. 21, the government asserts that it "not only has an especially strong interest in protecting children from patently offensive material on the Internet, it has an equally compelling interest in furthering the First Amendment interest of all Americans to use what has become an unparalleled educational resource." In other words, Americans can experience the freedom of speech only when they can surf the Internet without fear of stumbling upon "indecency." Material defined as such should have technological barriers, says the government's brief.

The ACLU says that the government's 55-page brief in Reno v. ACLU is "at odds with the extensive factual findings of the trial court," which overturned the CDA last June, ruling that it was unconstitutional.

ACLU attorney Christopher Hansen said the government's brief makes the astounding claim that it is protecting the First Amendment by censoring free speech on the Internet. "The government's arguments, if adopted, would justify blanket censorship not just on the Internet, but in traditional forums such as libraries and bookstores," he said.

Background on the case, a chronology, transcripts, and more are available at



Mark Roesler protects some of the most famous people in the world. When one of their images appears on the Web, he takes notice.

Who do you currently represent?
CMG Worldwide represents sports and entertainment figures including James Dean, Marilyn Monroe, Humphrey Bogart, Greta Garbo, Babe Ruth, Lou Gehrig, Jackie Robinson, Vince Lombardi, Joe Louis, Amelia Earhart, Mark Twain, Secretariat, and Cigar. As their exclusive agent, it is our job to market, promote, and protect their names, images, and likenesses.

What laws apply to your responsibilities in terms of protecting your clients' images on the Net?
We view the unauthorized commercial use of our clients--such as the use of a client's name and/or likeness to advertise or promote a product or service without permission--no differently on the Internet than in any other medium.

The unauthorized use of our clients on the Internet may give rise to a cause of action under various copyright, trademark, and Right of Publicity laws. These are exactly the same laws that have been applied to other unauthorized commercial uses in "non-Internet" cases.

The emergence of the Internet must mark a huge shift in CMG's focus.
It certainly has resulted in a huge and dramatic shift in our focus. The shift probably began about one year ago when we realized the power of the Internet and the ability of it to allow us to instantly communicate around the world. Our entertainment clients have a tremendous following around the world, and the emergence of the Internet has resulted in an increase of probably five full-time people for our company.

How exactly do you go about patrolling the Internet for possible copyright infringement?
Our entire staff actively uses the Net. Infringements more often take the form of "trademark" infringements as opposed to copyright infringements. In most cases the Internet is being used as an additional outlet for companies to distribute or advertise their products. In cases like that, where our clients are used illegally, the Internet allows us to more quickly discover the infringement and, because of the global reach of the Internet, gives us additional options as to where we initiate the legal action, if that is necessary.

What are some examples of copyright infringement of your clients that you have seen recently on the Net?
We have proceeded with legal action against several different companies who have violated our rights on the Net, but most infringements are settled prior to any legal action. There were at least two occasions where companies had actually registered the names of our clients as domain names. Those were and .

What legal action did you take?
With the Monroe infringement we were forced to sue a California company. The lawsuit was settled when the company agreed to transfer the domain name over to our client, the Marilyn Monroe estate. In the Dean case, we were able to amicably resolve the matter by also having them assign the domain name to our client, the Dean estate.

We also filed suit against American Legends. In this case this company was infringing on various rights of the James Dean estate by displaying copyrighted photos on its Web site, the facsimile signature of James Dean, and the trademarked CMG logo. Presently, we are concluding settlement negotiations.

Do you think that most infringers are unaware that what they're putting on their Web sites is illegal?
With trademark infringements, I believe the majority of infringers that we discover purposely infringe on the rights of our clients. Internationally, I would say it is the opposite. Trademark infringements would be those that use the trademarks of our clients as either the name of a Web site or on a product. Copyright infringements generally use an image that our client owns. We find those to be mostly accidental, so they are less troublesome to us.


About Mark Roesler

As chairman of CMG Worldwide (, Mark Roesler manages the interests of entertainers. In 1993, he represented James Dean's estate in a landmark case against Warner Bros. establishing a precedent that has enabled the heirs of celebrities to be compensated for the use of celebrity images. Roesler's agency pays close attention to the use of celebrity images on the web.

Et Cetera

@ttribute ( from NetRights allows users to create customized image captions that are embedded within the FlashPix image format. (FlashPix is supported by Microsoft's Picture It and Live Picture's LivePix.) Captions include the image's owner name, date, and title, plus comments. The technology also allows caption content to call into a copyright-management server to initiate contact with creators or to update descriptions.

FreeFax from Innovex Technologies Corp. allows Windows users to send faxes from their Internet accounts to regular fax machines, thus avoiding long-distance phone charges. Because documents arrive on regular fax machines, recipients do not need special software or an Internet connection. FreeFax uses the Net for long-distance transmission, then uses local fax servers to transmit the document to its final destination via a local call; area codes supported are listed on Innovex's Web site. The $59.95 software also reads and writes most popular image formats and compression techniques. comes to the rescue when your system crashes, your e-mail program's outbox is wiped out, or you failed to save a copy of an important e-mail. The service stores copies of your e-mail and sends you a hard copy by regular post. A subscription to the basic backup and storage service is $145 per year, with a $15 charge (plus $2 shipping) for every e-mail message you want to retrieve. A certificate that verifies all the transmission and routing information is $40. (Hard-copy shipping is available only to U.S. customers, and attached files cannot be stored.) The service sounds pricey, but it beats the head-aches of trying to prove to the boss you sent an e-mail.

WebEtc has been released by Microtest Inc. The software eliminates the need for network Internet users to have multiple modems, phone lines, and Internet accounts. WebEtc al-lows as many as 20 simultaneous users to gain access through a single modem and Internet connection. Priced at $149, it is compatible with Windows 3.x, 95, and NT, and all major Web browsers and e-mail packages. More information and a demo are available at

Dow Jones & Co., Financial Times Information, and Knight-Ridder Information have announced a joint effort to create an online resource for global news. The new service will launch in mid-1997 and should prove valuable to business researchers. The database will contain newspapers, news magazines, and trade publications, with ample attention to international news. Information can be found at,, and

Bazaar Analyzer Pro from Aquas Inc. is a Java-built tool that does double duty as a Web-server log-analysis tool that lets Webmasters measure the effectiveness of their sites and as an HTTP server that gathers information about visitors and their activities and generates statistical reports. Priced at $999, Bazaar Analyzer Pro comes in versions for MacOS, six variants of Unix, and Windows NT. Because the client portion of the tool is a Web browser, anyone with a password can access the log data in real time and customize the information displays.

HTML 3.2 specifications were endorsed by the World Wide Web Consortium (W3C). The official Recommendation means that HTML 3.2 is stable and contributes to the development of the Web. Features of 3.2 include tables, applets, text flow around images, and supercripts and subscripts. See for more details.

Blaze Web Performance Pack ($89) from Datalytics puts a new spin on a basic browser-performance-enhancement technique called "read-ahead," which involves prefetching all the pages linked to a page you're currently viewing. Blaze Web's special edge is xSpeed technology, which both encapsulates and compresses the data at the server before sending it. Encapsulation drastically reduces the number of server hits and can increase download speeds five to 15 times. The catch is that your ISP needs to be running the xSpeed server package, which Dataly-tics is distributing for free.

--Susie Davis, Amy Dunlop, Jim Ivers, Ted Stevenson

VRML Gets Spin

The rapid growth in Virtual Reality Modeling Language (VRML) technology has compelled industry leaders to form an open standard and establish a consortium to maintain and build on the VRML specification. So far, more than 50 companies have joined the new nonprofit VRML Consortium, including Apple, IBM, Intel, Microsoft, Netscape, and Silicon Graphics.

As VRML advances, so do its potential benefits for the average user. Deepak Kamlani, executive director of the consortium, sees a time when people will interact more with information on the Net. "The interaction will be much more intuitive and personal," he says. "Living worlds" where avatars help users navigate through complex sites are one example he cites. While video games are the classic VRML application, headway is being made to develop business applications--including remote collaborative conferencing applications. Further information on the VRML Consortium can be found at

--Jim Ivers

Reprinted from Internet World magazine Vol. 8 No. 4, (c) 1997 Mecklermedia Corporation. All rights reserved.