Some Govt Oversight of E-Commerce Possible

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Washington -- While many lawmakers have declared a
pre-emptive "hands-off" policy regarding the Internet, industry representatives
told a House of Representatives panel here April 30 that there is some cause for limited
government oversight of electronic commerce.

In the first of a series of hearings held by the House
Commerce Committee, lawmakers heard that they should step in and clarify tax laws, pass
encryption legislation and revamp copyright statutes.

Witnesses were also concerned that Congress continues to
promote competitive practices as the Internet changes and expands.

One concern, said George Vrandenburg III, senior vice
president of America Online Inc., is that cable and phone companies could use the
advantages of cable-modem and DSL (digital-subscriber-line) telephony technologies to
dominate the broadband market.

"Both the telephone and cable industries could use
their control over their local loops to gain an insurmountable competitive advantage in
the broadband Internet business," Vrandenburg said.

There are currently 4,100 Internet-service providers in the
United States. AOL leads the ISP pack, with more than 12 million subscribers worldwide.

Congress and the Department of Justice should also not shy
away from enforcing existing antitrust laws, said Michael J. Durham, president and CEO of
The Sabre Group Inc. In a reference to alleged anti-competitive practices by Microsoft
Corp., Durham said the government should step in to prevent a company with existing
monopoly power from extending its market hold to another area.

Sabre has an interest in the anti-competitive charges
against Microsoft: The company's Travelocity, an online travel site, competes
directly with Microsoft's Expedia.

An information-technology company that pioneered the
computerized-reservations system used by travel agents, Sabre also has some experience
with monopoly practices.

When the company was owned by American Airlines in the
early 1980s, the government found that its system was anti-competitive because flights
from American appeared on the first computer screen that agents looked at. The Civil
Aeronautics Board ruled that a reservations system owned by an airline could not favor one
airline over another, and that all flights would have to be listed by time or price.

"[Sabre's experiences] prove that in many
instances, government has a legitimate role in antitrust regulation," Durham said.

Several of the committee's Democratic members were
receptive to Durham's calls for rigorous application of the century-old antitrust
laws.

"As we place restraints on ourselves not to kill the
goose that laid the golden egg, we need to have an appreciation of who else might be out
there ready to kill the goose," said Rep. Anna Eshoo (D-Calif.).

Rep. Edward J. Markey (D-Mass.) applauded the DOJ for
taking on Microsoft. "This is a fight against corporate cyber-centrism," he
said.

But Rep. Rick White (R-Wash.), from Microsoft's home
state, cautioned, "Simply being successful doesn't mean that a company is being
anti-competitive."

States News Service

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