Notes from the 2nd E-commerce Roundtable Meeting, 12-2 PM, May 11, 2000, Washington DC.

In Attendence were:
Joel Yudken, AFL-CIO
Michael Donohue, FTC
Maneesha Mithal, FTC
Brian Hengesbaugh, DOC
Patrice McDermott, OMBWatch
Ryan Turner, OMBWatch
Lawrence Hecht, Internet Public Policy
Harold Feld, Media Access Project
Katharina Kopp, Benton Foundation
Jean Ann Fox, Consumer Federation of American
Morgan Passiment, Association of American Medical Colleges
Jeff Chester, Center for Media Education
Rick Weingarten, American Library Association
Shalini Venturelli, American University
Brian Kahin, Internet Policy Institute
Manon Ress, Debs-Jones-Douglass Institute
Serge Wroclawski, Essential Information
Jamie Love, Consumer Project on Technology
Vergil Bushnell, Consumer Project on Technology
Thiru Balasubramanian, Consumer Project on Technology

Rick Weingarten of the American Library Association chaired this Roundtable meeting.

Topics Discussed

1. TECHNOLOGICAL PROTECTION MEASURES AND THE DIGITAL MILLENIUM COPYRIGHT ACT (DMCA)

- This discussion was led by Rick Weingarten of the American Library Association.
- There seems to be an increasing trend towards commodification and kioskification of information.
- There is an evolving business model where vendors retain control of intellectual property rights, and allow consumers to look in the window.
- This business model -- whether applicable to music, videos, DVD's or e-books -- is protected by an "iron triangle" of UCITA, Database Legistlation and the DMCA.
- Criminalizing technology that allows for the circumvention of access control may block fair use.
- Section 1201 of the DMCA may be unconstitutional unless broad exemptions are made for fair use.
- The Copyright Office has recently implemented a series of hearings on the DMCA. One hearing was next week, and one will take place next week. Reply comments can be given to the Copyright Office.
- The DMCA suffers from several vague definitions. For example, nobody really knows exactly what a "technological measure" is, it could be a library card. Also, no one knows what constitutes "circumvention".
- The background of the DVD case was briefly discussed. DVD's come encrypted. The consumer pays a license fee for a DVD player that can decrypt DVD's. No such license was negotiated for DVD players used under Linux-based operating systems. People figured out the DVD encryption system through reverse engineering, and posted the keys on the Internet. A judge ruled that this reverse engineering violated section 1201 of the DMCA.
- It was mentioned that the DMCA has an anti-competitive element to it, for it can be used to block new entrants into a market.
- Also, it was mentioned that court cases are cropping up that have the effect of extending copyright law and restricting reverse engineering, which is a natural activiry in the software development industry.

2. PROPOSED HAGUE CONVENTION ON JURSIDICTION AND FOREIGN JUDGEMENTS IN CIVIL AND COMMERCIAL MATTERS

Brian Hengesbaugh from the Department of Commerce led discussion on this topic
- Some background information about the proposed Hague Convention on Jurisdiction and Foreign Judgements in Civil and Commercial Matters was introduced. The idea for this Convention arose in 1992, when the U.S. Government proposed forming a treaty on jurisdiction and foreign judgements.
Last summer, a working group was set up to examine e-commerce aspects. - The Convention deals with personal jurisdiction and enforcement of judgement. It does not deal directly with choice of law issues.
- The latest draft of the Convention is from October 1999.
- Ultimately, in order for the Convention to be ratified by the U.S., it must be approved as a treaty in Congress.
- It was mentioned that there are 3 categories of problems with the Convention.
1. First of all, there is a classification problem. For instance, what constitutes a "good" or "service"?
2. There is also a locality problem. Does the country of origen or destination involved in an e-commerce transaction have jurisdiction?
3. Third, there are public policy issues with the Convention, especially concerning Article 7.
- Several questions were raised about the nature and accountability of The Hague Convention. The Hague Convention is an international organization with a small, private staff. The Hague Convention works on private, international law, providing a forum where the representatives of 50 countries participate.
- There is a carve-out in the Convention's Article 1 concerning arbitration agreements. The Treaty doesn't speak on arbitration, so domestic law would apply in the case of an arbitration agreement.
- The Convention has a huge scope that encompasses nearly all private commercial litigation.
- It was mentioned that a proposal has been made by the secretariat that would allow businesses to opt-out of national laws on consumer protection and privacy by substituting Alternative Dispute Resolution (ADR) mechanisms.
- Additional issues about the Convention were raised in discussion. - It was mentioned that, from a free speech or copyright perspective, the jurisdiction of the country of origen raises a number of important issues.
- It was mentioned that ADR systems are problematic, such as the ADR system used by ICANN.
- A question was raised about what corporations/ industry groups were engaged in active lobbying about the Convention. Brian Hengesbaugh (DOC) will provide a list of such corporations.
- Brian noted that the U.S. government was trying to gather information and perspectives on the Convention, and welcomed public comments.
- For more information on the Convention, see

http://www.hcch.net/e/events/press01e.html
http://cui.unige.ch/~billard/ipilec/
http://www.hcch.net/e/members/members.html
http://www.state.gov/www/global/legal_affairs/whats_new.html
http://www.state.gov/www/global/legal_affairs/991030_forjudg.html
http://www.cptech.org/ecom/hague-march-2000.html

3. ALTERNATIVE DISPUTE RESOLUTION (ADR)

-Discussion on this topic was led by Maneesha Mithal of the FTC.
- The FTC held a workshop on consumer protection/ international e-commerce issues last year. At this workshop, a consensus emerged that ADR should be explored as a meaningful way for consumers to seek redress.
- An ADR workshop was held in Europe in March.
- The FTC and DOC are planning a 2-day workshop on ADR on June 6-7, 2000. This workshop will be open to the public. No preregistration will be required. The workshop may feature breakout sessions.
- This workshop will feature presentations on several topical areas such as:
1. What is ADR?
2. Existing ADR programs.
3. Chargebacks as protection offered by credit card companies.
- The ADR workshop will also host a series of panel discussions, such as:
1. Incentives/ Disincentives for ADR.
2. Structuring an ADR program (costs, etc.).
3. Implementing ADR (procedural rules, confidentiality, etc.)
4. The appropriateness of binding arbitration agreements for consumer contracts.
5. The role of governments and the private sector.
- More detailed information about the ADR workshop may be found at www.ecommerce.gov/adr

4. OPEN ACCESS

- Harold Feld of the Media Access Project led the discussion on this topic.
- It was mentioned that the primary thrust of the open access fight has been about the cable industry over high-speed internet access.
- Cable firms are not subject to the open access requirements that telco firms are held to. For example, telco companies are supposed to be dumb conduits, prohibited from discriminating based on content.
- When a consumer purchases cable internet acccess, he is often required to use the cable firm's affiliate ISP.
- There are a growing coalition of groups fighting against content-based discrimination and for the right of independent ISP's to connect at the cable head-end.
- ATT, currently the largest cable system in the US, has signed a deal with Mindspring. According to the deal, once ATT's contract with Excite is over, ATT will allow access to other ISP's.
- The FCC had adopted a watchful waiting tone, with the expressed expectation that market forces would ensure open access.
- However, the gap between cable and potential competitors has been growing in favor of cable. Cable is now the dominant means for broadband getting to residential subscribers.
- It was mentioned that the cable industry is trying to import the cable TV model to the internet by controlling where people go. Through quality of service controls, cable operators can slow access to rival content providers and speed up access to affiliates.
- Last week, Time/Warner proved to be a media gatekeeper in its affair with Disney.
- In discussion, it was mentioned that open access is related to the digital divide issue. Even though most of the country may be wired for cable, there are no requirements that cable companies extend their networks (to poorer areas, for example) or upgrade connections for internet access.
- It was mentioned that content discrimination can be construed in terms of bandwidth. For example, limiting access to a service such as Naptster can be framed as an matter of bandwidth, rather than content.

5. CONTENT REGULATION AND FREE SPEECH ONLINE

- Professor Shalini Venturelli of American University led the discussion on this topic.
- There is an increasing tendency of nations to regulate content.
- According to Venturelli, there are at least 4 structual models of content regulation.
1. The Liberal Market Model employs supply-side economic incentives, and tends to favor 1 side of the Intellectual Property (IP) equation. Constrictions and barriers are created against non-commercial speech.
2. The Public Service Model uses tariff and access regulations, and has strong content obligations.
3. The Cultural/ Nationalist Model places national identity over consumer choice.
4. The Development Model uses regulation to ensure practices such as reverse engineering.
- Each model uses restrictions in the name of national security.