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Internet as Pawn in a Dangerous Euro-American Duel on Datamining
and E-Commerce

INTRODUCTION

When I published my long explanation of the formation of ICANN on
Thursday October 2nd, I asked the rhetorical question of why Ira
would force things to such disagreeable conclusions - including the
"I dare" NSI to go to court on .com.

This essay seeks to find a plausible explanation for that question.

It suggests that the only answer that makes any sense out of what is
happening is Magaziner's need to consolidate American control over
the Internet in order to use that control as a bargaining chip
against the Europeans and Asians to be able to force them to
capitulate to American corporate demands in the EC privacy disputes
coming to a head October 25 and with this action to gain leverage for
the Clinton administration's crypto policies which although, Ira says
at home he does not support, he like a good soldier carries out
abroad.

HYPOTHESIS

I asked the question a few days ago: what could justify Ira's heavy
handed tactics.

What stakes could be large enough to risk the stability of the net?

Here is an informed hypothesis based first on a 90 minute
conversation with an expert source in these areas who has a heavy
international background.  (I have also over the last three days
reality checked this hypothesis with a cross section of American and
foreign insiders.  I have now also documented it with articles drawn
from the web.)

Ira, I fear, is using the internet as a pawn in a far bigger game.

The game is inextricably linked with the privacy statutes of the EU
and OECD and the coming October 23th deadline for American companies
doing business in Europe and data mining on European citizens as part
of their ordinary activities.

It is also inextricably linked with the international encryption
debate which has resulted in policies that hamper European ability to
build competitive software for e-commerce in general.

This hypothesis is increasingly reinforced by my private
conversations with European press and senior figures in the American
internet who are not pleased at what is happening.

1. Since 1995 Ira has shaped policy mechanisms being used to turn
the internet into an American-controlled, strategic vehicle for
conducting global economic commerce on American terms.

2.  He has done so in direct opposition to the 1995 European Privacy
Commission Directives prohibiting export of data from EU countries
to countries such as the United States who have no laws protecting
the privacy of their citizens.

3.  He has been saying to the Europeans since the release of his
electronic commerce paper in July 97 that the answer is industry
self regulation.  And asking that we should trust the data mining
companies to regulate themselves despite the fact that the global
internet gives them the power to leverage the results and impact of
their data mining by an order of magnitude.

4.  In May 1998 he promised the Europeans and Asians that he would
prove to them that industry "self-regulation" would be the way to go
by saying that he would deliver an industry formed and driven
consensus model for the new IANA corporation by Oct 1..

5.  As we crashed into the October 1 deadline last week, he had no
choice but to pull out all the stops in order to achieve what he had
promised to deliver --  even if it meant perverting the process and
acting behind the scenes to pick winners.

6.  At the same time he has created an ICANN with a Board that has
no real checks in its ability to set prices and policy for names
(DNS), numbers (IP) and protocols.  (A dissenting point of view says
that while this may be true, the IETF has already served notice on
ICANN, that should it interfere with IETF processes, it will take its
protocol work elsewhere. It adds that, if it demanded an
unreasonable amount of money from ARIN for IP space, ARIN would be
screwed, but that the other two registries - RIPE and APNIC could do
just fine without complying for 18 to 24 months.)

7.  That ICANN has been established with a public authority
financing model subject to no outside fiscal restraint and with
largely unknown corporate board members with interests more in
electronic commerce than in the Internet itself.  He has declared
that he will NOT allow that board to have a foreign majority.  (The
opposing point of view says that it effectively has a foreign
majority and that there are inherent possibilities built in for
disobedience on the part of the supporting organizations to policies
of fiscal profligacy.)

8.  Thus the Board and the by laws will be presented in Ottawa as a
fait accompli to the OECD next Wednesday.

The message will be:

Accept our self regulation model and call off your the implementation
of your October 25 Privacy Commission Directive and we'll give you a
real seat at the ICANN table.

Fail to do this and our new ICANN demonstrates that we can use the
device that we have created to increase our dominance of the internet
as a medium of commerce and do so at your expense.

(The opposing point of view feels that we are right in the focus on
the danger of the October 24th deadline and on Ira's wanting to show
that self regulation can work and wrong in assuming that Ira is using
ICANN as a bargaining chip.  It adds, however, a warning that, in a
year or two many critical decisions on the conduct of e-commerce with
likely gravitate to an d be made within ICANN.)

PRIVACY:  WHAT IS AT STAKE?

>From a Scott Bradner Network World column: "You have no right to
privacy. There is nothing in the US Constitution that guarantees
that you have any ability to protect yourself from those who want to
know everything about you and disclose it to the world. From the
local supermarket chain that requires a special card to get discounts
and requires your social security number to get the special card
(then keeps track of everything you purchase after you get the card)
to credit card companies that sell the history of your purchases to
anyone with a few dollars -- personal information is now a basic
part of big business.

The potential for abuse was bad before the Internet explosion, when
corporations had isolated machines that did "data mining" to try and
figure out if you like pistachio ice cream, now with these machines
linked the implications are ominous indeed.

A simple case of potential privacy invasion on the Internet is the
ability of web servers to store facts about your web use in
"cookies" in your browser. Many people regularly run programs on
their machines to remove these cookies but Christian Huitema, the
former chair of the Internet Architecture Board (IAB) has proposed an
alternate approach designed to let histories be built up but to make
them useless. You send any cookies you get off to an Internet-based
cookie bank, the bank returns a random cookie to be used next time
you connect to the web server, thus the histories of many people get
jumbled together, negating the reliability of the information.

The Clinton administration's A Framework For Global Electronic
Commerce (http://www.iitf.nist.gov/eleccomm/ecomm.htm) argues
against legal protection for privacy as is done in many European
countries. It argues in favor of some vaguely defined industry
"self-regulation." Somehow I do not find it comforting to know that
the data mining industry is in charge of protecting my privacy. I'd
rather make it so that people that improperly disclose information go
to jail. It would seem to me that a government prosecutor would have
a somewhat better chance against a billion dollar corporation that I
would in trying to right a wrong.

Those who claim that its all for our own good and enables
corporations to better target advertising that we want to see and,
anyway, if you have nothing to hide what are you worried about should
take a lesson from recent events. It was a general acquiesce to an
environment of no individual privacy rights that caused Diana and her
companions to be hounded, literally, to death in a tunnel in Paris.
This may seem overly dramatic but imagine what its like for someone
who tests positive to a disease such as HIV when that information
leaks from the corporate doctor to management. This type of thing is
at the bottom of the slope we are going down as we accept the
assertion that an individual has a limited right to privacy. See:
http://golem.sobco.com/nww/1997/36-privacy.html

>From another Bradner Network World column (late 1997): In general
I'm closer to the European point of view in most cases. The first big
difference is in the area of privacy. The European document supports
the "fundamental right to privacy and personal and business data"
and calls for laws to protect this right. The US view is quite
different and implies that privacy is subservient to business "needs"
and only asks for a "voluntary framework" to protect , at some level,
individual privacy.   See:
http://golem.sobco.com/nww/1997/29-e-commerce.html

BACKGROUND ON THE PRIVACY STATUTES DISPUTE

>From an Australian privacy newsletter-- The now-completed 1995
European Union Directive on privacy and free flow of personal data
. .  . prohibits the transfer of personal data from EU countries to
any countries which do not have 'adequate' data protection laws. .  .
. . The Directive requires all EU member states to implement a
Europe-wide standard of data protection.  from
http://www.austlii.edu.au/au/other/plpr/Vol2No06/v02n06b.htm

"What's the single most important issue threatening worldwide
electronic commerce today? The stalemate between the U.S. and the
European Union over policy on online consumer privacy protection,
according to U.S. Commerce Secretary William Daley.  Daley,
testifying today at a House Commerce Committee hearing on global
e-commerce, said that despite the differing stances, he  is confident
that the Europeans, who have issued a directive that calls for strict
protections over the transport of private data, will ultimately be
convinced that American companies "adequately" protect consumer
privacy.  The European directive goes into effect Oct. 25. It calls
for adequate privacy protections but doesn't define how that
standard will be measured. Meanwhile, the Clinton Administration  has
adopted a policy favoring industry self-regulation regarding the
notification of online collection and usage of personal data.  "This
could have an impact on millions of transactions," Daley testified.
"It could have an impact on the free flow of information."  IDG, Sept
20, 1998

In other words the European Union is saying to the US based
corporations like IBM and AOL and many others, if you want to do
business in Europe after October 25th 1998, your companies
information systems *MUST* not transfer personal data from EU
countries to any countries which do not have 'adequate' data
protection laws.  You do not have adequate data protection laws.

This has been an issue since 1995. It is likely that major redesign
of our companies information technology systems would be entailed.
It is also likely that many wouldn't be able to collect the data here
if they did not in Europe.  They have assumed that the Europeans are
bluffing.  They are not.  And we are less than 30 days from it
become illegal to transfer 'personal data" from the EU to the US.

Now since the American response is: "self regulation will do
therefore the EC statutes are unnecessary," Ira stuck his neck last
May 29 in an interview when he said that:

If the Internet can be pushed into "effective self-regulation" in
the next few months, then the United States can appeal to the
European Union to make a case that such regulation can succeed.
Because of that, Magaziner is not terribly worried about what might
happen come October when the European Privacy Directive is to take
effect, particularly because the various nations involved will
administer and enforce the directive differently. "Infoworld
Electric, May 29 98"

Therefore Ira needs to deliver full blown "self regulation of the
internet" lest he go to the Canadian OECD meeting on the 7th of
October with his own confident assertion in tatters.

SECURITY ISSUES:  WHY AMERICAN CRYPTO POLICY STICKS IT TO THE REST
OF THE WORLD

European Companies Threatened by US Export Controls on Encryption
Technology  (undated 1997 press release)

EEMA is actively lobbying the European Commission in Brussels to
improve competition in the Global Information Society.  .  .  EEMA
has identified that European companies are being severely
disadvantaged by not being able to use secure messaging transmission
techniques in conducting legitimate electronic trading. EEMA
recognizes that the principal reasons for this are the disparate
European legislation controlling the use of encryption and the fact
that inter-working with dominant US-based computer software
(operating system and application software) is subject to US
legislation and restrictions.  **These Controls have inhibited
European industry access to effective security products and even
worse, block European suppliers from competing on equal terms with
their non-European competitors. Even more damaging is that EU
suppliers are prohibited from supplying their own products into their
national markets.**

A large proportion of the products and services which support the
Information Society are of American origin. In order to integrate
their products into popular applications originating from the US
(for example those supplied by Microsoft), European companies
currently need a Software Development Kit containing the Application
Programming Interface (API) or Cryptographic API (CAPI). If this kit
is to be used to produce a product outside of the United States or
Canada it is subject to export controls by the US government.

The consequence of these controls is that European suppliers are
disadvantaged in comparison with US and Canadian suppliers because
their access to the necessary Software Development Kits is
inhibited. European suppliers must develop detailed plans for
approval by the US government, even if they plan to sell their
products into the EU market only, prior to obtaining the necessary
Software Development Kit. There are no guarantees that EU companies
would actually receive such permission. Likewise there are no
indications of how long it might take to obtain such a permission.

Alex Drobik, Chairman of EEMA, comments: "If this is not solved it
will have severe implications for European companies ability to do
business in the international marketplace. Vendors are unable to
develop effective products and as a result users will not get the
benefit of secure products. This has serious knock-on effects right
across the supply chain." http://www.eema.org/prenc.html

European Business in Danger of Being Left Behind in Electronic
Commerce Digital Certification Taskforce Set to Drive European
Market

"Amsterdam, June 3rd 1998 - EEMA, the leading forum for advanced
business communications, has today launched the European
Certification Authority Forum (ECAF) at its annual conference in
Amsterdam. The main objective for ECAF is to steer the European
Digital Certification market to enable European businesses to compete
effectively in the global online marketplace. Digital certificates,
private and public keys are being used more and more and are an
essential ingredient in the future of Electronic Commerce, however,
until ECAF there was no co-ordinating body. ECAF's main remit is to
establish harmonized European Digital Signature Legislation by
getting the pan-European certification authorities to sign up to a
common way of working.

Roger Dean, Executive Director of EEMA, comments: "Digital
certification will open up real eCommerce opportunities for European
businesses, however, without proper control it will end up as lots
of propriety systems that don't talk to each other as vendors develop
their own standards. ECAF will prevent this by driving common
standards across Europe. This is fundamental if European businesses
are to avoid slipping further behind their US counterparts."

THE INTERNET

- AMERICAN CONTROLLED AND ACCESSIBLE TO SNOOPING OF
INTELLIGENCE AND LAW ENFORCEMENT

- AS PREMIER VEHICLE FOR ECONOMIC COMMERCE

At the same time Ira has for the past three years focused on his
mission with Tom Kalil and working through the National Economic and
Security Council to setting up the internet as a mechanism for global
economic commerce.....   touting the net as a means on which, in a
few year's time, the majority of the world's economy will depend.

It looks as though Ira's agenda is to do this in such a way that the
internet can be controlled by an American based, incorporated, non
profit public authority set up under American law with a Board,
purposefully established without fiscal restraints and without any
oversight or accountability. And with board members who with a
smattering of international representation can be made as
subservient as possible to the interests of the large American
Corporations. These Board members, through the GIP, will be passing
the cup to pay for the expenses of establishing ICANN.  Consider Bill
Burrington Director of Law and Public Policy and Assistant General
Counsel at AOL, a company which huge data holdings.  He is the chair
of the Washington DC Interactive Services Association which went on
to form the Internet Alliance with membership very similar to GIP.
Burrington is manning the barricades of the companies involved in the
privacy dispute with the OECD.  (Why should Burrington care? Consider
AOL's electronic profiles on its 12 million members) Consider also
Andy Sernovitz of AIM whose members have the same general interests
and who helped Barb Dooley of the CIX sell out the IFWP process.

So even if Ira looks heavy handed -- for this agenda to be used as
the White House intends-- Ira needs to have his ducks in order in
time for the OECD meeting in Canada that begins next week.  He needs
to demonstrate that he has enough power to have rammed through a
solution at home.   That is why things have turned nasty during the
last week and why the iron fist is becoming seen with the
incorporation of ICANN , and Postel's submission of the ICANN
proposal  yesterday -- even though, by Ira's own allegedly free
process, ICANN should not yet be seen as the winner.

ICANN WITH ALL POWERFUL BOARD UNKNOWN TO MOST OF THE SENIOR PEOPLE
WHO RUN THE NET

Consider the new board that has also been handed down with the
Postel proposal to Commerce yesterday.  No one I have spoken to knows
anything about any of the board members save for Jun Murai and
Esther Dyson. Conrades is of course well known. Howerver a couple of
the most savvy, long time, well-connected people in the net have told
me that they have no idea from where Conrades will be coming on on
key issues. The Dun and Bradstreet nominee is seen as a staunch
defender of intellectual property rights in the best Lynn Beresford
WIPO and PTO tradition.  The Australian is utterly unknown and as one
of the two from Asia is perceived as a second insult to Asians who
view the Aussies as Europeans.  I have heard a perception from more
than one source that, though irrational as it may seem to us, that
having a Japanese serve on the board is a particular insult to the
other Asian nations.   The Europeans are unknowns here and the
President of Radcliffe, though regarded as a nice person, is seen as
knowing nothing about the issues on which she will have to decide.
This is an interim board generally stacked with people who can not be
expected to have any appreciation of the decisions necessary to keep
the Internet from falling completely under the sway of American
commercial, data gathering and privacy invasive interests.  One must
ask whether is a board that may be counted on to be compliant to the
interests of AIM, the GIP, and the Internet Alliance.  Conrades, for
example, is an ex IBM vice president.

DROP YOUR DEMANDS AND WE WILL GIVE YOU SOME INFLUENCE WITHIN ICANN

Ira is determined to confront the OECD next week with an Internet
that *HE* and the White House clearly controls and to do so as a
bargaining chip to use in getting our way against the Europeans and
Asians and Canadians..... on the issues of encryption and privacy
statutes.  It would be instructive to see the legal basis of the
government's arguments being used to get NSI to cave.  Could it be
that their content might be embarrasing?  Several people assert that
the condition that NSI has been asked to agree to bear no longer any
relationship to the conditions of the legally binding 1993 cooperate
agreement now in its last day of life.  That is why Becky and Ira
can't afford any leaks.

If SAIC doesn't order NSI to sign Ira's demands by the seventh, then
Ira and the White House will not be as in control of the internet,
as they need to demonstrate themselves to be, in order to use the
internet as an American dominated global commerce weapon against the
other OECD governments.  Given that the majority of SAIC's work is
tied to the intelligence community in the US, I am now convinced
that SAIC will be offered a big enough plum for signing and penalty
for not that such that although Gabe Batista certainly doesn't want
to give in, he will be removed by SAIC if he doesn't capitulate.
Then with .com firmly under the control of a compliant ICANN Board
and Ira insisting that there will be an American majority the rest of
the world can play on *OUR* terms with .com. The American view is
that with the Internet firmly in command of the White House on
American corporate terms, the Asians and Europeans will have no
choice but to back off their privacy and the American encryption
demands in order to get us to refrain from using our control against
them.  One of the experts with whom I have reviewed drafts of this
article thinks that although ICANN does not really extend American
control where it was before and indeed may give the Europeans a
greater voice that they had before, the Europeans may be too angry to
see it this way.

Remember also that Europe is trying to launch the Euro in such a way
that it becomes the world's reserve currency. One would like to know
whether the White House orders are do what ever is necessary to see
that this effort fails.

The Europeans and Asians understand perfectly well the power play
that Ira is engaged in.  They are not surprisingly seething with
anger. American arrogance could be doing dangerous things.  It is
likely that Ira believes that the EC won't dare to start a trade war
over the October 25th deadline. Other sources indicate that European
national sovereignty and honor are at stake and that Ira is making a
big mistake to think that rationality will be operative.  If we drive
Europe and Asia into an economic and political alliance against us,
we all will lose.  Privacy, and the freedom to live our lives without
government and corporate political or economic interference are at
stake.

*********************************************************************
* The COOK Report on Internet            White House Corrupts
Formation of IANA 431 Greenway Ave, Ewing, NJ 08618 USA  Corporation.
White Paper a Sham. See (609) 882-2572 (phone & fax)
http://www.cookreport.com/sellout cook@cookreport.com
  Index to 6 years of COOK Report, how to subscribe, exec summaries,
special reports, gloss at http://www.cookreport.com
**********************************************************************

-----------------

Also in this issue:

- Internet as Pawn in a Dangerous Euro-American Duel on Datamining
  and E-Commerce
    When I published my long explanation of the formation of ICANN on
    Thursday October 2nd, I asked the rhetorical question of why Ira
    would force things to such disagreeable conclusions - including the
    "I dare" NSI to go to court on .com.
    This essay seeks to find a plausible explanation for that question.
- Cyberwars: Proper vigilance or paranoia?
    The last war was on land, air and sea. The next one may be on your
    computer.
- Is Linux ready for publishing?
    Linux, long considered an underdog operating system for programmers,
    is gaining ground in the commercial and professional space.
- Library board: Kids shouldn't see smut
    NEW SMYRNA BEACH -- Children's computers in public libraries
    shouldn't have access to Internet sites with sexually explicit
    material but no such restrictions should be put on computers for
    adults, a library advisory board agreed Friday.
- India's poor tap into video e-mail technology
    NEW DELHI, India (AP) -- Her face hidden behind a colorful veil, an
    illiterate woman stepped in front of a computer screen in a remote
    Indian rural district.
- THE BROWSER BullsEye cuts clutter, helps users direct aim at
  information target
    More than 148 million people around the world connected to the
    Internet last month. For each of those individuals, the task of
    actually trying to find something more than 300 million Web pages
    can become quite overwhelming.
- New Lists and Journals
    * NEW: WINDOWS 95 : For Windows 95 Users
    * NEW: AAPI-L Asian American Pacific Islander Health/Social Issue
    * CHANGE: It's A Woman Thing



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