Jul 1, 1998 12:00 PM

Power Broker

By Will Rodger

| THE NETIZEN

| Power Broker

Big Brother: Your Boss

GOP to Web: Watch Your Mouth

Degreasing the Wheels of Commerce

Homestyle Spam

Siren System

Chips, Choice, Charter Schools

Wiretap War of Attrition

Raw Data

<h4>#### n O'Donovan wants you to buy electricity from 7-Eleven and Net access from your electric company. But first, he has to crank up the heat in Congress.</h4 Ling for some power in the Capitol? Kevin O'Donovan has plenty to spare. Problem is, he can't sell you a watt of it until he breaks up the monopoly that controls the sale of electric power in most states.

Onovan's job is to jump-start deregulation of electric utilities, which have enjoyed nearly a century of "natural monopoly" rights in the US. As a lobbyist for the commodity traders at the New York Mercantile Exchange, he admits there is plenty of corporate self-interest behind his efforts to deregulate the power industry. If nationwide competition becomes a reality, it will be a bonanza for the NYMEX, which already trades contracts in electricity futures and options. But done right, the savings from competition could be significant for consumers as well. Electricity bills would drop an average of 25 percent, according to the free-market think tank Citizens for a Sound Economy.

Uity companies are grappling with a range of proposals that would force them to open up their markets. Customers could buy electricity not just from local utilities, but from suppliers up the road or across state lines – maybe even the local 7-Eleven. New competitors like Colorado's en-able offer bundled services – like phone and Net access – for electric companies.

Shat's the holdup nationwide?

Cress decided years ago to deregulate wholesale competition in natural gas, and three bills moving through the House Subcommittee on Energy and Power would speed the transition to competitive electricity generation. Meanwhile, out on the hustings, at least 20 states are in the process of loosening regulations. The Feds want to prod the rest to move in that direction. O'Donovan agrees, adding, "A monopoly has no incentive to innovate."

Ja year on the job, O'Donovan is getting high marks for his Capitol Hill savvy. Dana Perino, a spokesperson for subcommittee chair Dan Schaefer (R-Colorado), says, "If anyone has taken a role in making sure electricity competition happens, it's Kevin."

Ntechnology makes surveillance cheap and easy, yet few privacy protections apply in the workplace. According to a 1997 study by the American Management Association, nearly two-thirds of major US companies electronically monitor their workers. The Fourth Amendment's safeguards against "unreasonable search and seizure" apply only to government surveillance – not private-sector snoops. Employees may find some protection under federal wiretap statutes, state laws, union contracts, or employer policies, but, in general, the boss can monitor almost everything you do at work.

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o> oyers increasingly cite health-care costs to justify genetic testing. One US Circuit Court has ruled that conducting such tests without a public employee's knowledge is a privacy violation. But in general, workers have no right to "genetic privacy" and no federal protection from random drug tests.</bl
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Two one censorship proposals are gathering momentum in Congress. The first, S 1619, introduced by Senate Commerce Committee chair John McCain (R-Arizona), would require schools or libraries that receive federal funds for Net access to "filter or block matter deemed to be inappropriate for minors." Meanwhile, Senator Dan Coats (R-Indiana) has been making steady progress with S 1482 – legislation that would punish commercial Web distribution of material that is "harmful to minors."

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h backfrom the Organization for Economic Cooperation and Development, 34 nations are putting the brakes on the bribery business. Late last year, the 29 member nations of the OECD, along with Argentina, Brazil, Bulgaria, Chile, and the Slovak Republic, wrapped up negotiations on a "Convention on Combating Bribery of Foreign Public Officials in International Business Transactions." Since then the focus has shifted to national legislatures, where lawmakers must now ratify the treaty and adopt local rules to give it teeth. The

vention is designed to establish standards for national laws that criminalize the bribery of foreign officials and increase the transparency of corporate accounting practices. A related agreement eliminates the tax deductions for bribes that are allowed in European countries like Germany and France. Over

,e treaty has been welcomed by reformers who want to eliminate costly bribery expenses and activists seeking to expand the rule of law. According to Michael Hershman, a cofounder of the corruption watchdog group Transparency International, "an international conscience is being seeded by the realpolitik realization that bribery, a bad business, is also bad for business." <h4>Wit

t#### m legislation stalled in Congress, several states are looking for local solutions to the junk email problem. By Jennifer Hillner</h4> Uns tcommercial email is a political weed that many legislators would love to wipe out. But thus far, not much has been done to stop the overgrowth of spam that is clogging in-boxes from coast to coast. That may soon change, however, as the state of Washington has become the first to take action. On t

eal level, four antispam bills have been stalled in Congress for almost a year. (See "<a href="htt Spam</a>," W</e.08, 82.) The proposals have been on the back burner ever since the Federal Trade Commission suggested that such efforts raise a host of thorny consumer protection and ecommerce issues. To sort out the mess, the FTC asked a group of marketers, technology experts, and privacy advocates to complete a report on policy options. In the meantime, legislators on Capitol Hill have followed the free-market leanings of Billy Tauzin (R-Louisiana), chair of the House subcommittee on telecommunications, in hopes that self-regulation will control the spam infestation. But

plem has only gotten worse. And while Congress waits, state legislators have taken it upon themselves to pacify their frustrated constituents. Washington's law, which takes effect on June 11, seeks to address the common objection that spammers use less-than-honorable tactics to bypass the blocking filters erected by ISPs. The measure outlaws spammers who disguise a message's point of origin, use a third party's Internet domain name, or include false or misleading information in a subject line. In addition, it prohibits both sending spam from computers located in Washington and distributing it to state residents. Penalties for violations can include civil damages of up to US$500 per unsolicited message. Lawmakers hope that this liability provision will short-circuit the economics of bulk email by raising spammers' per-message costs. Crit

ever, point out that the law does not contain a blanket prohibition against spamming, nor does it make it easier for individuals to remove themselves from spammers' distribution lists. This

nalways the case. As originally drafted by the state attorney general's office, Washington's bill included a flat-out ban on unsolicited commercial email unless the sender and the recipient had already established a business relationship. According to Paula Selis from the state attorney general's office, "The legislation was substantially revised under pressure from the ACLU, the Direct Marketing Association (DMA), and Microsoft." Whil

eLU generally opposes antispam legislation on First Amendment grounds, Microsoft argued that the original bill's ambiguous language could have discouraged the development of new markets. The DMA agreed, adding that the Internet is too new to legislate at all. "We are saving the medium and making it available for business," says DMA representative Jerry Cerasale. "The initial version of the bill was basically killing it." Alth

believe Washington's new rules will solve the spam problem, a regulation doesn't have to be perfect to be effective. ISPs will soon be armed with a legal club that will make antispam litigation easier – and potentially quite lucrative. As David Sorkin of The John Marshall Law School's Center for Information Technology and Privacy Law explains, "Rather than relying on government enforcement, this kind of consumer protection law sets statutory damages at a level where people end up enforcing the law themselves." Wash

oregulations are not the end of the story. Despite pressure from the DMA, Nevada has also passed spam legislation, which takes effect July 1. The Silver State's new law says that spam must be "readily identifiable" as an advertisement, and also includes mandatory opt-out procedures for consumers who want to be removed from lists. At l

other states are considering spam legislation. With each state drafting its own rules, lawmakers are creating a minefield of conflicting spam paradigms. The DMA insists that its lobbying efforts in the states are designed to "save the Internet." But in the end, the group may regret that a federal law has not been passed. As more and more states pass their own antispam bills, it will be expensive to comply with a complex patchwork of rules in 51 jurisdictions. Then again, that might solve the spam problem once and for all.

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d latenight, you stumble to answer a ringing telephone. To your sleep-addled surprise, a recorded voice calmly announces that two inmates have escaped from a nearby jail. Automated emergency notification calls such as this are the handiwork of the Community Alert Network (CAN), an Albany, New York, firm whose clients include municipalities, government facilities, and shopping malls. Once a designated official calls in an alarm, the CAN system alerts emergency-response teams or activates its 120 dedicated telephone lines to warn area residents about natural disasters, toxic leaks – or jail breaks. By T

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rnia sents ranking 39th in the nation in reading and dead last in the percentage of 18- to 24-year-olds with high school diplomas, education has become a statewide economic priority. That's why TechNet – the industry political group headed by John Doerr and Jim Barksdale – recently helped broker an agreement that will expand the number of charter schools in the state. By kicking i

$illion to support the Charter Public Schools Initiative, a ballot measure sponsored by a Silicon Valley-based group called Californians for Public School Excellence, TechNet was able to bring the California Teachers Association and other opponents to the negotiating table. In the end, the parties developed a legislative compromise that will allow for new charter schools – publicly funded institutions that offer alternative curricula – while avoiding a costly November fight at the polls. Nationwide,

ts have already passed legislation for creating charter schools. California's new law eliminates the present statewide cap of 100 and allows 100 new charter schools to be created each year. It also requires credentials for charter school teachers. But do chart

cls work? A 1997 study by SRI International yielded inconclusive results, although charter schools did show more extensive parent involvement than standard public schools. And in California, the high tech industry is getting more involved as well. By Aaron

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unicats Commission has been called in to referee a long-running dispute between the FBI and telephone carriers over high tech wiretapping. Congress thought the matter was settled back in 1994, when lawmakers approved the Communications Assistance for Law Enforcement Act, designed to preserve the surveillance capabilities of law enforcement agencies as telephone networks go digital. Under CALEA, phone companies are required to install wiretap circuits in their switches by October 1998. In exchange, Uncle Sam will pick up the bill for the alterations – to the tune of US$500 million. Controversy erup

ast immediately. An early FBI proposal was interpreted to mean the agency wanted the capacity to simultaneously monitor one out of every hundred phone lines. Roy Neel of the United States Telephone Association charges the government with "complete intransigence." The FCC has been

eo sort out the mess, but the agency may not have the last word. The loser in the dispute will almost certainly appeal in federal court. Meanwhile, Georgia Republican Bob Barr has introduced a bill to delay CALEA's October deadline for another two years. After all this time, the CALEA debate is just getting warmed up. Only 4 percent o

dEastern Internet users are women (Internet Arab World Magazine) … EmploI, and AT&T collectively spend 2,800 hours a month visiting the Penthouse Web site (Nielsen Media Research) … Usersethe Internet for three years or more are 17 percent less concerned about online violence and pornography than those who got online this year (Cyber Dialogue) … AOL r4unsolicited commercial email messages each day (San Francisco Chronicle) c Spam is growing at an annual rate of 176 percent (Electronic Mail & Messaging Systems) … Despia5 percent of America's 80,000 public schools are connected to the Net, only 27 percent of the classrooms are connected (San Jose Mercury News)