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The Jurisdiction Moment May Be At Hand
by William NewAfter 10 years of at times hair-pulling debate over the role of international jurisdiction and enforcement of judgments in commerce, nations are poised to reach agreement on a narrow treaty, a U.S. official said on Tuesday.
"I believe we're finally within at least striking distance" of an agreement, said Jeffrey Kovar, the State Department's assistant legal adviser for private international law. "If we seize this opportunity, I believe it could have a significant impact on global commerce."
Kovar, who leads the U.S. delegation to the negotiations at the Hague Conference on Private International Law, said he would make no predictions on the outcome of new negotiations scheduled for Dec. 1-9 in The Hague, Netherlands. The draft convention under negotiation has been narrowed to an agreement on which country's courts can enforce cross-border business-to-business (B2B) contracts when disputes arise.
"Although the project is greatly reduced in scope, it is not going to be easy" to reach agreement, Kovar said. One issue is that some nonprofit organizations, including libraries, might not be covered by a B2B convention yet are much larger and more powerful than the small businesses with which they contract, he said. Also, parties want to be careful not to draft provisions that would trap them into a system that cannot evolve with time and new technologies, he said.
Kovar noted that the United States' hands-off, leave-it-to-business approach to the Internet could leave it somewhat isolated as other nations are drawn toward regulations imposed by the European Union and elsewhere. "Regulations love a vacuum," Kovar said. "There's always a tension to how long you should hold back." But he said he personally does not foresee a "top-down" global Internet regulatory regime developing.
The Rules Of The Web
Kovar spoke at a conference of the Cato Institute. Many of the conference panelists are authors of a new book published by Cato: "Who Rules The Net? Internet Governance and Jurisdiction."
Marc Pearl, a pro-business member of the U.S. delegation to the Hague convention talks, said at the conference that courts should decide where to draw the line between business and consumer uses of products and services. "This is not the non-employment-of-lawyers treaty," he said.
Panelists tended to show support for the EU approach of placing jurisdiction in the "country of origin" that is home to the seller. Michael Greve, a scholar at the American Enterprise Institute, argued that under an origin-based approach, administrative and compliance costs drop. He based his assessment on Europe's value-added tax that taxes goods at each stage of development based on their value at the time. The tax was extended to e-commerce this year.
Pearl, founder of IT Policy Solutions, said businesses generally support the country-of-origin approach, while consumers insist on "country of destination," or the home turf of buyers. He warned that failure to resolve the issue would prompt companies to limit sales of their products to certain countries. "It is becoming increasingly more difficult or impossible for businesses to comply with all of the laws that apply to them" worldwide on the Internet, Pearl said.
Some speakers criticized governments such as China and Burma for controlling their citizens' access to the Internet. But Kurt Wimmer, a partner at the Covington & Burling law firm, said many others, including major trading partners of the United States like Italy and France, also control the Internet and pull foreign publishers into court. He gave the example of Zimbabwe taking action to block Internet publication of the London-based Guardian newspaper, despite the fact that it has no physical circulation in Zimbabwe.
Wimmer said publishers could start limiting the online reach of their publications. U.S. companies may be nervous about continuing the strategy of letting other governments sue and relying upon winning their cases in the United States, where they have First Amendment protection.
Jonathan Band, an attorney at Morrison & Foerster, said that in recent years companies have been allowed to change the "balancing" principles of copyright law. That "privatization" of intellectual property laws has led to the use of "browsewrap" or "click-on" licenses that commit consumers to terms of use simply when they buy products or services online, he said. Band said consumers often have few competitive choices in such cases.
Band also said publishers are using an old law to prevent people from copying material from the publishers' sites, arguing that it would damage the capacity to use the sites. Another law prevents competitors from taking information from sites and using it for commercial reasons, he said.
'Digital Divide' Program To Be Expanded
At the Asia-Pacific Economic Cooperation (APEC) summit on Tuesday, President Bush announced the expansion of the U.S. Digital Freedom Initiative to two APEC countries, Indonesia and Peru. APEC involves countries that border the Pacific Basin.
The $6.5 million, three-year initiative, launched in February, is aimed at helping entrepreneurs in developing countries use the Internet by transferring information technology.
The private-sector-led project began with a focus on Africa. In Indonesia and Peru, projects will place U.S. private- and public-sector volunteers in small to medium-sized businesses to share technology expertise. It also will support the development of a national cyber-security program, provide easier access to credit and apply U.S. expertise to areas such as distance learning, telehealth and e-government.
Separately, APEC leaders created an online data system for the gas market. The goal is to expand the trade of natural gas.
U.N. Telecom Body Examines Business Models
The weeklong conference of the U.N. International Telecommunication Union (ITU), which ended Saturday, saw smaller crowds than the last one, which was held during the height of the dot-com boom.
Still, the industry-oriented event involved more than 900 exhibitors from 51 countries, plus 26 pavilions organized by governments and telecom associations to enable smaller businesses to participate. Daily traffic at the event ranged from about 8,000 to 18,000, and there were more than 1,500 accredited media, according to the ITU.
The emphasis was less on innovation than on ways to implement business models and technologies, one researcher said. More than 150 new products were announced at the event, and contracts won there are valued in the hundreds of millions of dollars, ITU announced.
For the ITU, the event also served as a momentum-builder for the World Summit on the Information Society this December in Geneva.
Meetings In Jordan Focus On Telecom Markets
Muna Nijem, the chairwoman of Jordan's Telecommunication Regulatory Commission, was in Washington this week to discuss developments in that nation, including plans to license a third mobile telecom operator.
A public forum on the Jan. 1 market opening will be held Thursday in Amman. Proposals are due by Oct. 31. The new operator will be issued a 15-year license and will be allowed to share Jordan Telecom's infrastructure. The licensing effort is part of Jordan's larger opening of its telecom market, an effort that began in 2002.
The country also hosted a meeting of the Arab Telecommunications Regulators Network in August. At that meeting, the network agreed to communicate more closely and cooperate on crafting regulations. The group also recommended that Jordan draft a strategic plan and working plan that account for the proposals of countries in the network.
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