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Constitution, Commerce Clause Confuse Internet Policies
Two years ago, Missouri officials discovered that a gambling Web site run by the Coeur d'Alene Native American tribe in Idaho was informing visitors that their bingo and other games were legal in a number of states, including Missouri. While bingo, as well as a state lottery and riverboat gambling are legal in Missouri, state law does not permit Internet gambling, and the attorney general's office promptly filed two civil suits against the tribe. Last week, the plaintiffs were celebrating — but not because their legal battle was over. In fact, after two years of court appearances, it hasn't even really begun.
The Missouri attorney general's office won the right to hear the case in its own state court under the argument that the tribe is violating state consumer laws by advertising it is legal to place online bets as a Missouri resident, explained spokesman Scott Holste. The tribe had argued federal law would apply and therefore wanted to try the case in federal court. But by asserting that the transaction takes place in the state of the bettor, and not the site operator, state Attorney General Jay Nixon won the right to try the case in state court, where gambling traditionally has been legislated.
Internet analysts and law experts say these types of battles over policing the Internet will only become more frequent, thanks to the growth of e-commerce and the heightened attention of a few state governments to the matter. Trying to regulate the blurred boundaries online has become increasingly difficult for states and federalism advocates, and many acknowledge that they are treading on treacherous terrain. But creating a system that allows states their own sovereignty and right to prosecute offenses while still cooperating with 49 other jurisdictions is a weighty task that, while many acknowledge important, is a long way off.
The Commerce Clause Conundrum
Many state and local government groups acknowledge that they must address the way localities regulate Internet content and determine a workable policy. But the recent attention to monetarily-pressing issues such as the taxation of e-commerce, open access to cable networks and Y2K have flooded agendas recently, leaving less time for such debate. "It's one of the issues we've not taken head-on," said Andy Madden, director of the Telecommunications and Information Technology Task Force of the American Legislative Exchange Council. He notes that while they have been tracking the development of Internet legislation, including laws addressing online pornography and alcohol sales and shipments, the organization has not developed policy recommendations in the area.
"I don't think a lot of people are talking about it publicly," said Liza Kessler, staff counsel for the Center for Democracy and Technology. She added that while constitutional issues regarding content continue to crop up in state legislatures, the commerce clause, which forbids one state from interfering in the business of another state, also factors into many cases.
"A lot of Internet businesses are worried about it and surely are talking about it privately, because it's going to be phenomenally expensive to defend cases all over the country or all over the world… These are really thorny issues and there's not a lot of case law on it related to the Internet," she said.
One of those prickly topics is online pornography, as three states already have enacted, and then had struck down, laws dealing with material on the Internet deemed "harmful to minors." On Wednesday, a group of 16 plaintiffs including Internet business alliances and civil liberties organizations filed a lawsuit challenging a Virginia state law that makes it illegal to knowingly display "harmful to minors" material on the Internet where it is accessible to minors. The groups, such as the Commercial Internet Exchange Association, Virginia Internet Service Providers Alliance, PSINet and People for the American Way, filed the suit against Virginia Gov. Jim Gilmore and state Attorney General Scott Earley objecting to the law on constitutional and economic grounds.
"The Internet is a lot like an interstate highway in that it doesn't work if you have fifty state regulations," said Larry Ottinger, a lawyer for the People for the American Way working on the case. "It doesn't work to put different burdens on different states, because it will then burden the Internet. When a state puts a law on the Internet in one state, it doesn't burden one state, it burdens every state. And it's not technically or economically feasible."
Solutions Seemingly Scarce
What could be hindering states' development of more content laws is enforcement: with current technology it is difficult to filter out "illegal" bits of information traveling on networks known as "packets," or even police the growing number of Web sites posted daily. "There aren't many ways now to sniff out packets and find out they're obscene or gambling packets, but invariably some states are going to want to…prohibit it," said Pennsylvania State University law professor Rob Frieden, author of "Modern Communication Law." "It's an issue of growing importance but practically speaking, technology will frustrate enforcement."
Those difficulties are also frustrating most efforts to develop a uniform policy, and are one reason that Henry H. Perritt, Jr., dean of Chicago-Kent College of Law and author of "Law and the Information Superhighway," suggests that there should be a comfortable period of experimentation with such rules at the state level.
"An important part of our legal tradition of federalism is to let states experiment with different approaches before the Congress adopts any particular approach," Perritt said in an e-mail interview. "It is important that the law not get out in front of actual commerce and conduct."
But even though legal scholars have been studying the issue, a concrete suggestion or method for dealing with the problem is a long way off. Most policy recommendations come from two basic camps, one advocating a laissez-faire approach and the other pushing for strong federal regulations, both of which don't please many state lawmakers. And so while officials try to iron out tax issues and ensure basic privacy protections, it seems as though individual case law may drive policy direction until more attention can be focused on the issue. That might not be such a bad thing, some say.
"Jurisdiction issues are going to be such an interesting thing for lawyers" until the laws are ironed out, Kessler said. "It's totally harried."
—by Stephanie Lash
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