18 January 2001

Text: Commerce Dept.'s Annual Report on Digital Progress

The U.S. Commerce Department's Electronic Commerce Working Group's final annual report details the role information and communications technologies have played in transforming the U.S. economy and society.

The report -- "Leadership for the New Millennium, Delivering on Digital Progress and Prosperity" -- was released by the working group January 16 and sets out the accomplishments of the Clinton administration over the past three years.

"The information technology sector has accounted for almost one-third of U.S. economic growth, and has helped spark an increase in U.S. productivity and global competitiveness," the working group said.

The full report can be found on the Internet at http://www.ecommerce.gov/ecomnews/ecommerce2000annual.pdf.

Following are abbreviations and terms used in the text:

-- FY: fiscal year. -- CEO: chief executive officer. -- OECD: Organization for Economic Cooperation and Development. -- WIPO: World Intellectual Property Organization. -- G-8: Group of Eight major industrialized nations. -- E-Commerce: electronic commerce. -- billion: equals 1,000 million. -- WTO: World Trade Organization.

Following is the text of the report's executive summary:

(begin text)

Leadership for the New Millennium:
Delivering On Digital Progress and Prosperity

Executive Summary

The Internet, and other information and communication technologies, are not only driving our economies but are transforming our societies in countries around the world. Recognizing the vast potential for these technologies to better the lives of all people, President Clinton and Vice President Gore last year directed the Electronic Commerce Working Group to launch three new initiatives designed to harness the full power of the Internet's potential benefits. These initiatives have narrowed the digital divide and increased access to digital opportunity; improved the quality and availability of government services while making government more transparent, responsive and efficient; and used new technologies like the Internet to enrich our lives and address our most urgent social challenges. At the same time, we have expanded our ongoing efforts to promote the growth of electronic commerce and foster a safe, secure online environment.

This report outlines the Clinton-Gore Administration's success in making the Internet a tool for both social and economic growth. In pursuing these dual objectives, we have adhered to the principles the President and the Vice President first outlined three years ago in setting forth a global vision for the growth of e-commerce. These principles of private sector leadership, avoidance of unnecessary regulation, and a minimalist government role have continued to prove their durability and relevance. Our commitment to them has helped the Internet to flourish beyond our expectations and brought us closer to our ultimate objective of achieving digital equality for all our citizens.

In the fast changing world of the Internet, the five policy principles that President Clinton and Vice President Gore set forth in July 1997 have proven sound and sufficiently flexible to apply to the new challenges arising daily.

They are:

-- The private sector should lead.

-- Governments should avoid undue restrictions on electronic commerce.

-- Where governmental involvement is needed, its aim should be to support and enforce a predictable, minimalist, consistent and simple legal environment.

-- Governments should recognize the unique qualities of the Internet.

-- Electronic commerce over the Internet should be facilitated on a global basis.

I. Creating Digital Equality

The Clinton-Gore Administration has helped widen the circle of digital opportunity at home and abroad. Domestically, the Administration has helped create unprecedented access to the information technology. Over the last year, the digital divide between our citizens has narrowed dramatically. There were 116.5 million Americans with Internet access at some location by August 2000, 31.9 million more than there were only 20 months earlier. The Administration also has increased technology access, training and usage for all students. We also have helped small businesses to harness the power of the Internet and take part in the emerging global digital economy. Today, small businesses are using the Internet to increase their efficiency, reach international markets, participate in business-to-business exchanges, and integrate themselves into supply chains that stretch around the world. Finally, the Administration has expanded digital opportunity globally. Around the world, we are helping developing countries use digital technologies to accelerate their social and economic development and participate fully in the Information Revolution.

The Administration has:

Connected Schools and Libraries to the Internet -- The e-rate is benefiting more than 90 percent of America's public schools and providing Internet access for 30 million children in more than one million classrooms and 47,000 schools and libraries.

Tripled Funding for Community Technology Centers -- The Administration proposed tripling funding for Community Technology Centers in its FY 2001 budget to $100 million to create up to 1,000 new centers. These centers will help to close the digital divide by providing computers and Information Age tools to children and adults unable to afford them at home.

Expanded Access to Education Technology -- The President and Vice President have increased overall investments in education technology from $23 million in 1993 to $766 million in FY 2000.

Increased Technology Training for Teachers -- The Administration is providing grants to help train 400,000 new teachers to use computers effectively in the classroom. In addition, the Technology Literacy Challenge Fund, which the Administration created in 1997 to help states provide software and Internet access for students, increase the number of multimedia computers in the classroom and provide technology training for teachers, received $425 million in FY 2000.

Helped Disabled Persons Get Access to the Web and Assistive Technology -- The Administration has supported the World Wide Web Consortium's Web Accessibility Initiative, promoting accessible information technology through research and industry collaboration; created an interagency task force to explore enhancing Medicare and Medicaid to help people with disabilities pay for technologies that will assist them to live and work independently; created state-based loan programs so that individuals with disabilities can have access to personal loans from traditional financial institutions for the purchase of assistive technology services and devices; and awarded $9 million to AmeriCorps to put 1,200 volunteers into schools and communities to teach students with disabilities and others the skills they need to use the Internet effectively.

Mobilized Public-Private Partnerships Targeting People with Disabilities -- With Administration support, over 45 high-tech CEOs have pledged to support "best practices" on accessibility and presidents of 25 of the nation's top research universities have agreed to expand research and education on accessibility issues. SmartForce, an e-learning company, also has pledged to provide $20 million of free access to its online training material and Sun Microsystems has created a lab to make free, open-source desktop software accessible for people with disabilities.

Launched a Distance Learning Service for Small Businesses -- Through a public/private partnership, the Administration began offering small businesses a distance learning curriculum that features online e-commerce courses and an e-commerce guidebook.

Created a Global Digital Opportunity Taskforce -- With strong support from key developing countries, industry, non-profit groups and other stakeholders, the Administration and its G-8 partners have launched a major international effort to create digital opportunity worldwide by providing policy advice, building human capacity, and increasing access (http://www.ecommerce.gov/ ecomnews/pr0725002.html).

Expanded the Internet for Economic Development Initiative -- The Administration invited India and Jordan to join the initiative in early 2000 and seven additional countries -- Mali, Indonesia, Kenya, Nigeria, Senegal, Romania and Guyana -- in July 2000. Vice President Gore announced 11 pilot countries in June 1999.

II. Building An E-Society

The Administration has recognized that the Internet has the potential to address our most urgent challenges and improve our quality of life. The Internet is not just an engine of economic growth but a means of improving the quality of our lives. Increasingly, the Internet is a means to access educational, medical and other services. Over the last year, the Administration has stepped up efforts to make the Internet live up to its full potential to benefit people in critical areas such as health and education.

The Administration has:

Deployed Telemedicine Technologies to Remote Communities -- Over the last year, the Administration has moved rapidly to deploy state-of-the-art technology to bring primary care and specialty medicine to remote communities. Currently, there are almost 40 telemedicine programs and partnerships within the Indian Health Service alone that are delivering care to isolated communities.

Put Quality Health Care Information Online -- Both health care professionals and consumers, can get online, accurate, up-to- date, quality health care information from the world's largest medical library, the National Library of Medicine at the National Institutes of Health using MedlinePlus. This service provides access to extensive information about specific diseases and conditions, and has links to consumer health information, dictionaries, lists of hospitals and physicians, health information in Spanish and other languages, and clinical trials. Medline-plus receives over one million hits per month (http://www.nlm.nih.gov/medlineplus/). In addition, medical products consumers can use Medwatch to search medical product reporting and safety information (http:// www.fda.gov/medwatch/index.html).

Made the Human Genome Project Available Online -- Members of the scientific community can use GenBank, a genetic sequence database, to access an annotated collection of all publicly available DNA sequences. The collection contains over 10.3 billion base pairs (http://www.ncbi.nlm. nih.gov/Genbank/genbankstats.html).

Improved Monitoring of Public Health -- Using information and communication technologies, the Administration has improved methods for conducting public health surveillance to gather health data in real time, facilitate the monitoring of health communities and analysis of trends, and to detect emerging public health problems.

Improved Rural Communities Through Information Technology -- The Administration has approved loans to install over 6,587 miles of fiber optic lines and upgrade 127 rural telephone exchanges so the plants are ready to allow customers to access high-speed DSL Internet service; awarded $18.7 million to link hospitals, schools, doctors, educators, patients and students in rural America with medical research institutions, universities, libraries, doctors, educators, and professors; and deployed Mobil Internet Vans to provide IT training in rural communities.

Pushed to Establish Online School Report Cards -- The Administration has proposed posting state-level, district and individual report cards on the Internet; provided funding for a pilot program in Maryland that has become a model for other states; and piloted the development of systems in eight states to allow states to compare their schools' academic performance.

III. Empowering Citizens

The Clinton-Gore Administration has brought government into the Digital Age. We have used digital technologies to make government move at Internet speed and make it possible for citizens to access critical government services and information around the clock. Now, anyone with a computer connection has the government at his or her fingertips. In addition to making government more efficient and accessible, we also have made government leaders more responsive via e-mail and are exploring ways of making it easier for all Americans to participate in the nation's political life. Digital empowerment is helping citizens take control of their government as never before.

The Administration has:

Launched the FirstGov.gov Website -- The Administration launched the first-ever website that provides the public with easy, one-stop access to all Federal government online information and services. The customer-focused FirstGov permits users to search 27 million Federal agency web pages instantaneously and intuitively -- by subject or by keyword. The FirstGov search engine, run by the non-profit Federal Search Foundation, can search half a billion documents in less than one-quarter of a second (http:// www.FirstGov.gov).

Promoted Online Filing of Government Paperwork -- Under the Government Paperwork Elimination Act (GPEA), the Administration directed agencies in May to plan for electronic filing by October 2003 and to use electronic signatures for the full range of government activities and services, considering risks, costs, and benefits.

Put Government Services Online -- The Administration has dramatically expanded the range of services online. These services include:

-- Taxes -- Taxpayers can use the IRS e-file program to file from the convenience of their homes quickly and simply. E-filing reduces the chances of an error to less than 1 percent. With the security of Direct Deposit, refunds are in taxpayer's savings or checking accounts within three weeks, half the time compared to paper filings (http://www.irs.gov/elec.svs/ index.html).

-- Students.Gov -- Post-secondary students can obtain financial aid, easily complete electronic student aid applications, pay student loans and obtain other government information under the Access America initiative announced by Vice President Gore in February 1997 (www.students.gov).

-- Seniors.Gov -- Seniors can receive estimates of their social security benefits, verify benefits received, and gather other government information of particular interest online (http://www.seniors.gov).

-- Medicare Compare Database -- Citizens can find the Medicare option that works best for them using an interactive database that provides comprehensive information on various Medicare health plans, including the cost, quality, and benefits of each plan (http://www.medicare.gov/mphCompare/ home.asp).

-- Paperless Procurement -- Vendors who conduct business with the government can now use a totally paperless procurement process (http://www.fts.gsa.gov). The Government Services Administration (GSA) issues each potential bidder a digital signature certificate, allowing him or her to digitally sign and submit proposals and conclude contracts electronically.

-- Campsite Reservations -- Campers can now get information and make reservations at more than 50,000 U.S. campsites and facilities (http://www.recreation.gov).

Examined the Feasibility of Online Voting -- On October 11-12, 2000 the National Science Foundation sponsored the Internet Policy Institute e-Voting Workshop. The Workshop explored the issues raised by online voting, including privacy, security, authentication, broad and equitable access, and the potential impact on representative democracy. A report detailing the findings from the workshop will be posted at www.netvoting.org in early 2001.

IV. Enhancing Consumer Confidence

E-commerce and other Internet applications will never reach their full potential unless consumers and other users can go online with confidence. The Clinton-Gore Administration has worked to ensure consumers enjoy equivalent protection whether they shop online or in brick-and-mortar stores. We also have significantly improved privacy protections through private sector self-regulation and legal protection in the most sensitive areas, and helped provide greater security on the Internet against cyber-criminals and other threats. We have achieved these successes while maintaining our core commitment to minimal government intervention and private sector solutions like codes of conduct and third party audits and enforcement mechanisms.

The Administration has:

Improved Consumer Protection Online -- The Administration has enhanced consumer protection by successfully challenging industry to establish codes of conduct, encouraging consumer education, and aggressively fighting misleading and deceptive practices online.

Explored Alternative Dispute Resolution (ADR) Mechanisms -- The Administration held a public workshop in June to explore the new and innovative ADR models emerging in the marketplace; exchange ideas on how to develop fair dispute resolution systems; identify obstacles to the more widespread use of ADR for online consumer transactions; and examine the incentives and disincentives for creating these programs (www.ecommerce.gov/adr/).

Encouraged Industry to Protect Individual Privacy -- The number of commercial web-sites that post privacy policies has jumped from 2 percent in 1998 to 62 percent this year.

Enhanced Protection for Children on the Internet -- The FTC issued rules to implement the Children's Online Privacy Protection Act in April 2000. The Administration actively supported enactment of this Act, which requires sites aimed at children to get verifiable parental consent before they gather and use personal information received from children under 13 (http://www.ftc.gov/ opa/2000/04/coppa1/.htm).

Increased Protections for Medical Records -- In December 2000, the Administration issued the final rules guaranteeing the privacy of medical information under the Health Insurance Portability and Accountability Act of 1996. These rules will apply to all medical providers and plans and their business associates (13 percent of the U.S. economy).

Established a Safe Harbor for Consumer Information -- The United States and the European Commission completed the safe harbor privacy accord, which helps to ensure that trans-Atlantic data flows will not be interrupted. This landmark accord, which became operational in November of this year, will enhance privacy protection for U.S. consumers and assure effective privacy protection for European citizens whose data is transferred to the United States (http:// www.export.gov/safeguard).

Implemented Sweeping Changes to Restrictions on the Export of Encryption Products -- In January 2000, the Administration implemented the new policy on the export of encryption products. The new policy, announced in September 1999, both protects national security interests and paves the way for U.S. industry to compete in major markets around the world. It also helps consumers and other users protect their data. In July 2000, the Administration announced a further update that opens up encryption exports to the 15 member nations of the European Union as well as eight other trading partners (http://w3.access.gpo.gov/ bxa/fedreg/earfedreg.html#65fr42565).

Worked to Protect Internet Security -- In February, President Clinton convened a summit of industry leaders to examine the security of America's computer networks. In July, the White House announced a proposed legislative package to address both privacy protections and law enforcement needs for crime in cyberspace. The package contained provisions to update telephone-era laws for the Internet-age, enhance privacy protections and allow law enforcement to protect the public safety.

Announced First-ever Critical Infrastructure Protection Plan -- President Clinton issued in January the National Plan for Information Systems Protection, the first attempt by any national government to articulate a plan to protect its computer-controlled networks (http://www.pub.whitehouse.gov/uri-res/ I2R?urn:pdi://oma.eop.gov.us/2000/1/7/7.text.1).

V. Creating A Seamless Global Marketplace

The Administration has worked to create a seamless global marketplace that will allow e-commerce and the Internet to reach their full potential. This year we continued work in dozens of areas, including taxation, customs duties, electronic signatures, and intellectual property rights, to ensure that the global regulatory environment encourages the development of global trade in cyberspace rather than stifles it. Nowhere has the application of our principles of private sector leadership and minimal government intervention been more successful.

The Administration has:

Established the Validity of Electronic Signatures -- President Clinton signed into law the Electronic Signatures in Global and National Commerce Act (E-SIGN) on June 30, 2000. E-SIGN promotes electronic commerce by ensuring explicitly the legal validity of electronic records, signatures, and transactions (http://www.ecommerce.gov/ ecomnews/ElectronicSignaturess761.pdf).

Worked to Extend the Global Moratorium on Customs Duties -- This year the Administration continued to build on the successful May 1998 WTO electronic commerce declaration to formally extend the existing moratorium on customs duties on electronic transmissions and continue the WTO work program regarding the application of all trade disciplines to e-commerce.

Promoted Tax Simplification and Non-Discrimination -- The Administration has continued to work to prevent multiple or discriminatory taxes on electronic commerce through the G-8, the OECD, and in bilateral efforts. The Administration also furthered the debate domestically on the simplification of state and local taxes through our participation in the Advisory Commission on Electronic Commerce and called for a permanent ban on Internet access taxes.

Provided Global Leadership on Intellectual Property Protection -- The Administration has encouraged worldwide support for the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty through trade negotiations, speeches, and participation in conferences. As of November 2000, 21 and 19 countries respectively, had ratified the two treaties, representing all geographical regions of the world.

Strengthened Procedures for Patenting Innovation -- The Administration significantly strengthened the procedures for evaluating applications for business method patents by partnering with affected industry, enhancing training for patent examiners, revising examination guidelines, and improving management oversight among other steps.

VI. Facilitating the Growth of the Internet

The Administration has worked to ensure that the Internet continues to grow. We have encouraged the rapid deployment of high speed Internet services through our pro-competitive policies. We have encouraged the development of voluntary standards through open private sector led processes and continued successful efforts to ensure that the domain name system is managed by a global, functionally diverse, and private sector-led organization. We also have expanded our understanding of the Digital Economy and how to sustain the growth, job creation, and low inflation that are driving our overall economic performance.

The Administration has:

Encouraged the Rapid Deployment of High Speed Internet Services -- The Administration's pro-competitive policies are stimulating rapid build-out of high speed Internet services. In addition, the President's proposed FY 2001 budget included a new pilot program that will provide $2 million in grants and $100 million in loans to accelerate private sector deployment of broadband networks in under-served urban and rural communities.

Supported Industry Efforts to Define Key Standards for the Internet -- The Administration has vigorously supported private sector-led efforts to create voluntary technical standards for the Internet.

Advanced Privatization of Domain Name Management -- The Internet Corporation for Assigned Names and Numbers (ICANN), which was created by the private sector with strong Administration support in 1998, held its first worldwide membership drive and online elections of new Members of its Board of Directors. ICANN selected seven new top-level domain names.

Expanded our Understanding of the Digital Economy -- The Administration released its Digital Economy 2000 report which examines the evolution of electronic commerce and the role of IT-producing industries in driving growth, reducing inflation, increasing productivity, and increasing jobs (http:// www.esa.doc.gov/de2000.pdf). The Census Bureau of the Department of Commerce also began measuring both business-to-business and business-to-consumer e-commerce sales.

Distributed by the Office of International Information Programs, U.S. Department of State.
Web site: http://usinfo.state.gov