Regulation brewing over Net

The Internet has grown and prospered in a climate of government nonintervention,

but that climate may be changing, warns author James Glassman.

After several years of allowing the Internet to evolve with few restrictions,

the government shows increasing eagerness to rein in the Net with regulations,

Glassman said in an address at the conservative Heritage Foundation on Monday.

Next year, Congress is likely to consider controls on the Internet ranging

from taxes to content-filtering requirements. Meanwhile, federal regulatory

agencies are pondering restrictions ranging from privacy requirements to

antitrust actions, Glassman said.

But shackling the Internet could lead to a "regulatory recession" in which

the nation's economy is stifled by restraints imposed on the technology

sector, said Glassman, who is a financial columnist and co-author of the

book "Dow 36,000."

The federal government's antitrust suit against Microsoft Corp. last spring

was a key indicator of the regulatory climate change, Glassman contends.

He links the antitrust suit and the collapse of technology stocks that occurred

at about the same time.

The federal government should limit its role in the technology sector to

supporting basic research and development, protecting intellectual property

and continuing to serve as the largest buyer of technology goods and services,

he said.

Increased regulation of the Internet isn't the only threat that Washington

poses to the technology sector of the economy. The new president's budget

policies could have a major impact, according to Robert Atkinson, director

of the Technology and New Economy Project at the Progressive Policy Institute.

George W. Bush's promise for a large tax cut, for example, threatens further

cuts in federal spending on technology research and development — cuts that

would "cascade into the IT business," Atkinson said. Federal investment

in IT research and development has been in a decade-long decline, he said.

But there are some actions the government can take to help the technology

sector, however. Laws that promote the use of digital signatures would be

beneficial. So would restrictions on junk e-mail, Atkinson said.

Perhaps most useful of all, however, would be for the federal government

to promote electronic government, he said. In addition to improving government

operations, electronic government would encourage more people to do more

online — government and commercial activity — which would then stimulate

the economy, Atkinson said.