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Strengthening the Internet as a Safe, Secure Medium while Fostering Innovation

Many exciting new companies are using the Internet to transform commerce, creating enormous value for consumers and generating thousands of high-paying jobs. TechNet believes that the growth of the Internet depends upon consumer confidence: users must know that that their privacy and security are protected, that kids can use the Internet safely and that fraudulent behavior can be identified, punished and prevented.

TechNet companies have invested enormous resources to fight threats like "spyware", online fraud (including phishing), and identity theft. TechNet has a record of working with law enforcement, public officials, consumers and other stakeholders to develop solutions. TechNet believes that where legislation is necessary it must in general be appropriately focused on combating harmful behavior while permitting innovation for useful purposes. Moreover, many Internet threats arise beyond the reach of any particular state?s jurisdiction and are addressed most appropriately with national rules.

• Online Safety. TechNet member companies have been at the forefront in keeping the Internet safe for kids and protecting consumers from online fraud. In the area of kid safety, TechNet member companies are supporting initiatives to provide curricula that educate kids how to use the Internet safely and give law enforcement more tools to protect kids. TechNet member companies are working hard with law enforcement, nonprofits and schools to educate young people about how to use the Internet safely and recognize threats from sexual predators; make available filters and technology to protect kids and to work with law enforcement to identify, apprehend and prosecute those who prey on children through the use of the Internet or other media.
• Regulation of electronic commerce. As Internet commerce grows, off-line competitors have sometimes attempted to impose burdensome regulatory regimes on their online competition. For example, some bricks and mortar retailers have proposed imposing restrictions on online commerce. For example, some retailers have suggesting attacking organized crime by proposing measures that would single out online commerce for greater regulation. TechNet is concerned about the problem of organized crime affecting the retail sector, but opposes some of the policies advocated by off-line retailers that would have the effect of curtailing competition from online commerce, such as bans or restrictions on the Internet-based sales of certain categories of goods.
• Use the Internet to improve the delivery of government services. The government can and should use the Internet to deliver inherently governmental services more efficiently. For example, the Internet can be used to electronically file taxes in a way that reduces government costs by eliminating paper and speeding tax refunds to the citizen. TechNet advocates state participation in the Free File Alliance, which involves a public-private partnership between tax preparation software providers and states under which tax preparation software providers make available free online tax preparation and electronic filing services to lower-income, disadvantaged and underserved taxpayers; these commercial software programs helps taxpayers better master the complexity of filing their returns and claiming refunds which many fail to understand and apply for, like the Earned Income Tax Credit. This approach enables states to help more taxpayers in a manner that avoids unnecessary costs and the potential conflict of interest that arises when the tax collector also becomes the tax preparer. TechNet must oppose using state resources to duplicate services offered by commercial enterprises where a robust competitive marketplace already exists.

Digital downloads. Digital media is nothing like tangible products and has therefore never before been subject to tax. Legislators in some states have proposed taxing digital media. Although digital media is sold to consumers in the online marketplace from around the globe, federal law prohibits states from taxing any companies that do not have a sufficient nexus or connection to those states. Therefore, companies who operate or provide jobs within those states are the easiest and most certain targets of these proposals. Under most digital download tax proposals, in-state companies will be required to collect the new Internet tax while out-of-state companies will not. The result: a heavy new penalty on in-state companies who are often providing good jobs.