PROFITS ON THE NET WILL GROW AS US GOVERNMENT STANCE ON ENCRYPTION CHANGES

   NEW YORK, NY -- The announcement by the White House today of a new policy for the Internet, capped a series of developments unfolding over the past few weeks, indicating that the US government has changed its stance and will soon change its policies on the Internet.

   There seems to be a connection between these developments and the ways companies are already using the net to achieve savings and boost profits in business activities.

   Perhaps most important in the government's new attitudes toward the net was the Reno v. ACLU decision granting First Ammendment free speech protections to the Internet, putting the net in the same categories as other strongly protected media, such as newspapers and books. The high court was appalled by government defenses asserting that the Internet would not mature without the penalties imposed by the Communications Decency Act, legislation signed by President Clinton, that was overturned last month.

   The same week, the US Department of Commerce relaxed its rulings on the export of strong (128-bit) encryption technology used in financial software. This was the first time that such near-impossible to break coding technology has been allowed to be exported by US software companies. Such coding systems are generally placed in the classification of "munitions" and treated with the same security restrictions as bombs.

Profits Will Grow

   With such sweeping changes in free speech and encryption, many industry observers believe that electronic- and Internet-based commerce will thrive, especially if other privacy and security issues can be attended to with the same enlightened encryption policy.

   A growing number of companies are currently using the net to profit, including Wal-mart, IQVC (an online version of the broadcast and cable TV shopping network) as well as Cisco Systems and Dell Computer. The latter two are both enjoying multi-million dollar-per-day sales on the net. Cisco claims saving of over one-half billion dollars in the past year as a result of using the net for a variety of business processes and activities. These include conversion of paper documentation into electronic form, software distribution, customer service and support, and online recruiting.

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