[109696] in Cypherpunks
Re: Introduction and more on Federal legislation
daemon@ATHENA.MIT.EDU (Robert Hettinga)
Thu Apr 1 22:32:28 1999
Date: Thu, 1 Apr 1999 22:15:20 -0500
To: cypherpunks@cyberpass.net
From: Robert Hettinga <rah@shipwright.com>
Reply-To: Robert Hettinga <rah@shipwright.com>
--- begin forwarded text
Delivered-To: DIGSIG@LISTSERV.TEMPLE.EDU
Date: Thu, 1 Apr 1999 18:59:00 -0500
Reply-To: Digital Signature discussion <DIGSIG@LISTSERV.TEMPLE.EDU>
Sender: Digital Signature discussion <DIGSIG@LISTSERV.TEMPLE.EDU>
From: "Baker, Stewart" <SBaker@STEPTOE.COM>
Subject: Re: Introduction and more on Federal legislation
Comments: To: Kevin Kolevar <Kevin_Kolevar@ABRAHAM.SENATE.GOV>
To: DIGSIG@LISTSERV.TEMPLE.EDU
Kevin --
You may be interested in our quick thoughts on this bill. I'd welcome any
corrections if you think we've missed something.
Stewart Baker
Steptoe & Johnson LLP
ph--202.429.6413
fx---202.429.3902
sbaker@steptoe.com
From: Stewart Baker (sbaker@steptoe.com)
Matthew Yeo (myeo@steptoe.com)
On Friday, March 26, Senator Spencer Abraham (R-MI) introduced the
"Millennium
Digital Commerce Act" (S. 761), co-sponsored by Senators McCain (R-AZ) and
Wyden
(D-OR). (A copy of the bill is attached.) A corresponding bill, H.R. 1320,
has
been introduced in the House by Rep. Anna Eshoo (D-CA). The bill represents
an
effort to establish a minimum national standard for the recognition of
electronic signatures.
The bill is starkly minimalist in its approach. It has, in effect, only
three
operative provisions. The first operative provision, Section 6(a), would
affirm
that any contract "relating to an interstate transaction shall not be denied
legal effect solely because an electronic signature or electronic record was
used in its formation." The second operative provision, Section 6(b), would
guarantee the right of the parties to an "interstate transaction" to
establish
by contract procedures for the use and recognition of electronic signatures.
The
third operative provision, Section 6(d), would establish that "the intent of
a
person to execute or adopt an electronic signature shall be determined from
the
context and surrounding circumstances, which may include accepted commercial
practices."
The stripped-down approach of the Abraham bill undoubtedly reflects an
effort to
avoid trampling on the Uniform Electronic Transactions Act presently under
consideration by the National Conference of Commissioners on Uniform State
Law
(NCCUSL). The result is not exactly graceful. The bill states that the
first
two operative provisions described above shall not be construed to preempt
any
State law governing electronic transactions that is consistent with those
provisions. The bill further states that if a State adopts the UETA
"substantially as reported to" NCCUSL, the State shall be deemed to have
satisfied the requirements of Sections 6(a) and 6(b) so long as the
legislation
adopted is not inconsistent with those provisions. In other words, States
may
enact whatever electronic transactions legislation they desire, whether in
the
form of the UETA or otherwise, so long as that legislation guarantees party
autonomy and does not discriminate against electronic signatures and records
solely because they are in electronic form.
It is undoubtedly important to establish these principles on a uniform
national
basis, although some have questioned whether federal preemption is truly
necessary in light of the NCCUSL process. Perhaps the most that can be said
for
the Abraham legislation is that it would guarantee that the States could not
depart from the core principles of non-discrimination and party autonomy in
their negotiation of the UETA and in their respective implementations of
that
uniform law. Given the amount of time that it ordinarily takes to negotiate
and
implement a NCCUSL uniform law, the Abraham legislation may also achieve the
desired baseline of national uniformity earlier than the NCCUSL process.
Passage of the Abraham bill would also have some value in reinforcing the
positions that the United States has consistently advocated in international
discussions of authentication issues, particularly with regard to party
autonomy. The United States has sought to ensure that foreign legislation
and
international documents concerning authentication recognize the right of
parties
to enter into contracts concerning the use and recognition of authentication
methods, and having done so itself would have considerable exemplary and
rhetorical value.
At the same time, the Abraham bill's effort to accommodate the UETA and,
more
generally, to avoid encroaching upon an area that has traditionally been
within
the States' jurisdiction, has resulted in some unusual legislative
contortions.
For example, the operative provisions apply only to electronic contracts
relating to "interstate transactions." This term is not defined, and may or
may
not be synonymous with the well-understood notion of transactions "in
interstate
commerce" (which, in this day and age, basically encompasses all commercial
activity). One can imagine uncertainty and potential litigation over this
provision, as well as over the requirement that State laws be "consistent"
with
the provisions of Sections 6(a) and 6(b).
Supporters of the UETA process and other detractors of the bill will
probably
point to these difficulties as a reason to allow the UETA process to come to
a
conclusion before adopting national legislation in this area. Still, the
legislation does little or no harm, and at least provides some basic
parameters
within which the uniform state law effort can proceed.
____________________Reply Separator____________________
Subject: Introduction and more on Federal legislation
Author: "Kevin Kolevar" [SMTP:Kevin_Kolevar@ABRAHAM.SENATE.GOV]
Date: 4/1/99 4:56 PM
Before entering the substance of the issue at hand, I'd like to introduce
myself. I am the Legislative Assistant to U.S. Senator Abraham for
technology
and science, and am managing the legislation that was recently "reviewed" on
this listserve (S. 761, The Millennium Digital Commerce Act). Thanks to Dan
Greenwood for providing an early draft of the legislation on his informative
website. It is now available on Senator Abraham's homepage at
www.senate.gov/
~abraham/.
Since the bill's introduction there have been some significant events that
deserve mention. To begin with, the Senate Majority Leader (Trent Lott) has
been added as an enthusiastic cosponsor of this legislation. The Leader's
support is critical to this bill becoming law. Thus, this legislation is
cosponsored by the Senate Leader, the Chairman of the Senate Commerce
Committee
and the Chairman of the Communications Subcommittee. Senator Wyden's
support
makes this a bipartisan effort.
Outside Congress, Gateway has joined Hewlett-Packard and Microsoft in
endorsing
the legislation. In addition to ITAA and NAM, we expect several other
(high-
tech) associations to join in the next week.
S. 761 gives businesses electronic contractual certainty and the right to
choose
their own technology and business models with respect to electronic
signatures
in records. This addresses a need that has been consistently and strongly
articulated by industry. In addition, language addressing the international
use
of electronic signatures is designed to bolster the U.S. freemarket position
adhered to in negotiations with the Europeans. It was written in close
cooperation with the U.S. Department of Commerce.
Politically, this legislation is a practice in the art of the doable. It
limits
itself to addressing known, widely agreed upon issues, but demonstrates
restraint and leaves untouched a host of issues which, frankly, are not
mature
for consideration by the Congress at this time.
Please feel free to contact me directly by e-mail or by phone.
Kevin Kolevar
Kevin_Kolevar@abraham.senate.gov
202-224-3462
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-----------------
Robert A. Hettinga <mailto: rah@philodox.com>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
