Past Issues of Government Technology

Electronic Commerce

What effects will virtual cash, faceless electronic transactions and digital signatures have on government, business and society?

by , / March 31, 1997 0
Will the roar of stock markets, the crackle of currency and jangle of cash-registers &emdash; soon die away to a weightless whisper of electrons? Will the six-bit shave and a haircut cost bytes instead?
In 1996, Internet commerce - still in its infancy - contributed 1 percent of our gross domestic product, and at least one expert has predicted billions in Internet commerce by the year 2000. According to Larry Irving of the NTIA, the federal government is required to make all payments electronically except tax refunds by January 1, 1999.
So what effects will virtual cash, faceless electronic transactions and digital signatures have on government, business and society? Government Technology interviewed Irving and a panel of experts to find out.


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Question 1:

At least one expert has predicted that by the year 2000, $1 billion in commerce will be conducted annually over the Internet. Do you think electronic commerce will have far-reaching effects on our society? If yes, could you give a few examples?


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Question 2:

What opportunities does electronic commerce present to state and local government?


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Question 3:

A number of states have legislated standards in electronic signatures and other features of electronic commerce. Is this a good idea? Why or why not?


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Question 4:

How will jurisdiction-based regulatory agencies cope with "virtual corporations" in cyberspace?


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Question 5:

Business Week reported recently that Rep. Cox (R-Calif.) and Sen. Wyden (D-Ore.) plan to propose a moratorium on any new federal, state or local taxes on electronic commerce. Won't this bill hurt state and local sales tax revenues?


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Question 6:

Currently, states can only impose taxes on out-of-state companies if they have a "physical presence" in that state. How will electronic commerce affect that viewpoint?


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Question 7:

How can the need for strong encryption in electronic commerce reconcile with law enforcement's need to conduct legal wiretaps?


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Question 8:

Will ironclad identity documents or a national ID card be a necessary prerequisite for widespread electronic commerce?


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Question 9:

The IRS started a program to pay taxes by computer, but pulled the plug because of fraud. Is fraud more prevalent with electronic transactions?


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Question 10:

What is the most effective way to begin a state or local government electronic commerce initiative?


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Question 11:

What "best in class" electronic commerce solutions exist in the public sector?


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Question 12:

Other comments?


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Question 13:

By the year 2002, what percent of government's business


will be transacted online?

Kawika M. K. Daguio
is federal representative for operations, retail banking and risk management in the Regulatory and Trust Affairs Division of the American Bankers Association (ABA) in Washington, D.C. He addresses operations, technology, risk management and privacy issues arising out of federal regulatory or legislative proposals - included are: check operations, coin and currency, counterfeiting, cryptography, debit/ATM/credit card operations, digital cash and stored value cards, fedwire operations, government financial operations, information technology management, information security, payment system risk and telecommunications.

Prior to joining ABA, Kawika was a financial program specialist with the U.S. Department of Treasury, Financial Management Service. He has been employed in technology and financial positions in both the private and public sectors.

Mr. Daguio, holds master's degrees in business administration and public management from the University of Maryland at College Park. He earned his bachelor's degrees in social science and social ecology at the University of California at Irvine.


Faye Farrington
is the director of Solution Development, Tax and Revenue Practice, Information Services Group, Unisys Corp. As a former tax administrator with the Massachusetts Department of Revenue, she brings to Unisys Tax and Revenue practice a full understanding of the business and operational issues confronting tax and revenue agencies. As manager of solution development for the practice, she explored the opportunities provided by the use of electronic commerce to tax agencies in reducing the heavy burden of paper processing and enhancing the delivery of taxpayer services.

As part of the practice's mission to be a full-service technology provider to tax agencies, Unisys has developed strategic alliances with best-of-breed electronic commerce solution providers. In addition we are active members in the Council for Electronic Revenue Communication advancement.


Larry Irving
is the assistant secretary for Communications and Information and the administrator of the National Telecommunications and Information Administration (NTIA). In that capacity, Mr. Irving serves as a principal advisor to the president, vice president and secretary of commerce on domestic and international telecommunications and information issues, and manages the federal government's use of spectrum.

Under Mr. Irving's leadership, NTIA instituted the Telecommunications and Information Infrastructure Assistance Program (TIIAP), which has awarded over 250 matching grants to nonprofit organizations throughout the United States to demonstrate the benefits of telecommunications and information technology. This highly competitive grant program funds projects that extend the reach of the National Information Infrastructure (NII) to underserved rural and urban communities. The program is playing a key role in bridging the gap between information haves and have-nots.

In December 1995, Irving was named one of the fifty most influential persons in the "Year of the Internet" by Newsweek Magazine.

During the past three years, Mr. Irving played a key role representing the administration to secure passage of the Telecommunications Act of 1996, the most comprehensive reform of our nation's telecommunications laws in 60 years.

Mr. Irving serves as chair of the Telecommunications Policy Committee of the Clinton administration's Information Infrastructure Task Force (IITF). In May 1996, President Clinton appointed Mr. Irving to serve on the National Commission on the Restructuring of the Internal Revenue Service (IRS). After conducting a one-year review, the commission will make recommendations to Congress for restructuring the IRS.

Mr. Irving served as "sherpa" (lead coordinator) for the U.S. Government for the Information Society and Development Conference, which took place May 13-15, 1996, in Johannesburg, South Africa. In February 1995, Mr. Irving served as the sherpa and a member of the U.S. delegation for the G-7 Ministerial Conference on the Information Society.

From March 1987 to March 1993, Mr. Irving was the senior counsel to the U.S. House of Representatives Subcommittee on Telecommunications and Finance where he played a key staff role in the enactment of the Cable Television Consumer Protection Act of 1992, the Children's Television Act of 1990 and the Television Decoder Circuitry Act of 1990.

From January 1983 until March 1987, Mr. Irving served as legislative director and counsel to the late Congressman Mickey Leland (D-Texas). He was the congressman's acting chief of staff in 1983 and 1985.

Prior to joining Congressman Leland's staff, Mr. Irving was associated for three years with the Washington, D.C. law firm of Hogan and Hartson, where he specialized in the areas of communication law, antitrust law and commercial litigation.

He received a bachelor of arts' degree from Northwestern University in 1976. He is also a graduate of Stanford University School of Law where he was president of the class of 1979.

Mr. Irving currently serves on the board of directors of the U.S. Telecommunications Training Institute (USTTI) and the advisory board of Highway 1. He previously served on the board of directors of the U.S. House of Representatives Child Care Foundation, and was appointed by the Speaker of the House to serve on the advisory board of the U.S. House of Representatives Child Care Center.

Mr. Irving also has served as staff chairman of the U.S. House of Representatives Fair Employment Practices Committee, as a member of the board of visitors of the Stanford University School of Law and as co-chair of the Electronic Media Division of the American Bar Association's Forum on communications law.

He is married to Leslie Annett Wiley and lives in the District of Columbia.


Kimberly Jenkins
is founder, executive director and chairman of Highway 1, a non-profit, Washington, D.C.-based corporation created to educate members of Congress and other government leaders about information technologies. The corporate sponsors of Highway 1 include AT&T, Apple, Eastman Kodak, IBM, Adobe, Microsoft, Netscape and Sunsoft. A number of other hardware, software and telecommunications firms are technology partners of Highway 1.

Kimberly's previous experience includes five years as the president and principal owner of the Jenkins McMurray Group, a strategic marketing company in Palo Alto, Calif. Prior to creating her own firm, Kimberly was the director of Market Development for NeXT and the founding director of Microsoft's Education Division, a program she created which produced over 10 percent of Microsoft's domestic revenue in its first year. She began her corporate career as a technical analyst with Control Data Corp.

Kimberly is a magna cum laude graduate of Duke University with a B.S. in biology and a Ph.D. in education.


Secretary of State Bill Jones
was elected in 1994. During his first two years in office, he completely revamped the direction of the agency, providing information technology-based solutions to help resolve many of the problems that evolved from a previous archaic paper-driven system.

As California's chief filing officer, he is actively working to expand the use of electronic data interchage (EDI) in governmental communication. He is currently finalizing regulations to facilitate the use of digital signatures in written communications with the state.

In the future, he expects to utilize EDI for the filing and retrieval of the millions of business filing and political disclosure documents his office receives annually.


Gary Lambert
As deputy state purchasing agent for the commonwealth of Massachusetts, Gary Lambert is responsible for the management of $1 billion of goods and services procurements annually, including the purchase of information technology hardware, software and services. He is a key member of the commonwealth's procurement reform effort, which includes the newly created, Internet-based Commonwealth Procurement Access and Solicitation System

Mr. Lambert is also a member of the National Association of State Purchasing Officials where he serves as a member of the Executive Committee and also as the association's Information Technology Committee chairperson.


Mike McKenzie
is vice president and general manager for electronic commerce for EDS' State and Local Government business unit. He is responsible for EDS' contracts that provide electronic commerce solutions for state and local governments.

Before joining EDS, he was the data processing director for the Missouri Department of Social Services. While in this role, McKenzie also served as co-chairman of the Systems Technical Advisory Group to the federal Health Care Financing Administration.

Currently, McKenzie serves on the NASIRE/ITAA Electronic Commerce Task Group.


Gordon Peterson
is the chief information officer for the state of Utah, appointed by Gov. Leavitt in 1993. He has served as the executive director of the Governor's Electronic Highway Task Force, chairs the state's Information Technology Policy and Strategy Committee, serves on the state's Information Technology Commission and is a member of the Governor's Cabinet Council.

In the statute that created his office, he is charged with maintaining a liaison with the legislative and judicial branches, higher and public education, local government, federal government, business and industry, and consumers. n the Regulatory and Trust Affairs Division of the American Bankers Association (ABA) in Washington, D.C. He addresses operations, technology, risk management and privacy issues arising out of federal regulatory or legislative proposals - included are: check operations, coin and currency, counterfeiting, cryptography, debit/ATM/credit card operations, digital cash and stored value cards, fedwire operations, government financial operations, information technology management, information security, payment system risk and telecommunications.

Prior to joining ABA, Kawika was a financial program specialist with the U.S. Department of Treasury, Financial Management Service. He has been employed in technology and financial positions in both the private and public sectors.

Mr. Daguio, holds master's degrees in business administration and public management from the University of Maryland at College Park. He earned his bachelor's degrees in social science and social ecology at the University of California at Irvine.


Faye Farrington
is the director of Solution Development, Tax and Revenue Practice, Information Services Group, Unisys Corp. As a former tax administrator with the Massachusetts Department of Revenue, she brings to Unisys Tax and Revenue practice a full understanding of the business and operational issues confronting tax and revenue agencies. As manager of solution development for the practice, she explored the opportunities provided by the use of electronic commerce to tax agencies in reducing the heavy burden of paper processing and enhancing the delivery of taxpayer services.

As part of the practice's mission to be a full-service technology provider to tax agencies, Unisys has developed strategic alliances with best-of-breed electronic commerce solution providers. In addition we are active members in the Council for Electronic Revenue Communication advancement.


Larry Irving
is the assistant secretary for Communications and Information and the administrator of the National Telecommunications and Information Administration (NTIA). In that capacity, Mr. Irving serves as a principal advisor to the president, vice president and secretary of commerce on domestic and international telecommunications and information issues, and manages the federal government's use of spectrum.

Under Mr. Irving's leadership, NTIA instituted the Telecommunications and Information Infrastructure Assistance Program (TIIAP), which has awarded over 250 matching grants to nonprofit organizations throughout the United States to demonstrate the benefits of telecommunications and information technology. This highly competitive grant program funds projects that extend the reach of the National Information Infrastructure (NII) to underserved rural and urban communities. The program is playing a key role in bridging the gap between information haves and have-nots.

In December 1995, Irving was named one of the fifty most influential persons in the "Year of the Internet" by Newsweek Magazine.

During the past three years, Mr. Irving played a key role representing the administration to secure passage of the Telecommunications Act of 1996, the most comprehensive reform of our nation's telecommunications laws in 60 years.

Mr. Irving serves as chair of the Telecommunications Policy Committee of the Clinton administration's Information Infrastructure Task Force (IITF). In May 1996, President Clinton appointed Mr. Irving to serve on the National Commission on the Restructuring of the Internal Revenue Service (IRS). After conducting a one-year review, the commission will make recommendations to Congress for restructuring the IRS.

Mr. Irving served as "sherpa" (lead coordinator) for the U.S. Government for the Information Society and Development Conference, which took place May 13-15, 1996, in Johannesburg, South Africa. In February 1995, Mr. Irving served as the sherpa and a member of the U.S. delegation for the G-7 Ministerial Conference on the Information Society.

From March 1987 to March 1993, Mr. Irving was the senior counsel to the U.S. House of Representatives Subcommittee on Telecommunications and Finance where he played a key staff role in the enactment of the Cable Television Consumer Protection Act of 1992, the Children's Television Act of 1990 and the Television Decoder Circuitry Act of 1990.

From January 1983 until March 1987, Mr. Irving served as legislative director and counsel to the late Congressman Mickey Leland (D-Texas). He was the congressman's acting chief of staff in 1983 and 1985.

Prior to joining Congressman Leland's staff, Mr. Irving was associated for three years with the Washington, D.C. law firm of Hogan and Hartson, where he specialized in the areas of communication law, antitrust law and commercial litigation.

He received a bachelor of arts' degree from Northwestern University in 1976. He is also a graduate of Stanford University School of Law where he was president of the class of 1979.

Mr. Irving currently serves on the board of directors of the U.S. Telecommunications Training Institute (USTTI) and the advisory board of Highway 1. He previously served on the board of directors of the U.S. House of Representatives Child Care Foundation, and was appointed by the Speaker of the House to serve on the advisory board of the U.S. House of Representatives Child Care Center.

Mr. Irving also has served as staff chairman of the U.S. House of Representatives Fair Employment Practices Committee, as a member of the board of visitors of the Stanford University School of Law and as co-chair of the Electronic Media Division of the American Bar Association's Forum on communications law.

He is married to Leslie Annett Wiley and lives in the District of Columbia.


Kimberly Jenkins
is founder, executive director and chairman of Highway 1, a non-profit, Washington, D.C.-based corporation created to educate members of Congress and other government leaders about information technologies. The corporate sponsors of Highway 1 include AT&T, Apple, Eastman Kodak, IBM, Adobe, Microsoft, Netscape and Sunsoft. A number of other hardware, software and telecommunications firms are technology partners of Highway 1.

Kimberly's previous experience includes five years as the president and principal owner of the Jenkins McMurray Group, a strategic marketing company in Palo Alto, Calif. Prior to creating her own firm, Kimberly was the director of Market Development for NeXT and the founding director of Microsoft's Education Division, a program she created which produced over 10 percent of Microsoft's domestic revenue in its first year. She began her corporate career as a technical analyst with Control Data Corp.

Kimberly is a magna cum laude graduate of Duke University with a B.S. in biology and a Ph.D. in education.


Secretary of State Bill Jones
was elected in 1994. During his first two years in office, he completely revamped the direction of the agency, providing information technology-based solutions to help resolve many of the problems that evolved from a previous archaic paper-driven system.

As California's chief filing officer, he is actively working to expand the use of electronic data interchage (EDI) in governmental communication. He is currently finalizing regulations to facilitate the use of digital signatures in written communications with the state.

In the future, he expects to utilize EDI for the filing and retrieval of the millions of business filing and political disclosure documents his office receives annually.


Gary Lambert
As deputy state purchasing agent for the commonwealth of Massachusetts, Gary Lambert is responsible for the management of $1 billion of goods and services procurements annually, including the purchase of information technology hardware, software and services. He is a key member of the commonwealth's procurement reform effort, which includes the newly created, Internet-based Commonwealth Procurement Access and Solicitation System

Mr. Lambert is also a member of the National Association of State Purchasing Officials where he serves as a member of the Executive Committee and also as the association's Information Technology Committee chairperson.


Mike McKenzie
is vice president and general manager for electronic commerce for EDS' State and Local Government business unit. He is responsible for EDS' contracts that provide electronic commerce solutions for state and local governments.

Before joining EDS, he was the data processing director for the Missouri Department of Social Services. While in this role, McKenzie also served as co-chairman of the Systems Technical Advisory Group to the federal Health Care Financing Administration.

Currently, McKenzie serves on the NASIRE/ITAA Electronic Commerce Task Group.


Gordon Peterson
is the chief information officer for the state of Utah, appointed by Gov. Leavitt in 1993. He has served as the executive director of the Governor's Electronic Highway Task Force, chairs the state's Information Technology Policy and Strategy Committee, serves on the state's Information Technology Commission and is a member of the Governor's Cabinet Council.

In the statute that created his office, he is charged with maintaining a liaison with the legislative and judicial branches, higher and public education, local government, federal government, business and industry, and consumers.

Gov. Leavitt's task force identified electronic commerce as a major technology opportunity for the state. He created a working group within state government to prepare the state from within for EC and participates with SmartUTAH, a group outside of government charged with accelerating the adoption of electronic commerce throughout the state.


Jonathan Rosenoer
A California lawyer, Jonathan Rosenoer is the author of a new book, CyberLaw: The Law of the Internet, published by Springer-Verlag. Mr. Rosenoer recently joined Arther Andersen Knowledge Enterprises, where he focuses on issues related to electronic commerce.

Mr. Rosenoer has spoken widely on online resources and associated legal issues. He has been an invited speaker for, among others, the Standing Committee on Lawyer Referral and Information Service, American Bar Association; State Bar of California's Committee on Professional Responsibility and Conduct; Continuing Education of the Bar - California; Pacific Conference; Council of Section Chairs, The State Bar of California; Conference of Western Attorneys General; and California Political Attorneys.

Since 1990, Mr. Rosenoer has published a pro bono educational service on computer law for computer users named CyberLaw ?. In June 1993, MacWorld magazine listed CyberLaw as one of "18 Great Mac Resources." Since 1994, CyberLaw has been published on the Internet . In January 1996, The Web magazine listed CyberLaw as one of the top 50 sites on the Internet.


Todd Sander
is the assistant director for Strategic Computing and Planning for the Washington State Department of Information Services - where he responsible for major electronic commerce, public access and statewide educational network initiatives. Previously, he has worked in a variety of information technology management and consultant positions for such organizations as Booz-Allen and Hamilton Inc., Applied Technology Associates, the U.S. Army Intelligence Center and the U.S. Air Force.

Mr. Sander holds a bachelor's degree in information system management from the University of San Francisco.


Howard J. Stern
is director of government markets for Sterling Commerce's Commerce Services Group, where he is responsible for the sale and provision of electronic commerce solutions in federal and state government.

Prior to the spin-off of Sterling Commerce in March 1996, he served as vice president in marketing for Sterling Software's Federal EC Division, where he was responsible for the marketing communications, customer service and business development activities of this business unit. Previously, Mr. Stern was director of electronic data interchange (EDI) services for Sterling Software's Network Services Division, where he was responsible for the product planning and marketing functions for Sterling's worldwide EDI network service.

Mr. Stern joined Sterling in January 1994, from Sprint where he held senior marketing management positions in several divisions.

Prior to Sprint, Mr. Stern had extensive marketing and product management experience providing IT solutions to the information, manufacturing, financial, insurance and health care industries.

He holds a B.A. from the University of Rochester and an M.B.A. from Seton Hall University, is an APICS-certified practitioner in inventory management and is a frequent speaker at industry conferences.

Mr. Stern represents Sterling Commerce within the Information Technology Association of America, where he serves on the board of directors and is president of the Information Services and Electronic Commerce division, and within FGIPC's Industry Advisory Council.


Scott Stone
is currently responsible for worldwide development and implementation of IBM's government electronic commerce strategies and solutions. The Electronic Trade Commerce (ETC) and solution is part of IBM's $6 billion Global Government Industry. ETC is primarily focused on e-procurement solutions for national, state and local government.

Before assuming his responsibilities in IBM's Global Government Industry, Mr. Stone served on a select team of 10 specialists responsible for the development of network computing strategies. During the assignment, Mr. Stone's focus industries were government, healthcare and education.


Prior to joining IBM, Mr. Stone held positions with the following organizations:
GE Information Services; Rockville, Md.
manager, Information Management Marketing
manager, EDI Product Marketing and Development

America Online; Vienna, Va.
consultant - Online Retail Services and International Expansions

International Cablecasting Technologies Inc.; Los Angeles
vice president, National Sales and Affiliate Marketing

Digital Planet Inc.; Los Angeles
vice president and general manager - Western Region


Joe Wood
completed his B.S. in mathematics at Michigan Technology University and completed his graduate certificate in management science at American University.

He started as a crypt-analyst at the National Security Agency in 1967, evaluating algorithms for cryptographic systems. He then worked on the Minuteman Systems project. He moved to Harris Corp., managing defense contracting, and worked at GTE for eight years, specializing in government security. Joe has spent six years working in government network security applications at BBN. A great believer in remote access, he and his wife live on a 200 acre farm in Northern Vermont.


Charles Cresson Wood
CISA, CISSP, is an independent information security consultant with Baseline Software in Sausalito, Calif. He has been working in the information security field for over 17 years, including a stint as lead network security consultant at the Bank of America. His consulting work most often deals with network security issues for financial institutions and high tech companies. He has published over 160 articles and four books dealing with information security. His latest book is entitled How to Handle Internet Electronic Commerce Security: Risks, Controls & Product Guide.

His consulting work involves risk analyses, secure systems design, incident investigations, and security documentation preparation. He was awarded the Lifetime Achievement Award by the Computer Security Institute in November 1996.

He holds an M.B.A. in finance and a B.S.E. in accounting from the Wharton School at the University of Pennsylvania, as well as a M.S.E. in computer science from the Moore School of Engineering at the same university.






[ April Table of Contents]
Wayne Hanson

Wayne E. Hanson served as a writer and editor with e.Republic from 1989 to 2013, having worked for several business units including Government Technology magazine, the Center for Digital Government, Governing, and Digital Communities. Hanson was a juror from 1999 to 2004 with the Stockholm Challenge and Global Junior Challenge competitions in information technology and education.