Ohio Bill Seeks to Limit Online Competition With Private Sector

COLUMBUS, Ohio -- The Ohio Legislature is wrestling with a bill that would limit the kinds of services offered on the state government's Web site.

Nearly identical to model legislation proposed by the conservative American Legislative Exchange Council (ALEC) in five other states, a provision of Ohio's H.B. 95 (the state's budget bill) would restrict the kinds of electronic commerce activities that state and local governments offer.

Stifling Electronic Government
The possibility that Ohio's e-government efforts could be stifled has state CIO Greg Jackson very concerned.

"Government should have the option of using as many service delivery channels as possible to meet the needs of the citizenry -- be it paper, web, phone, or wireless," he said. "The philosophy used to generate this legislation purports to take us back to the days of feather quills and ink wells."

Morgan Long, director of ALEC's Telecommunications and Information Technology Task Force, doesn't agree.

Although the bill has been introduced in five states and failed to pass in any of them, she said she thinks it's just a matter of time and persistence. Long said the concern that government is competing with industry is valid and based on numerous experiences.

In Ohio alone, she said, there are 80 local governments providing Internet, broadband or cable service in markets already served by the private sector.

"In other cases across the country there are over 200 municipalities providing telecom services," she said. "Across the country, local communities are getting into the business of telecom."

But some Ohio government officials feel the bill is too encompassing.

"What about our state parks?" asked Gil Ashbridge, CIO of the Ohio Department of Taxation. "There are so many questions and not very many answers. I think it [the bill] is too broad."

Since travel agencies and private companies provide information and reservations for camping facilities, Ashbridge is concerned that the state could no longer offer those services on its portal.

The area of taxation, however, has been the "hot potato" in the Internet services debate.

"This is the fourth year we have put I-File out on the Internet," Ashbridge said. "Are we truly competing with Intuit and others?"

He said he also questioned if the proposed rule would apply to office transactions.

"For years, in partnership with the IRS, we have provided in-person assistance," he said. "And, according to this bill, we couldn't continue to do that."

Intuit, home of QuickBooks and TurboTax, is a strong supporter of the ALEC bill.

Mississippi CIO David Litchliter said the attempt to pass the same bill in his state inspired more questions than answers.

"We had questions from the universities," he said. "We offer courses online and there are all kinds of other places that also offer courses. Does that mean we are in competition and have to stop that?"

Litchliter said the language of the bill is so vague it would cause ongoing debate about where it did and did not apply.

Bill Targets "Value Added Services"
Long said the legislation would not have such far-reaching effects.

"There is a misunderstanding about the bill," she said. "It doesn't prohibit any type of service being provided, it just provides for oversight. It's the value-added services and not those provided by government in person."

The bill calls for a seven-member State Controlling Board to provide oversight and approval of online commerce activities.

According to the Ohio bill, if there are two or more "competing privately owned companies" providing a particular electronic commerce service, the government may not offer a similar service.

Ashbridge said this statement casts a wide net.

"I have been at meetings where every agency is involved, including school districts, and everybody is opposed," he said.

One successful program that could be affected if the bill is passed is an online store run by the state's penal system, in which inmates make license plates, furniture and other items for sale to the public. The state realized significant revenues from the service and provided job training to more than 2,600 inmates.

The alternative to job training, according to a prison official who spoke to the Cleveland Pain Dealer, "would be expensive rehabilitation programs that, in the past, have had questionable value."

Is Government Acting Too Much Like the Private Sector?
Many state governments offer online tax filing and have reported very positive results.

Not only do taxpayers have 24/7 convenience, there are reportedly fewer errors and faster handling of accounts. Companies such as Intuit have found themselves, to some degree, competing with government in this arena. But, Ashbridge believes H.B. 95 is too heavy-handed.

"We have other facilities, processes and procedures that could handle these issues without legislation," he said.

Linda Woggon, vice president of public affairs for the Ohio Chamber of Commerce, doesn't agree.

"We think it is attractive because it forces government agencies to look at the services they may be providing to be sure it is in line with their main purpose," she said. "Is government moving past its fundamental purpose?"

She noted that online government services have an unfair advantage because, unlike the private sector, there is no tax levied on government's activities.

At this point, Ohio officials feel confident the bill will not become law.

Gov. Taft has line-item veto powers, and the belief is that he will use them to kill the bill. But meetings are ongoing and the bill language is subject to change.