[Congressional Record Volume 146, Number 37 (Wednesday, March 29, 2000)]
[Senate]
[Page S1846]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     DIGITAL SIGNATURE LEGISLATION

  Mr. HOLLINGS. Mr. President, I ask unanimous consent that the 
following letter, signed by 45 members of the Democratic Caucus, be 
printed in the Record. Moreover, I would like to thank my colleagues, 
Senator Sarbanes, ranking member of the Banking Committee, and Senator 
Leahy, ranking member of the Judiciary Committee, for their assistance 
in the preparation for the conference on S. 761, the digital signature 
bill.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                                  U.S. Senate,

                                   Washington, DC, March 28, 2000.
     Members of the Conference Committee on Electronic Signature 
       Legislation United States Congress.
       Dear Conferee: We are writing to express our strong support 
     for legislation that will ensure the electronic marketplace 
     functions effectively for both businesses and consumers. We 
     all supported S. 761, the ``Millennium Digital Commerce 
     Act,'' as it passed the Senate on November 19, 1999. As that 
     bill proceeds to conference, we continue to believe that it 
     is important to remove unintended barriers to electronic 
     commerce. We must provide certainty regarding the legality of 
     electronic transactions which spur economic growth and 
     provide many benefits to consumers.
       We also want to ensure that any new law would provide 
     consumer protections equivalent to those currently required 
     for paper transactions, and would not facilitate predatory or 
     unlawful practices. The electronic world should be no less 
     safe for American consumers than the paper world.
       According to a recent Commerce Department report entitled 
     Falling Through the Net, more than 70 percent of American 
     households do not have access to the Internet. In enacting 
     legislation to facilitate electronic commerce, we must ensure 
     that we do not widen the ``digital divide,'' to the 
     disadvantage of the majority of Americans.
       We must ensure that consumer protections established over 
     several decades are not inadvertently made ineffective by the 
     transition to electronic transactions. We believe that the 
     legislation produced by your conference committee must 
     incorporate the following principles in order for us to 
     support it:
       Ensure effective consumer consent to the replacement of 
     paper notices with electronic notices.
       Ensure that electronic records are accurate, and relevant 
     parties can retain and access them.
       Enhance legal certainty for electronic signatures and 
     records and avoid unnecessary litigation by authorizing 
     regulators to provide interpretive guidance.
       Avoid unintended consequences in areas outside the scope of 
     the bill by providing clear federal regulatory authority for 
     records not covered by the bill's ``consumer'' provisions.
       Avoid facilitating predatory or unlawful practices.
       Attached is a more detailed description of these 
     principles.
       The conference committee has the opportunity to write the 
     ground rules for the transition of our economy from paper-
     based transactions to electronic transactions. This 
     transition offers great potential benefits for both business 
     and consumers, but must be done in a way that preserves basic 
     consumer protections and ensures the confidentiality and 
     security of such transactions.
           Sincerely,
         Patrick Leahy, Paul Sarbanes, Tom Daschle, Chris Dodd, 
           Max Cleland, John Edwards, Harry Reid, Daniel K. Akaka, 
           Ernest F. Hollings, Ron Wyden, John F. Kerry, Tom 
           Harkin, Charles E. Schumer, Frank R. Lautenberg, 
           Barbara A. Mikulski, Joseph R. Biden, Jr., Jay 
           Rockefeller, J. Robert Kerrey, Richard J. Durbin, 
           Barbara Boxer, Carl Levin, John B. Breaux, Daniel K. 
           Inouye, Mary L. Landrieu, Max Baucus, Richard H. Bryan, 
           Bob Graham, Jack Reed, Tim Johnson, Evan Bayh, Joseph 
           I. Lieberman, Jeff Bingaman, Russell D. Feingold, 
           Dianne Feinstein, Chuck Robb, Byron L. Dorgan, Paul 
           Wellstone, Patty Murray, Daniel Patrick Moynihan, Ted 
           Kennedy, Herb Kohl, Robert Torricelli, Blanche L. 
           Lincoln, Kent Conrad, Robert C. Byrd.

     Basic Consumer Protection Principles for Electronic Signature 
                              Legislation

       1. Ensure Effective Consumer Consent to the Replacement of 
     Paper Notices with Electronic Notices.
       The final bill must include effective consumer consent 
     provisions that provide the following protections:
       Consumer consent must involve a demonstration that a 
     consumer will actually have the capacity to receive and read 
     electronic notices.
       Consumers must be notified of their rights, including any 
     right to receive notices on paper, a description of the types 
     of records covered, and their right to revert to paper 
     records (or clear explanation that the option will not be 
     available because of the purely on-line nature of the 
     business).
       Consumer consent must be reconfirmed if a change in 
     technology by business results in a material risk that a 
     consumer will be unable to receive electronic records.
       Consumers must be ensured that electronic delivery of 
     notices will have substantially equivalent reliability as 
     paper delivery.
       Consumer privacy must be protected by requiring that the 
     provider of the electronic record shall take reasonable steps 
     to ensure confidentiality and security.
       2. Ensure that Electronic Records are Accurate, and That 
     Relevant Parties Can Access and Retain Them.
       The legislation must require that, in order to meet record 
     delivery and retention requirements under existing consumer 
     protection laws, businesses must take reasonable precautions 
     to preserve the accuracy and integrity of electronic records. 
     In addition, all parties entitled to a copy of a notice or 
     disclosure by law or regulation should be able to access and 
     retain an accurate copy of that record for later reference 
     and settlement of disputes.
       3. Enhance Legal Certainty for Electronic Signatures and 
     Records.
       The legislation must provide clear interpretive authority 
     to the regulatory agencies responsible for implementing the 
     statutes modified by the legislation. Failure to provide such 
     authority will create significant business uncertainty about 
     the requirements for compliance with the law, which in turn 
     might lead to litigation. Agencies may also be unable to stop 
     abusive practices and preserve consumer confidence in on-line 
     transactions without such authority. This authority would not 
     give agencies the ability to override any of the bill's 
     requirements, only to clarify how they apply in specific 
     circumstances.
       4. Avoid Unintended Consequences in Areas Outside the Scope 
     of the Bill.
       The legislation must provide clear federal regulatory 
     authority for records not covered by the bill's consumer 
     provisions, including authority to exempt requirements from 
     the bill's provisions if necessary. The broad scope of the 
     legislation may have unintended consequences for laws and 
     regulations governing ``records'' outside its intended focus 
     on business-to-consumer and business-to-business 
     transactions. For example, the bill could affect rules on the 
     posting of workplace safety notices. Protections must be 
     provided against such unintended consequences of the 
     legislation.
       5. Avoid Facilitating Predatory or Unlawful Practices.
       The legislation must provide adequate protection against 
     predatory or unlawful practices.

  Mr. LEAHY. Mr. President, I am pleased that my colleagues on the 
other side of the aisle have worked out their problems and enabled the 
Senate, at last, to appoint conferees on S. 761. I co-authored S. 761 
as it passed the Senate, and I look forward to working as a conferee to 
ensure that the final conference report respects the principles that 
this body endorsed when it passed that legislation by unanimous consent 
last year. The letter to conferees dated March 28, 2000, signed by all 
45 Democratic Senators, reminds us of those principles.
  I am only one conferee among 17 but working with the other 6 
Democratic Senate conferees and the 10 Republican Senate conferees. I 
will endeavor to encourage electronic commerce with balance, fairness, 
and due regard for consumer protection.
  The PRESIDING OFFICER. The Senator from Utah.

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