Governments that try and play God with the development of the Internet are risking their places in the new global information economy, Bill Clinton's former senior IT adviser said at the Cisco Networkers conference here last week.
According to Ira Magaziner, who was adviser to the president until December last year, any government that tries to tax Internet transactions or attempts to regulate content can only damage the reputation of their country and impede its development as an Internet player.
"If governments start to do this they will strangle the goose that laid the golden eggs," Magaziner said.
"Governments move too slow, they can't keep up with the pace of the Internet. It has to be the private sector that drives the growth of the Internet."
Indeed, attempts to regulate the industry will ultimately prove futile anyway because of the nature of the beast, he said.
"No one really knows where the Internet is headed. So if you try to anticipate and if you try to regulate you're doomed to failure."
Governments do have a role to play, according to Magaziner, but that role is restricted to simply providing a uniform commercial operating environment.
"Other than that, leave it alone," he advised.
In fact, as Internet technology converges with other media it is likely to force government to become more hands-off generally, according to Magaziner. For example, it will be very difficult for government to control the broadcast and telecommunications as more voice and video is transmitted via the Internet, he said.
In regard to taxing Internet transactions, Magaziner said the only way to do it was to replicate existing tax conditions based on where the buyer lives. So if Australia has a GST of 10 per cent on goods bought traditionally, any Australian that bought goods over the Internet would be charged that same 10 per cent tax regardless of where they buy from. Companies like Visa and MasterCard would be responsible for collecting the taxes and smart cards would identify where the buyer was from.
The way to overcome privacy concerns was to form a third-party private organisation - similar to the IETF which controls Internet technology standards - that would award digital seals of approval to organisations that adhere to online privacy guidelines. Conservative Web users can then set their browsers to only give themselves access to these approved sites.
Magaziner had two major concerns about the development of the Internet. It was important to over- come the current skills shortage and, secondly, he said it was critical that poorer communities had equal access to the Internet, in order to stop digital class stratification.