
Computer underground Digest    Wed  Mar 22, 1995   Volume 7 : Issue 23
                           ISSN  1004-042X

       Editors: Jim Thomas and Gordon Meyer (TK0JUT2@NIU.BITNET)
       Archivist: Brendan Kehoe
       Semi-retiring Shadow Archivist: Stanton McCandlish
       Intelligent Agent:  David Smith
       Shadow-Archivists: Dan Carosone / Paul Southworth
                          Ralph Sims / Jyrki Kuoppala
                          Ian Dickinson
       Monster Editor:    Loch Nesshrdlu

CONTENTS, #7.23 (Wed, Mar 22, 1995)

File 1--Hong Kong's I-net Provider Raids, and Internet Digital Voice
File 2--Conference - First Amendment In Cyberspace
File 3--Gibson, Sterling Arrange MTV Donation To EFF-Austin (fwd)
File 4--     Re: Campaign to Defeat Communications Decency Act
File 5--(fwd) American Library Association Draft Computer Policy (fwd)
File 6--FTC Legislative Alert  (Telemarketing legislation)
File 7--Cu Digest Header Info (unchanged since 19 Mar, 1995)

CuD ADMINISTRATIVE, EDITORIAL, AND SUBSCRIPTION INFORMATION APPEARS IN
THE CONCLUDING FILE AT THE END OF EACH ISSUE.

---------------------------------------------------------------------

Date: Fri, 17 Mar 1995 23:33:54 -0600 (CST)
From: David Smith <bladex@BGA.COM>
Subject: File 1--Hong Kong's I-net Provider Raids, and Internet Digital Voice


Forwarded from:

In, Around and Online- Issue 2.10 - Week Ending 3/10/95
=======================================================
 Copyright (C) 1995 Robert Seidman (robert@clark.net).  All rights
reserved.  May be reproduced in any medium for non-commercial purposes.

HONG KONG POLICE told Internet providers whose equipment was seized in
March 3rd raids that they could pick up their equipment.  The raid left
only one provider up and running in the British colony.  There is still
some confusion on why the police bothered to raid them over the lack of a
$96 (750 Hong Kong Dollars) license.  The operators of services shut down
in the raid have stated they will not put their services back online
until they have received their licenses.  The seven operators, mostly
newcomers to the exploding market had been engaged in a price war with
the one commercial service left operational after the March 3 raid, Hong
Kong SuperNet.  We have it easy in the states, SuperNet charges about
$25/hour for daytime use and about $12.50/hr. off-peak.  The grounded
competitors offered services at a cheaper prices ranging from about $6-$8/hr.

(Seidman's newsletter is free and ambitious in its overview of the
Internet and the online services.  Anyone who is interested in a
subscription should sending e-mail to  LISTSERV@CLARK.NET and -- in the
BODY of the message -- writing: Subscribe Online-L <YOUR FULL NAME>

Example: SUBSCRIBE ONLINE-L Robert Seidman.)

------------------------------

Date: Thu, 9 Mar 1995 11:33:47 -0600
From: Barad@MAIL.UTEXAS.EDU(Meredith Barad)
Subject: File 2--Conference - First Amendment In Cyberspace

                  THE FIRST AMENDMENT IN CYBERSPACE

        THE JOHN HENRY FAULK CONFERENCE ON THE FIRST AMENDMENT
             Sponsored by The Center for American History
                  The University of Texas at Austin

Tuesday, April 18,  1995
 1:00 - 5:00 p.m.
Joe C. Thompson Conference Center
26th St. and Red River

1:00-1:20       Introductions

1:20-1:30       The Legacy of John Henry Faulk, by Michael Burton

1:30-3:15        Panel I:  The First Amendment in Cyberspace

3:30-5:00        Panel II:  Who is Driving on the Information Superhighway?

5:00             Reception at the Center for American History.

"The First Amendment in Cyberspace" will explore the legal definition of
free speech on the information superhighway, censorship online, universal
access to the Internet,  and new directions for information technologies in
the 21st century.

Conference speakers
Introduction:
Michael Burton, author of John Henry Faulk: The Making of a Liberated Mind
and former journalist specializing in educational and media awareness
issues

Panel I:
Mike Godwin, online counsel for the Electronic Frontier Foundation

Katie Hafner, technology reporter for Newsweek and author of Cyberpunk:
Outlaws and Hackers on the Computer Frontier

Peter Lewis,The New York Times correspondent on cyberspace issues

John Seigenthaler, chair of the Freedom Forum First Amendment Center at
Vanderbilt University and former editorial director for USA Today

Eugene Volokh, professor of copyright and constitutional law at UCLA Law
School and author of "Cheap Speech and What it Will Do," forthcoming in The
Yale Law Journal

Frederick Williams, Mary Gibbs Jones Centennial Chair, UT College of
Communication, and author of The People's Right to Know: Media, Democracy
and the Information Highway (moderator)

Panel II:
Smoot Carl-Mitchell, managing Partner in Texas Internet Consulting and
president of Matrix Information and Directory Services and the Zilker
Internet Park

Gary Chapman, coordinator for the 21st Century Project at UT's LBJ School
of Public Affairs and former executive director of the Computer
Professionals for Social Responsibility

Jon Loehman, Southwestern Bell Telephone Company, focusing on regulation
and planning in the telecommunications industry

James Love, director of Economic Studies at the Center for the Study of
Responsive Law and the director of the Center's Taxpayer's Assets Project
in Washington D.C.

Yolanda Rivas, M.A. student, Communication and Technology Policy Program in
the Department of Radio-Television-Film at UT specializing in online access
issues for Latin America

Bruce Sterling, author of The Hacker Crackdown: Law and Disorder on the
Electronic Frontier, science fiction author, journalist, and editor
(moderator)

The Faulk Conference is presented in honor of Texas humorist John Henry
Faulk, a victim of the blacklist during the McCarthy years.  The Faulk
Conference is free and seating is on a first come, first serve basis.  The
conference brochure and conference summaries will be posted at
http://www.lib.utexas.edu/Libs/CAH/cah.html.  For more information contact
the Center for American History at (512) 495-4515 or e-mail
m.norkunas@mail.utexas.edu.

*********************************************
Martha Norkunas
Center for American History
SRH 2.101
University of Texas at Austin
Austin, TX  78712

Phone: 512-495-4515
FAX: 512-495-4542
internet address: m.norkunas@mail.utexas.edu

------------------------------

Date: Wed, 22 Mar 1995 00:10:56 -0600 (CST)
From: David Smith <bladex@BGA.COM>
Subject: File 3--Gibson, Sterling Arrange MTV Donation To EFF-Austin (fwd)
               ---------- Forwarded message ----------
Date: Tue, 21 Mar 1995 22:10:05 -0600 (CST)
From: Steve Jackson <sj@io.com>

PRESS RELEASE

MTV-EUROPE DONATES 500 POUNDS TO AUSTIN CYBERSPACE CIVIL RIGHTS GROUP

Austin, March 21, 1995

	EFF-Austin, an Austin, Texas civil rights group concerned with
electronic network access and free expression, gratefully acknowledges
a contribution of 500 pounds from the European branch of MTV Music
Television.  The donation came in response to an MTV publication
titled "Global Communication: Channel Your Experience," which was
released in conjunction with the 1994 First European Music Awards,
held at the Brandenburg Gate in Berlin.

	Cyberpunk science fiction writers William Gibson and Bruce Sterling
created an original collaborative artwork for the "Global
Communication" project. MTV-Europe then contributed a cheque for 500
pounds to the two authors' favorite charity -- EFF-Austin.

	"We've seen some oddities in our five years on the electronic
frontier," said EFF-Austin President David Smith, "but this one takes
the cake.  Not only are we so hip that we get contributions from
MTV-Europe, but now we can describe ourselves as 'William Gibson's
favorite charity.'"

For more information, contact Steve Jackson, EFF-Austin secretary
(sj@io.com)

** Steve Jackson - yes, of SJ Games - yes, we won the USSS case -
   fnord ** yes, INWO is out - http://io.com/sjgames/ - dinosaurs,
   Lego, Kahlua!

------------------------------

Date:         Sun, 19 Mar 1995 19:19:36 -0600
From:         Stephen Smith <libertas@COMP.UARK.EDU>
Subject: File 4--     Re: Campaign to Defeat Communications Decency Act


               ---------- Forwarded message ----------
Date: Sun, 19 Mar 1995 14:29:48 -0700 (MST)
From: Charles Levendosky <levendos@ed.trib.com>

If it will be helpful, you can distribute my column on this bill. It ran
on the NYT wire last week for two days, but many on the internet may not
have read it. Feel free to use it.

Charles Levendosky
Editorial Page Editor
Casper (Wyoming) Star-Tribune
email: levendos@trib.com
tel: 307-266-0619
----------

`DECENCY ACT' A FLASHER IN HIDING

  (EDITOR'S NOTE: Charles Levendosky, editorial page editor of the
Casper (Wyo.) Star-Tribune, has a national reputation for First
Amendment commentary. His columns recently won the American Bar
Association's Silver Gavel Award and The Baltimore Sun's H.L. Mencken
Award.)

By CHARLES LEVENDOSKY

c.1995 Casper (Wyo.) Star-Tribune

(Distributed by New York Times Special Features)

There's a nasty bill lurking in the Senate, like a flasher hiding in a
doorway waiting for the opportunity to throw open his trenchcoat and
show you his wares. When it's too late to turn away.

The bill, S. 314,  was introduced by Sen. J. James Exon, D-Neb., and
Sen. Slade Gorton, R-Wash. It's called the "Communications Decency Act
of 1995." Don't let that fool you, there's nothing decent about it.

The bill would amend the Communications Act of 1934 and the U.S. Code to
force those, who allow others access to the Information Superhighway, to
monitor their customers' communications. If the provisions of the bill
are violated, those who allow access to the information highway face
potential federal criminal prosecution that could lead to $100,000 fines
and/or two years in prison.

On the Information Superhighway, there is no way to monitor a moving
message. It's broken into digital packets that scoot over telephone
wires across the world. If you were to look at one packet, it would be
indecipherable. It's only a small bit of the information sent ---- not
unlike putting a normal letter into a shredder and then sending each
strip to the recipient in separate envelopes along with hundreds of
other envelopes each containing a strip from different pieces of mail.

Messages in transit on the information highway are impossible to
monitor.

That means the organization that provides access to Internet must
monitor the information flow from the source or at the receiver's end.
That is possible. But it makes the access provider a Big Brother agent
of the federal government who leans over your computer.

The bill doesn't define what would be legally "indecent." The vagueness
of this term could apply to lovers or married couples who are e-mailing
one another sweet murmurs about the night before.

It could apply to, by some subjective standards, to a photo of a child
lying bloody in a street, killed by a drive-by shooter.

It could apply to a photo rendition of one of Auguste Rodin's most
famous sculptures, "The Kiss." It could apply to many of Pierre Renoir's
paintings. Or any of the classical paintings of nudes that museums have
put on the Internet.

The bill can be characterized as a federal agent muscling a private
citizen. Agent Big Brother in your study or in your workplace, breathing
on your neck, reading over your shoulder. Leaning on you. Leaning over
the person with whom you are communicating.

Apparently, the intent of the bill is to protect children who might
stumble on something too adult for them on the information highway. It's
a wrong-headed approach --- the atom bomb solution --- it would blow
away the free flow of information. It would melt the promise of this
Electronic Gutenberg.

The information highway is an interactive medium. Consumers can control
their own access. Parents can control the access of their children.
America Online already gives parents control over what chat sessions are
available to their children. More can be done, and is being done, so
that parents can select and control their children's access to the vast
variety of information offered on the electronic highway.

As this indecent bill is written, it would apply to public and
university libraries that offer their patrons the use of online
computers, according to Daniel Weitzner, deputy director of the Center
of Democracy and Technology. Libraries could be fined; librarians
jailed. Think of it, a librarian imprisoned because some patron found
his way through Internet byways to the Penthouse calendar nude of the
month.

It's bad law. It places criminal liability, not on the actor, but on the
provider. A legal parallel would be to frame the law so that a gun
dealer who sold a legal weapon to a qualified citizen would be
prosecuted if that citizen later shot his neighbor.

And, worse, a broad range of content would be actionable under this
bill.

Less discussed by critics of this bill, are ramifications for newspapers
and news organizations who use the information highway.

Newspapers, like the Casper Star-Tribune, who go online with their
product, do not necessarily have their own access to the Internet. In
the Star-Tribune's case, the access provider is the University of
Wyoming. By this bill, the university could be liable for criminal
prosecution for something the Star-Tribune put on Internet; therefore,
it might want to monitor what news the Star-Tribune put online.

What happens to freedom of the press then? News decisions could be taken
away from the editor of the papers, or newspapers might elect to keep
their product off the information highway. Either way the public
suffers.

More and more newspapers are making portions of their dailies available
through the information highway. This intersection of the press with
telecommunications will cause headaches for First Amendment experts for
decades to come.

The electronic media has never enjoyed the liberties guaranteed by the
freedom of the press clause of the First Amendment.  Now there is a
convergence of the two and American must either opt for greater freedom
for the electronic media or less for the press.

Wrap up this bill in its soiled trenchcoat, lock it in a closet, and
toss away the key. This issue needs a great deal more thought than
either Sen. Exon or Sen. Gorton have given to it.

Keep liberty a priority. There are better ways to protect our children
than sacrificing the free exchange of information and ideas.

Copyright Casper Star-Tribune

March 5, 1995

------------------------------

Date: Mon, 20 Mar 1995 22:29:03 -0600 (CST)
From: David Smith <bladex@BGA.COM>
Subject: File 5--(fwd) American Library Association Draft Computer Policy (fwd)

Here is more evidence to support my thesis that librarians are just the
coolest.

David Smith	          *  Calendar of way cool e-things:
bladex@bga.com            *  Mar 15-17    SXSW Multimedia
President, EFF-Austin     *  Mon Mar 20th EFF-Austin General Meeting
Board of Directors, CTCLU *  April 1-2    Robofest

               ---------- Forwarded message ----------

 ============================================================

Date--        Mon, 20 Mar 1995 10:55:29 CST
From--Cyndi Robinson <U24803@UICVM.BITNET>
Subject--Draft Interpretation


Following is the draft Interpretation on Access to Information, Services and
Networks, drafted by the ALA Intellectual Freedom Committee.  The Committee
welcomes all comments on the draft.  Comments can be forwarded to
Judith.Krug@ala.org or by mail to the Office for Intellectual Freedom,
American Library Association, 50 E. Huron, Chicago, IL 60611.

Please feel free to distribute this draft widely.
=================================================


                         DRAFT DRAFT DRAFT DRAFT
                             Draft Version 1.1
                                  3/5/95

ACCESS TO ELECTRONIC INFORMATION, SERVICES, AND NETWORKS: AN
INTERPRETATION OF THE LIBRARY BILL OF RIGHTS

Freedom of expression is an inalienable human right and the
foundation for self-government.  Freedom of expression encompasses
the freedom of speech and the corollary right to receive
information.  These rights extend to children as well as adults.

Libraries and librarians exist to facilitate these rights by
providing access to, identifying, retrieving, organizing, and
preserving recorded expression regardless of the formats or
technologies in which that expression is recorded.

It is the nature of information that it flows freely across
boundaries and barriers despite attempts by individuals,
governments, and private entities to channel or control its flow.
Electronic technology has increased the speed and universality of
this flow.

Although we live in a global information village, many persons do
not have access to electronic information sources because of
economic circumstances, capabilities of technology, and
infrastructure disparity.  The degree of access to electronic
information divides people into groups of haves and have-
nots.  Librarians, entrusted as a profession with the stewardship
of the public good of free expression, are uniquely positioned to
address the issues raised by technological change.

Librarians address intellectual freedom from a strong ethical base
and an abiding commitment to the preservation of the individual's
rights.

The American Library Association has expressed these basic
principles of librarianship in its CODE OF ETHICS and in the
LIBRARY BILL OF RIGHTS and its Interpretations. These serve to
guide professional librarians and library governing bodies in
addressing issues of intellectual freedom and the rights of the
people they serve.

The constant emergence and change of issues arising from the
still-developing technology of  computer-mediated information
generation, distribution, and retrieval need to be approached by
librarians from a context of established policy and constitutional
principles so that fundamental and traditional tenets of
librarianship are not swept away.

In making decisions on how to offer access to electronic
information, each library should consider its mission, goals,
objectives, cooperative agreements, and the needs of all the
people it serves.  The library should address the rights of users,
the equity of access, and information resources and access issues.

                            THE RIGHTS OF USERS

All library system and network policies, procedures or regulations
relating to electronic resources and services should be
scrutinized for potential violation of user rights.

User policies should be developed according to the policies and
guidelines established by the American Library Association,
including GUIDELINES FOR THE DEVELOPMENT AND IMPLEMENTATION OF
POLICIES, REGULATIONS AND PROCEDURES AFFECTING ACCESS TO LIBRARY
MATERIALS, SERVICES AND FACILITIES.

Users have the right to be free of interference and unreasonable
limitations or conditions set by libraries, librarians, system
administrators, vendors, network service providers, or others.
This specifically includes contracts, agreements, and licenses
entered into by libraries on behalf of their users.

No user should be restricted or denied access for expressing or
receiving constitutionally protected speech.  No user's access
should be changed without due process, including, but not limited
to, notice and a means of appeal.

Users have a right to full descriptions of and access to the
documentation about all electronic  systems and programs they are
using, and the training and assistance necessary to operate the
hardware and software.

Users have the right of confidentiality in all of their activities
with electronic resources and services provided by the library,
and the library shall ensure that this confidentiality is
maintained.  The library should support, by policy, procedure, and
practice, the user's right to privacy.  Users should be advised,
however, that security is technically difficult to achieve and
that electronic communications and files are safest when they are
treated as if they were public.

The rights of users who are minors shall in no way be abridged.

                             EQUITY OF ACCESS

Electronic information, services, and networks provided directly
or indirectly by the library should be readily, equally, and
equitably accessible to all library users.  Once the decision is
made to use library funds to provide access to electronic
information, the user must not be required to pay to obtain the
information or use the service.  When resources are insufficient
to meet demand, rationing service may be necessary to provide
equitable access.  All library policies should be scrutinized in
light of ECONOMIC BARRIERS TO INFORMATION ACCESS: AN
INTERPRETATION OF THE LIBRARY BILL OF RIGHTS.


                  INFORMATION RESOURCES AND ACCESS ISSUES

Electronic resources provide unprecedented opportunities to expand
the scope of information available to users.  Libraries and
librarians should provide material and information presenting all
points of view.  This pertains to electronic resources, no less
than it does to the more traditional sources of information in
libraries. (See DIVERSITY IN COLLECTION DEVELOPMENT: AN
INTERPRETATION OF THE LIBRARY BILL OF RIGHTS.)

Libraries and librarians should not deny or limit access to
information available via electronic resources because of its
allegedly controversial content or because of the librarian's
personal beliefs or fear of confrontation.  Information retrieved
or utilized electronically should be considered constitutionally
protected unless determined otherwise by a court with appropriate
jurisdiction.

Providing access to electronic information, services, and networks
is not the same thing as selecting and purchasing material for a
library collection.  Libraries may discover that some material
accessed electronically may not meet a library's selection or
collection development policy.  It is, therefore, left to each
user to determine what is appropriate.  Parents who are concerned
about their children's use of electronic resources should provide
guidance to their own children. (See FREE ACCESS TO LIBRARIES FOR
MINORS: AN INTERPRETATION OF THE LIBRARY BILL OF RIGHTS; ACCESS TO
RESOURCES AND SERVICES IN THE SCHOOL LIBRARY MEDIA PROGRAM; and
ACCESS FOR CHILDREN AND YOUNG PEOPLE TO VIDEOTAPES AND OTHER
NONPRINT FORMATS)

Just as libraries do not endorse the viewpoints or vouch for the
accuracy or authenticity of traditional materials in the
collection, they do not do so for electronic information.

Libraries must support access to all materials on all subjects
that serve the needs or interests of all users regardless of the
user's age or the content of material.  Libraries and librarians
should not limit access to information on the grounds that it is
perceived to be frivolous or lacking value.

Libraries have a particular obligation to provide access to
government publications available only  in electronic format.

Libraries may need to expand their selection or collection
development policies to reflect the need to preserve materials
central to the library's mission as a retrievable copy in an
appropriate format to prevent loss of the information.

                                CONCLUSION


By applying traditional tenets of intellectual freedom to new
media, librarians provide vision and leadership in an arena where
it is so clearly needed.  Our services have never been more
important.

James Madison wrote, "A popular government, without popular
information, or the means of acquiring it, is but a Prologue to a
Farce or a Tragedy; or perhaps both.  Knowledge will forever
govern ignorance; and a people who mean to be their own Governors
must arm themselves with the power which knowledge gives."

------------------------------

From: Druff <71553.1102@COMPUSERVE.COM>
Subject: File 6--FTC Legislative Alert  (Telemarketing legislation)
Date: 20 Mar 1995 17:45:16 GMT

                          Legislative Alert!

New proposed Federal Trade Commission Rules on Telemarketing pose a
great threat

to businesses, sysops, list brokers, copywriters, printers, desktop
publishers, etc., and to freedom of  speech!

Your Immediate Attention Is Called To 16 CFR Part 310

Telemarketing Sales Rules

Note: Section 310. Definitions...includes...the use of facsimile
machines...computer modems, or any telephonic medium.

Your attention is called to "Assisting and Facilitating" Section
310.3[b] [1] {page 11} of the proposed rule sets forth a general
prohibition against assisting or facilitating deceptive telemarketing
acts or practices. Assistors who engage in these activities will
violate the rule if they know, or should know, that the person they
are assisting is engaged in an act or practice that violates the rule.

The five types of assisting and facilitating activities listed in the
proposed rule are as follows: first, providing lists of customer
contacts to a seller or telemarketer [e.g., serving as a list
broker]...and fifth, providing any script, advertising, brochure,
promotional material, or direct marketing piece to be used in
telemarketing.

Section 310.4[b] [pages 14 & 15] ...it is an abusive act or practice
and a violation of the rule to call a person's residence to offer,
offer for sale, or sell, on behalf of the same seller, the same or
similar goods or services more than once within any three month
period...

Page 25 - #7 - The proposed rule states that the term "telemarketing"
includes the use of a facsimile machine, computer modem, or any other
telephonic medium, as well as calls initiated by persons in response
to postcards, brochures, advertisements, or any other printed, audio,
video, cinematic or electronic communications by or on behalf of the
seller...

Page 25 - #8 - The proposed definition of "telemarketing" includes
within the rule's coverage On-Line information services which a person
accesses by computer modem.

Section 310.3 [a] [4] {page 11} would prohibit consumers from paying
by check over the phone without prior written authorization while
allowing credit card holders to do so without prior written
authorization.  This would discriminate against the 75 million
consumers who do not have a credit card, the millions of consumers who
have no usable credit on their credit card and the businesses, most of
them small or new, who cannot obtain credit card merchant status to
accept credit cards.  It would also further the monopoly of Visa and
MasterCard and the up to 21 percent interest they charge credit card
users.

Please read the proposed rules in their entirety to ascertain their
possible effect on your business, the telemarketing industry and the
growth of the Information Super Highway.

Since most businesses and individuals are totally unaware of these
proposed rules, it is important that this information is distributed
through every means possible so that interested parties have the
opportunity to comment and protect their interests.

Written comments must be submitted on or before March 31, 1995.  A
public workshop-conference will be held at the Chicago Hilton on April
18th through April 20th from 9am to 5pm.

Five paper copies of each written comment should be submitted to the

Office of the Secretary, Room 159, Federal Trade Commission,
Washington DC 20580.

To encourage prompt and efficient review and dissemination of the
comments to the public, all comments should be submitted, if possible,
in electronic form, on either a 5< or 3= inch computer disk, with a
label on the disk stating the name of the commenter and the name and
version of the word processing program used to create the document.
Submissions should be captioned: "Proposed Telemarketing Sales Rule"
FTC File NO. R411001.

The full 50 pages of the proposed rules can be downloaded from the
NYACC Bulletin Board, file name "FTC" -  phone 718-539-3338.

I would appreciate your feedback and a copy of any comments that you
intend to submit and I suggest that you disseminate this information
as widely as possible.

Ronald A. Stewart

126  13th Street

Brooklyn, NY 11215

Phone 718-768-6803

Fax 718-965-3400

 =========================================================

From--Druff <71553.1102@COMPUSERVE.COM>
Subject--FTC Alert (more info)
Date--20 Mar 1995 17:45:51 GMT

Proposed comments to FTC about  written authorization required for
checks by phone

Under Section 310.3 [a] [4] of the proposed rule, it is a prohibited
deceptive telemarketing act or practice for a seller or telemarketer
to obtain or submit for payment from a person's checking, savings,
share, or similar account, a check, draft, or other form of negotiable
paper without that person's express written authorization.  For
example, a telemarketer cannot submit an unsigned draft on a
consumer's bank account without that consumer's prior written
authorization.  This Section of the proposed rule would discriminate
against the 75 million Americans who do not have a credit card [1990
census] and the millions of credit card holders who want to make a
purchase by phone, fax, computer, computer bulletin board, etc., but
who have no usable credit on their card.

Would discriminate against the thousands of new and small businesses
who cannot obtain Credit Card Merchant Status to accept major credit
cards and reduce their sales by not being able to accept a customer's
check over the phone.

The rules would allow credit card payments over the phone, increasing
the monopoly of MasterCard and Visa with their up to 21 percent
charges to consumers.

Would effectively kill the rapidly growing "checks by phone" industry,
putting over 20 companies (and their employees) out of business and
costing countless less sales to the thousands of clients these
businesses are now servicing.

Fraud associated with checks by phone is less than with credit cards.
Any consumer can take a check to his or her bank and, since consumer's
signature is not on check, have the check kicked back to the bank it
was originally deposited in and have their account credited.  As with
credit card sales over the phone, it is the merchant that is at risk,
not the consumer.

The FTC must demonstrate why checks over the phone must require prior
written authorization from consumers [which would effectively negate
its usefulness] while allowing credit card purchases by phone without
prior written authorization.

In order for the Information Super Highway to continue to grow, checks
by phone will play a positive important role.  People will be shopping
from their personal computers, from their TV sets using their
interactive remote control device...on computer bulletin boards and on
the Internet and by fax machine.  Consumers will need ways to transmit
money over the phone and fax lines and businesses will need ways to
receive money by phone line and fax and by computer.  75 million
Americans do not have a credit card and thousands of legitimate
businesses cannot qualify for credit card merchant account status to
accept major credit cards.  To preclude checks by phone will cause
great economic loss to the American economy.

If banks received numerous complaints about checks by phone they would
stop paying them [checks without account holders signature].

Handicapped, the elderly, shut-ins, etc., would be further penalized
by being forced to address envelopes, purchase postage stamps, and
going to a mail box instead of being able to conveniently give a check
over the phone.

If future information and statistics demonstrate that checks by phone
produces more fraud and complaints than credit card fraud, the FTC can
revisit this issue in future rules.  No anecdotal evidence presently
exists that this is currently the case.

------------------------------

Date: Sun, 19 Mar 1995 22:51:01 CDT
From: CuD Moderators <cudigest@sun.soci.niu.edu>
Subject: File 7--Cu Digest Header Info (unchanged since 19 Mar, 1995)

Cu-Digest is a weekly electronic journal/newsletter. Subscriptions are
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End of Computer Underground Digest #7.23
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