Mr Chairman, Ladies and Gentlemen. My task this afternoon is to review
with you the interests and the activities of the European Union related
to the Internet. I am speaking on behalf of the European Commission. I
hope that I will be able to give you some new information, and - if
need be - to contribute to a closer dialogue between the Internet
technical community, particularly in Europe, and the policy and
research activities sponsored by the Union.  Thus the overview of our
interests refers both to administrative and regulatory considerations
and to technological considerations.

* Administrative and regulatory: the domain name system, intellectual
  property and content issues.

* Technological: infrastructure and applications.

The European Commission has quite a track record in the area of
telecommunications policy and that is what many of you probably
identify the Commission with. But we know that the Internet is not
telecommunications - even though a large proportion of it operates
through telecommunications connections. The Internet is very different,
in its architecture, its technical standards, and in its range of
services. We recognise these differences, but we are also aware of
issues which are common to the Internet and to telecommunications:
bandwidth, identification and directories, interoperability,
competition.  Furthermore, the Commission fully recognises and supports
the desirability of organising the Internet on the basis of a flexible
and consensual system of self-regulation by the Internet community
itself. The Internet is a success story, in terms of its overall
growth, in terms of new capabilities and services - particularly the
World Wide Web - and in terms of its economy. Self-regulation based on
consensus should mean just that, and it is increasingly important that
the objective be realised globally.

But at the same time there are areas where self-regulation of the
Internet impinges on established areas of public policy - and law. The
Internet does not operate in a legal and political vacuum. On the
contrary, the Internet and all its users are part of national and
international society at large. In principle and in practice, many
existing rules apply, and the challenge to the policy makers and to
those with authority over the self regulatory system is how to
reconcile the technology and practice of the Internet with the rules
and regulations of society at large. I will illustrate this challenge
with three current examples, which is not to say that there may not be
other such cases in the future.

The Domain Name System

For at least the past year, the future organisation of the Internet DNS
has been intensively debated, without resolution today. A year is a
long, long time in the he history of the Internet, and that in itself
illustrates the depth of this problem.

I am sure that I don't need to go into details here: the two parallel
systems of generic and national Top Level Domains; the management of
the *dot* by IANA; congestion in the .COM domain; the transition from
the existing US government contracts towards a self-supporting
administration . . . these themes have fed a wide debate, particularly
in the United States, and more recently in Europe. The importance of
resolving some of these issues has been reinforced by forecasts and
reports of technical problems in the Internet arising either from the
light infrastructure of the DNS and Root Server system and from the
commercial tensions which are emerging between different groups of
Internet actors.

At the same time that the public authorities in Europe and in the
United States are quite prepared to have a "hands off" approach to
Internet management, it is equally true that the Internet is becoming
an indispensable infrastructure for a significant part of our economy
and society and that disputes within the Internet environment will in
the last resort land in the area of public regulation or law. I think
it is afar to say that the Commission is happy to sit on the sidelines
and watch the game, but not as a spectator - rather as an alternate
player, should the need arise.

By contrast, the US Administration is a player. We understand that they
would like to get off the pitch, and we fully respect that decision,
but it is important to the Commission that the regime of private self
regulation that the US hands over to next year represents a globally
representative and acceptable consensus system.

What precisely does Europe want?

First, a stable reliable transition to a technically and politically
viable alternative. In Europe we are prepared to take the time it takes
to achieve this. Most of us in Europe would be prepared to put up with
the shortcomings of the present system for a while longer if that would
lead to a real consensus on an alternative system.

Secondly a system of governance where international participation and
representation is assured on an equitable basis. The Commission has
asked the Internet Policy Oversight Committee to reformulate its
proposals for the representation of European and other regional
interests in this respect.

We are open to suggestions as to how best this could be done - or
course Europe is not the only part of the world which is involved. One
possibility would be to give the Internet policy bodies a regional
structure, representing national and generic Registrars.

Thirdly, the legal basis of the proposed system must be clear and
agreed. At present it appears that the ITU will have a key role but how
this will evolve in the future remains to be seen. The World
Intellectual Property Organisation has been proposed to organise the
dispute resolution procedure for Trademark aspects of the Internet.

This leads me to the second aspect of regulatory policy: the protection
of Intellectual Property. There are several aspects: trademarks,
patents, and copyrights.

Intellectual Property Rights

Specifically, about trademarks, the allocation of domain names must
take into account established rights to trademarks. I gather that there
have been a limited number of problems in this area but that a few
cases have had a rather high profile. The Commission would support the
establishment of pre-registration procedures to reduce the number of
disputes and the creation of world-wide trademark databases. These
issues are being studied by a task force in the World Intellectual
Property Organisation. The Commission and the Member States Industrial
Property offices are participating actively in this work.

More generally, the Internet is proving to be the principal global
medium where the long-standing debate over copyright in electronic
communications is being played out. Here again, the Commission has been
for many years a proponent of up-dating copyright laws to take account
of new technologies. Earlier this year a Communication was published
announcing new legislative proposals addressing, notably the
harmonisation of authors' reproduction rights and I understand that a
draft directive may be proposed in the autumn. Meanwhile, the
Commission fully supports the ratification and implementation of the
December 1996 WIPO Treaties on copyright and neighbouring rights, which
also address the applicability of copyright in the digital media.

Internet Content Issues

The Internet has also become a powerful influence in the social,
educational and cultural fields, empowering citizens and educators,
lowering the barriers to the creation and distribution of content and
offering much wider access to sources of digital information. However
the Internet can also carry potentially harmful of illegal content and
be misused. Although this is essentially a limited problem,  these
aspects are too important to be ignored and have attracted significant
political attention in recent months. The Commission has addressed the
issue through a Communication to the Council and Parliament about
Harmful and illegal content and a consultative Green Paper on the
Protection of Minors.

The Communication analyses the technical aspects of monitoring and
filtering content on the Internet and points out that in the Union it
is the Member States' responsibility to ensure the application of
existing laws. Furthermore the Commission has proposed:

* strengthened cooperation between Member States in enforcing existing laws;

* encouraging self-regulation among service providers on access to
  illegal material;

* recommendations encouraging use of filtering software and rating
  systems in Europe;

* consideration of an international convention on harmful and illegal content.

The Commission has also set up a web site about technical legal and
other solutions to these problems.

The Green Paper took a longer term view of the protection of minors and
human dignity in the audio visual sector and addressed a number of
question to interested parties. The Commission is considering the
outcome of these consultations.

The Internet and the Research Community

The Internet originated in the Research Community, and although there
has of course been massive private and commercial development since
those days, the Research Community continues to be a major priority for
Internet policies in the European Union. Let us look briefly at the
infrastructure aspects, current R&D priorities and longer term
objectives.

Infrastructure: As part of the European strategy for Trans European
Networks, the Commission is supporting the TEN-34 project which will
deploy high capacity facilities, up to 34 megabits per second, to allow
the national research networks in Europe to be exploited globally and
to maintain the competitiveness of :European research. The phased roll
out of this project will address both the requirements for greater
capacity and to support multimedia applications.

A number of projects supported through the telecommunications and
telematics programmes will increasingly be Internet based, and more
generally the World Wide Web Consortium which is also supported by the
European Commission will promote the full realisation of the Web's
potential. The WWW consortium provides a repository of information for
developers and users, especially about specifications and standards and
various prototype and sample applications to demonstrate the use of new
technology on the Web.

Looking towards the near future, many of you will be aware that the
Commission is currently preparing its proposals for the Fifth R&D
Framework Programmes, including the information and communications
technology component. in this context, the priority for advanced R&D
networking is expected to be maintained. A pan European network is
required, capable of supporting all research needs and of keeping pace
with international developments.

the fist objective will be to ensure that European industrial and
academic collaborative research and education benefits from broadband
capabilities. The capacity of European interconnection should match the
efforts made within the Member States to improve national facilities.

The second objective is to create the critical mass in Europe for
future broadband technologies by creating Europe-wide test beds. We
will aim at upgrading existing 34 megabit capacity to 622 megabits by
the year 2000 and working towards gigabit capacity in the foreseeable
future.

The Commission will seek to ensure that the R&D community in Europe is
able to use state of the art Internet based applications across the
whole range of research applications involving all the specific
programmes in all sectors of research.

More generally, the Commission, in its preparations for the information
technology and communications programme in the Fifth Framework
Programme, wishes to see a stronger link between European research and
future developments in the Internet, and enhanced European
participation in the work of the IETF.

Electronic Commerce

Why has the Internet become so important to the public authorities in
Europe and in the United States, all of a sudden? I think it is summed
up in a work: electronic commerce.

The great hope has long been that information technology would
contribute to economic growth, efficiency and competitiveness and
finally to job creation. For many years developments in these
beneficial directions were questionable. Separate developments in
telecommunications, computing and the media are finally coming together
in the potential of the Internet, and industry at large is finally
sensing a possibility for doing business electronically not only with
their suppliers and contractors (electronic data interchange has been
around for quite a log time, after all) but with the final customer,
his or herself.

You will not be surprised that earlier this year both the Commission
and the US Administration published major policy papers on electronic
commerce within weeks of each other and that European Ministers met in
Bonn in early July to consider the implications of electronic commerce
over a wide range of policy areas.

Electronic commerce refers to any activity which involves enterprises
interacting and doing business with customers, with each other or with
administrations by electronic means.

It includes electronic ordering of goods and services, on line ordering
and payment, electronic funds transfer and trading, direct marketing
and many other potential electronic economic services.

The global electronic commerce market is growing extremely fast and
Internet Commerce could be worth 200 billion Euros by the year 2000.
World wide 86 million people were connected to the Internet by the end
of 1996 and by 2000 this is expected to reach 250 million individuals.

The Commission's policy focuses on four objectives:

* reliable and affordable infrastructure;

* a favourable regulatory framework, including a neutral tax
  environment;

* a favourable business environment, including meeting the training and
  skills requirements for this new industry;

* European coordination in relevant international fora and groups for
  data protection, data security, taxation and technical standards.

These broad objectives were given a push in the right direction through
the Bonn Ministerial Declaration of 8 July 1997 which resulted in a
broad consensus between Ministers, industry and users on the key issues
and solutions for the development of Global Information Networks,
including the general principle of maximum resort to voluntary industry
self-regulation. For example, Ministers stressed that the rules on
responsibility for content should be based on common principles and
that network operators and access providers should, in general, not be
responsible for content. They also agreed to work towards global
principles on the free flow of information whilst protecting
fundamental rights to privacy and personal and business data. Thus the
conference considered that data security is required for the
development of the Information society and that the availability of
strong encryption technology is necessary for the successful
development of electronic commerce, within the limits of applicable law
for cryptographic products.

*   *   *   *

In conclusion, Mr Chairman, I hope I have been able to give your
conference an useful  overview of the Commission's activities and
interests related to the Internet. These are evolving rapidly. What I
have had to say today is quite different from what I would have said
six month's ago and I am sure that there will have been as many
developments in six months' time.

In the short term, it is important to resolve the on-going debate about
the Internet DNS and more generally the system of global Internet
governance which will be put in place, possibly in the course of next
year. It will also be necessary to resolve current uncertainties about
the regulation of content, liability questions and the protection of
intellectual property. International cooperation has a high priority
here, both multilateral in ITU, WIPO, OECD and other fora and
bilaterally, in this case, especially between the European Union and
the United States, although there are many other interested parties.

In the longer term we will have to look at the issues posed by the
potential for global growth in the Internet by one or two orders of
magnitude. This will raise technological and regulatory issues which -
with the exception of IP-Version 6 - have not yet been appreciated in
the policy arena even if they may have been addressed in the relevant
IETF working groups. From this point of view I would personally like to
see a stronger link in the future between IETF standardisation work and
the more classic ICT standardisation work carried out in the industrial
consortia and in the international standardisation bodies.

I thank you all for your attention.