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WASHINGTON, D.C. -- Two key lawmakers predict Congress is likely to approve online privacy legislation this year, in part to protect consumers from so-called "bad actors"--companies that fail to subscribe to voluntary privacy practices.

"I believe that significant privacy legislation is going to be sent to the president this year, and the debate is not, 'Is it going to be sent to the president?' The debate is, 'What is it going to look like?'" said Sen. Ron Wyden (D-Oregon) at a public policy forum here Friday.

The chair of the powerful House Commerce Committee, Rep. Billy Tauzin (R-Louisiana), also predicts legislation will be passed, perhaps within eight months. "We're gearing up and organizing to take on this issue," Tauzin said.

Compelling Compliance

Both Tauzin and Wyden, speaking at a forum sponsored by high-tech public policy group TechNet and the National Venture Capital Association, said legislation will be needed to compel companies that refuse to participate in voluntary privacy schemes to nonetheless protect consumer privacy.

That could be achieved by writing legislation that includes a "safe-harbor" provision exempting companies from having to follow any federal rules, provided they subscribe to self-regulatory principles on privacy under a scheme outlined by Tauzin and Wyden. Once a company posts a privacy policy, violations could be subject to U.S. Federal Trade Commission enforcement.

Tauzin also wants to ensure federal Web sites adhere to privacy practices. A study conducted by the General Accounting Office last year concluded that many government Web sites didn't follow FTC fair information practices.

Any privacy legislation may have to deal with the problems of "multiple jurisdictions," or the possibility of a patchwork of state and federal privacy laws, Tauzin added. The AEA, a trade group formerly known as the American Electronics Association, this week urged lawmakers to adopt privacy rules that would preempt state privacy laws--a stance that's opposed by a group of privacy advocates and other organizations.

Advocating Self-Regulation

But Bob Herbold, Microsoft's executive vice president and chief operating officer, who also spoke at the forum, urges continued self-regulatory efforts. He said the industry is deploying tools, such as the Platform for Privacy Preferences Project, that customers can trust to protect their privacy.

"We think it's better that companies like Microsoft, and others in this industry, provide those tools as opposed to dealing with burdensome legislation," Herbold said.

Another priority for this Congress will be giving the Bush administration the authority to more easily develop trade opportunities, says Rep. David Dreier (R-California). "We want to make sure that we find opportunities to open up new markets around the world."

Dreier said "major reform" of the controls on exports of high-performance computers is needed. The U.S. General Accounting Office, in a report released Thursday, said the controls were ineffective in stopping countries from developing high-performance systems through clustering.

"If products are available from other countries ... we shouldn't diminish the ability of U.S. businesses to compete there," Dreier said.

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