June 14, 2000 Reprinted by permission of the Dow Jones & Company, Inc. House Passes 'Digital Signatures' Bill In Move Seen Boosting E-Commerce WASHINGTON -- The House has approved, by a 426-to-4 vote, a bill giving legal recognition nationwide to so-called "digital signatures," a measure expected to boost electronic commerce. The Senate is expected to follow suit this week, and the White House has signaled its support for the measure. The bill would enable contracts and other transactions to be validated electronically over the Internet, eliminating the need for signatures on paper documents. Consumers and businesses could close most contracts without signing any paper documents whatsoever, including mortgages, brokerage accounts, or contracts for home repairs, as a few examples. The bill is expected to provide a boost to the financial-services industry, which will benefit from increased efficiencies, elimination of cumbersome paper documents, and the ability to close deals more quickly. It could also be a boon to companies developing or selling security software. Some digital signature software is already in use for business-to-business transactions or for internal transactions. "We won't see a dramatic shift in revenue this year, but the groundwork will be laid," said Tommy Petrogiannis, President of Silanis Technology Inc. in Montreal. "Next year we see as an explosive year for the marketplace." While the bill was sought by the financial-services industry, the high-tech industry and by insurance companies, consumer groups did win a number of provisions forcing companies to verify that customers want to conduct transactions electronically - and that they can actually receive and read on their computers the actual contracts along with notices disclosing terms and conditions. Some transactions will remain on paper. For example, wills and adoptions can't be executed online. Nor can utility cancellations, mortgage foreclosures, termination of health insurance and court orders. House Commerce Committee Chairman Tom Bliley (R., Va.), said the bill was essential in light of the growth of electronic commerce. "More and more Americans are getting their news from the Internet, rather than a newspaper; e-mail is replacing handwritten letters; consumers are using e-tickets instead of paper airline tickets," he said on the House floor. House Minority Leader Dick Gephardt (D., Mo.), also praised the bill, saying it was a "bipartisan agreement" that will "encourage consumers to engage in electronic commerce with the confidence that the same protections against fraud afforded them in the offline world will be available to them online." The bill "will further move us from the paper age to the digital age," smoothing the way for a change in the way people have done business since the time of the ancient Egyptians," said House Commerce Committee Chairman Tom Bliley (R., Va.), the Associated Press reported. The AP further noted that, in addition to easing commerce for individuals, the legislation would open the way for companies to supply their customers with contracts, documents and information online rather than with paper through the mail. The bill would set national legal standards for e-commerce, which is expected to triple from $500 billion last year to some $1.6 trillion by 2003, according to the AP, which noted the measure is the result of months of negotiations among the House, Senate and the administration on how best to move business transactions into the electronic age without sacrificing consumer protections. The administration opposed earlier versions of the bill that passed the House and Senate last year, saying they didn't adequately protect consumers from fraud and abuse, according to the AP. Commerce Department Secretary William Daley applauded the legislation, saying it "enables companies to harness modern information technologies" while "ensuring that consumers in cyberspace will have legal protections equivalent to those in the offline world," the AP further reported. (Compiled from Dow Jones Newswires and other sources) Copyright (c) 2000 Dow Jones & Company, Inc. All Rights Reserved.