1. Role of Law, Regulation & Public Policy in Information Sciences & Technology and Security & Risk Analysis John W. Bagby Professor of IST Co-Dir. Inst. Info.Policy

2. What is the “Law of the Horse?” Generalism serves best by reducing search, transactions, switching & opportunity costs Jump to define new fields risks ineptitude, unjustified special exceptions –Karl Llewellan, parent of UCC, argued value in specialized contract law for B2B & B2C –Gerhard Casper, 80’s U.Chi.Law Sch dean proudly denounced any Law of the Horse special topic Public policy set by insiders risks self-serving complexity; set by newcomers risks unintended consequences, waste, irrelevance Optimality requires pioneering & adaptation

3. Cyberlaw: another “Law of the Horse?” Rules for idiosyncratic transactions between amateurs? –Frank H. Easterbrook, J. 7 th Cir & U.Chi.L.Sch faculty Observation about new fields –They must illuminate the entire law - not pander to dilettantes (dabblers, connoisseurs) Netizen’s Utopian Declaration of Independence might insulate Cyberspace from traditional social, political, legal & regulatory controls –Could Regulation stifle eCommerce? But should we pander to Cyber Libertarians? –Traditional law too often fails to encourage or accommodate technological development –Lawrence Lessig (Stanford): “We see something when we think about the regulation of cyberspace that other areas would not show us.”

4. Biggest Challenge for Cyberlaw Adapt Existing Law vs. New Lawmaking –Some existing law adapts well unchanged –Rush to legislate will produce some bad laws (e.g., DMCA, CDA, DigSig, more?) Pamela Samuelson suggests a careful approach 1.Review first principles underlying traditional regulation, many accommodate cyberspace effectively without much adaptation 2.Exercise restraint: study, deliberate then confine new law to reasonable & proportionate responses 3.Simple/minimal new law & technology neutral

5. SRA/IST Related Law & Public Policy Regulation & Litigation Processes –Jurisdiction –Internet Taxation Intellectual Property –Copyright –Trade Secrets Database Protections –Patents –Trademark dns (a Merger?) Technology Transfer –Employment Contracts –Confidentiality eCommerce Transaction Process –ePmts –eAgents –eGovt Intelligent Transport Privacy Security Sectoral Regulations –E.g., TeleCommunications Standards & Antitrust –Network economics

6. What is Information Policy? The impact of public policy on information creation, access, ownership and use Public Policy is exerted by … –Government: through law, regulations, executive power, courts –NGO, SRO, trade associations, professional self- discipline –Markets: by attraction or deterrence of capital, trade practices –Private contracts: private ordering, private regulation, employee restrictions

7. Public Policy, Law & Regulation IST spans many cutting-edge policy issues –Like in gaming environments today, the early cyber- libertarians demanded the Internet be exempt from traditional law –Cyberlaw history resoundingly rejected that demand IST public policy clustering of some traditional areas of law –Interesting additional areas dictated by social, political & economic idiosyncrasies caused of new technology –Therefore, special aggregation of traditional laws, arguably becoming a law of the horse

8. Relevant Traditionally Fields of Law Must adapt to Cyberspace & IT –Constitutional law (e.g., bill of rights, due process, takings, commerce clause, separation of powers, federalism, freedom of contract), –Litigation & dispute resolution (e.g., forensics, electronic and traditional discovery, alternative dispute resolution, privileges, role of scientific evidence in legislation, evidence admissibility), –Legislation (e.g., lobbying, Congressional watchdog committees, pluralist grassroots communities), –Administrative law & regulatory process (policy development, rulemaking, enforcement forensics, inter-agency co- operation/competition, dispute resolution), –Intellectual property (IP) –Corporate governance (corporation law, securities regulations, disclosure, contracts, conflicts of interest), –Commercial law, (contracting, payments, property transfers, technology transfer) –Tort liability (reform & risk management, product & service liability) –Sovereign immunity

9. Intellectual Property Rights Copyrights –Form of expression fixed in tangible medium, weak but long protection Trade Secrets –Information, valuable, security efforts, variable protections Patents –Invention (machine, manufacture, composition of matter, process), strong but medium term protection Trademarks & Trade Dress –Commercial symbol used in commerce, reduces consumer search costs, identifies source Sui Generis Protections: – Semiconductor chips, asexual plants, boat hull design, designs, petty patents, databases, unfair competition

10. Traditional Contracting Models Information Exchange Model –No actual contracting, ads Mutual Assent Model –Offers, acceptances, counter-offers, revocations, rejections, documentation Consideration Model –Online interaction contingent on agreement to terms of use, collection of private information Performance Model –Electronic payments, commercial docs, eDelivery

11. eCommerce Business Models 1.Information Access & Warehousing ¶e-Brochures, Ads, Info Capture for Resale, ad referrals 2.Ordering On-Line 3.e-Payment Systems 4.e-Delivery – Information & Data – Software – Advice & other Services Combinations of these 4

12. Existing e-Commerce Successes Banking: Wire Transfer & EFT Securities: trading, execution, record keeping Health Care Records & Reimbursement Airline Reservations & e-Ticketing Telecommunications Television Book, CD, Video Sales: amazon.com On-Line Auctions Advertising

13. Jurisdiction & Internet Taxation Jurisdiction & Tax share power/authority of a government to regulate/tax activities Due Process: state tax interstate business Sales & Use Tax if Nexus –Internet Tax Freedom Act (access, bit) Complexity of taxation of eCommerce –Differences: rates, base, exemptions, remitter Int’l taxation: collect EU’s VAT?

14. Telecommunications Regulation Federal Communications Commission & State/Local Regulators Licensing and Entry Structural Regulation (competition) Regulation of Rates Technology & Standards

15. eGovt Diffusion of Information Technology into Government Activities –Migrating transaction processes –Compare/Contrast private sector eCom w/ eGovt –Applications: military, terrorism, control ID Key Applications, Facilitate Further Diffusion: –IRS, PTO, DOD, FTC, SEC, SAP (PA), DMVs, Public Docs under FOIA/Open Records, eVidence in Litigation –Nine Next Neediest: utilities, INS, national security, transportation, insurance, professional licensure, public safety, elections, cybercrime

16. An Ontology for Public Policy Scholarship in IST IT Governance Standardization IP Policy and Strategy Security and Privacy Electronic Commerce (eCommerce) See: http://faculty.ist.psu.edu/bagby/

17. IT Governance “specifying the decision rights and accountability framework to encourage desirable behavior in the use of IT.” “the leadership and organizational structures and processes that ensure that [IT serves strategic objectives].” Corporate governance constraints; impact of law, regulators, security & privacy standards; SOX; Implemented through: technology transfer agreements private contracts employment restrictions IP constraints eCommerce commercial practice

18. Standardization Standards Development Activities (SDA) –Expanding form of public policy development “Code is Law” Major foci: resolution of conflicts of interest –Antitrust & IP –International Aspects quickly Emerging EU through ISO & China –Due Process & Fair Political Representation Balanced against participants’ domain expertise

19. IP Policy and Strategy Pervasive to nearly all IST scholarship streams –artifacts, cooperative research, HCI, security, privacy, search, dB, data mining, domain-related informatics, cyber-infrastructure, GIS, enterprise systems –See http://ist.psu.edu/facultyresearch/research/ Copyright, trade secret, patent, trademark: –IP Strategy & IP Reform –IP rights valuation, IP rights assessment, IP audit infringement risk analysis P2P, numerous urban legendary myths –Open Source & Antitrust aspects of IP –Software & BMPatents

20. Security and Privacy An Amalgam of: –Criminal Law –CyberForensics (EDD, ESI, ERM) –Sectoral privacy regulations e.g., privacy regulations in health, financial, online, telecommunications, law enforcement, international commerce, security breaches) –IT governance –Information Assurance –Electronic Surveillance –Money Laundering –Social Network Analysis Mapping using Graph Theory

21. eCommerce Online & Electronic Contracting Ubiquitous EULAs –Shrink, Click, Box & Browse Wrap Contracts Electronic Marketing & Auction Markets Electronic Payment Systems Financial Services IT Regulation –Money Laundering…again Automated Transaction Processing –AI, intelligent agents, electronic agents, ontologies & expert systems in eCommerce

22. Some Instruction Interests Existing Courses: –IST 432 –IST 452 –IST 453 –SRA 211 Proposed New Courses: –Critical Infrastructures –Standardization –Open Source –Electronic Payment Architecture & MoneyLaundering

23. Research Methods Useful in Public Policy of IST Doctrinal Legal Research Public Policy Analysis Conceptual Analysis Model Building & Testing Artifact Design, Development & Testing Simulation Various Empirical Methods

24. Doctrinal Legal Research Combines Analytical Methods from Humanities, Empirical Social/Natural Sciences, Public Policy Analysis Evaluates Existing/Proposed Law for Consistency, Validity, Authority & Impact (social, political, economic) –Constitutions, precedents, statutes, regs Influences cases, legislative history, policymaking, other disciplines’ research design