1. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 1 E-commerce Issues for Policy Makers Alexander NTOKO Head, E-Strategy Unit ITU Telecommunication Development Bureau (BDT) Email: ntoko@itu.int Web: http://www.itu.int/ITU-Dntoko@itu.int Regional Seminar on E-Commerce for CEE, CIS and the Baltic States Bucharest, Romania 14-17 May 2002

2. o Legal Issues Privacy Data protection Liabilities of Service Providers Intellectual property rights, copyright Digital signatures Electronic contracts Consumer protection Jurisdiction for Cross-border transactions

3. o Financial Issues Customs Taxation Revenue implication for Governments Monetary Policies Banking Regulations Currencies

4. o Technology issues Security Encryption Authentication Telecommunications infrastructure Internet: cost, quality of service, speed,... Standards, interoperability Electronic payment systems

5. o Economic issues Impact on workforce des-intermediation re-intermediation Effects of automation Market access Micro Businesses Skills availability Revenue implications

6. o Cultural issues Content Multilingualism Cultural diversity Censorship

7. o Governance issues International coordination of the Internet Domain Names and Address Management Payment of international links Certification Authorities Root certification, Hierarchy of CAs International coordination

8. o Trade issues WTO Agreements Duty-free entry of goods in electronic form Free Trade Zones

9. Near consensus: paperless o Paperless transactions: Law has traditionally presumed the presence of paper records in writing. Near consensus that governments need to make amendments to laws in order to bring media-neutrality of statutes, evidence rules for electronic records (note: email evidence was used in Clinton and Microsoft legal battles), recognition of electronic signatures combined with a reliable certification authority.

10. No consensus proposals o Privacy only self-regulation ?? o Encryption o Jurisdiction (consensus ??) o Role of private sector, government and international organizations o Content o Internet governance and domain names o Liability of intermediaries

11. No consensus: Privacy Bad practices: o Keep track of user browsing and choices without his/her consent o Sell user data (e.g., e-mail addresses) o Use spending profile for advertisement o Pull user data from cookies stored in the users computer

12. No consensus: Encryption o Recommended key lengths public key systems: 1024 bits keys symmetric systems: 128 bits keys o Export Restrictions and Usage for encryption with long keys (e.g. more than 512 bits for RSA and 40-56 bits for symmetric)

13. Encryption: key length problem o US Data Encryption Standard (DES) 56-bit keys is becoming inadequate o Triple-DES is one improvement: encrypting the output of DES twice using three keys o Long term (20 years): 90-bits symmetric keys are adequate o 128-bit keys: impossible to break o Must distinguish authentication and integrity services from confidentiality services

14. Encryption: key length problem o RSA RC5 56-bit key crack challenge, early 1997 o Bovine RC5 Effort: tens of thousands computers linked over Internet, more than 4,000 teams o 72 quatrillion (72,057,594,037,927,936) possible keys to test o 268 million key blocks distributed to teams o Peak rate of processing: 7 billion keys/second o Oct 22, 1997: RSA announces successful crack o Conclusion: 56-bit key not sufficient o Remember Moores law: computing power doubles every 18 months (no longer valid)

15. Cost and time of brute force attacks o Assumption: 3 years equipment life and continual use o Authors: Blaze, Diffie,Rivest, Schneier, Shinomura,Thompson

16. No consensus: Encryption o Should citizens rights to privacy take precedence over law enforcement concerns? o … not possible to prevent criminals from using encryption … little point in preventing legal users from protecting themselves (Bangemann, European Commission)

17. No consensus: Encryption o Key escrow: copy of any secret key is deposited with Trusted Third Party (TTP) o National law might require that TTP hands over secret key on certain situations o Key recovery: encryption system allows authorized organizations to rebuild key on request (back door access to private key) o Both schemes allow access to encrypted data

18. No consensus: Encryption o Some European companies are concerned about using US-based Trusted Third Parties (TTPs), since they may contravene their own countrys data protection laws o A number of countries are becoming concerned about maintaining national root TTPs, to prevent dominance of their national economies by foreign brands

19. Certification Authority Issues o Issuing certificates is easy o Managing effectively and securely is difficult: CAs must maintain a Certification Revocation List (CRL), must not store private keys (risk of identity theft),... o Trust depends on integrity and security of CAs practices and procedures o Users will have many certificates (e.g., one for Intranet, one for Extranet, one at home) o Interoperability: need for standard

20. Hierarchy of Certification Authorities Source: BYTE Magazine

21. Role of Governments, International Organizations and Private sector o Some E-Commerce frameworks ignore the role of governments & international organizations: everything should be private- sector driven o Jeffrey Ritter, the chairman of the American Bar Association's committee on Internet law, seeks a middle ground between industry and public policy. "The private sector will be mistaken if they believe they can formulate the rules for e-commerce without the input and consultation of governments," he said.

22. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 22 Role of ITU in Global E-Business Framework for Global Co-ordination Policy and Regulatory Assisting Developing Countries The ITU VAP and ISAP Building Global Connections The ITU Standards

23. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 23 ITU Role: Policy and Regulatory Global Forum for Policy and Regulatory Issues ITU World Telecom Development Conferences ITU Regional and Global TELECOM events ITU World Policy Forum World Summit on the Information Society (WSIS) ITU Regional E-Commerce Events Workshops to provide national policy guidance Strategic Planning Workshops for Regulators Case Studies, Surveys and Policy Analysis

24. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 24 ITU Role: Regional and Global TELECOM

25. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 25 ITU Role – Policy Analysis Results of an ITU survey on the use of certification for building global trust

26. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 26 ITU-T and ITU-R Recommendations Access to E-Business Services, Security and Trust Users and Consumers: Digital, Analogue and cable modem standards for user access to the Internet (V.90 and ISDN standards) Businesses and Service Providers: Broadband Internet Access for e-business and service providers (DWDM) Building Global Trust and Security - Standards to establish identities of parties in e-transactions, Digital and Attribute Certificates, Digital Signatures, Certification Authorities and Certificate Distribution Systems M-Business and Wireless Internet (IMT-2000) Global Standards for high speed 3G digital mobile Fair and equitable access to the radio-frequency spectrum

27. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 27 ITU-T and ITU-R Recommendations Digital, Analogue and Cable modem standards High speed digital mobile (IMT 2000) Broadband IP standards Certification Standards Digital Certificates

28. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 28 Framework for Global Trust Establishing the identities of entities in electronic transactions… … ITU-T X.509 enables authentication for e-business e-government e-learning and e-procurement etc…

29. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 29 Through IMT-2000, ITU is laying the foundation for high-speed mobile Internet access and services … Rapid evolution towards Mobile Internet as high speed digital mobile (3G ITU IMT-2000) networks, services and solutions are scheduled to roll-out...

30. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 30 Third Generation Networks – ITU IMT-2000

31. ©1998-2002 Telecommunication Development Bureau (BDT) E-Strategies. Page - 31 ITU-D :Assisting Developing Countries Creating Digital Opportunities

32. International coordination frameworks Considering that time is ripe to: 1. seek a better international understanding on how to achieve a friction free and borderless marketplace while meeting general public interest objectives 2. define the key issues that require strengthened international coordination 3. many organizations are proposing frameworks for global E-commerce coordination

33. Need for a global framework The global electronic marketplace requires an appropriate framework covering technical, commercial, and legal aspects. This should foster interoperable technical solutions, competitive business practices and consistent rules. It does not need to consist of detailed and harmonised rules on all relevant aspects. What is required is a concerted examination of the problems and the priorities, in order to allow the international community to address them in a substantive and coordinated manner.

34. Need for global framework o Building trust in electronic commerce by ensuring the security and privacy of transactions and data, and the protection of consumers. o Establishing ground rules so that commercial laws, tax and customs tariffs, trade policy and market access, and intellectual property measures create a level playing field for electronic transactions.

35. Need for global framework o Enhancing the information infrastructure through common interoperable standards, and access to open networks. o Maximizing the benefits of electronic commerce by developing awareness and skills, encouraging widespread SME adoption, and ensuring participation and use by all countries.

36. Conclusion While waiting for all these issues to be addressed, it is important for Governments to work with the relevant stakeholders (international organizations, public and private sector and civil society) to promote policies that will enhance the development and use of electronic commerce. Thank you for your attention