Editorial: Proposed laws threat to growth of Internet

Thousands of revenue-hungry, budget-poor taxing agencies are turning their appetites to the Internet, where new business models generate big bucks, much of it beyond tax collectors’ reach.

A host of proposals in statehouses and Congress to tax and regulate the Internet threaten to unleash a multitude of unintended, unpleasant consequences. These government intrusions, ranging from taxing online sales to unnecessary record-keeping, threaten to retard growth, inhibit the creativity that has transformed communications and commerce and divert time and money into getting around intrusions rather than into productive uses.

“Reckless and misguided laws, often originating at the state level, threaten to undermine the foundation of the free and open Internet,” says the NetChoice Coalition, a group of online businesses opposing the efforts. “Some of the most serious threats to the Internet come in the form of lawmakers trying to ‘fix’ it.”

NetChoice is backed by AOL, Yahoo, eBay, Oracle and other companies that have identified the 10 worst proposed Internet laws, including a New Jersey bill to force Web sites to be law enforcement investigators by imposing civil and fraud penalties on social networking sites unless they promptly investigate and report complaints of sexually offensive and harassing communications.

Such laws arrogantly assume one state can or should regulate the Internet. The proposed law also would create new liabilities for medical, travel and community Web sites and impose “a massive compliance burden on smaller, upcoming services that are often free of charge for users.”

Pending legislation is listed at NetChoice’s Web site, www.iawful.com, an acronym for Internet Advocates Watchlist for Ugly Laws.

The group says proposed laws attack “core Internet principles.” We agree. There’s a greater threat: expanding the reach of governments at perhaps a geometric progression. The Internet has grown enormously in a short time. Unfettered, it promises to bring together countless buyers and sellers, irrespective of geography.

Areas of concern are boundless. Sales and other taxes, cybersecurity, broadband development, venture capital, regulatory matters and many other issues are ripe for government meddling — and harm. NetChoice promises to “track dangerous legislation and mobilize citizens to defeat bills” that threaten e-commerce and online communication.

Internet users and advocates for limited government should visit the site and sign up for e-mail updates on “the most immediate dangers.”