01-5053. Notice, Request or Comments on Section 105(a) of the Electronic Signatures in Global and National Commerce Act

AGENCY:

National Telecommunications and Information Administration, U.S. Department of Commerce.

ACTION:

Request for comments on the Section 105(a) of the Electronic Signatures in Global and National Commerce Act.

SUMMARY:

The National Telecommunications and Information Administration (NTIA) invites interested parties to review and comment on section 105(a) of the Electronic Signatures in Global and National Commerce Act (“ESIGN” or “the Act”) (Pub. L. 106-229, 114 Stat. 464). Section 105(a) requires the Secretary of Commerce to conduct an inquiry and report to Congress on the effectiveness of delivery of electronic records to consumers using electronic mail as compared with the delivery of written records via the United States Postal Service and private express mail services. In connection with this report, this Federal Register notice is intended to solicit comments from interested parties. NTIA invites the public to submit comments on section 105(a) of the ESIGN Act in paper or electronic form. All comments submitted in response to this Notice will be posted on the NTIA website.

DATES:

Interested parties are invited to submit comments no later than April 2, 2001.

ADDRESSES:

Comments may be mailed to Josephine Scarlett, Office of the Chief Counsel, National Telecommunications and Information Administration, Room 4713 HCHB, 1401 Constitution Ave., NW, Washington, DC 20230. Paper submissions should include a diskette in ASCII, WordPerfect (please specify version) or Microsoft Word (please specify version) format. Diskettes should be labeled with the name and organizational affiliation of the filer, and the name version of the word processing program used to create the document.

In the alternative, comments may be submitted electronically to the following electronic mail address: <[e-mail]>. Comments submitted via electronic mail should be submitted in one or more of the formats specified above.

FOR FURTHER INFORMATION CONTACT:

Josephine Scarlett, Office of the Chief Counsel, telephone: [phone]; or electronic mail: <[e-mail]>. Media inquiries should be directed to the Office of Public Affairs, National Telecommunications and Information Administration, at [phone].

SUPPLEMENTARY INFORMATION:

I. Background

Advances in information technology and increased Internet usage in domestic and international business transactions have produced significant benefits to U.S. businesses and consumers. Electronic commerce or “e-commerce” has contributed significantly to the growth of the U.S. economy in recent years. Census Bureau statistics show that total retail e-commerce sales for 2000 reached an estimated $25.8 billion, and accounted for .08 percent of the total retail sales. Although commercial transactions over the Internet have increased over previous years, one of the greatest burdens to the growth of Internet commerce has been the lack of consistent, national rules that govern the use of electronic documents and signatures in electronic business transactions.

In order to promote continued growth in electronic commerce, Congress enacted ESIGN on June 30, 2000. ESIGN facilitates the use of electronic documents in domestic and international commerce and reinforces the validity and enforceability of electronic contracts and signatures. The Act gives businesses the option of transmitting electronic copies of documents that are legally required to be provided to consumers in written form, and provides consumers with the option of receiving electronic copies of these documents. ESIGN does not apply, however, to all documents and notices that are required to be presented in writing.^[1]

Section 105(a) of ESIGN directs the Secretary of Commerce to prepare a study comparing the effectiveness of electronic mail in the delivery of electronic records with the effectiveness of traditional methods of document delivery (e.g. mail, express delivery services), and to report the findings of the study to Congress no later than June 30, 2001. NTIA invites interested parties to submit comments on the general issue of the effectiveness of electronic mail in the delivery of electronic documents in comparison to the traditional methods of document delivery and on the specific issues set out in this Notice.

NTIA recently sought public comment on a joint study conducted with the Federal Trade Commission on section 105(b) of the ESIGN Act.^[2] The joint study being conducted under section 105(b) concerns the consumer consent provisions of the ESIGN Act and is separate from the study being prepared for this Notice. Comments submitted in this proceeding may be used in preparation of the report to Congress regarding the consumer consent provisions of the Act under section 105(b). Parties should note or incorporate by reference any comment that was submitted in conjunction with the joint study under 105(b) that also should be considered in this study.

II. Statutory Language Requiring a Report to Congress

The statutory language requiring the Secretary of Commerce to submit a report to Congress on the effectiveness of electronic mail is found in section 105(a) of ESIGN and is set forth below.

Sec. 105. STUDIES.

(a) DELIVERY.—Within 12 months after the date of the enactment of this Act, the Secretary of Commerce shall conduct an inquiry regarding the effectiveness of the delivery of electronic records to consumers using electronic mail as compared with delivery of written records via the United States Postal Service and private express mail services. The Secretary shall submit a report to the Congress regarding results of such inquiry by the conclusion of such 12-month period.

III. Specific Questions

The Department seeks comment on the following specific questions. Parties need not address all questions, but are encouraged to respond to those about which they have particular knowledge or information.

1. General Issues

a. Provide an estimate of the percentage of transactions that you conduct per month that require next day, or same day, delivery.

b. Of the transactions included in 1(a) above, approximately what percentage of these are complicated by the fact that mail services do not have Sunday delivery?

c. Describe any delivery problems that you experience with electronic transmissions. How do these problems compare with any problems you experience using the Postal Service, private express, or courier services for delivery of records?

2. Business Issues

a. Do you offer consumers a choice of delivery mechanisms (i.e. electronic or traditional)? Has the market evolved enough to give consumers the choices they need? State whether you conduct a mail or express delivery service, or an electronic mail business.

b. Explain any benefits to your business of providing consumers with a choice between electronic transmission, postal service, or express mail service delivery of documents. Is cost a large factor in your decision to offer more than one method of delivery?

c. How important is the elimination of paper to your business?

d. Does your software enable your company or business to accurately keep track of customer confirmations and electronically “file” correspondence and consents received from customers?

e. What method(s), if any, do you employ for sender/signature verification for electronic transactions?

f. What types of consent mechanisms does your business employ?

g. What methods do you employ for third parties who are authenticating electronic delivery?

h. Under what circumstances will information received from a customer be shared?

i. Do you provide universal service (i.e. delivery to all geographic locations)?

(i) Please estimate the percentage of the population that your business serves that receives daily deliveries, as opposed to deliveries every few days (e.g. to areas less populated). Estimate the number of those who receive deliveries every few days that also use your electronic services, if available, for faster delivery.

(ii) What percentage of your electronic customers are small businesses, what percentage are large businesses, and what percentage are individuals?

3. Consumer Issues

a. Do you have access to the necessary tools to enable you to receive documents electronically?

b. If you have the option of receiving electronic records but choose not to, is this decision related to a lack of technology to conduct business in this manner?

c. Describe any burdens that you as a consumer experience, or expect to experience, in receiving electronic records (such as the inability to open, store, or print electronic records).

d. Compare the usefulness and burdens of receiving an electronic record, and confirming receipt electronically, with the usefulness and burdens of receiving a written record.

e. Describe how the existence of electronic records affects the convenience of record-keeping, both negatively and positively.

f. How concerned are you with online privacy and security issues? Describe any specific issues you have encountered (e.g. viruses).

g. Describe any concerns you have with keeping paper documents confidential during their transmission or storage. Are the same concerns present for electronic documents received through electronic mail? If so, state whether you are more concerned with preserving the confidentiality of paper documents or electronic documents.

h. Are electronic transactions complicated by the fact that the consumer must notify a business when the consumer's e-mail address changes? If so, how significantly?

i. Do electronic transactions increase or decrease the potential for fraud or identity theft?

4. Technology Issues

a. What are the estimated costs, either to businesses or consumers, of updating software to ensure compatibility for the electronic transmission of electronic records?

b. What types of technology are being employed to ensure security of transmissions? For example, does your business utilize smart cards, encryption, or password protection devices? Are these devices effective?

c. Are anonymizer-type programs effective in protecting online privacy? Do such programs render authentication ineffective?

d. Does your business use/provide biometrics?

e. Does your business provide consumers with technical support in the event that consumers encounter difficulties in making electronic transmissions?

Kathy D. Smith,

Chief Counsel.

Footnotes

1.  Section 103 of ESIGN provides exceptions for testamentary and domestic relations documents, court orders, notices of cancellation for utility services and health benefits, housing or rental foreclosure and default notices, and product safety and hazardous material notices. ESIGN does not affect state or federal laws that require a writing for these types of documents and notices.

2.  See Request for Comment and Notice of Public Workshop: Electronic Signatures in Global and National Commerce Act, 66 FR 10011 (Feb. 13, 2001). The notice and comments received concerning the joint study are also available on NTIA's homepage at <http://www.ntia.doc.gov>.