How can countries curb the illegal, unethical and unfair activities that now increasingly pollute the global network? And thornier still, how can they do that while protecting the privacy of Internet users?
Since the United States is the world's biggest Internet user, it is the scene of most computer crime. It is also where the most significant regulatory efforts--and discussions about needed laws and regulations--have taken place.
The FBI is seeking legislation giving it the authority to control encryption technology, the data-scrambling techniques that enable businesses to protect the privacy of their Internet communications. The FBI argues that the same technology can be used by terrorists and drug dealers to escape detection and that U.S. encryption products should provide law enforcement officials, under warranted circumstances, with access to "keys" for decoding the messages.
Five House panels have recommended conflicting versions of legislation that would overhaul U.S. encryption policy and remove stringent export controls on encryption technology. House Rules Committee Chairman Gerald B.H. Solomon (R-N.Y.) says he won't send a bill to the floor if law enforcement officials would have insufficient access to electronic messages.
European Commission officials oppose U.S. export controls on encryption technology and have spurned U.S. proposals that would allow law enforcement to monitor Internet communications between individuals or businesses.
Adair Turner, director of the British Confederation of Industries, said British business interests became concerned only after finally recognizing that "the technology is roaring far ahead of the legal framework" for dealing with such issues as secrecy, encryption and data protection.
Security concerns have caused some European firms to shy away from the Internet. An official of the British American Tobacco Co. in London said his firm, among many others, regards every e-mail address as a potential access point that could be penetrated by thieves looking to steal sensitive data.
Both the U.S. Commerce Department and the European Commission (the executive body of the European Union) emphasize the need for laws and rules to prevent fraud, data theft and other illegal activities. At the same time, they stress the importance of keeping global electronic networks as insulated as possible from laws or regulations that might hinder free trade or the free exchange of ideas.
While governments are occupied trying to strike a balance between those two sometimes clashing goals, online crooks are staying several steps ahead of them as they move quickly to take advantage of the rapidly developing communications technology.
"The drug kingpins can buy the very latest equipment and pay the best technicians to manipulate the Internet," said an American diplomat in London who is an expert on computer crime. "Governments are still debating the kinds of methods, funds and resources they think should be devoted to the problem."
Since banks and financial institutions often fail to report electronic crimes for fear of bad publicity, there is no accurate way to estimate the total take from Internet theft.
The San Francisco-based Computer Security Institution, in a survey of 536 companies, financial institutions and government agencies, found that 75% reported large monetary losses, but only 17% of the computer crimes were reported to law enforcement agencies.
The FBI estimates that computer-using thieves make off with as much as $10 billion a year in the United States alone. In the United Kingdom, the British Banking Assn. has estimated the cost of computer fraud at $8 billion a year.
"Even the most conservative estimates suggest that both the number of incidents and the dollar losses are staggering," said Scott Charney, the U.S. Justice Department's chief of computer crimes.
And that does not count the cost of computer espionage, which cannot be easily measured in dollars. In a survey of 428 information specialists with Fortune 500 companies, the Computer Security Institution found that 42% reported unauthorized penetration. The White House Office of Science and Technology has estimated overall losses to U.S. businesses from foreign economic espionage at nearly $100 billion a year.
Reports about the vulnerability of U.S. government computers have been just as startling. Hackers have penetrated the Web sites of several government agencies, including the Justice Department and the CIA.
Congress' General Accounting Office reported that, in 1995 alone, the Defense Department may have experienced as many as 250,000 hacker attacks, an estimated 64% of which succeeded.
Earlier this year the U.S. Defense Science Board's task force on information warfare predicted that, by 2005, widespread hacker attacks by crime syndicates, terrorists and foreign espionage agencies would seriously threaten U.S. information systems.