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                            105th Congress                             
 
                                 Report                                 
 
                                                                           
 
                        HOUSE OF REPRESENTATIVES                        
 
                               2d Session                               
 
                                105 775                                 
 
                                                                        
 
                      CHILD ONLINE PROTECTION ACT                       
 
 
 
                                                                         
 
  October 5, 1998.--Committed to the Committee of the Whole House on the 
 State of the Union and ordered to be printed                            
                                                                         
 
 Mr.  Bliley,  from the Committee on Commerce, submitted the following   
 
                                  REPORT                                 
 
                         [To accompany H.R. 3783]                        
 
       [Including cost estimate of the Congressional Budget Office]      
 
 
     The Committee on Commerce, to whom was referred the bill (H.R. 3783) 
  to amend section 223 of the Communications Act of 1934 to require       
  persons who are engaged in the business of selling or transferring, by  
  means of the World Wide Web, material that is harmful to minors to      
  restrict access to such material by minors, and for other purposes,     
  having considered the same, report favorably thereon with an amendment  
  and recommend that the bill as amended do pass.                         
 
                               CONTENTS                                 
         Amendment                                                        2
         Purpose and Summary                                              5
         Background and Need for Legislation                              6
         Hearings                                                         20
         Committee Consideration                                          21
         Rollcall Votes                                                   21
         Committee Oversight Findings                                     21
         Committee on Government Reform and Oversight                     21
         New Budget Authority, Entitlement Authority, and Tax Expenditures21
         Committee Cost Estimate                                          22
         Congressional Budget Office Estimate                             22
         Federal Mandates Statement                                       24
         Advisory Committee Statement                                     24
         Constitutional Authority Statement                               24
         Applicability to Legislative Branch                              24
         Section-by-Section Analysis of the Legislation                   25
         Changes in Existing Law Made by the Bill, as Reported            29
 
 
 
   The amendment is as follows:                                           
 
     Strike out all after the enacting clause and insert in lieu thereof  
  the following:                                                          
 
          SECTION 1. SHORT TITLE.                                                 
 
   This Act may be cited as the ``Child Online Protection Act''.          
 
          SEC. 2. CONGRESSIONAL FINDINGS.                                         
 
   The Congress finds that--                                              
 
       (1) while custody, care, and nurture of the child resides first with
   the parent, the widespread availability of the Internet presents        
   opportunities for minors to access materials through the World Wide Web 
   in a manner that can frustrate parental supervision or control;         
 
       (2) the protection of the physical and psychological well-being of  
   minors by shielding them from materials that are harmful to them is a   
   compelling governmental interest;                                       
       (3) to date, while the industry has developed innovative ways to    
   help parents and educators restrict material that is harmful to minors  
   through parental control protections and self-regulation, such efforts  
   have not provided a national solution to the problem of minors accessing
   harmful material on the World Wide Web;                                 
       (4) a prohibition on the distribution of material harmful to minors,
   combined with legitimate defenses, is currently the most effective means
   by which to satisfy the compelling government interest; and             
       (5) notwithstanding the existence of protections that limit the     
   distribution over the World Wide Web of material that is harmful to     
   minors, parents, educators, and industry must continue efforts to       
   protect children from dangers posed by the Internet.                    
                    SEC. 3. REQUIREMENT TO RESTRICT ACCESS BY MINORS TO MATERIALS 
          SOLD BY MEANS OF THE WORLD WIDE WEB THAT ARE HARMFUL TO MINORS.         
     Part I of title II of the Communications Act of 1934 (47 U.S.C. 201  
  et seq.) is amended by adding at the end the following new section:     
                    ``SEC. 231. RESTRICTION OF ACCESS BY MINORS TO MATERIALS SOLD 
          BY MEANS OF WORLD WIDE WEB THAT ARE HARMFUL TO MINORS.                  
   ``(a)  Requirement To Restrict Access.--                               
 
       ``(1) Prohibited conduct.--Whoever, in interstate or foreign        
   commerce, by means of the World Wide Web, knowingly makes any           
   communication for commercial purposes that includes any material that is
   harmful to minors, without restricting access to such material by minors
   pursuant to subsection (c), shall be fined not more than $50,000,       
   imprisoned not more than 6 months, or both.                             
       ``(2) Intentional violations.--In addition to the penalties under   
   paragraph (1), whoever intentionally violates such paragraph shall be   
   subject to a fine of not more than $50,000 for each violation. For      
   purposes of this paragraph, each day of violation shall constitute a    
   separate violation.                                                     
       ``(3) Civil penalty.--In addition to the penalties under paragraphs 
   (1) and (2), whoever violates paragraph (1) shall be subject to a civil 
   penalty of not more than $50,000 for each violation. For purposes of    
   this paragraph, each day of violation shall constitute a separate       
   violation.                                                              
     ``(b) Inapplicability of Carriers and Other Service Providers.--For  
  purposes of subsection (a), a person shall not be considered to make any
  communication for commercial purposes to the extent that such person    
  is--                                                                    
       ``(1) a telecommunications carrier engaged in the provision of a    
   telecommunications service;                                             
       ``(2) a person engaged in the business of providing an Internet     
   access service;                                                         
       ``(3) a person engaged in the business of providing an Internet     
   information location tool; or                                           
       ``(4) similarly engaged in the transmission, storage, retrieval,    
   hosting, formatting, or translation (or any combination thereof) of a   
   communication made by another person, without selection or alteration of
   the content of the communication, except that such person's deletion of 
   a particular communication or material made by another person in a      
   manner consistent with subsection (c) or section 230 shall not          
   constitute such selection or alteration of the content of the           
   communication.                                                          
   ``(c)  Affirmative Defense.--                                          
 
       ``(1) Defense.--It is an affirmative defense to prosecution under   
   this section that the defendant, in good faith, has restricted access by
   minors to material that is harmful to minors--                          
       ``(A) by requiring use of a credit card, debit account, adult access
   code, or adult personal identification number; or                       
       ``(B) by any other reasonable measures that are feasible under      
   available technology.                                                   
       ``(2) Protection for use of defenses.--No cause of action may be    
   brought in any court or administrative agency against any person on     
   account of any activity that is not in violation of any law punishable  
   by criminal or civil penalty, and that the person has taken in good     
   faith to implement a defense authorized under this subsection or        
   otherwise to restrict or prevent the transmission of, or access to, a   
   communication specified in this section.                                
   ``(d)  Privacy Protection Requirements.--                              
 
 
       ``(1) Disclosure of information limited.--A person making a         
   communication described in subsection (a)--                             
       ``(A) shall not disclose any information collected for the purposes 
   of restricting access to such communications to individuals 17 years of 
   age or older without the prior written or electronic consent of--       
    ``(i) the individual concerned, if the individual is an adult; or      
 
       ``(ii) the individual's parent or guardian, if the individual is    
   under 17 years of age; and                                              
       ``(B) shall take such actions as are necessary to prevent           
   unauthorized access to such information by a person other than the      
   person making such communication and the recipient of such              
   communication.                                                          
       ``(2) Exceptions.--A person making a communication described in     
   subsection (a) may disclose such information if the disclosure is--     
       ``(A) necessary to make the communication or conduct a legitimate   
   business activity related to making the communication; or               
    ``(B) made pursuant to a court order authorizing such disclosure.      
 
     ``(e) Definitions.--For purposes of this subsection, the following   
  definitions shall apply:                                                
       ``(1) By means of the world wide web.--The term `by means of the    
   World Wide Web' means by placement of material in a computer            
   server-based file archive so that it is publicly accessible, over the   
   Internet, using hypertext transfer protocol or any successor protocol.  
    ``(2)  Commercial purposes; engaged in the business.--                 
 
       ``(A) Commercial purposes.--A person shall be considered to make a  
   communication for commercial purposes only if such person is engaged in 
   the business of making such communications.                             
       ``(B) Engaged in the business.--The term `engaged in the business'  
   means that the person who makes a communication, or offers to make a    
   communication, by means of the World Wide Web, that includes any        
   material that is harmful to minors, devotes time, attention, or labor to
   such activities, as a regular course of such person's trade or business,
   with the objective of earning a profit as a result of such activities   
   (although it is not necessary that the person make a profit or that the 
   making or offering to make such communications be the person's sole or  
   principal business or source of income). A person may be considered to  
   be engaged in the business of making, by means of the World Wide Web,   
   communications for commercial purposes that include material that is    
   harmful to minors, only if the person knowingly causes the material that
   is harmful to minors to be posted on the World Wide Web or knowingly    
   solicits such material to be posted on the World Wide Web.              
       ``(3) Internet.--The term `Internet' means the combination of       
   computer facilities and electromagnetic transmission media, and related 
   equipment and software, comprising the interconnected worldwide network 
   of computer networks that employ the Transmission Control               
   Protocol/Internet Protocol or any successor protocol to transmit        
   information.                                                            
       ``(4) Internet access service.--The term `Internet access service'  
   means a service that enables users to access content, information,      
   electronic mail, or other services offered over the Internet, and may   
   also include access to proprietary content, information, and other      
   services as part of a package of services offered to consumers. Such    
   term does not include telecommunications services.                      
       ``(5) Internet information location tool.--The term `Internet       
   information location tool' means a service that refers or links users to
   an online location on the World Wide Web. Such term includes            
   directories, indices, references, pointers, and hypertext links.        
       ``(6) Material that is harmful to minors.--The term `material that  
   is harmful to minors' means any communication, picture, image, graphic  
   image file, article, recording, writing, or other matter of any kind    
   that--                                                                  
       ``(A) the average person, applying contemporary community standards,
   would find, taking the material as a whole and with respect to minors,  
   that such material is designed to appeal to or panders to the prurient  
   interest;                                                               
       ``(B) depicts, describes, or represents, in a manner patently       
   offensive with respect to minors, an actual or simulated sexual act or  
   sexual contact, an actual or simulated normal or perverted sexual act,  
   or a lewd exhibition of the genitals or female breast; and              
       ``(C) taken as a whole, lacks serious literary, artistic, political,
   or scientific value for minors.                                         
       ``(7) Minor.--The term `minor' means any person under 17 years of   
   age.''.                                                                 
 
          SEC. 4. NOTICE REQUIREMENT.                                             
 
     (a) Notice.--Section 230 of the Communications Act of 1934 (47 U.S.C.
  230) is amended--                                                       
       (1) by redesignating subsections (d) and (e) as subsections (e) and 
   (f), respectively;                                                      
    (2) by inserting after subsection (c) the following new subsection:    
 
     ``(d) Obligations of Interactive Computer Service.--A provider of    
  interactive computer service shall, at the time of entering an agreement
  with a customer for the provision of interactive computer service and in
  a manner deemed appropriate by the provider, notify such customer that  
  parental control protections (such as computer hardware, software, or   
  filtering services) are commercially available that may assist the      
  customer in limiting access to material that is harmful to minors. Such 
  notice shall identify, or provide the customer with access to           
  information identifying, current providers of such protections.''.      
     (b) Conforming Amendment.--Section 223(h)(2) of the Communications   
  Act of 1934 (47 U.S.C. 223(h)(2)) is amended by striking ``230(e)(2)''  
  and inserting ``230(f)(2)''.                                            
          SEC. 5. STUDY BY COMMISSION ON ONLINE CHILD PROTECTION.                 
 
     (a) Establishment.--There is hereby established a temporary          
  Commission to be known as the Commission on Online Child Protection (in 
  this section referred to as the ``Commission'') for the purpose of      
  conducting a study under this section regarding methods to help reduce  
  access by minors to material that is harmful to minors on the Internet. 
     (b) Membership.--The Commission shall be composed of 17 members, as  
  follows:                                                                
    (1)  Industry members.--The Commission shall include--                 
 
       (A) 2 members who are engaged in the business of providing Internet 
   filtering or blocking services or software;                             
       (B) 2 members who are engaged in the business of providing Internet 
   access services;                                                        
       (C) 2 members who are engaged in the business of providing labeling 
   or ratings services;                                                    
       (D) 2 members who are engaged in the business of providing Internet 
   portal or search services;                                              
       (E) 2 members who are engaged in the business of providing domain   
   name registration services; and                                         
       (F) 4 members who are engaged in the business of making content     
   available over the Internet.                                            
      Of the members of the Commission by reason of each subparagraph of   
   this paragraph, an equal number shall be appointed by the Speaker of the
   House of Representatives and by the Majority Leader of the Senate.      
       (2) Ex officio members.--The Commission shall include the following 
   officials:                                                              
    (A) The Assistant Secretary (or the Assistant Secretary's designee).   
 
    (B) The Attorney General (or the Attorney General's designee).         
 
       (C) The Chairman of the Federal Trade Commission (or the Chairman's 
   designee).                                                              
   (c)  Study.--                                                          
 
       (1) In general.--The duty of the Commission shall be to conduct a   
   study (and submit a report under subsection (d) on the study) to        
   identify technological or other methods, if any, to help reduce access  
   by minors to material that is harmful to minors on the Internet that--  
       (A) the Commission determines meet the requirements for use as      
   affirmative defenses for purposes of section 231(c) of the              
   Communications Act of 1934 (as added by this Act); or                   
    (B) may be used in any other manner to help reduce such access.        
 
      Any methods so identified shall be used as the basis for making      
   legislative recommendations to the Congress under subsection (d)(3).    
       (2) Specific methods.--In carrying out the study, the Commission    
   shall identify and analyze various technological tools and methods for  
   protecting minors from material that is harmful to minors, which shall  
   include--                                                               
       (A) a common resource for parents to use to help protect minors     
   (such as a ``one-click-away'' resource);                                
    (B) filtering or blocking software or services;                        
 
    (C) labeling or rating systems;                                        
 
    (D) age verification systems;                                          
 
 
       (E) the establishment of a domain name for posting of any material  
   that is harmful to minors; and                                          
       (F) any other existing or proposed technologies or methods for      
   reducing access by minors to such material.                             
       (3) Analysis.--In analyzing technologies and other methods          
   identified pursuant to paragraph (2), the Commission shall examine--    
    (A) the cost of such technologies and methods;                         
 
       (B) the effects of such technologies and methods on law enforcement 
   entities;                                                               
    (C) the effects of such technologies and methods on privacy;           
 
       (D) the extent to which material that is harmful to minors is       
   globally distributed and the effect of such technologies and methods on 
   such distribution; and                                                  
    (E) the accessibility of such technologies and methods to parents.     
 
     (d) Report.--Not later than 1 year after the enactment of this Act,  
  the Commission shall submit a report to the Congress containing the     
  results of the study under this section, which shall include--          
       (1) a description of the technologies and methods identified by the 
   study and the results of the analysis of each such technology and       
   method;                                                                 
       (2) the conclusions and recommendations of the Commission regarding 
   each such technology or method;                                         
       (3) recommendations for legislative or administrative actions to    
   implement the conclusions of the committee; and                         
       (4) a description of the technologies or methods identified by the  
   study that may be used as affirmative defenses for purposes of section  
   231(c) of the Communications Act of 1934 (as added by this Act).        
     (e) Staff and Resources.--The Assistant Secretary for Communication  
  and Information of the Department of Commerce shall provide to the      
  Commission such staff and resources as the Assistant Secretary          
  determines necessary for the Commission to perform its duty efficiently 
  and in accordance with this section.                                    
     (f) Termination.--The Commission shall terminate 30 days after the   
  submission of the report under subsection (d).                          
     (g) Inapplicability of Federal Advisory Committee Act.--The Federal  
  Advisory Committee Act (5 U.S.C. App.) shall not apply to the           
  Commission.                                                             
 
                                    PURPOSE AND SUMMARY                           
 
      The purpose of H.R. 3783 is to amend the Communications Act of 1934  
   by prohibiting the sale of pornographic materials on the World Wide Web 
   (or the Web) to minors. H.R. 3783 has been carefully drafted to respond 
   to the Supreme Court's decision in Reno v. ACLU, 117 S.Ct. 2329 (1997)  
   and the Committee believes that the bill strikes the appropriate balance
   between preserving the First Amendment rights of adults and protecting  
   children from harmful material on the World Wide Web. Notwithstanding   
   H.R. 3783, the Committee recognizes that parents, educators, and        
   industry must continue to play a role and find ways to help protect     
   children from being exposed to harmful material that can be found on the
   Internet.                                                               
      H.R. 3783 prohibits a person from knowingly making, by means of the  
   World Wide Web, any communication for commercial purposes that is       
   harmful to minors, unless such person makes a good faith effort to      
   restrict access by minors. A person violating H.R. 3783 could be subject
   to criminal and civil penalties. The bill explicitly states that only   
   entities engaged in the commercial business of making communications    
   that contain material harmful to minors could be held liable under the  
   bill. These entities include a person who knowingly causes the material 
   that is harmful to minors to be posted on the World Wide Web or         
   knowingly solicits such material to be posted on the World Wide Web. The
   general prohibition would not be applicable to entities that merely     
   access, transport, or link the communications of another person.        
      The bill provides examples of ways a business would be in compliance 
   with the law by identifying ``affirmative defenses'' to prosecution.    
   Such examples include the use of a credit card, debit account, adult    
   access code, or adult personal identification number. There is also a   
   general affirmative defense for a business that makes a good faith      
   effort to restrict a minor's access to material harmful to minors. In   
   addition, the bill requires providers of interactive computer services  
   to notify customers, at the time the customer signs up for service, that
   parental control protections, such as computer hardware, software, and  
   filtering services, are commercially available that may assist the      
   customer in limiting access to material that is harmful to minors.      
   Finally, the bill establishes a Commission on Online Child Protection   
   that is required to study technological and other methods to help reduce
   access by minors to material that is harmful to minors on the Internet. 
   The Commission is required to submit its findings within one year from  
   the date of enactment of the bill.                                      
      H.R. 3783 presents no ban on the distribution or display of material 
   harmful to minors, nor does it impose any unreasonable burdens on       
   adults. Rather, it simply requires the sellers of such material to      
   recast their messages so that they are not readily available to         
   children. Thus, the Committee believes that H.R. 3783 is currently the  
   most effective, yet least restrictive, way to reduce a minor's access to
   harmful material.                                                       
                            BACKGROUND AND NEED FOR LEGISLATION                   
 
                              I. Background                              
 
           A. Electronic commerce                                                  
 
      For over two hundred years, the Congress of the United States has    
   sought to protect and facilitate the development of interstate and      
   foreign commerce. From regulating matters regarding ports of entry into 
   the United States (18th century) to the creation of a national railroad 
   system (19th century) to establishing communications policy (20th       
   century), Congress' duty remains constant: to uphold the                
   responsibilities delegated to the Congress by the people with respect to
   the regulation of commerce among the several States.                    
      As the Nation approaches the next millennium, Congress must stand    
   ready to ``keep pace with the progress of the country, and adapt        
   [itself] to the new developments of time and circumstances.'' Pensacola 
   Tel. Co. v. Western Union Tel. Co., 96 U.S. 1, 9 (1878)). One such      
   development is the explosive growth of electronic commerce. In general, 
   electronic commerce is the term used to describe the buying, selling, or
   transfer of goods and services over electromagnetic transmission media. 
   The media could include wireline and wireless networks, both of which   
   have been previously held to be interstate in nature. While electronic  
   commerce is becoming a more common way to conduct business, many        
   industries have been engaged in it for years. Bank-wire transactions,   
   the use of automatic-teller machines, credit card verifications, and the
   purchase of goods or services over the telephone all constitute a type  
   of electronic commerce.                                                 
 
      The growth of electronic commerce is having a profound impact on the 
   nation's economy. Over the past decade, the information technology      
   sector of our economy has grown rapidly and is seen by many as playing a
   leading role in the current economic expansion. According to The        
   Emerging Digital Economy, a recent Department of Commerce report on     
   electronic commerce, the information technology sector now constitutes  
   8.2 percent of the nation's GDP, up from 4.5 percent in 1985. At the end
   of 1997, approximately 7.4 million Americans were employed in this      
   field. Many are predicting even stronger growth in the future. Estimates
   of the total value of economic activity conducted electronically in 2002
   range from $200 billion to more than $500 billion, compared to just $2.6
   billion in 1996. While other mediums have been used to enable electronic
   commerce in the past, the growth and use of the Internet will likely be 
   the basis for additional growth in the future.                          
           B. The Internet                                                         
 
      The Internet was largely the domain of academic researchers from its 
   creation in the late 1960s until the start of the 1990s. In 1991, the   
   National Science Foundation lifted its restriction on commercial        
   activity on the Internet. Also in 1991, the World Wide Web was created. 
   In 1993, the first commercially available Web browser was introduced,   
   thus allowing millions of consumers and businesses an easy method of    
   navigating on the Internet. These events, combined with the widespread  
   availability of inexpensive yet powerful personal computers (that       
   allowed computer users to access graphics, audio, and video on the World
   Wide Web in addition to text), led to the dramatic growth of the        
   Internet and online services.                                           
           C. Adult entertainment industry                                         
 
      One such market that has flourished on the Internet is sale of       
   pornography. According to Wired Magazine, there are approximately 28,000
   adult Web sites promoting pornography on the Internet and these sites   
   generate close to $925 million in annual revenues. While legitimate U.S.
   businesses should remain free from unnecessary government regulation,   
   the adult entertainment industry has traditionally been subject to      
   restrictions because of the danger posed by pornographic material to    
   children. Parents, educators, and civic groups agree that exposure to   
   pornography shapes a child's perspective on sexual activity in a manner 
   that may be inconsistent with the goal of healthy sexual development.   
   For example, some pornography consists of photographs, videos,          
   magazines, and games that are violent, abusive, and degrading, and      
   certainly counterproductive to learning about sexual activity in an     
   appropriate educational or home setting.                                
      Publishers of pornography, like all publishers in the United States, 
   are protected by the First Amendment which provides that ``Congress     
   shall make no law . . . abridging the freedom of speech.'' U.S. Const., 
   Amdt. 1. The amendment prohibits government restrictions on ``the       
   freedom of speech,'' but not all speech such as obscenity or child      
   pornography. Thus, while the Internet is the medium of choice for       
   electronic commerce, it is also the medium of choice that stimulates a  
   marketplace of ideas generated from Web pages, newsgroups, listservs,   
   chat rooms, e-mail, and bulletin board services, all of which have the  
   ability to reach more Americans on more topics, including pornography,  
   than we have seen from traditional mediums of communications in the     
   past.                                                                   
           D. The Communications Decency Act of 1996                               
 
      As part of the Telecommunications Act of 1996 (the Telecommunications
   Act), Congress enacted two statutory provisions designed to protect     
   minors from ``indecent'' and ``patently offensive'' communications on   
   the Internet. These statutory provisions were included in Title V of the
   Telecommunications Act, known as the Communications Decency Act of 1996 
   (the CDA) and were codified as part of the Communications Act of 1934,  
   as amended (the Act). 47 U.S.C. 223. The first provision, Section 223(a)
   of the Act, prohibited the knowing transmission of obscene or indecent  
   messages to any recipient under 18 years of age. The second provision,  
   Section 223(d) of the Act, prohibited the sending or displaying of      
   patently offensive messages in a manner that is available to a person   
   under 18 years of age.                                                  
      The breadth of these provisions were qualified by two affirmative    
   defenses. One covers those who take ``good faith, reasonable, effective,
   and appropriate actions'' to restrict access by minors to the prohibited
   communications. Section 223(e)(5)(A). The other covers those who        
   restrict access to covered material by requiring certain designated     
   forms of age proof, such as a verified credit card or an adult          
   identification number or code. Section 223(e)(5)(B).                    
      Immediately after the Telecommunications Act was signed into law, two
   lawsuits were filed challenging the constitutionality of Sections       
   223(a)(1) and 223(d). The two cases were consolidated and the Federal   
   Court for the Eastern District of Pennsylvania held that part of Section
   223(a)(1) was unconstitutional with respect to ``indecent''             
   communications (but not obscenity) and that all of Section 223(d) was   
   unconstitutional. ACLU v. Reno, 929 F.Supp. 824 (E.D.Pa. 1996), aff'd,  
   Reno , 117 S.Ct. at 2329. The government appealed the case to the       
   Supreme Court and in Reno , the Court affirmed the lower court's ruling.
   117 S.Ct. at 2329. The Court concluded that the CDA lacks the precision 
   that the First Amendment requires when a statute regulates the content  
   of speech and that the CDA effectively suppresses a large amount of     
   speech that adults have a constitutional right to receive. Id. at 2346. 
      Specifically, the Court noted the lack of legislative hearings, the  
   use of different linguistic forms for ``indecent,'' the broad definition
   of indecent, the heightened level of review because of the criminal     
   nature of the statute, the broad applicability of the statute to        
   commercial and noncommercial speech, the failure of the government to   
   consider less restrictive alternatives, and unreliable affirmative      
   defenses as fundamental problems with the CDA. Although the Court stated
   that the ``CDA's burden on protected speech cannot be justified,'' id.  
   at 2346, it went on to say that such problems ``could be avoided by a   
   more carefully drafted statute.'' Id.                                   
 
           E. Section 230 of the Communications Act                                
 
      In addition to Section 223, as part of the Telecommunications Act,   
   Congress added Section 230 to the Communications Act. 47 U.S.C. 230.    
   Section 230 states that providers and users of interactive computer     
   services shall not be treated as publishers of any information provided 
   by another information content provider. Section 230 also provides      
   liability protections for providers and users of interactive computer   
   services by permitting them to remove or restrict access to             
   inappropriate materials.                                                
                  II. The Continued Need for Legislation                 
 
           A. The growth of the Internet                                           
 
      Over the past several years, the popularity and use of the Internet  
   has grown dramatically. Since January 1996 (one month before the CDA was
   enacted), the number of host computers (i.e., machines physically       
   connected to the Internet) has more than tripled from approximately 9.4 
   million hosts to more than 29.6 million hosts. The number of users has  
   also increased. According to a recent study by Nielsen Media Research,  
   approximately 70.2 million adults use the Internet in the United States.
   This figure represents an increase from approximately 52 million adults 
   using the Internet a mere nine months ago. With respect to children     
   using the Internet, the Chairman of the Federal Trade Commission        
   recently stated that the population of minors on the Internet has almost
   doubled to 16 million from a year ago. Testimony of Robert Pitosfsky,   
   Chairman, Federal Trade Commission, before the Senate Committee on      
   Commerce, Science, and Transportation (September 22, 1998).             
      In addition, a national effort is underway to connect every school   
   and library to the Internet. See In the Matter of Federal-State Joint   
   Board on Universal Service, Report and Order, CC Docket 96 45, FCC 97   
   157 (May 8, 1997). According to a 1997 U.S. Department of Education     
   survey, 78 percent of all public schools have access to the Internet. Of
   these schools, approximately 27 percent of the classrooms that are used 
   for instructional purposes have access to the Internet, with at least 43
   percent of the schools that have Internet access in 5 or more           
   instructional classrooms. Furthermore, the Department of Education      
   predicts that 95 percent of all schools will have access to the Internet
   by the year 2000. Internet Access in Public Schools, National Center for
   Education Statistics, U.S. Department of Education (Feb. 1998).         
      While clearly the Internet is not yet as ``invasive'' as             
   broadcasting, its popularity and growth because of electronic commerce  
   and expansive Federal subsidy programs make it widely accessible for    
   minors. The Committee recognizes that parents are responsible for the   
   custody, care, and nurture of the child, but the widespread availability
   of the Internet presents opportunities for minors to access information 
   on the Internet that can frustrate parental supervision and control.    
   Moreover, because of sophisticated, yet easy to use navigating software,
   minors who can read and type are capable of conducting Web searches as  
   easily as operating a television remote. While a four-year old may not  
   be as capable as a thirteen year old, given the right tools (e.g., a    
   child trackball and browser software) each has the ability to ``surf''  
   the Net and will likely be exposed to harmful material.                 
           B. The availability of material harmful to minors                       
 
      As the Internet has grown, so has the availability of on-line        
   pornography. In 1996, there were estimates that almost 50 percent of the
   content available on the Web was unsuitable for children. ``Half of 'Net
   Content Said Unsuitable for Children,'' Reuters Financial Service       
   (January 10, 1996). Two years later, as of 1998, the estimates have     
   increased to almost 70 percent of the traffic on the Web is             
   adult-oriented material. ``The Net's Dirty Little Secret: Sex Sells,''  
   Upside Publishing Company (April 1998). Sexually explicit material on   
   the Internet includes text, pictures, and communications via chat rooms.
   Purveyors of such material generally display many unrestricted and      
   sexually explicit images to advertise and entice the consumer into      
   engaging in a commercial transaction. Currently, minors can move from   
   Web page to Web page, viewing and downloading this material without     
   restriction. Once posted on the Internet, sexually explicit material has
   entered all communities.                                                
      While much of the sexually explicit material is accessed             
   deliberately, minors often stumble upon it by mistake. There are        
   numerous hard-core pornography sites on the Internet using ``copycat    
   URLs'' to take advantage of innocent mistakes to bring traffic to their 
   graphic sexual images. First, children searching the Internet for the   
   official Web site of the White House can be confronted by hard-core     
   pornography by mistyping ``www.whitehouse.com'' rather than             
   ``www.whitehouse.gov.'' Second, children who mistype                    
   ``www.betscape.com'' instead of ``www.netscape.com'' or                 
   ``www.sharware.com'' instead of ``www.shareware.com'' will be confronted
   with live sex shows and other X-rated pictures. Finally, brand names are
   often misused in ways that direct people to sexually explicit material. 
   Testimony of Enough is Enough, Hearing on Legislative Proposals to      
   Protect Children from Inappropriate Materials on the Internet, House    
   Commerce Committee (September 11, 1998) (Committee Hearing). Another set
   of examples involves children using Internet search engines to look up  
   innocent information. Searches for toys, dollhouses, girls, boys, pets, 
   teen, cheerleader, actress, gang, beanie babies, bambi, and doggy will  
   lead to material harmful to minors. Testimony of Enough is Enough,      
   Committee Hearing; Testimony of National Law Center for Children and    
   Families, Committee Hearing.                                            
      Moreover, even though some Web sites contain warnings that the       
   material on that Web site is adult-oriented, most provide no warnings,  
   or if they do provide a warning, there is sexually explicit material on 
   the same page as the warning. Consequently, the odds are no longer slim 
   that a user will enter a sexually explicit site by accident. Contra 929 
   F. Supp. at 16.                                                         
           C. Exposure to sexually explicit material harms children                
 
      A child's sexual development occurs gradually throughout childhood.  
   Exposure to pornography shapes children's sexual perspectives by        
   providing them with information on sexual                               
 
                    activity intended for adults. The type of information provided
          by pornography, however, does not provide children with a normal sexual 
          perspective. Unlike learning provided in an educational or home setting,
          exposure to pornography is counterproductive to the goal of healthy and 
          appropriate sexual development in children. It teaches without          
          supervision or guidance, inundating children's minds with graphic       
          messages about their bodies, their own sexuality, and those of adults   
          and children around them. Dr. Gary Brooks, Assistant Chief of Psychology
          Services, Department of Veterans Affairs, The Centerfold Syndrome       
          (1996).                                                                 
      Testimony before the Committee also highlighted the dangers of       
   exposing minors to harmful material. One witness testified that         
   pornography produces ``permission-giving beliefs'' for sexual pathology 
   and sexual violence and that pornography produces distortions that      
   change an individual's belief system. As a result, children exposed to  
   pornography can become victims or victimizers, encouraged by the strong 
   sexual images contained in pornography found on the World Wide Web.     
   Testimony of Dr. Mary Anne Layden, Committee Hearing. Similarly,        
   testimony has been inserted into the record describing the body of      
   research indicating that pornography has significant impact on attitudes
   and values, and that such impact is clearly harmful to minors. Testimony
   of Enough is Enough, Committee Hearing.                                 
                   III. Constitutionality of H.R. 3783                   
 
           A. Congress has a compelling interest in protecting children            
 
      The Supreme Court's precedent is clear in establishing the           
   government's compelling interest in protecting children from exposure to
   sexually explicit material. The Court has repeatedly articulated such an
   interest in Ginsberg v. New York, 390 U.S. 629, 636 43 (1968); FCC v.   
   Pacifica Foundation, 438 U.S. 726, 748 50 (1978); New York v. Ferber,   
   458 U.S. 747, 757 (1982); Sable Communications of Cal. v. FCC, 492 U.S. 
   115, 126 128 (1989); Denver Area Ed. Tel. Consortium v. FCC, 116 S.Ct.  
   2374, 2391 (1996); and 117 S.Ct. at 2346, 2348. As stated by the Court  
   in Ferber: ``It is evident beyond the need for elaboration that the     
   State's interest in safeguarding the physical and psychological         
   well-being of a `minor' is `compelling'.'' 458 U.S. at 757. ``This      
   interest extends to shielding minors from the influence of literature   
   that is not obscene by adult standards.'' 492 U.S. at 126. Whether the  
   restrictions have required pornography to be sold behind the counter at 
   a drug store, on blinder racks at a convenient store, in a shrink wrap  
   at a news stand, or broadcast between certain hours of the night, the   
   restrictions have sought to shield children from exposure to material   
   that could distort their views of sexuality. The purpose of H.R. 3783 is
   to extend those protections in cyberspace by restricting the sale of    
   material harmful to minors over the World Wide Web.                     
      Though the primary responsibility for protecting the welfare of      
   children resides with the parent, the parent deserves the support of the
   law. This principle is of particular importance as it relates to        
   shielding children from exposure to sexually explicit material over the 
   Web, where they may be exposed to such material outside the home, at a  
   friend's house, at the local library or school. ``While the supervision 
   of children's reading may be best left to their parents, the knowledge  
   that parental control or guidance cannot always be provided and         
   society's transcendent interest in protecting the welfare of children   
   justify reasonable regulation of the sale of material to them.'' People 
   v. Kahan, 15 N.Y.2d 311, 312, 206 N.E.2d 333, 334 (1965), cited in      
   Ginsberg, 390 U.S. at 640.                                              
           B. H.R. 3783 is narrowly tailored                                       
 
      The Committee recognizes the First Amendment rights of adults and    
   carefully drafted H.R. 3783 not to impose an unnecessary burden on those
   rights. For example, the prohibition on making communications that are  
   harmful to minors applies only to material posted on the World Wide Web.
   The World Wide Web is one type of remote information retrieval system,  
   among many. H.R. 3783 does not apply to content distributed through     
   other aspects of the Internet such as one-to-one messaging (e-mail),    
   one-to-many messaging (list-serv), distributed message databases (USENET
   newsgroups); real time communications (Internet relay chat); real time  
   remote utilization (telnet) or remote information retrieval other than  
   the World Wide Web (ftp and gopher).                                    
      H.R. 3783 is also limited to the commercial distribution of material 
   harmful to minors and does not affect noncommercial speech. In addition,
   the bill defines harmful to minors in a manner that parallels many State
   statutes that have been upheld by the Supreme Court and only restricts  
   access for minors 16 years old or younger. Finally, H.R. 3783 provides  
   maximum flexibility for entities engaged in the business of selling     
   pornography by providing them with a host of good faith defenses from   
   prosecution if they adopt reasonable measures to restrict a minor's     
   access to material that is harmful.                                     
           C. H.R. 3783 is consistent with Reno v. ACLU                            
 
      H.R. 3783 addresses the specific concerns raised by the Supreme Court
   in Reno v. ACLU. In ruling against the indecency portions of the CDA,   
   the Court stated that ``the government interest in protecting children  
   from harmful materials . . . does not justify an unnecessary broad      
   suppression of speech addressed to adults.'' 117 S.Ct. at 2346. H.R.    
   3783 was crafted in a way to respond to the Supreme Court's concerns and
   thus should not result in an unnecessary broad suppression of speech.   
            1. The definition of harmful to minors                                  
 
      The principal concern of the Court with the CDA was that the         
   ``indecency'' and ``patently offensive'' content standards used in the  
   challenged sections of the CDA were overly vague as applied to the      
   Internet. The Court also noted that the CDA's definition of             
   ``indecency'' did not conform with Ginsberg because it lacked an element
   ensuring that material of serious literary, artistic, political, or     
   scientific value would not be swept up in the statute. 117 S.Ct. at     
   2345.                                                                   
      H.R. 3783 conforms to the standards identified in Ginsberg, as       
   modified by the Supreme Court in Miller v. California, 413 U.S. 15      
   (1973). H.R. 3783 modifies the ``patently offensive'' language by       
   explicitly describing the material that is harmful to minors. In        
   particular, it includes                                                 
 
                    material that displays an actual or simulated sexual act or   
          sexual contact, actual or simulated normal or perverted sexual acts, or 
          a lewd exhibition of the genitals or female breast. H.R. 3783 mirrors   
          many of the State laws already in place, which have been upheld by the  
          Supreme Court. The new harmful to minors definition also includes the   
          requirement that the material is harmful to minors only if ``taken as   
          whole, lacks serious literary, artistic, political, or scientific value 
          for minors.''                                                           
      The ``harmful to minors'' standard is also familiar to the Federal   
   courts, even though that standard is not used in present Federal        
   statutes, since the Federal district courts and Federal appellate courts
   have routinely heard challenges to State ``harmful to minors'' display  
   laws and upheld those laws on a regular basis over the years. See, e.g.,
   Crawford v. Lungren, 96 F.3d 380 (9th Cir. 1996), cert. denied, 117 S.  
   Ct. 1249 (1997); American Booksellers v. Webb, 919 F.2d 1493 (11th Cir. 
   1990); American Booksellers Ass'n v. Com. of Va, 882 F.2d 125 (4th Cir. 
   1989); Upper Midwest Booksellers v. City of Minneapolis, 780 F.2d 1389  
   (8th Cir. 1985); M.S. News Co. v. Casado, 721 F.2d 1281 (10th Cir.      
   1983).                                                                  
            2. Scope limited to commercial transactions                             
 
      The Court in Reno also criticized the CDA for its breadth with       
   respect to commercial and non-commercial transactions. The Court stated 
   that the ``[b]readth of the CDA's coverage is wholly unprecedented.     
   Unlike the regulations upheld in Ginsberg and Pacifica, the scope of the
   CDA is not limited to commercial speech or commercial entities. Its     
   open-ended prohibitions embrace all non-profit entities and individuals 
   posting indecent messages or displaying them in the presence of         
   minors.'' 117 S.Ct. at 2347. By contrast, H.R. 3783 applies only to     
   commercial transactions involving the display of material that is       
   harmful to minors over the World Wide Web. It does not prohibit         
   non-commercial activities over the Web, or over the Internet for that   
   matter, and thus the concerns raised by the Supreme Court are no longer 
   applicable. The Committee notes that a large quantity of information    
   will still be available to minors who are capable of accessing these    
   non-commercial sites on the Web and on the Internet. As a result, as    
   part of Section 5 of H.R. 3783, the Committee anticipates that the      
   industry will suggest legislative proposals on how to address the       
   difficult issue of restricting a minor's access to inappropriate        
   material with respect to these aspects of the Internet.                 
                        3. Age verification systems are technologically and         
            economically feasible                                                   
      The Court in Reno also was concerned that age verification systems   
   under the CDA were not technologically feasible for certain             
   non-commercial, private, and on-line services such as e-mail and chat   
   rooms. 117 S.Ct. at 2347. Or, even where technological feasibility was  
   acknowledged, the Court was concerned that such measures would be cost  
   prohibitive to some non-commercial content providers. Id. The Court     
   recognized, however, with regard to restricting access by minors by     
   requiring use of a verified credit card or adult verification, that     
   ``[s]uch verification is not only technologically available but is used 
   by commercial providers of sexually explicit material. These providers, 
   therefore, would be protected by the defense.'' 117 S.Ct. at 2349.      
 
      H.R. 3783 provides a legitimate defense for commercial purveyors of  
   pornography. As discussed above, H.R. 3783 does not apply to            
   noncommercial sites, nor does it apply to those aspects of the Internet 
   outside the World Wide Web. Thus, the Committee agrees with the Supreme 
   Court that commercial distributors of material harmful to minors will be
   protected by these defenses if they make a good faith effort to restrict
   a minor's access to harmful material.                                   
      Unlike other restrictive approaches, age verification systems stop a 
   minor's access at the source of the communication and require no        
   independent judgments to be made about the content of the material. The 
   Committee notes that the FCC's dial-a-porn regulations, which were      
   upheld in Dial Information Services Corp. v. Thornburgh, 938 F.2d 1535  
   (2d Cir. 1991), cert. denied, 502 U.S. 1072 (1992), and cited with      
   approval in Sable, 429 U.S. 115 (1989), provided a defense to           
   prosecution by allowing a provider, before the transmission of a        
   message, to restrict customer access by requiring either payment by     
   credit card or authorization by access or identification code. In Sable 
   , the Court found that such commercial restrictions would be effective  
   in excluding most juveniles, stating: ``the FCC's technological approach
   to restricting dial-a-porn messages to adults who seek them would be    
   extremely effective, and only a few of the most enterprising and        
   disobedient young people would manage to secure access to such          
   messages.'' 429 U.S. at 130.                                            
      In fact, the use of the age verification means prescribed under H.R. 
   3783 are standard practice among some commercial distributors of        
   pornography on the Web. Testimony before the Committee revealed that    
   adult verification services are effective and can be used successfully  
   to screen minors from adult material. Testimony of Laith Paul Alsarraf, 
   Cybernet Ventures, Committee Hearing. One such service is sold by       
   Cybernet Ventures, an industry leader in age verification systems. This 
   service utilizes age verification software that contains a script that  
   is embedded into a Web page. The script is placed at the entrance of a  
   website that may contain material that is harmful to minors thus        
   preventing further access or exposure of the website's content by       
   requiring a personal identification number, which is only available to  
   adults. If a consumer does not have a personal identification number    
   (PIN), a link is provided for them to obtain one from the age           
   verification system associated with that site. Consumers may obtain a   
   PIN instantly by submitting an application to an age verification       
   system. The credit card and other information submitted by a consumer   
   are verified by a proprietary age verification system to determine      
   validity. If the information is deemed to be valid, a working adult PIN 
   is issued. The process of verifying the information submitted generally 
   takes less than one minute and often only 5 to 10 seconds. Consumers may
   also apply for a PIN by fax. Id. Testimony received by the Committee    
   shows that there are at least 25 organizations assigning adult PINs and 
   age verification services today. Testimony of National Law Center for   
   Children and Family, Committee Hearing (Tab K).                         
      It is not only economically feasible for commercial content providers
   to comply with the bill, but profitable for them to do so. Adult        
   verification systems generally require the user to pay for entrance to a
   site, although users have many ways to subscribe. Given that the scope  
   of the bill is limited to commercial activity, and that the age         
   verification system procedures prescribed under the bill represent      
   standard procedures for conducting commercial activity on pornographic  
   Web sites, the effect of the bill is simply to reorder the process in   
   such a way as to require age verification before pornography is made    
   available, essentially requiring the commercial pornographer to put     
   sexually explicit images ``behind the counter.'' The commercial         
   pornographer is not otherwise restricted in his trade.                  
            4. Parents maintain control and minor is defined as those under 17      
 
      In Reno , the Court expressed concern that the CDA wrested primary   
   authority over the child from the parent if the statute is construed to 
   make criminal a parental choice to make sexually explicit material      
   available to a minor. 117 S.Ct. at 2348. H.R. 3783 contains no          
   restriction on the discretion of the parent to purchase material for    
   their children who are under the age of 17. In other words, a parent    
   should not be liable under H.R. 3783 for merely sharing sexually        
   explicit material with a minor. In addition, a minor is defined under   
   the bill as persons under 17 years of age.                              
            5. Congress may regulate services offered over the Internet             
 
      The Supreme Court also questioned Congress's role in regulating the  
   Internet. The Court distinguished the Internet from other distribution  
   mediums and stated that ``[n]either before nor after the enactment of   
   the CDA have the vast democratic fora of the Internet been subject to   
   the type of government supervision and regulation that has attended the 
   broadcast industry.'' 117 S.Ct. at 2343. Regulation of the Internet     
   does, however, fall within the jurisdiction of the Congress under its   
   Article I, Section 8, Clause 3 authority. Regardless of whether Congress
   exercises its authority under this section, the power of Congress to    
   regulate in this area remains constant. During the 105th Congress, bills
   have moved through both House and Senate authorizing committees that    
   address intellectual property rights over the Internet, whether the     
   Internet should be taxed, and how communications over the Internet can  
   be kept secure through the use of encryption technologies. Merely       
   because the Internet itself has not been widely regulated because of its
   organizational structure and lack of dominance by a single entity should
   not imply that Congress cannot regulate certain activity conducted over 
   the Internet, including regulating the display of harmful material to   
   children on the Web. In fact, in Reno , the Supreme Court explicitly    
   upheld Congress's ability to regulate obscene communications transmitted
   over the Internet. 117 S.Ct. at 2350.                                   
            6. Legislative hearings highlight the problem                           
 
      In Reno, the Court noted that Congress did not hold legislative      
   hearings on the CDA, nor did Congress reach any detailed findings       
   addressing the problem of distributing indecent materials to minors over
   the Internet. 117 S.Ct. at 2348. On the other hand, both the House and  
   Senate during the 105th Congress have extensively considered ways to    
   reduce a minor's access to harmful material. The Senate Committee on    
   Commerce, Science, and Transportation held a hearing to consider ways to
   protect children on the Internet on February 10, 1998, as did the House 
   Committee on Commerce on September 11, 1998. The testimony received     
 
                    highlighted the problem of children getting easy access to    
          pornography and the need for Congressional action to stop the widespread
          distribution of material harmful to minors.                             
           D. Alternatives considered by the committee                             
 
      In light of the Reno decision, the Committee has thoughtfully and    
   thoroughly considered a number of ways to help protect children from    
   being exposed to harmful material. Each proposal has merit, but the     
   Committee concludes that H.R. 3783 is currently the most effective, yet 
   least restrictive approach that should be taken given the current state 
   of technology. The alternatives considered generally involve zoning and 
   blocking techniques that rely on screening material after it has been   
   posted on the Internet or retrieved by the end-user. The Committee      
   believes that it is more effective to screen the material prior to it   
   being sent or posted to minors, and that such a restriction imposes     
   minimal burdens on adults. The Committee's general conclusion is        
   supported by the Second Circuit in the Dial Information Services        
   decision, where the appellate court stated:                             
 
                     Common sense dictates that a presubscription       
          requirement, like requirements for payment by credit card     
          before a message is transmitted, for use of an authorized     
          access or identification card before transmission . . . is    
          more likely to achieve the goal sought than blocking after one
          or more occasions of access. It always is more effective to   
          lock the barn door before the horse is stolen. 938 F.2d at    
          1542.                                                         
            1. Market-based solutions in general                                    
 
      The industry has taken some significant steps to reduce a child's    
   access to inappropriate material. There have been a number of online    
   summits where policymakers and industry have discussed the ``ugly'' side
   of the Internet (e.g., kidsonline.org and americalinksup.org). Given the
   public policy sensitivities and potential demand for new products, the  
   industry has developed new technologies that will help screen material  
   for parents and educators. Some of the new products include Secure      
   Learning (Spyglass, Inc.), NetWatch (Netscape Communications), Kids     
   CyberHighway (AT&T), Cyber Patrol (The Learning Company), Disney's      
   Internet Guide (The Walt Disney Company), Parental Controls (AOL), Net  
   Nanny (Net Nanny Software, Inc.), X-Stop (Log On Data Corp.), Net       
   Shepherd (Net Shepherd, Inc.) and Internet Explorer that incorporates a 
   content advisor feature (Microsoft). In addition, there have been a     
   number of educational trade shows that help inform educators about new  
   products that enhance online safety for children. The Committee applauds
   the efforts of industry and is confident that demand for new products   
   will continue to grow.                                                  
      Unfortunately, industry-led efforts have not provided a national or  
   uniform solution to the problem of children accessing harmful material. 
   To quote the CEO of Net Nanny, one of the leading filtering software    
   developers in the nation:                                               
 
                     Asking us to come up with one specific             
          technological solution to the child safety issue is an        
          extremely difficult proposition because we are not all in the 
          same line of business. Some of us are filtering companies,    
          others are ISPs and still others are search engine and browser
          companies. No single company has complete control over the    
          access points to the Internet or is responsible for all the   
          content that is produced online.                              
 
    Letter from Gordon Ross, President and CEO, Net Nanny Software        
  International, Inc. to The Honorable Joseph Lieberman and The Honorable 
  Rick White, Members of Congress (August 4, 1998). H.R. 3783 provides a  
  national solution and places the burden on the appropriate entity, the  
  person selling the harmful material on the Web.                         
            2. Zoning techniques                                                    
 
      A number of proposals have been suggested that would identify or     
   classify material harmful to minors. ``Zoning'' effectively places the  
   seller of pornography in a red-light district in cyberspace. While each 
   of these proposals are technically feasible today, mandating their use  
   raises a host of additional issues that jeopardize their success and    
   effectiveness. In addition, zoning techniques alone do not solve the    
   problem of minor's accessing harmful material. Zoning techniques must be
   combined with a blocking or filtering service and may require the same  
   type of age verification system specified in H.R. 3783.                 
             a. Tagging                                                             
 
      Tagging is a term used to describe information about a Web page. Some
   tags, known as ``meta tags,'' do not affect how the Web page is         
   displayed. Instead, meta tags provide information such as who created   
   the page, how often the page is updated, what the page is about, and    
   which keywords represent the page's content. Many search engines use    
   tags when building their indices. As a result of tagging, websites may  
   contain information that will alert users of adult content. In order for
   tagging to be used as an effective zoning technique, a requirement of   
   tagging must be complied with by every provider of material harmful to  
   minors. A requirement would then need to be imposed on the hardware and 
   software community to develop products that would include capabilities  
   to block ``tagged'' material. The Committee does not believe that level 
   of regulation of the computer industry is warranted at this time, nor   
   does it believe that it has the luxury of time to wait for industry to  
   develop uniform blocking standards while material harmful to minors is  
   being distributed to children today.                                    
             b. Ratings                                                             
 
      Voluntary ratings systems of Web sites have been somewhat successful.
   Several systems have already been developed and show promise in allowing
   parents to block objectionable material. The most popular rating systems
   rely on the Platform for Internet Content Selection (PICS) protocol.    
   PICS is not a rating system, but rather a technical standard that can be
   used                                                                    
 
                    to enable the rating of sites. Two current rating systems     
          (RSACi and SafeSurf) allow websites to self-rate using the PICS         
          protocol. Under RSACi, the owner of the Website rates itself on a scale 
          of 0 4 in four categories (sex, violence, nudity, and language). A third
          system, NetShepherd, uses a third party to rate all sites. The drawbacks
          of rating systems are that few sites are actually rated today and it is 
          unlikely that commercial websites would rate themselves. Alexa Internet 
          reports that in August 1997 they searched a collection of 88,647 Web    
          pages . . . and found 2363 had RSACi labels and 483 had SafeSurf labels.
          Technology Inventory, Internet Online Summit--Focus of Children         
          (7/29/98). To mandate self-rating would raise additional First Amendment
          issues because entities such as online newspapers could be asked to rate
          their content. Furthermore, without the use of filters or other         
          screening methods, ratings could actually help a minor find adult       
          material.                                                               
             c. Domain name zoning                                                  
 
      Segregating adult content was also considered by the Committee.      
   Schemes have been proposed to create a generic top level domain on the  
   Internet that would be specifically reserved for adult content. For     
   example, a set of domain names could be adult only, such as             
   ``www.site1.adult'' or ``www.site1.xxx.'' There are no technical        
   barriers to creating an adult domain, and it would be very easy to block
   all websites within an adult domain. Unfortunately, the domain name     
   registration system is in a state of flux. The Internet industry is     
   currently in the process of creating a self-governing structure that    
   will manage the future domain name system and IP number allocation      
   process. In addition, changes made to the top level domains under the   
   new self-governing structure, will have international consequences and  
   the United States should not act without reaching broad industry and    
   international consensus. With respect to the creation of a second level 
   domain within the .us domain, such as ``www.site1.xxx.us,'' which       
   clearly is within the control of the United States, zoning the adult    
   entertainment industry by itself does not solve the problem. Moving     
   commercial sellers of material harmful to minors into a ``.xxx.us''     
   domain, like tagging, must be combined with a blocking service. As      
   stated above, the Committee is reluctant to begin regulating the        
   computer industry or waiting for uniform blocking techniques to be      
   developed. Anything short of a mandate on regulating the source of the  
   pornographic material would not result in sufficiently protecting       
   children from accessing material that is harmful.                       
            3. Blocking or filtering techniques                                     
 
      Blocking and filtering techniques vary and can be as simple as       
   blocking access to particular sites or as complicated as reviewing each 
   page of material posted on the Web based on key words. In addition, some
   techniques can be used in conjunction with the zoning methods discussed 
   above, while other approaches operate independently of zoning           
   techniques. While blocking and filtering techniques may be effective for
   many parents, schools, and libraries, the Committee does not believe,   
   however, that they are as effective as the approach taken in H.R. 3783. 
   In fact, the Committee is concerned that a national mandate requiring   
   the use of blocking or filtering could lead to private censorship or    
   inadvertent blocking. The Committee also does not believe that any of   
   these approaches are currently any less restrictive than the age        
   verification services that are now widely used by the adult             
   entertainment industry and adults.                                      
      In general, blocking or filtering software programs work in          
   conjunction with Internet browsers such as Netscape Navigator and       
   Microsoft's Internet Explorer, and are either installed directly onto   
   individual computers or onto a host server used with a network of       
   computers. Blocking or filtering software could also be installed at the
   site of the Internet access provider. Software to block access to       
   websites has existed for many years. Other products do not prohibit     
   access to sites, but provide parents with a record of which websites a  
   minor has visited.                                                      
      In order to block Internet sites, a software vendor identifies       
   categories of material to be restricted and then configures the software
   to block sites containing those categories of speech. Some software     
   blocking vendors employ individuals who browse the Internet for sites to
   block, while others use automated searching tools to identify which     
   sites to block. New products are constantly being developed, however,   
   that could improve the effectiveness of the blocking software. For      
   example, at least one product has been designed that is capable of      
   analyzing the content being retrieved by the computer. By analyzing the 
   content, rather than a predefined list of sites, the product is capable 
   of screening inappropriate material from chat rooms, e-mail, attached   
   documents, search engines, and web browsers. Such products will help    
   parents and educators reduce a minor's exposure to sexually explicit    
   material.                                                               
      Mandating blocking or filtering software, however, is not the        
   preferred solution. Because of the discretionary means to screen        
   information, there is a chance that protected, harmless, or innocent    
   speech would be accidentally or inappropriately blocked. Software that  
   blocks a minor's access to ``breast,'' for example, may also screen that
   minor from accessing information about ``breast cancer.'' In addition,  
   simple blocking techniques that would screen tagged material are not    
   currently available in existing Internet browsers. Moreover, the        
   Committee notes that blocking and filtering software and services can be
   expensive and may discourage adults or schools from using them. For     
   example, the cost of most products for home use range from $14.95 to    
   $199.50 depending on the quality of the software program. Presumably    
   parents would want to purchase the best product for their use. Other    
   software used for schools or multiple users may cost anywhere from      
   $1,050 to $4,250. See Internet World, ``www.internetworld.com'' (May 18,
   1998). Even if a customer incurs a single nonrecurring cost, he or she  
   may also incur recurring costs because the software needs to be         
   continually updated to respond to the ever-changing content on the World
   Wide Web. Filters may be very useful tools for parents and educators,   
   but the law should impose duties on the source of the problem, not the  
   victims.                                                                
      Finally, the Committee remains concerned that all blocking software  
   requires the exercise of subjective human judgment by the vendor or     
   purchaser to decide what speech is acceptable and what is unacceptable. 
   In some cases, the library of restricted words, URLs, or content is not 
   visible to users and may result in hidden censorship if the blocking or 
   filtering service includes matters beyond adult content such as         
   addressing politics or religion.                                        
 
           E. International distribution of pornography                            
 
      Throughout the legislative debate, opponents of H.R. 3783 have argued
   that 40 percent or more of the pornography sold in the United States    
   originates from foreign countries and that a domestic legislative       
   solution will not stop material from being sent into the United States. 
   To date, however, no reliable statistics exist on the world-wide        
   distribution of pornography over the Internet. A 1996 finding by the    
   lower court ruling in Reno is often misquoted by opponents of           
   legislation. They argue that ``40% or more'' of the material that is    
   harmful to minors is produced outside of the United States. In fact, the
   lower court concluded that ``[a] large percentage, perhaps 40 percent or
   more, of content on the Internet originates outside the United States.''
   929 F. Supp. at 848 (emphasis added). ``Content'' is not synonymous with
   ``material harmful to minors.'' While data regarding the origination of 
   material that is harmful to minors are unavailable, the fact remains    
   that much of the harmful material is produced and posted in the United  
   States. In describing the $8 billion dollar adult entertainment         
   industry, of which commercial pornography is included, the Executive    
   Director of the Free Speech Coalition testified that ``[t]hose eight    
   billions are homegrown American products, generating more dollars, jobs 
   and taxes in a burgeoning export trade.'' Testimony of Jeffrey J.       
   Douglas, Committee Hearing. Clearly domestic restrictions in the United 
   States will help reduce a child's access to pornography, and it may even
   help protect children in foreign nations who are the recipients of this 
   ``burgeoning export trade.'' To the extent that an international problem
   exists, the Committee has requested that the Commission on Online Child 
   Protection study the matter and report back to Congress.                
                                          HEARINGS                                
 
      On September 11, 1998, the Subcommittee on Telecommunications, Trade,
   and Consumer Protection held a legislative hearing on methods to prevent
   the distribution of material that is harmful to minors over the         
   Internet. The Subcommittee received testimony from: The Honorable Dan   
   Coats, U.S. Senate, State of Indiana; The Honorable Bob Franks, U.S.    
   House of Representatives, Seventh District, State of New Jersey; The    
   Honorable Ernest J. Istook, Jr., U.S. House of Representatives, Fifth   
   District, State of Oklahoma; Mr. Stephen R. Wiley, Chief, Violent Crimes
   and Major Offenders Section, Federal Bureau of Investigations; Mr. Jerry
   Berman, Director, Center for Democracy and Technology; Mr. Jeffrey J.   
   Douglas, Executive Director, Free Speech Coalition; Mr. Laith Paul      
   Alsarraf, President and CEO, Cybernet Ventures, Inc.; Dr. Mary Anne     
   Layden, Center for Cognitive Therapy, Department of Psychology,         
   University of Pennsylvania; Dr. Larry Lessig, Professor, Harvard Law    
   School; Mr. Peter Nickerson, Chief Executive Officer, N2H2; Mr. Andrew  
   L. Kupser, Chief Executive Officer, Northwest Internet Services, LLC;   
   Mr. John Bastian, Chief Executive Officer, Security Software Systems    
   Inc.; and Ms. Agnes M. Griffen, Director, Tucson-Pima Public Library.   
                                  COMMITTEE CONSIDERATION                         
 
      On September 17, 1998, the Subcommittee on Telecommunications, Trade,
   and Consumer Protection met in open markup session and approved H.R.    
   3783, the Child Online Protection Act, for Full Committee consideration,
   amended, by a voice vote. On September 24, 1998, the Full Committee met 
   in open markup session and ordered H.R. 3783, reported to the House,    
   amended, by a voice vote, a quorum being present.                       
                                       ROLLCALL VOTES                             
 
      Clause 2(l)(2)(B) of rule XI of the Rules of the House requires the  
   Committee to list the recorded votes on the motion to report legislation
   and amendments thereto. There were no recorded votes taken in connection
   with ordering H.R. 3783 reported. An Amendment in the Nature of         
   Substitute offered by Mr. Oxley was adopted by a voice vote. A motion by
   Mr. Bliley to order H.R. 3783 reported to the House, amended, was agreed
   to by a voice vote, a quorum being present.                             
                                COMMITTEE OVERSIGHT FINDINGS                      
 
      Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of the House of
   Representatives, the Committee held a legislative hearing and made      
   findings that are reflected in this report.                             
                        COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT              
 
      Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of the House of
   Representatives, no oversight findings have been submitted to the       
   Committee by the Committee on Government Reform and Oversight.          
             NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES    
 
      In compliance with clause 2(l)(3)(B) of rule XI of the Rules of the  
   House of Representatives, the Committee finds that H.R. 3783, the Child 
   Online Protection Act, would result in no new or increased budget       
   authority, entitlement authority, or tax expenditures or revenues.      
                                  COMMITTEE COST ESTIMATE                         
 
      The Committee adopts as its own the cost estimate prepared by the    
   Director of the Congressional Budget Office pursuant to section 402 of  
   the Congressional Budget Act of 1974.                                   
                            CONGRESSIONAL BUDGET OFFICE ESTIMATE                  
 
      Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of the House of
   Representatives, the following is the cost estimate provided by the     
   Congressional Budget Office pursuant to section 402 of the Congressional
   Budget Act of 1974:                                                     
 
 
       U.S. Congress,                                                          
 
       Congressional Budget Office,                                            
 
       Washington, DC, October 1, 1998.                                        
 
 
 
          Hon.  Tom Bliley,              Chairman, Committee on Commerce,
 
       U.S. House of Representatives, Washington, DC.                          
 
       Dear Mr. Chairman: The Congressional Budget Office has prepared the 
   enclosed cost estimate for H.R. 3783, Child Online Protection Act.      
      If you wish further details on this estimate, we will be pleased to  
   provide them. The CBO staff contacts are Mark Hadley (for federal       
   costs), Hester Grippando (for revenues), and Jean Wooster (for the      
   private-sector impact).                                                 
   Sincerely,                                                              
 
         June E. O'Neill,  Director.                                            
 
   Enclosure.                                                              
 
           H.R. 3783--Child Online Protection Act                                  
 
      Summary: H.R. 3783 would amend the Communications Act of 1934 to     
   require persons engaged in interstate or foreign commerce in the        
   distribution of material that is harmful to minors in or through the    
   World Wide Web to restrict access to such Internet material by persons  
   under 17 years old. The bill would impose civil and criminal penalties  
   on persons who violate this requirement and would establish a commission
   to study ways of reducing access by children to harmful materials on the
   Internet.                                                               
      CBO estimates that implementing this bill would cost about $1 million
   in 1999, assuming appropriation of the necessary amounts. Because the   
   bill would establish new criminal penalties and thus could affect       
   receipts, pay-as-you-go procedures would apply, but CBO estimates that  
   any changes in receipts would be less than $500,000 a year.             
      H.R. 3783 would impose both intergovernmental and private-sector     
   mandates, as defined by the Unfunded Mandates Reform Act (UMRA), but CBO
   estimates that the costs of the mandates would fall well below the      
   thresholds established in UMRA. (The thresholds are $50 million for     
   intergovernmental mandates and $100 million for private sector mandates,
   adjusted annually for inflation after 1996.)                            
      Estimated cost to the Federal Government: Under H.R. 3783, CBO       
   expects that the Federal Communications Commission (FCC) would issue a  
   regulation to prescribe procedures to be used to restrict access to     
   Internet material that is considered harmful to minors. Based on        
   information from the FCC, we estimate that this regulation would cost   
   less than $500,000 to promulgate. That spending would be subject to     
   appropriation of the necessary amounts, but under current law the FCC is
   authorized to collect fees from the telecommunications industry         
   sufficient to offset the cost of its                                    
 
                    regulatory program. Therefore, CBO estimates that this        
          provision would have no net cost to the government.                     
      The bill also would amend the Communications Act of 1934 to impose   
   criminal and civil penalties on any person who violates the requirement 
   to restrict access to material that is harmful to minors. Enacting H.R. 
   3783 could increase governmental receipts from the collection of fines, 
   but CBO estimates that any such increase would be less than $500,000    
   annually. Criminal fines are deposited in the Crime Victims Fund and are
   spent in the following year. Thus, any change in direct spending from   
   the fund would also amount to less than $500,000 annually.              
      Finally, the bill would establish a one-year commission to study ways
   to reduce access by minors to harmful material on the Internet. Based on
   information from the National Telecommunications and Information        
   Administration and the experience of similar commissions, CBO estimates 
   that implementing this provision would cost about $1 million in 1999,   
   subject to appropriation of the necessary amount.                       
      Pay-as-you-go considerations: The Balanced Budget and Emergency      
   Deficit Control Act sets up pay-as-you-go procedures for legislation    
   affecting direct spending or receipts. CBO estimates that any increases 
   in governmental receipts and direct spending would each total less than 
   $500,000 a year.                                                        
      Intergovernmental and private-sector impact: H.R. 3783 would impose  
   both intergovernmental and private-sector mandates, as defined in UMRA. 
   CBO estimates that the costs of the mandates imposed on providers of    
   interactive computer services, including public educational institutions
   and perhaps some libraries, and on commercial interstate and foreign    
   distributors of ``material that is harmful to minors'' would be small   
   and would fall below the thresholds established in UMRA.                
      Section 5 would require that providers of interactive computer       
   services (most of which are private) notify customers that parental     
   control protections are commercially available. According to information
   from representatives of private-sector Internet providers and their     
   trade association, most providers currently supply the required         
   information to their customers, and some also offer software or         
   filtering services. Furthermore, the cost to those public and private   
   providers that may not currently supply this information would be       
   minimal. Because some public college, universities, perhaps some public 
   libraries offer Internet access, this requirement would impose an       
   intergovernmental mandate on those entities. Based on information from  
   the National Association of State Colleges and Land Grant Universities  
   and the Public Library Association, CBO estimates that the cost of      
   complying with this requirement would be minimal since it would not     
   require significant alteration in most of the agreements currently used.
      Section 3 would also impose a private-sector mandate on commercial   
   interstate and foreign distributors who knowingly cause or solicit      
   ``material that is harmful to minors'' to be posted on the World Wide   
   Web. This section would require that those distributors restrict access 
   to minors of such material. The use of a credit card, debit account,    
   adult access code, adult personal identification number, or any feasible
   measures would constitute compliance. Based on information from         
   representatives of the industry, commercial adult-content Web sites     
   currently require the use a credit card or some type of age verification
   for membership or subscription payment. Thus, CBO estimates that those  
   commercial interstate and foreign distributors would not incur any      
   additional costs.                                                       
      Previous CBO estimate: On March 30, 1998, CBO transmitted an estimate
   of S. 1482, a bill to amend section 223 of the Communications Act of    
   1934 to establish a prohibition on commercial distribution on the World 
   Wide Web of material that is harmful to minors, as ordered reported by  
   the Senate Committee on Commerce, Science, and Transportation on March  
   12, 1998. That bill would not establish a new commission (as H.R. 3783  
   would); therefore, CBO estimated that S. 1482 would have no significant 
   net effect on the federal budget.                                       
      Estimate prepared by: Federal costs: Mark Hadley; Federal revenues:  
   Hester Grippando; Impact on the private sector: Jean Wooster.           
      Estimate approved by: Paul N. Van de Water, Assistant Director for   
   Budget Analysis.                                                        
 
                                 FEDERAL MANDATES STATEMENT                       
 
      The Committee adopts as its own the estimate of Federal mandates     
   prepared by the Director of the Congressional Budget Office pursuant to 
   section 423 of the Unfunded Mandates Reform Act.                        
                                ADVISORY COMMITTEE STATEMENT                      
 
      No advisory committees within the meaning of section 5(b) of the     
   Federal Advisory Committee Act were created by this legislation.        
                             CONSTITUTIONAL AUTHORITY STATEMENT                   
 
      Pursuant to clause 2(l)(4) of rule XI of the Rules of the House of   
   Representatives, the Committee finds that the Constitutional authority  
   for this legislation is provided in Article I, section 8, clause 3,     
   which grants Congress the power to regulate commerce with foreign       
   nations, among the several States, and with the Indian tribes.          
                            APPLICABILITY TO LEGISLATIVE BRANCH                   
 
      The Committee finds that the legislation does not relate to the terms
   and conditions of employment or access to public services or            
   accommodations within the meaning of section 102(b)(3) of the           
   Congressional Accountability Act.                                       
                       SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION             
 
           Section 1. Short title                                                  
 
      Section 1 establishes the short title of the bill as the ``Child     
   Online Protection Act.''                                                
           Section 2.  Congressional findings                                      
 
   Section 2 lists the Congressional findings.                             
 
                      Section 3. Requirements to restrict access by minors to      
           materials sold by means of the World Wide Web that are harmful to minors
      Section 3 amends the Communications Act of 1934 by adding a new      
   section 231, entitled ``Restriction of Access by Minors to Materials    
   Sold by Means of the World Wide Web that are Harmful to Minors.''       
      New subsection 231(a) provides that whoever, in interstate or foreign
   commerce, by means of the World Wide Web, knowingly makes any           
   communication for commercial purposes that includes any material that is
   harmful to minors without restricting access to such material shall be  
   fined or imprisoned.                                                    
      The Committee believes that this restriction will help reduce a      
   minor's access to sexually explicit material on the World Wide Web. The 
   restriction is narrowly drafted and is limited to entities making       
   communications for commercial purposes that include material harmful to 
   minors. The restrictions do not apply to other communications on the    
   Internet that involve electronic mail, newsgroups, or chat rooms. The   
   key words used in the prohibition, such as ``commercial purposes,'' and 
   ``harmful to minors'' are defined in new subsection 231(c). In addition,
   like any criminal statute, a person who is a conspirator or otherwise   
   aids and abets the offender may be prosecuted under this statute.       
      New subsection 231(b) clarifies that certain entities do not ``make  
   any communication for commercial purposes'' if they are engaged in      
   certain transmission or access related activities. In particular, this  
   subsection clarifies that, for purposes of subsection (a), a person     
   shall not be considered to be engaged in making communications for      
   commercial purposes to the extent that such person is (1) a             
   telecommunications carrier engaged in the provision of                  
   telecommunications services; (2) a person engaged in the business of    
   providing Internet access services; (3) a person engaged in the business
   of referring or linking users to an online location on the World Wide   
   Web and includes the provision of directories, indices, references,     
   points, and hypertext links services; or (4) similarly engaged in the   
   transmission, storage, retrieval, hosting, formatting, or translation of
   a communication made by another person, without the selection or        
   alteration of the content of the communication.                         
      The Committee believes that these entities do not knowingly cause the
   material that is harmful to minors to be posted on the World Wide Web,  
   nor do they knowingly solicit such material to be posted on the World   
   Wide Web. The Committee notes, however, that subsection 231(b) applies  
   only ``to the extent that such person'' is engaged in these other       
   activities. For example, if an Internet access provider also has a web  
   site selling harmful material on the World Wide Web, then that site     
   would be subject to the general restriction set forth in new subsection 
   231(a).                                                                 
      New subsection 231(c) states that it is affirmative defense to       
   prosecution under this section if the defendant, in good faith, has     
   restricted access by minors to material that is harmful to minors. The  
   new subsection provides two ways to be eligible for the affirmative     
   defense. The first defense, subparagraph 231(c)(1)(A), permits the      
   person posting the harmful material on the Web to employ the use of a   
   credit card, debit account, adult access code, or adult personal        
   identification number as a means to prove age. The second defense,      
   subparagraph 231(c)(1)(B), allows the defendant to use any other        
   reasonable measures that are feasible under available technology. New   
   subsection 231(c) also permits a good faith defense for entities that   
   attempt to restrict or prevent the transmission of, or access to, a     
   communication specified in this section.                                
 
      For purposes of this subsection, the Committee believes that         
   purveyors of material harmful to minors have sufficient tools available 
   today to make a good faith attempt to restrict access to their web      
   sites. Credit card verification is commonly used today in both the      
   dial-a-porn and Internet context and it should be easy to use and       
   implement for commercial entities that sell pornography on the Web. In  
   addition, adult access codes and adult personal identification numbers  
   could be issued by mail or fax after reasonably ascertaining that the   
   applicant is not a minor. The Committee does not consider data such as  
   zip codes, telephone numbers, or mere warning pages as a good faith     
   attempt to restrict access. This information is unrelated to the age of 
   the person wishing to access the material and thus should not constitute
   a defense to prosecution.                                               
      The fact that some uncertainty exists surrounding what constitutes a 
   good faith effort to restrict access under subparagraph 231(c)(1)(B)    
   should not undermine the legitimacy of the criminal statute. Entities   
   selling material that is harmful to minors could utilize the            
   subparagraph 231(c)(1)(A) defenses until other defenses under           
   subparagraph 231(c)(1)(B) became available. The Committee believes that 
   technologies will evolve and new age verification systems, such as use  
   of digital certificates, tags, student identifiers, etc. could be used  
   to reduce access and thus, could become effective affirmative defenses. 
   As a result, the bill incorporates needed and limitless flexibility. In 
   addition, the Committee also tasked the industry to study age           
   verification methods pursuant to Section 5 of the bill, which could     
   provide additional help regarding the subparagraph 231(c)(1)(B)         
   defenses.                                                               
      New subsection 231(d) prohibits a person who collects information    
   about another individual for purposes of restricting access to material 
   that is harmful to minors from disclosing any information collected. The
   Committee intends to ease the concerns of adults who may be required to 
   disclose certain information about themselves in order to gain access to
   material that they have a right to receive.                             
      New paragraph 231(e)(1) defines the World Wide Web as the placement  
   of material in a computer server-based file archive so that it is       
   publicly accessible, over the Internet, using hypertext transfer        
   protocol or any successor protocol.                                     
      In general, the Web utilizes a hypertext formatting language called  
   hypertext markup language (HTML), and programs that browse the Web can  
   display HTML documents containing text, images, sound, animation and    
   moving video. Any HTML document can include links to other types of     
   information or resources, so that while viewing an HTML document that,  
   for example, describes resources available on the Internet, one can     
   ``click'' using a computer mouse on the description of the resource and 
   be immediately connected to the resource itself. Such hyperlinks allow  
   information to be accessed and organized in very flexible ways, and     
   allow people to locate and efficiently view related information even if 
   the information is stored on numerous computers all around the world.   
   Most sellers of material that is harmful to minors have home pages on   
   the Web that provide links to sexually explicit material, although the  
   home pages themselves often contain hard-core or soft-core pornographic 
   ``teasers'' that contain material harmful to minors.                    
      New paragraph 231(e)(2) defines commercial purposes as a person who  
   makes a communication when such person is engaged in the business of    
   making such communication. ``Engaged in the business'' is defined as a  
   person who makes a communication via the Web that is harmful to minors  
   and such person makes the communication as a regular course of such     
   person's trade or business. The Committee notes that the term ``engaged 
   in the business,'' 18 U.S.C. 1466, has been held constitutional and not 
   unconstitutionally vague as the term is applied to obscenity law. U.S.  
   v. Skinner, 25 F.3d 1314 (6th Cir. 1994).                               
      New paragraph 231(e)(3) defines the Internet as a combination of     
   computer facilities and electromagnetic transmission media, and related 
   equipment and software, comprising the interconnected world-wide network
   of computer networks that employ the Transmission Control               
   Protocol/Internet Protocol (TCP/IP) protocol or any successor protocol. 
      New paragraph 231(e)(4) defines Internet access service as a service 
   that enables users to access content, information, electronic mail, or  
   other services offered over the Internet, and may include access to     
   proprietary content, information, and other services as part of a       
   package of services offered to consumers, and paragraph (5) defines     
   Internet information location tool as a service that refers or links    
   users to an online location on the World Wide Web.                      
      New paragraph 231(e)(6) defines material that is harmful to minors as
   any communication that (A) the average person, applying contemporary    
   community standards, would find, taking the material as a whole and with
   respect to minors, that such material is designed to appeal to or       
   panders to the prurient interest; (B) depicts, describes, or represents,
   in a manner patently offensive with respect to minors, an actual or     
   simulated normal or perverted sexual act or contact, or a lewd          
   exhibition of the genitals or female breast; and (C) taken as a whole,  
   lacks serious literary, artistic, political, or scientific value for    
   minors.                                                                 
      The Committee intends for the definition of material harmful to      
   minors to parallel the Ginsberg and Miller definitions of obscenity and 
   harmful to minors, as those definitions were later refined in Smith v.  
   United States, 431 U.S. 291, at 300 02, 309 (1977) and Pope v. Illinois,
   481 U.S. 497, at 500 01 (1987). In essence, the Committee intends to    
   adopt the ``variable obscenity'' standard for minors. The Committee     
   recognizes that the applicability of community standards in the context 
   of the Web is controversial, but understands it as an ``adult''         
   standard, rather than a ``geographic'' standard, and one that is        
   reasonably constant among adults in America with respect to what is     
   suitable for minors. In addition, when a person posts material on the   
   Web, he makes it available, simultaneously, to all communities in the   
   world where a computer can be plugged in. Thus, the person posting the  
   material is engaged in interstate commerce and is subjecting himself to 
   the jurisdiction of all communities in a manner similar to the way      
   obscenity laws apply today. See United States v. Thomas, 74 F.3d 701    
   (6th Cir. 1996), cert. denied, 117 S.Ct. 74 (1996); Sable, 492 U.S. at  
   126 27. Furthermore, it is well established that ``there is no          
   constitutional impediment to the government's power to prosecute        
   pornography dealers in any district into which the material is sent.''  
   United States v. Bagnell, 679 F.2d 826, 830 (11th Cir. 1982), cert.     
   denied, 460 U.S. 1047 (1983).                                           
 
      The Committee also notes that the ``harmful to minors'' standard has 
   been tested and refined for thirty years to limit its reach to materials
   that are clearly pornographic and inappropriate for minor children of   
   the age groups to which it is directed. Cases such as Erznoznik v. City 
   of Jacksonville, 422 U.S. 205 (1975) and Board of Education v. Pico, 457
   U.S. 853 (1982), prevent the traditional ``harmful to minors'' test from
   being extended to entertainment, library, or news materials that merely 
   contain nudity or sexual information, regardless of how controversial   
   they may be for their political or sexual viewpoints.                   
      New paragraph 231(e)(7) defines minor as any person under 17 years of
   age.                                                                    
           Section 4.  Notice requirement                                          
 
      Section 4 amends Section 230 of the Communications Act by requiring a
   provider of interactive computer service to notify each customer, at the
   time it enters into an agreement to sign up the customer, that parental 
   control protections (such as computer hardware, software, and filtering 
   service) are commercially available that may assist the customer in     
   limiting access to material that is harmful to minors.                  
      The Committee believes that such a requirement will help inform      
   parents and educators on the availability of filtering software and     
   services that may assist with the shielding of harmful material. The    
   Committee also believes that this requirement is a necessary supplement 
   to the general prohibition in Section 3 and allows for marketplace      
   solutions to develop to address the difficult technical and legal       
   questions surrounding restricting a minor's access to harmful material  
   with respect to all communications that take place on the Internet.     
           Section 5. Study by commission on online child protection               
 
      Section 5 establishes a temporary Commission on Online Child         
   Protection for purposes of conducting a study regarding methods to help 
   reduce access by minors to material that is harmful to minors on the    
   Internet. The Commission will be composed of industry and government    
   representatives and is required to report its findings within one year  
   from the date of enactment of H.R. 3783. The Committee intends that the 
   Commission's findings may be used to make legislative recommendations to
   Congress on additional ways to reduce access by minors to harmful       
   material and as an evidentiary basis for good faith defenses under      
   Section 3 of the bill. The Committee notes that the Commission is       
   required to study alternative ways to reduce material that is harmful to
   minors on the Internet, which should include ways to reduce such harmful
   material with respect to one-to-one messaging (e-mail), one-to-many     
   messaging (listserv), distributed message databases (USENET newsgroups);
   real time communications (Internet relay chat); real time remote        
   utilization (telnet) and remote information retrieval systems. The      
   Commission is also free to comment on the approach taken in H.R. 3783   
   and on whether other legislative recommendations would be helpful, such 
   as a proposal to prohibit the distribution of unsolicited commercial    
   e-mail that contains material harmful to minors.                        
 
                   CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED          
 
     In compliance with clause 3 of rule XIII of the Rules of the House of
  Representatives, changes in existing law made by the bill, as reported, 
  are shown as follows (existing law proposed to be omitted is enclosed in
  black brackets, new matter is printed in italic, existing law in which  
  no change is proposed is shown in roman):                               
                                 COMMUNICATIONS ACT OF 1934                       
 
         * * * * * * *                                                           
 
           TITLE II--COMMON CARRIERS                                               
 
          PART I--COMMON CARRIER REGULATION                                       
 
         * * * * * * *                                                           
 
                    SEC. 223. OBSCENE OR HARASSING TELEPHONE CALLS IN THE DISTRICT
          OF COLUMBIA OR IN INTERSTATE OR FOREIGN COMMUNICATIONS.                 
   (a) * * *                                                              
 
         * * * * * * *                                                           
 
   (h) For purposes of this section--                                     
 
    (1) * * *                                                              
 
       (2) The term ``interactive computer service'' has the meaning       
   provided in section 230(e)(2) 230(f)(2).                                
         * * * * * * *                                                           
 
                    SEC. 230. PROTECTION FOR PRIVATE BLOCKING AND SCREENING OF    
          OFFENSIVE MATERIAL.                                                     
   (a) * * *                                                              
 
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     (d) Obligations of Interactive Computer Service.--A provider of      
  interactive computer service shall, at the time of entering an agreement
  with a customer for the provision of interactive computer service and in
  a manner deemed appropriate by the provider, notify such customer that  
  parental control protections (such as computer hardware, software, or   
  filtering services) are commercially available that may assist the      
  customer in limiting access to material that is harmful to minors. Such 
  notice shall identify, or provide the customer with access to           
  information identifying, current providers of such protections.         
 
   (d)  (e)  Effect on Other Laws.--                                      
 
    (1) * * *                                                              
 
         * * * * * * *                                                           
 
   (e)  (f)  Definitions.--As used in this section:                       
 
    (1) * * *                                                              
 
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                    SEC. 231. RESTRICTION OF ACCESS BY MINORS TO MATERIALS SOLD BY
          MEANS OF WORLD WIDE WEB THAT ARE HARMFUL TO MINORS.                     
   (a)  Requirement To Restrict Access.--                                 
 
       (1) Prohibited conduct.--Whoever, in interstate or foreign commerce,
   by means of the World Wide Web, knowingly makes any communication for   
   commercial purposes that includes any material that is harmful to       
   minors, without restricting access to such material by minors pursuant  
   to subsection (c), shall be fined not more than $50,000, imprisoned not 
   more than 6 months, or both.                                            
       (2) Intentional violations.--In addition to the penalties under     
   paragraph (1), whoever intentionally violates such paragraph shall be   
   subject to a fine of not more than $50,000 for each violation. For      
   purposes of this paragraph, each day of violation shall constitute a    
   separate violation.                                                     
       (3) Civil penalty.--In addition to the penalties under paragraphs   
   (1) and (2), whoever violates paragraph (1) shall be subject to a civil 
   penalty of not more than $50,000 for each violation. For purposes of    
   this paragraph, each day of violation shall constitute a separate       
   violation.                                                              
     (b) Inapplicability of Carriers and Other Service Providers.--For    
  purposes of subsection (a), a person shall not be considered to make any
  communication for commercial purposes to the extent that such person    
  is--                                                                    
       (1) a telecommunications carrier engaged in the provision of a      
   telecommunications service;                                             
       (2) a person engaged in the business of providing an Internet access
   service;                                                                
       (3) a person engaged in the business of providing an Internet       
   information location tool; or                                           
       (4) similarly engaged in the transmission, storage, retrieval,      
   hosting, formatting, or translation (or any combination thereof) of a   
   communication made by another person, without selection or alteration of
   the content of the communication, except that such person's deletion of 
   a particular communication or material made by another person in a      
   manner consistent with subsection (c) or section 230 shall not          
   constitute such selection or alteration of the content of the           
   communication.                                                          
   (c)  Affirmative Defense.--                                            
 
       (1) Defense.--It is an affirmative defense to prosecution under this
   section that the defendant, in good faith, has restricted access by     
   minors to material that is harmful to minors--                          
       (A) by requiring use of a credit card, debit account, adult access  
   code, or adult personal identification number; or                       
       (B) by any other reasonable measures that are feasible under        
   available technology.                                                   
       (2) Protection for use of defenses.--No cause of action may be      
   brought in any court or administrative agency against any person on     
   account of any activity that is not in violation of any law punishable  
   by criminal or civil penalty, and that the person has taken in good     
   faith to implement a defense authorized under this subsection or        
   otherwise to restrict or prevent the                                    
 
                    transmission of, or access to, a communication specified in   
          this section.                                                           
   (d)  Privacy Protection Requirements.--                                
 
       (1) Disclosure of information limited.--A person making a           
   communication described in subsection (a)--                             
       (A) shall not disclose any information collected for the purposes of
   restricting access to such communications to individuals 17 years of age
   or older without the prior written or electronic consent of--           
    (i) the individual concerned, if the individual is an adult; or        
 
       (ii) the individual's parent or guardian, if the individual is under
   17 years of age; and                                                    
       (B) shall take such actions as are necessary to prevent unauthorized
   access to such information by a person other than the person making such
   communication and the recipient of such communication.                  
       (2) Exceptions.--A person making a communication described in       
   subsection (a) may disclose such information if the disclosure is--     
       (A) necessary to make the communication or conduct a legitimate     
   business activity related to making the communication; or               
    (B) made pursuant to a court order authorizing such disclosure.        
 
     (e) Definitions.--For purposes of this subsection, the following     
  definitions shall apply:                                                
       (1) By means of the world wide web.--The term ``by means of the     
   World Wide Web'' means by placement of material in a computer           
   server-based file archive so that it is publicly accessible, over the   
   Internet, using hypertext transfer protocol or any successor protocol.  
    (2)  Commercial purposes; engaged in the business.--                   
 
       (A) Commercial purposes.--A person shall be considered to make a    
   communication for commercial purposes only if such person is engaged in 
   the business of making such communications.                             
       (B) Engaged in the business.--The term ``engaged in the business''  
   means that the person who makes a communication, or offers to make a    
   communication, by means of the World Wide Web, that includes any        
   material that is harmful to minors, devotes time, attention, or labor to
   such activities, as a regular course of such person's trade or business,
   with the objective of earning a profit as a result of such activities   
   (although it is not necessary that the person make a profit or that the 
   making or offering to make such communications be the person's sole or  
   principal business or source of income). A person may be considered to  
   be engaged in the business of making, by means of the World Wide Web,   
   communications for commercial purposes that include material that is    
   harmful to minors, only if the person knowingly causes the material that
   is harmful to minors to be posted on the World Wide Web or knowingly    
   solicits such material to be posted on the World Wide Web.              
 
       (3) Internet.--The term ``Internet'' means the combination of       
   computer facilities and electromagnetic transmission media, and related 
   equipment and software, comprising the interconnected worldwide network 
   of computer networks that employ the Transmission Control               
   Protocol/Internet Protocol or any successor protocol to transmit        
   information.                                                            
       (4) Internet access service.--The term ``Internet access service''  
   means a service that enables users to access content, information,      
   electronic mail, or other services offered over the Internet, and may   
   also include access to proprietary content, information, and other      
   services as part of a package of services offered to consumers. Such    
   term does not include telecommunications services.                      
       (5) Internet information location tool.--The term ``Internet        
   information location tool'' means a service that refers or links users  
   to an online location on the World Wide Web. Such term includes         
   directories, indices, references, pointers, and hypertext links.        
       (6) Material that is harmful to minors.--The term ``material that is
   harmful to minors'' means any communication, picture, image, graphic    
   image file, article, recording, writing, or other matter of any kind    
   that--                                                                  
       (A) the average person, applying contemporary community standards,  
   would find, taking the material as a whole and with respect to minors,  
   that such material is designed to appeal to or panders to the prurient  
   interest;                                                               
       (B) depicts, describes, or represents, in a manner patently         
   offensive with respect to minors, an actual or simulated sexual act or  
   sexual contact, an actual or simulated normal or perverted sexual act,  
   or a lewd exhibition of the genitals or female breast; and              
       (C) taken as a whole, lacks serious literary, artistic, political,  
   or scientific value for minors.                                         
    (7)  Minor.--The term ``minor'' means any person under 17 years of age.
 
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