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MOVERS & SHAKERS By Richard S. Dunham November 3, 1999


She's Weaving Web Policy from the West Wing
Elizabeth Echols' task: Coordinate Administration efforts to nurture e-commerce, while balancing the needs of consumers, business, and cyber have-nots

It's safe to say that almost no one in Washington knows Elizabeth Echols. Heck, it's even safe to say that many colleagues in the White House don't recognize her. Although she's not a familiar face in the corridors of power, the 39-year-old Echols has a job of critical importance to American business: She's the top staffer in the White House office devoted to the burgeoning field of electronic commerce.

Echols, a former investment banker and attorney specializing in international trade and telecommunications, was named the first executive director of the White House Electronic Commerce Working Group in August. She's responsible for coordinating the efforts of about a dozen federal agencies and Cabinet departments that deal with elements of e-commerce, from consumer protection and privacy to regulation and taxation.

The creation of Echols' job is further proof that "electronic commerce is a really big deal to the President and the Vice-President," says David Beier, chair of the Electronic Commerce Working Group and Al Gore's chief domestic policy adviser. "We are now devoting more resources to electronic commerce than ever before."

 


Echols urges business to create "a marketplace that consumers feel comfortable in"
 

There's good reason for that. By 2003, Internet sales are expected to reach $1.5 trillion. Echols says the Administration is trying to encourage high-speed Internet service that provides "greater consumer choice, more affordable price, and continued innovation." But because an unfettered marketplace is likely to leave some Americans behind, the White House also is seeking ways to provide service for underserved rural areas and inner cities. In that way, Echols says, "everyone can realize the true benefits of this medium, and electronic commerce can flourish."

At the same time, the Administration is proposing a new round of online consumer safeguards. "It's really in the interest of business to be proactive on both privacy and consumer-protection issues so there is a marketplace that consumers feel comfortable in," she argues. "It's important to have the same protections online as on Main Street."

To do this, the Administration is pushing an "Electronic Bill of Rights for Privacy in the Information Age." The proposal would give e-commerce customers the right to choose whether personal information is disclosed, and how and when it is disclosed. The plan also would allow consumers to view the information to determine whether it is accurate and to correct false entries. The problem was highlighted recently by the controversy over allegations that RealNetworks' RealJukebox software monitored users' choices and passed along the information to the company.

FIGHTING FRAUD. In addition to new consumer rights, the White House also would like to use current law to enforce buyer protections on the electronic frontier. Agencies such as the Federal Trade Commission are stepping up efforts to combat e-commerce fraud.

While the White House is pushing strongly for consumer protections, it believes in limiting the role of government in the electronic marketplace, Echols says. Her group has "worked very closely with the private sector," she maintains, "to push the concept of self-regulation," rather than government rules and regulations.

Sometimes, however, it is difficult for the Administration to stay above the fray. The White House is watching the so-called open-access battle between AT&T and Internet service providers with "concern for competition and consumers." But the Administration has not taken sides in the ongoing court battle in Portland, Ore., where AT&T, a leading cable provider, is seeking to prevent local officials from forcing it to open up its broadband network to Internet service competitors.

The White House also has weighed in on the debate over proposed legislation regulating "cybersquatting" by entrepreneurs who buy the rights to well-known names and then try to sell them back. While acknowledging there is a problem, the Administration has criticized a bill recently approved by the House of Representatives. The reason: The White House thinks the problem of cybersquatting must be dealt with by multinational agreement and not just unilateral domestic action.

BLUE-CHIP FIRM. Echols is at the vortex of all these debates. White House officials discovered the Berkeley (Calif.) native in the Commerce Dept., where she was a senior adviser to Secretary William Daley. At Commmerce, Echols specialized in information technology, telecommunications issues, and international market access. In naming Echols to her new post on Aug. 6, Gore cited her leadership abilities, policy expertise, and management skills. Beier lauds her as "a really smart, good, competent, qualified person."

An economics and political science major at Yale University, Echols came to the White House from a background in business. After graduating from Stanford Law School, she signed on with the investment banking firm of Morgan Stanley & Co. in New York and Tokyo, where she worked on international financial products and on mergers and acquisitions. Echols moved to Washington to pursue corporate law at the blue-chip D.C. firm of Steptoe & Johnson.

Why did Echols trade in a lucrative legal practice for a government paycheck? "I always wanted to serve in government at some point in my life," she says. "I felt I could help the Administration make America more competitive and create more jobs through [increased] trade."

 


One GOP governor complains of excessive caution on e-commerce at the White House
 

The White House has been watching e-commerce developments for about five years. The first e-czar was Ira Magaziner, who was given responsibility for watching the brand-new field of Internet commerce in 1994. Magaziner's previous assignment: helping to create the failed Clinton health plan. Magaziner guided the working group's first report in 1997, which laid out the Administration's e-commerce principles, including minimal taxation and regulation. Beier assumed the chairmanship in December, 1998, following Magaziner's return to the private sector, and months later persuaded the White House to create Echols' position.

Not everybody is a fan of the White House e-commerce efforts, though. Virginia Governor Jim Gilmore, chair of a blue-ribbon commission on Internet taxation, says the Administration seems to be "very cautious" on e-commerce issues. "We haven't seen anything that we can draw on from the White House or Al Gore," says Gilmore, a Republican. "Nothing. I'm not being facetious."

After years of dealing with the high-pressure world of high finance, Echols isn't deterred by skeptics. Not only is the White House working with American business, it is conferring with colleagues across the world to encourage consistent -- and minimal -- global regulation. "If we take a certain [hands-off] approach here and others take a different approach, it could slow down the growth of the Internet and e-commerce worldwide," Echols says.

Echols is excited by her assignment on the cutting edge of the economy. And, thus far, Administration officials are pleased by her efforts to coordinate numerous government agencies and shape the next generation of White House e-commerce policy. "She is doing a good job of helping to manage a complicated process," says Beier. And she's just getting started.

Dunham covers the White House for Business Week.


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