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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

                              R E P O R T

                        [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

                                                                   Page
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 Expenditures    21
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. 
Sec. 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. Sec. 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 
sexualactivity 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 includesmaterial 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 receivedhighlighted 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 
usedto 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 itsregulatory 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. Sec. 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) * * *

           *       *       *       *       *       *       *

  (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) * * *

           *       *       *       *       *       *       *


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 thetransmission 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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