CECC eXtra Newsletter - April 2000
1 April 2000
eDitorial Comment
Now at last - Western Victoria has a Main Street! A main street business district running through the entire western region of country Victoria.
This main street is not one made of asphalt and concrete but is one based on the internet; providing any business, shop or organisation with a Main Street 'shopfront' no matter where it is physically located in our region.
MainStreet.au is a regional internet 'commercial district' that has been built for the benefit of our region's businesses and communities, and aims to empower our people, businesses and organisations to take advantage of the quickly-emerging internet commerce and information revolution.
MainStreet.au will provide anyone connected to the internet with easy access to information, goods and services within the region and enhanced access to the rest of the world.
Current developments around the use of the internet are bringing about changes in commerce and information access that is clearly as significant to the balance of city versus country as the industrial revolution was in the 1800s.
It is imperative that country Australia takes a proactive attitude to exploiting this change in a manner that is positive, cooperative and aggressive. There can be great value in taking the opportunity provided by MainStreet.au to use the power of collaboration to ensure that this region is one that prospers in a time of change and new paradigms.
Visit the MainStreet.au site; not once but frequently as the facility develops. Look for opportunities that may emerge for you to benefit or advance your own ambitions using the internet. Join the Chamber of Electronic Commerce - Western Victoria and have a stake in the development of electronic commerce and information access in our region. Enquire as to how your business can get started using the internet.
MainStreet.au is not a threat but an opportunity. It does not belong to any single organisation; it belongs to country western Victoria.
Student to present paper at international conference
CECC's Helen Thompson, who has recently commenced a PhD after completing a Batchelor of Business at the University in 1999, will present her paper Capturing the electronic commerce advantage: The Western Victorian approach at the internationally-renowned 13th Bled electronic commerce conference.
The conference entitled Electronic Commerce: The End of the Beginning will be held in Bled, Slovenia on 19-21 June 2000. This is the first paper submitted to the conference by anyone associated with this University. The paper provides an overview of initiatives currently being undertaken within Western Victoria to coordinate and advance electronic commerce.
Its publication at such a prestigious event will give important international exposure to the Western Victorian region and the work being done in the field of electronic commerce by CECC and other regional organisations.
Congratulations Helen Thompson on your achievement!
The conference attracts speakers and delegates from business, government, information technlogy and universities and is the major world event for researchers working in any aspect of electronic commerce. Further information on the conference can be found at its homepage.
The conference venue is the alpine village of Bled, 30km south of the Austrian border - one of the most beautiful places imaginable.
e-Visit the town for a remarkable electronic tour of the region's history, culture, lakes, traditions, sports and much more.
CASOC conference report
The CASOC 2000 conference Creating and Sustaining Online Communities was held in Mandurah, Western Australia, on 29 March to 1 April 2000.
The conference, which attracted over 410 delegates, examined the phenomenal growth of virtual and geographic online communities as well as community owned and managed portals. A range of information and resources relating to the conference, including presentations by the keynote speakers, are available through the CASOC web site.
CECC was represented at the conference by Helen Thompson, the MainStreet.au project leader and Andrew MacLeod, the technical officer for the project. Their attendance at the conference provided some very valuable networking opportunities, which included meeting some previously virtual contacts. A first hand opportunity was provided to review the development of online communities across Western Australia, which commenced in 1997. Attendance also provided an opportunity to speak with managers of similar projects, local government representatives and industry participants.
Helen participated as a presenter in the conference workshop titled Trends in Community Portals, and case-studied the development of the regional Internet gateway known as MainStreet.au, one of the major projects currently being managed by CECC. Participants were able to learn more about how Western Victorian communities are coming on line through a coordinated strategy to advance the uptake of electronic commerce.
An interesting aspect of the developing online communities is that many references to sustainability were not based on financial but rather on ensuring the currency of content. It appeared many existing online communities lack a viable underlying business model with recurrent funding targeted from advertising or continuing local government or other support. Although currency of information is important the ongoing ability for projects to achieve financial sustainability is critical. The MainStreet.au business model with its range of revenue streams appears more sustainable in comparison.
A lack of technical resources represented a second distinguishing factor. A number of WA Online Communities appear locked into their original design decisions which makes it difficult for them to respond to changing demands or to progressively advance their online service delivery. We are operating in a business environment that is changing daily. In such an environment, we believe that access to the skills of a technical officer within the MainStreet.au project team provides a valuable resource and added flexibility to adapt to changing market conditions.
Attendance at CASOC 2000 Conference provided an valuable opportunity to share concepts and ideas, raise issues and suggest solutions, and help shape the future development of the online world.
GST concerns
The introduction of the GST in July poses real fears for Australian businesses operating on the Internet of loss of business to overseas competitors.
Eric Wilson (The Age, I.T2 News, 18 April) believes that it's because Australia lacks a comprehensive e-commerce policy. Wilson says "our IT-illiterate politicians have failed to realise that, in the borderless world of the Internet, the GST is not only impossible to apply but Automatically places 'new economy' Australian business in an uncompetitive position".
Explained simply by Wilson, if a good or service is 'connected' with Australia by way of the business operating here and the recipient is an Australian resident, a 10 per cent tax is applied to the supplier. But if a service comes from an overseas supplier without an office in Australia, the tax does not apply because the provider is outside Australian jurisdiction.
For example, an Australian software developer on "the vanguard of e-commerce" who writes a program and sells it on the Internet must charge Australian down-loaders 10 per cent extra to cover GST. An overseas competitor can sell the same product to Australians minus the 10 per cent because it's not subject to the local tax.
Even those slow on the uptake can figure out that to be competitive in Australia, Australian's will be better off moving their operations off shore.
Wilson says that the Australian Taxation office (ATO) warned of this in a 1997 discussion paper on e-commerce and taxation: "The removal of present bandwidth limitations allows all or most of the functions of an Internet business to be located in an offshore Web site, either in the country of residence or a low tax jurisdiction, and service Australia direct. ... This may result in a net loss of revenue from permanent establishments. Thus, measures to catch Web sites as permanent establishments may only provide revenue benefit in the short-term and could force them offshore in the long-term."
Furthermore, the GST position for Australians trading overseas on the Internet is not fully clear. David Braue (The Age, 28 March) reports that "while businesses will be able to reclaim the GST they pay on online transactions as input tax credits, widespread confusion over whether the tax applies to goods sold to overseas customers has left many Australian e-tailers worried about their ability to compete with lower-priced competitors overseas".
Braue agrees that any tax on Internet sales will put the industry at a disadvantage: "Experts say that businesses, especially online startups, may weigh the impact of the GST on their business plans and consider an overseas presence to stay competitive. ... and the Government may have to consider new measures to prevent the exodus of many promising local startups for more tax-friendly climes."
The Australian Taxation Office believes its previously issued GST guidelines have made the issue clear. The ATO blames the fact that most businesses still don't know how the GST will affect them on the businesses' lack of preparedness, not the complexities of the new tax.
"Generally, exported goods are GST-free," says one ATO spokesman, who referred confused businesses to the GST hotline on 132478. "In individual businesses' circumstances, they can seek written advice from the Tax Office and we'll give them a reply on their individual circumstances."
The ATO's reply does not clarify whether online retailers will be considered exporters in the same sense that Australian manufacturers shipping products in bulk for overseas distribution are exporters, and qualify for tax-free status.
Wilson believes that "senior tax officials have believed for years the current Government policy could export new economy jobs, which will also decrease income tax revenue" and questions "how could such an oversight happen in the Government's most important policy initiative?'
How indeed!
ISP pays in UK libel case
A libel case settled in London last week could have profound legal implications for Internet users and Internet Service Providers (ISPs).
Adam Turner (The Age, I.T1 News, 4 April 2000) reports that U.K. Internet service provider Demon Internet agreed to pay 15,000 ($39,000) damages and an estimated 230,000 ($605,000) in costs to Laurence Godfrey, a physicist who said he had been defamed by two anonymous postings on the net. Demon will have to pay its own costs, a similar sum.
The case appears to establish in British law that Internet service providers are subject to the same libel laws as newspapers and other media. Some lawyers argued that the settlement amounted to unacceptable censorship of the Internet, though this was disputed by others. It could herald a run of libel actions in Britain, where the libel laws are much tighter than in the US, over allegedly defamatory statements on the net.
Demon, now owned by Thus plc, later said it would press the Government for recognition that ISPs "should not be liable for the millions of items carried on the Internet every day".
The first posting, described by Gordon Bishop, Dr Godfrey's lawyer, as "squalid, obscene and defamatory", appeared on 12 January 1997 on the soc.culture.thai newsgroup, which is carried by Demon. It was a forgery purporting to be from Dr Godfrey. Despite several faxes from Dr Godfrey, the item remained on the newsgroup until 27 January, and he initiated legal proceedings.
In July 1998, a second posting, originating from one of Demon's own customers under the pseudonym "Iniquity", appeared in the uk.legal newsgroup and made further defamatory and personal allegations about Dr Godfrey, the judge was told. Dr Godfrey again requested their removal and again his request was not complied with.
Dr Godfrey received 5000 ($13,000) for the first libel and 10,000 ($26,000) for the second, which he said had a much wider readership in Britain.
Mr Bishop said Demon had never sought to suggest there was any truth in either libel and contended it was not responsible or liable for either. Thus plc said it had improved its procedures for handling complaints about material posted on the Internet.
Mark Stephens, a media lawyer, said: "In America, ISPs have immunity over the content they provide access to and that must be the situation here. Otherwise, you are going to have a legal free-for-all with libel writs flying left, right and centre."