There are a lot of people in Bermuda hard at work formulating the standards companies will follow in doing electronic commerce from Bermuda. The standards are meant to flesh out the procedures to be followed under the recently passed Electronic Transactions Act 1999.

The difficult part about forging such regulations is in anticipating the manner in which electronic commerce is going to occur and prosper without strangling entrepreneurship in too much red tape, while at the same time protecting the consumer. The drafters of the regulations will also have to leave them flexible enough to be amended and changed so as to take into account the varied uses entrepreneurs may find to make money off electronic transactions.

From the early draft copy (circa September) as presented by Bermuda Stock Exchange chief executive officer William Woods before a meeting of the committees formed to drive the process forward, I can see that good consideration is being given to protection of the consumer. After all, the customer is king on the Internet. Drive them away through the proliferation of shady companies and the industry in Bermuda will take a nose dive.

There are two sets of standards or codes of conduct being considered, one for intermediaries and one which will apply to intermediaries and e-commerce service providers. As Mr. Woods explained, the initial standards have not been set at a "high threshold'' as it will take time for providers to get their procedures in place. Still, a fine of $5,000 a day is being suggested for each day of contravention of the standard.

What's being discussed is a quality seal of approval for those doing electronic business, consumer protection, data protection, and protection of Bermuda's reputation. Ironically the standards being set for electronic commerce should form a major part of the consumer protection which Bermuda doesn't itself currently have for bricks and mortar companies. The previous Government and the current one have sat on recommendations made about three years ago by a commission on consumer protection under the leadership of Sir John Plowman -- although Government promised on Friday to amend the Consumer Protection Act.

The standards as currently suggested for Bermuda will require intermediaries and e-commerce service providers to disclose in their contracts with customers their identity, an address or location from which they are doing business from, an e-mail or mailing address contact, a registration number or unique identifier, their obligation to comply with the standards under Bermuda's Electronic Transactions Act, and a contact of the relevant authority or organisation to which customers can lodge a complaint.

Those doing e-commerce will also have to disclose all contractual terms and conditions, the level of security though which payments are being made, and importantly, the legal jurisdiction under which the transaction is governed.

Full costs, delivery times and accurate descriptions of goods must also be disclosed.

E-commerce providers will also have to meet standards of truth in advertising services and products, refrain from sending bulk, unsolicited electronic records, and prohibit their services from being used for sending such mass e-mailings called spam.

They will also be required to keep all records of complaints about spam.

Privacy on the Internet is also a concern. Companies "will endeavour to ensure that the personal data or business records can be checked by the customer; are accurate, and if necessary, kept up to date; if inaccurate, are erased or rectified; and is erased at the request of the customer and/or when no longer reasonably required'', according to the draft document.

The standard "know your customer'' rule applies in the case of intermediaries dealing with clients who want to do business from Bermuda. The extent of the proposed requirements serve to underline the global nature of electronic business and the need to meet international consumer protection standards current in Europe and North America. It must also be remembered that members of the European Community (EC) are currently at loggerheads over a planned regulatory framework for the rapidly growing e-commerce sector.

Attempts to impose separate national restrictions threaten to render the EC's e-commerce directive ineffective and reports suggest that some companies are already moving outside the EU to avoid conflicting national rules, according to Treasury Today newsletter.

Many companies in Bermuda are hoping the attraction of reasonable e-commerce regulations will drive that business to the Island.

Sign of the times: Encyclopaedia Britannica (www.britannica.com) decided to switch to the free Internet model in providing information two weeks ago. The model is all about being what's called a portal on the Internet -- gathering as much traffic through the Web site to eventually attract paying clients, those with goods to sell to visitors. The portal gets a cut on the sales.

In Britannica's case the company has evolved from selling a hard-backed 13-volume set for about $1,600 sold by door-to-door salesmen, to a multimedia CD-ROM for about $140 . Now the whole lot is free as the company is now billing itself as a "knowledge destination'' for all Internet users, hoping to channel traffic to the site.

Britannica has been selling its Internet version to subscribers for about $50 since 1994. All Britannica has to sell now is its name and credibility built up over two centuries the company has been in existence -- and that's quite a bit.

But a foul up happened on the way to the party. Unfortunately when Britannica made the announcement two weeks ago to go free the site was so swamped it was shut down. The site is still shut down. I bet the people stuck with an investment still sitting on their shelves must get some sort of satisfaction from that news.

Tech Tattle is about issues in technology. Contact Ahmed at Tel: (011-44)-1273708386 or ahmedelamin yhotmail.com