Harlot's Web.

• Author: THOMPSON, NICHOLAS

Why and how the government should regulate the Internet

JUDY FISCHER WAS FRUSTRATED BY HOW hard it can be to tell the good guys from the bad guys on the World Wide Web. So she decided to start an organization called the Web Assurance Bureau that would log consumer complaints and develop a seal of approval for ethical companies. After sketching her business plan, Ms. Fischer doled out $277 to a cheap online software dealer with a reputable-looking home page and a money-back guarantee.

The software soon arrived in the mail. But it didn't work. And the dealer that had sold it no longer existed. No Web page, no address, no recourse for Ms. Fischer and certainly no money back. She called the Federal Trade Commission (FTC) but no one knew where the company had gone, where it had come from or, indeed, that it had ever existed. It had taken Ms. Fischer's money and vanished into cyberspace without leaving a footprint.

This experience only confirmed what Ms. Fischer already knew: The Internet is far from the paradise that conventional wisdom would have it be. There's no doubt that it has made products cheaper and information more accessible. But from Matt Drudge's unsubstantiated mudslinging through fly-by-night software companies, the Internet continually extends society's lowest standards. Moreover, as the Net has become increasingly unruly and inscrutable, Congress and the Clinton administration have made little effort to protect consumers. After writing the report that shapes the central organizing principles for the Clinton administration on Internet issues, special adviser Ira Magaziner emphatically declared, "The Internet doesn't need government."

But it does. The Internet under Magaziner and Clinton's genial permissiveness would be like New York City without stoplights.

Surfing USA

The Internet was conceived of in the late 1960s at the Defense Department as a means to help the United States keep going in the aftermath of a nuclear war. Twenty years later, it had become a medium for computer programmers to exchange code. In 1991, Netscape developed its Navigator browser and made it easy for everyday computer users to get online.

In those first heady days, the Web looked to be the ultimate medium for increasing power from the ground up. Any entrepreneur could start a business; any researcher could find near-limitless data; any consumer could choose among 43 brands of nail clippers. The Net promised to inspire democratic initiative all over the world, from shoppers in Lincoln, Nebraska to oppressed minorities on the Burmese border.

As the Net started growing, small, idealistic companies were siphoning money and market power from large corporations. A frenetic 30-year-old named Jeff Bezos founded Amazon.com in a Seattle van. Even though he soon had enough cash to wipe out the external debt of Honduras, money didn't seem to be the only thing driving him and he still operated from behind his first desk, an old door balanced on a sawhorse. According to Bezos, Amazon began with noble ideals: to kill sprawling strip malls and to bring cheap books to the people. Did he want to sell books that people weren't interested in? No, he said: What consumerism really is, at its worst, is getting people to buy things that don't actually improve their lives.... That's approaching evil.

Unfortunately, getting people to buy things that don't actually improve their lives is a good way to get rich, and it wasn't long before the lure of major league fortunes crushed the principles of Internet visionaries. Soon, people began to put businesses online, not out of high ideals, but because they wanted to have their smiling billion-dollar photographs on the cover of Wired magazine.

Amazon certainly couldn't escape the change in attitude; last spring, the company was caught offering positive reviews and prominent placement to publishers who dropped bags of gold on the sawhorse. For $10,000 a publisher could get a top slot on the company's home page for its favored book, an author profile, and "complete Amazon.com editorial review treatment" That's trying to get people to buy things they don't want and that don't improve their lives. That's approaching evil. When caught, Amazon abandoned the practice and now disavows it. Still...