The Word on E-Sign

SAN FRANCISCO (07/03/2000) - From helping the CIA securely send messages to cutting through the red tape of getting a mortgage, the digital-signature bill that President Clinton signed into law Friday will have a profound impact on Internet business - eventually.

That was the consensus of a panel of four Internet executives who joined California State Attorney General Bill Lockyer on Friday for a lunchtime discussion on the bill, also known as the Electronic Signatures in Global and National Commerce Act, or E-Sign. They also agreed that the threat of fraud is no greater with electronic signatures than with the old-fashioned variety on paper, contrary to some community groups that have argued that the legislation would increase the risks of identity theft.

"It's just another medium that allows bad guys to operate," said Lockyer, who outlined his agency's role in enforcing the e-signature law in the nation's most populous state. "We mostly worry that consumers will feel less comfortable because they don't have the feel of paper in their hand."

But there's little threat of paper becoming obsolete any time soon, said Henrik Johannson, executive VP of strategic development for Creditland.com, a Web site that allows consumers to comparison shop and receive credit online.

"This is not going to happen overnight," Johannson said. "We have a lot of existing slowness in the system."

Johannson predicted, for instance, that it would take a year before a fully automated mortgage became reality. But once it does, he predicted, e-signatures would enable banks to close a mortgage within five days instead of 30. Smaller loans, he added, would have a much faster response time, with customers signing a contract online and the money posting to their checking accounts almost immediately.

John Witchel, CEO of Red Gorilla, which hosted the roundtable, predicted that giving electronic signatures legal standing would help build consumers' trust in the Web. "With the passage of this law, our customers can now do business more confidently on the Internet," said Witchel, whose company develops and syndicates Web-based applications.

Gilman Louie, president and CEO of In-Q-Tel, predicted that E-Sign would propel private companies to step up their efforts to develop more secure technologies.

Those efforts, in turn, could prove useful to communications within the CIA, which set up In-Q-Tel, a nonprofit-venture fund formed to foster technology aimed at solving the agency's IT problems. Louie, for instance, envisions the private sector figuring out a way to substitute an electronic thumbprint for a signature without any security risk, a technology that then could be used for CIA communication.

E-signatures also offer the potential to bridge the gap between government and business, said Jon Fisher, CEO of NetClerk. Fisher's company enables contractors to acquire city permits online by automating the process of turning their online applications into faxes or paper documents and submitting them.

Until now, NetClerk has been able to simplify the process for contractors, but hasn't been as successful with the municipal government. With electronic signatures holding legal weight, he's hoping that he can eventually change the government's side of that equation, as well.

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