Good morning.

We are gathered here this morning, as we resume this Legislative session, to discuss the electronic commerce technology with which we will begin the new century.

It is a complex subject and none of us will master it in a single morning.

But since we're all busy, perhaps we should start with an obvious question.

Why bother?

Why should we concern ourselves with electronic commerce? Why not let the technology develop for a few years and then see if any legislation is needed?

A good question -- with an important answer.

The answer is that the technology HAS been developing for years. Now is the time to consider legislation. And the penalty for not doing so is steep.

In my estimation, this issue has absolutely nothing to do with cost-savings or labor-saving techniques, although that may well come to be a beneficial consequence in the long term.

Rather, this is about maintaining Vermont's membership in the marketplace. This is about putting out the electronic welcome mat for environmentally friendly employers. This is about allowing businesses already here to continue the corporate manager's dream of being competative and living in Vermont at the same time.

In short, once you decode all the high-tech talk about electronic commerce, you will recognize the message -- this is about high-paying jobs for Vermonters.

This morning and in future hearings, you will hear about E-D-I and P-K-I and other high-tech acronyms. Please remember, the translation is J-O-B-S. That's the message.

The good news is that Vermont government is neither on the cutting edge of new technology, nor are we tagging along behind the parade.

If I can give you a one-line update, based on my own personal observations, we have a lot to learn and a lot to do, but we have a little time yet in which to learn and in which to implement.

When I say it is good news that we are not on the cutting edge, I think you recognize what I mean. I think we all agree that it would be irresponsible of us to be investing time or money in untested technology. We want to be up-to-date, we want to be competitive, but we surely do not want to be first when it comes to new technology.

Since the Microsofts of the world have a great deal more money than does the State of Vermont, I think it's only prudent to let fellows like Bill Gates make the mistakes with new technology. We should be running a year or two behind, with tried and true technology.

As we gather here today, we do still have a year or two to plan for the new century. But we will be discussing topics here this morning for which planning must begin immediately -- indeed, for which planning already has begun in several parts of state government.

Last spring, the House members of this panel asked my deputy if we would prepare some testimony on the subject of electronic document filings using what is called EDI or Electronic Data Interchange. Our presence here today is in response to your request.

The easy way to think of EDI is to consider it as a sort of international treaty among computer people -- an agreement by which they send electronic impulses to each other in a particular way so that the sender's message is always understood by the receiver, and that the sender, in turn, knows for sure that the receiver has understood.

In brief, as the situation now stands, the technology for on-line EDI filing is readily available and, in fact, is already in place in states such as Texas and Virginia. The problem is, lawyers and lenders won't use it.

What EDI presents, then, is not so much a technology challenge as a legislative challenge.

You will hear today from a policy expert in the field of electronic filing who is participating in the international effort to revise Article Nine of the Uniform Commercial Code. The goal is to give lawyers and lenders a high enough comfort level with EDI so that the new technology already installed in places like the Secretary of State's Office in Texas will be used.

You also will hear briefly from a senior engineer at Symquest in Burlington who has been studying the technological ramifications of our new Campaign Finance Law. He will speak briefly on how other states are viewing EDI technology in the context of campaign finance filings and other elections-related applications.

The other subject for discussion today is what is called Public Key Infrastructure, or PKI. This is the buzzword for a whole host of technologies that allow strangers to engage in secure financial transactions with each other over the Internet.

For all its complexities, PKI technology answers the simple and obvious questions any of us would have about engaging in financial transactions over the Internet:

1. How do I know this coded electronic message is really for me?

2. How do I know it came from you?

3. How do I know it wasn't intercepted in transit and also received by someone else?

4. How do I know it wasn't changed in transit?

5. How do I know you are who you say you are?

6. What do I do if you later try to repudiate this transaction?

These are the opening questions, based on the reasonable insecurities of any partner in an on-line transaction.

But as you can readily see, the social, legal and economic consequences of this sort of technology are enormous, and it will be these issues you'll have to grapple with.

We present our witness this morning in direct response to Rep. Kathy Keenan's bill number H. 60, a Senate version of which, S. 206, has recently been introduced by Senators Vince Illuzzi and Ann Hallowell. There is much to be said on Public Key Infrastructure, and I understand the Public Service Department has a substantially different approach to recommend. I want to stress that, today, we will merely scratch the surface. At another time, you will want the conflicting viewpoints to be heard.

But since H. 60 would give new duties and authority to our Office, we thought an appropriate way to begin the PKI discussion would be to hear from an expert who was involved in implementing a law very much like H. 60 in the Office of the Secretary of State in the State of Washington. We appreciate her willingness to be here today.

It may be that you will wish to go forward with H. 60, or you may choose an alternative approach that doesn't affect our office at all. We are not here today to recommend one approach or another, but rather to bear witness to some of the administrative consequences of pursuing the H. 60 approach.

I would like to offer a word of reassurance as you begin your consideration of what is probably the most esoteric stuff ever considered in these halls. The reassurance is this:

We don't have to design the technology. It's out there.

We don't have to even understand the technology. Few people do.

Our job is to make sure we don't try to go it alone.

We need to take the pulse of the technology wizards, consult with legal experts, seek the advice of our government colleagues in other states, and listen to input from the business community.

There are only two dangers involved, as I see it.

There is the danger of doing nothing, in which case we will quickly become a hostile environment for certain classes of environmentally friendly business -- which we would all find unacceptable.

And there is the danger of going it alone, in which case we would run the equally unacceptable risk of becoming technologically or statutorially incompatible with electronic commerce as it is practiced in the world's markets.

I would urge you, in your deliberations, to set a course designed to place Vermont smack in the middle of the pack, about three or four safe steps behind the leaders.

And remember, whenever you lose track of what it all means, the decoded message is J-O-B-S.