Mr. Chairman, and members of the Committee, thank you for the opportunity to testify today on the issue of creating legal certainty for electronic signatures, and on the E-SIGN bill, H.R. 1714, in particular. By way of reference, I serve as chair of the Electronic Commerce committee of the Information Technology Industry Coalition (ITI) an association of 26 of the largest high-tech companies in America with world-wide revenues exceeding $450 billion. Along with the Chamber of Commerce, the NAM, the American Electronics Association (AEA), and the Information Technology Association of America (ITAA), ITI has endorsed the Senate electronic signatures bill, S. 761. I am speaking today however only in my role as Manager for Technology Policy for the Hewlett-Packard Company. As a global leader in computing and Internet issues, HP has a great interest in the growth of electronic services, and therefore I want to commend you for holding this hearing on electronic signatures legislation.

The continued growth of electronic commerce depends on the development of a legal framework of electronic contract law that will supply uniformity and legal certainty to transactions in the electronic marketplace. The legal authentication of contracts and transactions is the necessary first step in developing that legal framework. Without a core foundation of legal certainty -that online transactions will be honored and afforded the same rights that obligate other commercial transactions--electronic commerce will never be able to achieve its full potential. Creating a regime of electronic signatures that has both legal certainty and widespread consumer acceptance is therefore an important policy goal.

In a sense, this legislation is actually Rev.2 in the effort to create a legal framework for electronic commerce. Last year, Congress passed important e-commerce legislation in the "Government Paperwork Elimination Act" (S.2107), which allows citizens to download federal forms through their computer. This public law also establishes a process where commercially available electronic signatures can then be used to return these filled-out forms back to the government. As there are 7,000 individual federal forms, which were filled out by the public 26 billion times last year, S.2107 provided important federal leadership for the development of open, technology-neutral standards for electronic signatures.

By making government forms available electronically, citizens will benefit from the ease and convenience of downloading and returning federal forms through the Internet. Having federal agencies go 'on-line' will also result in a significant lowering of their transaction costs for sending and receiving federal forms. Businesses will also be able to electronically collect, store and file government forms. Companies large and small will benefit from replacing paper copies and postage with simple and cost-effective electronic forms. For Hewlett-Packard, the savings will be $1 million per year for just one form alone: the IRS W-4 form.

Just as important however, is the precedent that the Government Paperwork Elimination Act sets in insuring that the legal framework for electronic signatures continues to move down the path of open systems that are not limited to any particular technologies, and are also available in the open marketplace. Unfortunately other countries around the world are not necessarily following the same open process that we are in this country. A number of countries, including Japan and China have taken steps to create technology-specific electronic signature laws. And at least two nations -Germany and Italy--have passed such laws.

The E-SIGN bill addresses this very important issue, and directs the U.S. government to "identify constraints imposed by foreign nations or international organizations that constitute barriers to providers of electronic signature products or services…" [Sec. 210(a)(1)(B)] The E-SIGN bill recognizes this need to harmonize international laws governing the use of electronic signatures so that electronic commerce can flourish globally. An important foundation to the creation of that seamless global marketplace must be the elimination of existing technology-specific national laws of electronic authentication and electronic signatures. Legal standing for electronic signatures should be "performance based", (i.e. that they are secure, easily available and user friendly) not "design based" (i.e. a specifically-mandated technology), in order to reflect the need for technology neutrality in the development of a legal framework for electronic contracts.

The goal for any global electronic signature regime must be to allow multiple technologies to compete in the marketplace and not default to government mandates to determine which authentication technologies will be used in global electronic commerce. Businesses and consumers must also be allowed to choose among commercially-available technologies; that contracts executed electronically will be presumed to have legal validity; and that the parties will have the opportunity to prove in court that their choice of authentication was legally valid.

One of the concerns that has been raised about moving forward on electronic signatures legislation is that it might cause harm to existing state consumer protection laws. HP is committed to the goal that this legislation on electronic signatures, or any legislation dealing with electronic commerce should not just offer consumer protections equal to those available in the paper world, but should also be consumer-empowering. We have already seen significant examples of how E-commerce competition drives prices down, offers more choice and provides consumers with the necessary material information they need to make informed purchasing decisions. We also need to ensure that this new electronic medium is also a clean well-lighted marketplace. If a consumer protection law now states that certain transactions require that a notice or disclosure to be offered in writing, then the burden should be on the electronic substitute to prove that it can meet a similar or higher standard of disclosure and authentication.

There is no question that the growth of electronic commerce will require new innovative approaches to enforcing traditional consumer protections. Just last week, Hewlett-Packard and the Better Business Bureau announced in Paris at the Global Business Dialogue meeting on Electronic Commerce a new global initiative on consumer protection through the use of alternative dispute resolution mechanisms (ADR's). The use of consumer-friendly, dispute-settlement procedures for global E-commerce can offer cross-border consumer protections no matter where the consumer or vendor is located.

As well, HP supports the privacy disclosure requirements listed in H.R. 1685, sponsored by Congressmen Rick Boucher and Bob Goodlatte. HP endorses the idea that all commercial websites should be required to disclose in a clear and conspicuous manner, what it is that they do with a consumer's personal data. Under this approach customers can make an informed decision whether they want to continue a transaction with that website or go to another that has a privacy disclosure more to there liking. If consumers in the marketplace decide that privacy is important to them, then the competitive advantage will be with those sites that have more stringent privacy policies.

Crafting the right approach toward consumer protections in the electronic marketplace at both a domestic and global environment must be a priority policy issue for government and industry. And an electronic signatures bill should not in any way diminish existing legal protections. But we can move forward in creating a legal framework for electronic signatures that will help empower consumers without putting at risk a consumer's rights to traditional consumer protections. As well, the United States needs to show global leadership in creating a legal framework of open authentication systems that are not limited to any particular technologies. Those should be the necessary -and achievable-- goals of this legislation.