The UK Government has published its long-awaited bill aimed at making Britain the best environment in the world to trade electronically.

But the Electronic Communications bill, which has had a controversial history, received a mixed response from industry and public policy pressure groups when it finally appeared on Friday.

The Conservative opposition has already described it as a "dog's breakfast" of legislation. The Foundation for Information Policy Research think-tank said on Friday it would harm industry, hold back the growth of e-commerce, undermine consumer protection and violate the European Convention on Human rights.

Doug Stevenson from AOL joins a discussion about the future of the internet

However, two major IT companies in the UK, Microsoft and the chip maker Intel, welcomed the bill as defining the ground rules for the growth of electronic commerce, which was vital to the UK's competitiveness.

Details of the draft bill

The Electronic Communications bill, formerly the Secure Electronic Commerce bill contains four sections:

• Part I, Cryptography Service Providers, proposes a voluntary licensing scheme on the lines of a Register of Approved Providers being set up. These would offer services to aid the growth of e-commerce such as electronic signatures and secure transmission of data. Industry wants self-regulation rather than government involvement in this.
• Part II, Facilitation of Electronic Commerce, intends to ensure the legal recognition of all electronic signatures and their admissibility in court. It appears non-contentious.
• Part III, Investigation of Protected Electronic Data, is the most controversial section, dealing with law enforcement issues. Civil liberties groups will find fault in wording which allows the authorities to serve a warrant or "decryption notice" on anyone they think "appears" to hold the key to coded data. A "tipping off" offence can prevent those being investigated to speak about their case, with their only recourse being an appeal through a secret tribunal.
• Part IV, Miscellaneous and Supplemental, deals with increasing the telecommunications regulator Oftel's powers to vary the licences of companies.

Credit card use online

Launching a consultation on the bill, the IT minister Michael Wills said this was part of a package of measures being introduced by the government to lay the foundations for electronic commerce to flourish in Britain.

These included the announcement of the terms for introducing third generation mobile phones which will allow high speed, mobile access to the Internet, and a consultation on licensing a new radio spectrum to allow broadband wireless services to be offered across the country.

The draft Bill would build confidence in trading electronically by protecting people's credit card and other personal details and sensitive commercial information. Mr Wills said: "The Electronic Communications Bill is a key element in encouraging business and giving consumers confidence.

"The Bill will allow business and individuals to use electronic signatures with confidence. I am working in partnership with industry to build trust in providers of electronic signatures and similar services by making self-regulation work."

Law enforcement powers

Home Office Minister Paul Boateng said the draft Bill would ensure that existing law enforcement powers were not undermined by the criminal use of the very technologies, such as encryption, needed to encourage e-commerce.

"In developing our policy to promote e-commerce for the law-abiding majority, we must ensure that criminals do not benefit. Giving law enforcement properly authorised access to decryption keys and plain text will help maintain their effectiveness in the battle against serious crime and terrorism," he said.

Microsoft UK's chairman, David Svendsen, said the draft was a golden opportunity for the United Kingdom to become the European Hub for electronic commerce.

"Time is fast running out and, whilst progress has been made towards achieving this vision, I believe this bill is a huge step towards the UK maintaining its leadership position in the global digital economy," he said. "As a result of this bill, finger on keyboard will be legally equivalent to pen on paper. This will revolutionise the way we live and work. I also welcome that Government has listened to industry by removing provisions for key escrow."

Intel UK also welcomed the removal of a key escrow proposal, where law enforcement would be able to access the keys to encrypted data held by licensed bodies known as Trusted Third Parties.

Keith Chapple, director of government affairs for Europe, Middle East and Africa said: "We are pleased that the government has taken out the mandatory provisions for key escrow and the licensing regime. The industry is itself strongly motivated to create a secure and trusted environment for users because without it there will be no electronic business."

'Objectionable proposals'

Caspar Bowden, director of the Foundation for Information Policy Research, said ministers still had the power to reintroduce such "objectionable proposals" later as regulations. He said two new offences in the bill raised serious civil liberties concerns:

"The bill will give police the power to demand decryption keys from anyone they suspect of possessing them, and failure to hand keys over can lead to a two-year jail sentence.

"Defendants will be presumed guilty of withholding a key unless they can prove otherwise, a likely contravention of the European Convention on Human Rights, and decryption notices will be secret, so it will be impossible to complain effectively if they are used in an oppressive way."

A "tipping-off" offence could prevent innocent associates from complaining publicly, with a penalty of five-years imprisonment, he added.

The National Council for Civil Liberties took a similar line. Liberty's Director, John Wadham, said :

"These powers are too sweeping, and in some respects problematic. It's difficult to discern quite how an individual could prove that they didn't have a key: you can't prove a negative. This reversal of the burden of proof may well infringe the right to a fair trial. The indefinite gagging order on any individual whose e-mail has been intercepted is extraordinary."

"The irony is that in human rights terms, business is way ahead of the government on this issue. Successful businesses have realised that those who respect their customers privacy will win in the long term. The interception powers risk undermining confidence in online privacy, and stunting the growth of electronic commerce."

A Home Office spokeswoman denied the bill would mean defendants being presumed guilty. "The bill doesn't reverse the onus of proof, the authorities still have to prove that an offence has been committed for it to get off the ground," she said.