Varney Prods FTC To Use Net For Consumer Education

Credit the Federal Trade Commission's newest commissioner, Christine

Anne Varney, with prodding the agency onto the Internet.

Varney, who was in Seattle last week, was sworn in last fall for a term that ends in September 1996. Her first question upon arrival at the FTC was about the agency's web site.

When Varney heard there wasn't one she was stunned.

"What do you mean we're not on the Net? Get us on!"

Her next request was that the agency dump DOS and get Windows, which should make nerds in Microsoft country grin with pride.

It seemed a natural request from the newest commissioner. At 39 Varney is the youngest of the five commissioners, who range from their mid-40s to 60-something. The others are becoming Net fans though, she said.

Both Varney, a graduate of Georgetown University Law Center, and her husband, Thomas J. Graham, are lawyers. Graham does not practice law, but is a "jock" for a computer company. Their sons, Mickey, 5, and John, 8, regularly surf the Net.

Varney sees great educational possibilities in the new technology. For instance, she looks forward to her sons getting acquainted with people from cultures around the world via the Net.

She believes the Net opens up a new world particularly for youngsters with learning disabilities. And she hopes public agencies will use the Net for more active consumer education, particularly with bilingual populations that might be targeted by scam artists.

In the past, Varney says, the FTC has targeted seniors, the middle class and up for most of its educational efforts. Now she believes it is time for the agency to step up diversity efforts and work more often with non-English speaking groups.

Varney was in Seattle to address a legal session of the Food Marketing Institute, a national supermarket trade group. She also did a chat room and "Your Business Bulletin Board" last week on Prodigy.

The "new kid on the block" doesn't see the FTC as a cyberspace traffic cop, but reminds entrepreneurs that her agency "has jurisdiction over fraud, regardless of where it is."

The FTC has prosecuted one Internet "bad guy" who made false representations about what he could do to help consumers with poor credit ratings.

But the agency is "closely watching" purveyors of investment opportunities, gem stones and other businesses, who traditionally have been quick to use "cutting edge technology" to bamboozle the unwary.

Because of different histories and laws, the FTC does not prosecute newspapers that print fraudulent advertising, or common carriers such as AT&T, unless the federal agency can prove those entities knew they were passing along fraudulent offers.

But the agency does hold broadcasters responsible for fraudulent ads.

The question to FTC staffers often is: Will you prosecute an online service that has fraudulent material?

The answer is, probably not if the online service cooperates and helps the feds get the bad guys off the Net.

But a recent decision in New York state could change that. A lower court judge held Prodigy liable for fraud committed by an entity online. The case is being appealed.

Varney fears that if the decision is upheld, Prodigy will stop its voluntary monitoring of businesses on line.

So far online providers have cooperated with regulatory agencies.

Varney believes the Net scene must be monitored as it evolves. "We need to find out if there is a need for government regulation," she said, clearly stating her preference for voluntary action.

On the subject of regulation on the Net to protect minors, Varney says neither business nor government can act as a substitute for parental supervision. She likens antics on the Internet to television fare: parents must establish and enforce their own rules.

Frankly it's easier to enforce Net and TV rules when kids are the ages of Varney's 5- and 8-year-olds, than it is the habits of a teenager.

Before her appointment to the FTC, Varney served as President Clinton's cabinet secretary, and was the primary contact between the chief executive and 20 cabinet members. It was a demanding job and one she didn't want to do forever with two young children, though she has a supportive spouse.

"I ran the White House, and he ran our house during that period," Varney jokes.

She served as chief counsel for the Clinton campaign, general counsel to the 1992 Inaugural Committee and general counsel to the Democratic National Committee. She also practiced law with a Washington, D.C., firm, focusing on health, trade, environment, energy, transportation and communications issues.

To check out the FTC write the agency at http://www.ftc.gov on the Internet, or locally phone (206) 220-6363. You also may contact the FTC's Public Reference Branch, Room 130, Sixth Street and Pennsylvania Avenue Northwest, Washington, DC 20580, phone (202) 326-2222. The teletype number for the hearing-impaired is (202) 326-2502.

Shelby Gilje's Troubleshooter column appears Wednesday and Sunday.

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