Subject: RE: Progress report?

From: David Burdett <[email-masked]>
Date: Thu, 12 Aug 1999 11:55:58 -0700

Ian

I sent a message on covering this topic to the OTP Forum last March. Below
is an updated version. Additions to that version of the email are marked
between asterisks.

I am also copying this to the IETF Trade working group which is now looking
after IOTP.

If you have any questions please get in touch.

Regards

David
====================================
To everyone on the otp-forum, I thought I should provide everyone with an
update on what's been happening recently with IOTP. 

More detail is provided below, but the key thing to note is that, if you
don't already know, IOTP is now being developed under the governance of the
Trade Working Group of the Internet Engineering Task Force *and is very
close to IETF last call. Donald Eastlake (chair of the IETF Trade WG) and
myself are working on this as I write this email. Donald also plans to issue
a revised charter very soon*.

You can subscribe to the Trade Working Group by sending a message with
"subscribe" or "unsubscribe" in the body to:
[email-masked]. Archives are  available at:
http://www.elistx.com/archives/ietf-trade/

I also agree that the IOTP web site needs updating, primarily to point to
the IETF Trade Working group which is where most activity is ocurring.
*Currently SIZ in Germany are working on a revamped web site which will be
called www.iotp.org and we will redirect the current otp web site to this
one. This should be available in August.*

More detail is provided below.

CURRENT STATUS OF IOTP
Last August governance of IOTP was handedover the Trade Working Group. Since
then: the first draft of version 1.0 of the specification was produced in
October 1998. This was then revised and a version published on the 28th
February which was reviewed at the IETF meeting in Minneapolis in mid March.
Since then a Working Group last call has been raised on this specification
with a view to making it an information RFC. *This was reviewed in at the
IETF meeting in Oslo in July 99 and as a result the decision was made to go
to IETF Last Call.*

As far as implementations are concerned, there are two existing based on
IOTP version 0.9, that have been implemented by the Royal Bank of Canada and
Hitachi in Japan. *The Royal Bank of Canada has since implemented a solution
based on verison 1.0.*

Other developments include: the MITI project in Japan which will use IOTP,
plans for implementation by SIZ in Germany, and the consideration by the
OECD of using IOTP to provide a method of recording tax information in form
which would be acceptable for to tax authorities and others. More details on
this are provided below. 

MITI Project
=========
The MITI (Ministry of International Trade and Industry) Project is due to
start this fall in Japan and will use IOTP to support SET and electronic
cash payment methods. Organizations that are involved are:
Card Issuers: VISA Japan, MasterCard Japan, UC Card, Diners Club Card, JCB,
Orient Corp., Hitachi Credit
Banks: Tokyo-Mitsubishi, Sanwa, Asahi, Daiichi Kangyo, Fuji, Association of
Regional Banks
Vendors: Hitachi, Fujitsu, NTT, Oki
Content Providers: Dai Nippon Printing, PA

SIZ
===
SIZ is the "IT Development and Coordination Centre of the German Savings
Banks Organisation". The Savings Bank have around 50% of the German banking
market and have issued 30m Geldkarte cards. They have stated that they have
the funds to do an IOTP pilot to support Geldkarte and SET during 1999.

OECD
====
This is best explained by the email posted to the Trade WG by Michael Hardy
of the OECD that provides an overview of the problem which the OECD is
addressing and how IOTP could help. Text follows ...

==========
Message from Michael Hardy of OECD

This thread started with David Burdett noting that he had been invited to
participate in an OECD technical advisory group (TAG).

The OECD is explicitly bringing together business and government groups
together to find solutions to the taxation challenges presented by
electronic commerce in a manner that is mutually agreeable and creates the
least burden on the system. 

I'll be at the same meeting as David in April and some background on the
OECD and its position in relation to taxation and electronic commerce might
be helpful.

The OECD is not interested in new taxes for electronic commerce. Neutral tax
treatment between conventional and electronic commerce is the desired
outcome - a level playing field. Tilting the playing field in either
direction disadvantages part of an economy and benefits nobody in the long
run.

At a practical level, neutrality still means that taxpayers are responsible
for filling in their tax returns and having documents like receipts and
invoices to work from. The existing laws already apply to the electronic
commerce environment.

I imagine that people will chose to use IOTP for a number of reasons - the
convenience of matching buyer and seller payment systems in a single
interface, the generation of documentation for warranty claims etc. If the
protocol also helps people with their tax position, it just adds more value,
so its more attractive.

The OECD is not going to dictate what the IOTP must be or must include.
However it seems as thought IOTP already includes most of the elements that
people might need to work out their tax position at the end of the year. If,
on closer examination, tax experts find that IOTP does not contain a field
for some useful piece of tax information, they'll suggest it to the IOTP
people who can decide for themselves whether they want to include the field
or not.

So, what's in it for the tax people?

If tax people know that the systems underlying electronic commerce support
individuals (or companies, trusts, partnerships...) to get their tax
position correct, then there is less chance of innocent errors when people
are meeting their tax obligations. 

The existing laws already apply, but the practical mechanisms have not yet
caught up. When you buy something locally you know who you are dealing with
and both parties know what local taxes might apply. You also get some type
of receipt or invoice which you can use if you need to claim a tax deduction
etc. With mail order, even from a foreign country, it's similar. You get
documentation to help you answer tax questions and to provide comfort in the
form of warranties etc. You are able to make an informed decision about the
foreign country with which you are dealing, and whether you think it has
*reputable* businesses. You will also possibly have access to phone or fax
or e-mail contacts for queries or customer support.

One of the key things from the above example, is that commercial trust is
important. Commercial trust often revolves around identity - "who am I
dealing with".

I think that technologies like digital signatures might provide answers on
identity. I guess that IOTP will record some details of buyer and seller
(like an invoice in the real world), but that the validation of identity
will be done by reliance on some other system (according to the mutually
agreeable arrangement reached between buyer and seller). Whatever technology
is used to answer the question of "who am I dealing with" in the commercial
sense, it might also answer the "who" questions for tax purposes, or
intellectual property, or contact law etc.

A number of useful OECD documents on the tax issues are available from: 

http://www.oecd.org/daf/fa/e_com/ottawa.htm 

ranging from the technical to the more concrete. The Taxation Discussion
Paper perhaps containing some of the most interesting things to consider.

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-----Original Message-----
From: Ian Green [mailto:[email-masked]]
Sent: Saturday, August 07, 1999 6:55 AM
To: [email-masked]
Subject: Progress report?

As evidenced by the below quote from the
  Internet Open Trading Protocol Version 0.9
  Date 12 January 1998 Draft for Public Comment
which I have downloaded just now in August 1999, there doesn't seem to be
any progress in a year and a half, and certainly the planned 1st quarter
1998 version 1.0 release has not eventuated.

Is it feasible to provide a progress report in the very near future, or at
least redirection if it turns out that I have been browsing a web-relic
whose deletion from the Internet has merely been neglected!

Certainly this project (a project to provide standards ensuring that
differently branded payments mechanisms can interoperate) is one of the most
crucial developments in electronic commerce needed today!

Ian Green
Managing Director
Alpha Omega Computers Pty Ltd
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------------------
This Version 0.9 of the document is for public comment which should be sent
to
[email-masked]

All email sent to this list will be archived in the Public area of the OTP
website
http://www.otp.org

Received comments will be incorporated and product developers are advised to
expect a revised Version 1.0 by the end of 1Q98.

Any products built from the Version 0.9 and/or the Version1.0 are expected
to prove
function and live interoperability. Therefore it may be necessary for early
released products developed with this Version 0.9 to be changed for
compatibility with the Version 1.0 of this protocol.
Any responsibility or liability for such changes is expressly disclaimed.

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