If the Digital Signature Act of 1999 becomes a federal law, electronic signatures will be as legally binding as handwritten signatures.
Digital signatures serve as online authentication of both business and individual identities. Currently, E-business transactions are secured by data encryption. The use of digital signatures would provide further evidence that the people conducting online transactions are actually who they say they are, aiding in the prevention of unauthorized transactions.
"To the extent that a federal agency recognizes a written signature as authenticating a document, the agency shall recognize a digital signature as authenticating an equivalent electronically-formatted document," the act states. The Digital Signature Act, as part of the Millennium Digital Commerce Act, was reviewed by the Senate Commerce Committee that heard testimony regarding the act on May 24.
"This bill is a critical next step in establishing trust in electronic commerce. Bringing a legal framework to the digital signature will allow every consumer to take advantage of the vibrant digital marketplace," Information Technology Association of America's president, Harris Miller, testified.
The act provides a guarantee that online signatures would be honored in all states, regardless of differences in state laws. It also requires government agencies to implement digital signature technology, while it encourages private businesses to do likewise.
"To have a federal law that says you're covered when you sign [documents] digitally will enable us to do a lot more commerce over the Net. End users will see much greater access to federal and state government services online," Verisign's digital-certification vendor, Vice President of Federal Markets Division, Nick Piazzola, said in a statement.
The act is scheduled to go into effect one year after it passes through Congress. A newly established National Policy Panel for Digital Signatures will be responsible for establishing procedures to ensure the reliability and security of digital signature management. This panel will be given one year, from the bill's enactment, to report its recommendations to Congress.
