U.S. CONGRESS LOOKS AT THE METAVERSE 57 MILES : Hello everyone. Welcome to Metaversed Island and the Metanomics ‘07. My name is Nick Wilson in real life, and I am 57 Miles in Second Life. Metanomics is hosted by Professor Robert Bloomfield and the Cornell Johnson Graduate School of Management. We're very pleased to have with us today Dan Miller, the Senior Economist at the Joint Economics Committee. Robert we'll give you a little bit more info on Dan, a little bit on Dan's background in just a moment. But before we start, I would like to thank some of the folks that make all these events possible. Metaverse Island the main sponsor is a group called Other Land. You can find them at otherland-group.com. They are responsible for all of what you see here, and they do a fantastic job. I'd also like to thank the partners of Metaverse, the companies that are really walking the walk in Second Life and actually doing this stuff every day. And they make all of these things possible financially, and provide a lot of the infrastructure and a lot of the things that we need to make our events happen. Those people are Sun Microsystems, Cisco Systems, Kelly Services, Saxo Bank, Generali, our newest partner, and SAP. Lastly, don't forget that you can watch this event and, indeed, all of the Metanomics events, on video over at SLCN.TV. SLCN's live camera crews are responsible, in large part, for making these events accessible to everyone, and we do thank them because, without them,
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U.S. CONGRESS LOOKS AT THE METAVERSE
57 MILES: Hello everyone. Welcome to Metaversed Island and the Metanomics ‘07. My
name is Nick Wilson in real life, and I am 57 Miles in Second Life. Metanomics is hosted by
Professor Robert Bloomfield and the Cornell Johnson Graduate School of Management.
We're very pleased to have with us today Dan Miller, the Senior Economist at the Joint
Economics Committee. Robert we'll give you a little bit more info on Dan, a little bit on Dan's
background in just a moment. But before we start, I would like to thank some of the folks
that make all these events possible.
Metaverse Island the main sponsor is a group called Other Land. You can find them at
otherland-group.com. They are responsible for all of what you see here, and they do a
fantastic job.
I'd also like to thank the partners of Metaverse, the companies that are really walking the
walk in Second Life and actually doing this stuff every day. And they make all of these
things possible financially, and provide a lot of the infrastructure and a lot of the things that
we need to make our events happen. Those people are Sun Microsystems, Cisco Systems,
Kelly Services, Saxo Bank, Generali, our newest partner, and SAP.
Lastly, don't forget that you can watch this event and, indeed, all of the Metanomics events,
on video over at SLCN.TV. SLCN's live camera crews are responsible, in large part, for
making these events accessible to everyone, and we do thank them because, without them,
they would be a shallow event former selves.
If you have questions for Robert or Dan during this discussion, please IM me. It makes
things a lot easier if I can pass these on through Skype to Robert, who is sitting with
Christian over at Cisco Systems in California. So please right click the bald guy with the
black T-shirt. I'll be stage left; I will be on your right and choose “IM” and ask your questions.
I will make sure they get in front of Robert. Without further ado, please welcome Robert
Bloomfield.
ROBERT BLOOMFIELD: Well, thanks a lot, Nick, “57,” for that introduction and producing
yet another Metanomics series event. As Nick said, I am here in San Jose, California, at
Cisco headquarters, building nine, with Christian Renaud just getting ready for the Virtual
World's conference, which is taking place here for the remainder of the week. So we should
have a lot of interesting things to talk about later on.
Just a couple things that I wanted to mention coming up. First, next week, the 15th, we're
going to have a show on Second Life Fashion. We'll be following that up with Brian Camp, a
law professor at Texas Tech, talking about tax law for virtual worlds. And then we're going to
have Gene Yoon, Ginsu Linden, and he's known as the architect of the economy in Second
Life and also is now heading up business affairs. So we'll be talking about in-world, as well
as real world economic aspects of Second Life.
Okay. Without further ado, let me introduce you all to Dan Miller, senior economist for the
Joint Economic Committee of the U.S. Congress. Dan is a staff member employed by Jim
Saxton, who is the ranking Republican on the Joint Economic Committee, and also a
Congressman from New Jersey. So Dan, hello.
DAN MILLER: Hello; good to be here.
ROBERT BLOOMFIELD: Great. So actually I understand, before we get into any details,
you have an important disclaimer you want to make. You want to go ahead and do that
now?
DAN MILLER: Yes, I'll go ahead and do that now. I just want to make clear that anything I
say here, I'm speaking on behalf of me. I'm not stating official committee policy. I'm not
representing a specific Congressman. So if you attribute any of the views that I state here,
attribute them to me and to me only.
ROBERT BLOOMFIELD: Okay, great. That is understood.
DAN MILLER: That’s sort of standard boiler plate disclaimer.
ROBERT BLOOMFIELD: Yeah. I actually make the same thing when I talk about the
Financial Accounting Standards Board. So before we get into details I was hoping I might
talk a little bit just about who you are and who the Joint Economic Committee is. So first of
all, can you tell us a little bit about the JEC and how you got there?
DAN MILLER: The JEC was created back in the ‘40s after World War II. We are the sister
organization to the President's Council of Economic Advisors. When people ask me to
describe what the JEC does, I say that we are sort of like an internal think tank for
Congress, and we focus on economic issues and we advise members of Congress on the
impact of legislation on public policy, on the economy and economic issues, generally.
Myself I started working for the JEC back in the early ‘90s and I've left a couple of times and
came back, and I work on a number of different areas, risk management and insurance
issues. I do a lot of tax policy, especially estate taxes, fiscal policy in general. Some labor
policy. And lately I've been doing a lot of work on the virtual economy and the economics of
virtual worlds.
ROBERT BLOOMFIELD: So what got you interested in this topic that we love so much, but
most people I talk to have never even heard of the issue? How did you get into that?
DAN MILLER: Well, I got into it because I'm a gamer. I've lost many hours of my life to
World of Warcraft and some of the other massively, multi-player online role playing games.
And as I followed these games on the Internet and on some of the sites dedicated to these
games, I kept seeing rumors or allusions made to taxing profits made within the game. And
to me, that's like, oh, you have got to be kidding. They can't be seriously talking about that.
I started looking into the issue a little bit, and I saw, well, you know, somebody could make a
serious argument based on existing tax law that you should tax this stuff. And so I thought
that it would make an interesting issue for the committee to take a look at. And we brought it
up and it's something we've been looking at for about a year now. And so really it came out
of my personal interest, then it became a professional interest.
ROBERT BLOOMFIELD: I see. Well, I guess that's an interesting way to see our tax dollars
at work and I'm glad to know The World of Warcraft can lead to new legislative outlooks in
public policy.
So the first question--and actually let me say first to the audience that--I mean I've got a
huge list of questions here, things I would love to hear Dan talking about, but we want to
give you opportunities, as well, to ask questions. So if you have questions really start typing
them right away, sending them to 57 Miles. If you just right click on him and then choose
“send instant message,” and he will pass them on. If you send them to me, I probably won't
see them, given the way I am doing this stuff on my computer. But we definitely want to hear
your questions.
Feel free also to engage in backchat. Type the chats so that we can see how what we are
doing is going over for you, and if you’re reacting to what people are saying, that would be
great as well.
So anyway, the first question that I have for you, Dan, is given that you're like the think tank
and you're presumably not only up there trying to figure out how legislators should deal with
virtual worlds, but [AUDIO GAP] you're also sensitive to what they are thinking about right
now, and what types of legislation are most likely to be coming through Congress. So I'm
wondering if you can just give us a sense of what topics are most likely to be the big ones
that we're going to see?
DAN MILLER: Okay. You know, there are a number of different public policy aspects to
virtual worlds. The one that got me involved and we've already touched upon is the question
of taxes. If you make money in a virtual world, be it Second Life, or World of Warcraft,
[AUDIO GAP] virtual property rights. And that’s something that will need to be addressed.
I think, as I've researched the issue and talked to a lot of people in government, where I
think you're most likely to see the first sort of government intervention or government
regulation is going to be how it relates to virtual crime and terrorism. Because, just like any
economic need [AUDIO GAP] be in virtual--you know, virtual economies represents an
opportunity for criminals to exploit and abuse. And I think that could be the first legislation
you see would be something to clarify existing tax laws or granting additional powers to the
FBI or a regulatory body.
ROBERT BLOOMFIELD: So if I could start out with the second thing, when you talk about
terrorism--actually, I see Nite Zelmanov is asking a question, saying, “You know, when you
talk about terrorism, is it really money laundering that’s sort of the starting point of this?”
DAN MILLER: Well, when you talk about crime and virtual worlds, I sort of see two general
groupings. One the one hand you have your garden variety criminal type in money
laundering illegal cash transfers; that's one thing. I think that basically--you know, I know for
a fact that some law enforcement agencies are looking at this particular angle.
But the other sort of aspect to this, besides the law-and-order type of crime, is how terrorists
might potentially use virtual worlds. I mean you could certainly think of scenarios in which a
terrorist organization or a terrorist cell could use a virtual world to, say, conduct a dry run of
a particular terrorist attack they want to launch. Like if they wanted to launch a terrorist
attack on a particular building, they could construct a three-dimensional version of the
building and they could run through dry runs, practice what they need to do. They could
practice any number of things. They could also use virtual worlds to transfer money so that
the financial backers of terrorism could finance the terrorist cells in other countries. And you
could see virtual worlds being used just for communication.
Now, a lot of this stuff can happen on the Internet. It doesn't require--there's nothing
necessarily unique except for maybe some of the three-dimensional practice stuff. You
know, a lot of this stuff could already happen on the Internet, but I think that you could see
terrorists using it in Second Life. Or, I don't mean to single out Second Life; you know, they
could do it in a different virtual world.
ROBERT BLOOMFIELD: Yes, so Igor(?) is interested in the last thing that you were just
talking about, which is that virtual worlds are just an online technology. We have a lot of new
laws through the Patriot Act, for example, that have changed the privacy of online
transactions. So do you think it's likely that, at least on that front, on the money laundering,
on the surveillance of activities in virtual worlds, do you think that there's going to be new
legislation that's actually going to be necessary to deal with that?
DAN MILLER: Getting legislation passed in Congress is an extraordinarily difficult task. I
think you're much more likely to see regulations handed down by the Treasury Department
or the Justice Department or an independent agency which addresses this stuff. And I think
a lot of the concern here is over the potential for abuse, not necessarily the actual abuse
that is occurring, because there's not really evidence of widespread use of virtual worlds to
launder money.
I think that when your FBI agent on the ground starts turning up evidence that their local
drug dealer, instead of laundering money through a car wash, they start laundering it
through a clothing shop in a virtual world, you know, once they start seeing that it's going to
filter up through the organization, and there's going to be feedback and request for new
powers, maybe, that require legislation. So if there were to be legislation on this aspect, I
don't see it as being imminent. I see it as being down the road a little bit.
RICHARD BLOOMFIELD: I have to say this discussion is simply lighting up the board here,
both on the comments that are being sent to 57, and passed on to me, some of them, by the
way, people listening online, not in Second Life, but through SLCN.TV. So a shout out to all
you people out there who are not fitting onto our island. There also are loads of questions in
the chat and many of the first ones go back to taxation, which you were talking about at the
top.
So let's talk about this a little bit. And I guess the first question that I have for you is, in your
personal view, or in the way that you've heard people on the Hill talk about it, should we be
viewing Lindens, actually, as money? Because it's very difficult to argue if someone is
getting money that they're not going to be taxed. And so it seems like that's an issue we
need to get out of the way up front. Do you see Lindens as money?
DAN MILLER: No, I don't, not in the official sense. It's not a sovereign currency. There is no
nation backing the currency. I see it more as being analogous to, say, gambling chips. I'm
not saying that Lindens are gambling chips; I'm saying it's analogous to it. It's a privately
issued item that has real economic value to it.
ROBERT BLOOMFIELD: Actually, this is one case where I know a little more, enough to be
dangerous on the EU side of things than in the U.S., but in the EU digital currency, you
know, one of the big requirements here is whether it's being used as a medium of
transaction between parties that are entirely independent of the issuer, of the medium.
And so in this case, for example, it seems to me unclear if two people are in Second Life
using the platform, trading materials through the medium of Lindens that seems dubious. If
they were doing it on a street corner here in San Jose, it would then be very clearly viewed
as some sort of digital currency separate from the service provider and issuer. Is that how I
ought to be thinking about it here in the U.S.?
DAN MILLER: Well, as far as I know--and I'm not a lawyer and I'm not a historian--the last
time we really had legislation dealing with definitions of money in the U.S., and currencies--
well, I think there was some discussion of it with the creation of the Federal Reserve at the
first part of the last century but also in the period following the Civil War before
Reconstruction, or during Reconstruction. So a lot of the laws on the topic in the U.S., at
least, are rather old, and they were done well before there was any concept of the word
“digital” much less a digital currency. And that does give rise to an interesting question
about the tax aspect of it.
And I think that the way some tax lawyers would say, "If you saw two people trading these
items on the street corner, it is a question of not currency, it is a trading of assets." I mean, if
I'm on a street corner and I give you my watch and you give me your cell phone, that's not a
digital currency. It's just an asset transfer. And so it gives rise to the suggestion that the
proper tax treatment is to treat virtual currencies as barter.
ROBERT BLOOMFIELD: Okay. Let's see. Yes. So when we get into the world of barter--
and barter is generally a taxable transaction. Do you think it's just a matter of time before the
IRS starts saying, "Look, we tax barter if it's something that you can hold in your hand.
There's nothing in the tax law that distinguishes between something you can hold in your
hand and something pretty you can look at online, so here we come." You can just see the
paperwork issues. Someone--actually Scarlett P(?)--asked, “What sort of tax documentation
should we be keeping now for when the IRS comes in? Do you think that's something we
should be expecting sometime soon?”
DAN MILLER: Well, that's hard to say. I mean the first part of your question is about the
IRS. You know, frankly, my own personal opinion is that it's not a question of when the IRS
steps in to take a look at this stuff or to try to tax in-world income, it's a question of when. It's
when, not if. Because I'm of the belief that these virtual economies, especially like Second
Life, and Foreigntropia, or even some of the gaming-oriented worlds, as the dollar volume
becomes more and more significant, the IRS is going to say, "Wait a second." You know,
people are letting--they're shielding income by putting it into a virtual world, or we could
make additional money just by issuing an IRS bulletin on the topic.
So in terms of the ability question, that could be the first official word. There's not going to
be legislation from Congress but a regulation issued by the IRS saying that the stuff--these
transactions in virtual worlds counts as barter income. And I think one of the key issues with
barter income is not the form of it in terms of whether or not you can touch it and hold it, it's
going to be--does it have a measurable economic value to it? And if it does--if you could
place a dollar value on a trade, then yes. You know, they're going to go after it.
Just a couple of sentences here on the history of barter tax law. You had a lot of barter
clubs that formed in the 1960s and ‘70s and really they were a means where a plumber
would fix the pipes for a lawyer and the lawyer would prepare a will for the plumber.
Now, the IRS eventually stepped in in the early 1980s--1980, ‘81, ‘82. They issued a series
of rulings which said the value of a will is, say, $250. So, you know, if you receive the
services of a lawyer in preparing a will, then you have to report on your taxable income.
There's actually a barter income form, you know, $250. And so the IRS--it took them more
than a decade to respond to the development of these barter clubs, but once they did they
came in and they said, “We're going to start taxing this stuff,” and barter clubs pretty much
disappeared overnight.
ROBERT BLOOMFIELD: Well, we actually have one thriving in Ithaca, New York, home of
Cornell University. We have something called Ithaca Dollars. So it's not exactly barter
because they've created something that is a quasi currency, and you trade your dollars to
someone else when they give you a service or a product, and you can use it around town.
And in fact, the IRS did step in, and it's taxable. So it made a lot of people in Ithaca very
unhappy. And if you know Ithaca at all, they tend not to be free-market, low-tax Republicans
in Ithaca. So interesting little dynamic there.
You know, we're actually having someone come to talk extensively about taxation of virtual
worlds in a few weeks, so I don't want to spend too much time on this topic. I'd like to move
on to a set of other questions that we've been getting from, for example, Bogart Beck, who's
watching on SLCN.TV, and Charlotte Bartlett who, I believe, is right here on Metaverse
Island. And the questions are about the virtual world stock exchanges and the banks.
At this point my understanding is that Linden Lab is keeping their hands off this. They are
simply saying, “We don't deal much with internal disputes and so, if you give your money to
someone in exchange for their promises, that's your deal.” And as far as I know, the SEC,
the state banking authorities, commodities and futures trading commission, they are not
jumping in to deal with these exchanges. But maybe you know something that I don't. So
can you tell us is there an outlook on that front, securities regulation, banking regulation?
DAN MILLER: I can tell you that I've not heard anything at least from the government side
about regulating this stuff. I think part of the issue is that these financial market regulatory
bodies--they've already got pretty full plates right now, and there's a certain learning curve
that has to be overcome for them to tackle the issue of virtual worlds.
But again, it's going to come down to, I think, a question of scope. And once the scope, or
the scale, of financial markets in virtual worlds reaches a certain size--you know, there's no
magical number but assuming they reach a certain point, you're going to have somebody
start to take notice. And it may be a series of newspaper articles, or it could just be
someone like me that’s working at the SEC that says, "Wait a second, somebody needs to
take a look at this stuff."
ROBERT BLOOMFIELD: Yeah. So Musimba Yellowknife has written in chat here that,
“People consider Second Life a game, so there shouldn't be any regulation. As you analyze
this, does that come into it? Does it matter whether it is a game or not?”
DAN MILLER: No, it does not matter. The intent of the medium, or the intent of the income
is completely irrelevant as to its taxability. So some people, like Brian Camp--and I believe
Brian Camp does--who is going to be here talking to you on the tax question--
ROBERT BLOOMFIELD: Yes.
DAN MILLER They have to draw a line, say, between Second Life, which sort of embraces
its commercial aspect and then you have the game world like World of Warcraft, which is
purely game, and you need to have two systems, or they should be treated differently. I
think that's a very difficult argument to make and to sustain.
ROBERT BLOOMFIELD: Well, in fact, the games are where the big money is, right?
DAN MILLER: Mm-hmm, yeah. I mean you look at the registration numbers--I don't follow
Second Life registration numbers on a daily basis but they're up in the nine million range.
But if you look at the number of people that have logged in in the last 30 days, it's probably
about 950,000, maybe? So it's less than a million, I think, the last time I checked.
ROBERT BLOOMFIELD: Yeah. I think it's even lower than that, as I recall.
DAN MILLER: It could be, could be. And then if you look at the real act of [courts?], even
smaller. With World of Warcraft, you've got nine million gamers that are paying money on a
monthly basis to participate in this world. So they're all going to be somewhat committed
because, otherwise, they wouldn't be paying money to have an account. So, yeah, they
really are the 800-pound gorilla on the scene.
ROBERT BLOOMFIELD: Now, I think I agree with you that the distinction between game
and not game doesn't make a whole lot of sense. But there is a different distinction that
might be more important, which is the intellectual property rights that are handed over
according to the end-user license agreement.
So for example, World of Warcraft officially forbids you from selling your goods. And, in fact,
there's a huge market. I've heard in these transactions that are explicitly forbidden by game-
based sites are somewhere upward of $2 billion dollars a year, globally, much of that not in
the U.S. Do you see that as being a big issue in your analysis?
DAN MILLER: In a way, yes. Let me touch upon a couple of things here. One is the
prohibition in, say, World of Warcraft. And when I say World of Warcraft, I'm just sort of
generically referring to all gaming worlds like World of Warcraft. So I don't mean to single
out one particular game. But they say, “Well, you're not allowed to take your gold pieces or
your killing demons or what have you and sell it and make money.” Well, you're not allowed
to scalp tickets either, but you still have to pay taxes on it. So, you know--
ROBERT BLOOMFIELD: That was an excellent comparison.
DAN MILLER: Yeah. I mean, look at how the IRS goes after criminals for tax evasion on
money that they made illegally. Even if they can't prove the underlying crime by which they
came by the money, they can still send the guy away to jail for not paying his income taxes.
So prohibition is not irrelevant, but it doesn't absolve gaming worlds of the tax liability that
may arise.
The second point is, yes, there are these U(?) laws in the terms of service agreement or
terms of use agreements. The question still remains--it has not been completely addressed
as to the enforceability of these game worlds, or of these agreements. And Second Life has
received a fair amount of publicity because they got sued by one of their users who--they
terminated his account and he lost I believe it was several thousand dollars, maybe close to
$10,000 dollars when Second Life, or Linden Lab, closed his account. And so he sued to get
his account back. And actually, I think it was just this past week that the Linden Lab reached
an out-of-court settlement. So we don't know exactly what the terms of that agreement were,
but that case could have provided some insight as to how courts are going to treat these
agreements.
There are some legal scholars that argue that they're not really enforceable, for a number of
reasons. I don't want to go into it, because I'm afraid I would misstate them, not being a
lawyer myself. But there was one, I think, key development in that, at one point while the
case was still pending, the court ruled against one of the provisions in Linden Labs’ terms of
use agreement and said that this provision, which was the provision in dispute at this
hearing, was not enforceable.
Well, if courts go around saying that these terms of service agreements, or the U(?) laws,
are not enforceable, that creates some very significant issues. And who knows how that will
fall out? But anyway, so--
ROBERT BLOOMFIELD: Okay. We're starting to get toward the end of our time, and
there's a big set of topics that we haven't gotten to yet, which is I guess more on the social
side. And in particular here in Second Life people are very aware of the laws governing, for
example, child pornography, gambling, things like that.
But in other worlds it seems likely, to me anyway, that there's going to be a much bigger
issue of child safety since, in fact, the number of people using Webkinz, for example, is
huge. It dwarfs a world like Second Life, and maybe even World of Warcraft. And they're all
kids. So maybe that's not part of the Joint Economic Committee's purview, but is that
something that you see coming on the horizon on the Hill?
DAN MILLER: I think it certainly could. It depends on what happens. I mean there could be
some situation or inappropriate behavior that occurs in Webkinz or Disney's Virtual Magic
Kingdom or one of these other worlds. But you're right. They're enormous. My Habbo Hotel
has something like 80 million avatars, or characters, that have been created. Eighty million.
That's huge. And that's not really an area that we get into, in terms of child protection
issues. We stick more to the economic issues.
I think the interesting angle on that, at least from my perspective, is the take-up rate among
kids to these virtual worlds is much higher than it is, as you would expect, among older age
groups. And I think this speaks very strongly to the long-term viability of virtual worlds
because in five, ten, fifteen years, the kids that are nailing Webkinz, or the Disney worlds,
they're going to be moving up to more adult-oriented worlds. And when they're in the
workforce they're going to be totally comfortable having meetings in the virtual space. So I
think that says loads about the long-term potential here.
ROBERT BLOOMFIELD: Yes. So as we talk about moving into the workplace, I know that a
lot of--you know, I've been dealing over the last few weeks with people from all of the big,
global tech companies, consulting companies, and it seems like a lot of them have a vision
that there will be a set of interoperable platforms that are not at all game-oriented, but that
are commerce oriented. And this could be a future of teleconferencing and global business.
And so do you see how--well, let me ask this a different way. There has been a fair number
of discussions about the appropriate legislation regarding the commons, the Internet, and
whether, for example, firms should be forced to carry content because it's useful, generally.
Is that a topic that you're looking at, in the context of the JEC?
DAN MILLER: Could you repeat the last part there? In terms of content?
ROBERT BLOOMFIELD: Well, I think the issue is that I guess I actually have Christian
feeding me notes. Christian, you want to ask a question? No, no. It's basically that right now
we have all these virtual worlds that are basically walled gardens that, you go into one, you
can deal with people--
DAN MILLER: Oh, okay.
ROBERT BLOOMFIELD: --in that one. You can't deal with others. It does seem like the
future. I mean if virtual worlds becomes something like the Internet, then you'll be able to
take assets from one world to another, for example.
Now, one way legislators might go about this is simply to let industry work out its own
solutions. Another way is, of course, to either try to enforce this or, frighteningly, for
Congress to get in and see something bad that they see about this, and work against it or
put up hurdles. So I'm just wondering if this whole set of issues is something that's on your
radar screen.
DAN MILLER: It's not on my radar screen. I suppose I see this as something similar to
differences in computer operating systems. Congress doesn't mandate that. A program that
works in Windows has to work in the Macintosh operating system and also has to work in
Linux. And I think most members of Congress would shy away from that level of rollover
technology.
ROBERT BLOOMFIELD: Okay. Let me--actually, I just got a really interesting question
from--and I think I am pronouncing this right; it looks like, Dr. [Offset Cortez?]. And the
question is, “How web savvy is the average Congressperson? I know that I deal with a lot of
people in all sorts of walks of life, and I mention “virtual world,” and they have no idea what
I'm talking about. Or else, once they figure it out, they start giggling. How hard is it going to
be simply to educate Congress on what these worlds are and how to think about them?”
DAN MILLER: Well, there's definitely a significant educational hurdle to overcome for
members of Congress, and even with their staffs, to be honest. It's easier to get through to
the staff than it is through to the members because the staff tend to be younger, and I think
it's just sort of natural that the younger generations are a little bit more up to date with the
latest technology than the older generations. I don't think there's necessarily anything
surprising there. There are some members of Congress that are very savvy and very
comfortable in digital environments in dealing with the Internet. Other members of
Congress, not so much. Some members of Congress get involved because they see a
political--or a policy, opportunity. So I don't know. And frankly, you know, one could ask if
ignorance among members of Congress might not be a good thing. I'm not saying it is, but
one could make that argument.
ROBERT BLOOMFIELD: You know you're actually--you know this is being broadcast live
and archived on the web. So--
DAN MILLER: Yes. No, I'm aware. I'm not saying that that's a good thing or a bad thing; I'm
just saying that one could ask that question.
ROBERT BLOOMFIELD: Yeah. Now, you mentioned the JEC is something like a think
tank, and we talked a while ago about your efforts to write some type of policy paper, or
white paper, about this topic. Can you tell us where you stand on that?
DAN MILLER: Well, we have been working on and off for most of the last year on the
paper. It's sort of an on-and-off type of issue because Congress--you know, it's not the only
issue that we have to deal with and there are a lot of competing policy questions that
demand attention. So sometimes it has to be set aside while we take a look at the state of
the macro economy or tax policy or what have you. So yes, there is a paper. I really can
offer no guidance as to when it might be released. But let me also take this opportunity to
say one thing, and that is when the JEC first announced its interest in virtual worlds and the
taxation of virtual worlds about a year ago I think it was, there was some confusion and
people saying that we, the Joint Economic Committee, and Jim Saxon, wanted to start
taxing virtual worlds.
I can tell you that that is not the case. If anything, the opposite is true. We are not looking to
impose taxes. And frankly, my personal opinion is that the less government regulation you
have over virtual worlds, the more the virtual worlds will thrive and develop, and you'll see a
very broad and exciting range of applications develop.
And I think in some ways the Joint Economic Committee's motivation in addressing or
looking at virtual worlds is to help set the agenda to define the issue so that it doesn't pop up
on the radar screen all of a sudden, and there's nothing out there, you know, for Congress
to fall back on. So we want to try to sort of educate staff and members of Congress as to the
range of issues that are involved when addressing virtual worlds.
ROBERT BLOOMFIELD: Let me ask: You know you're speaking to an audience here and
online through SLCN.TV of hundreds of people who are active in virtual worlds who are
developers, who are either legal scholars or economists. Is there anything that we can do to
help to make legislation go in the direction that we, either individually or collectively would
like to see?
DAN MILLER: Absolutely. If you're in the United States, you know, you can feel free to write
your Congressman and express your views. You know, mail the members of Congress
receive in their offices still commands quite a bit of respect on Capitol Hill. And a good part
of each member's staff is dedicated to handling mail. So mail is not just a lost cause. Trust
me. It's taken very seriously on the Hill.
I think I would also encourage people to contact me. If you have a view that you want to air
or to share with me, or perspective, or an issue or anything that you think might be of
interest, feel free to bring it to my attention.
If you represent an organization and you want to see government regulate this, or not
regulate that, again, you can send it to the JEC, or send it to me, or send it to your member
of Congress.
RICHARD BLOOMFIELD: Great. Well, I certainly appreciate your making the offer, and I
hope you get inundated with email and phone calls from individuals and from organizations
who are interested in this issue.
So, really, thank you so much for taking the time to speak with us today. I think this has
really been very informative to us and hopefully it will give you some feedback as well. So
we're going to sign off now.
Those of you who are here on Metaversed Island, I'd like to point out that the Metaversed
partners have locations right on Metaverse Island just outside the space where we are right
now and so you can, therefore, just go take a look, talk with the representatives of the
different firms there, and thank them for making these events possible.
Join me in thanking, also, Dan Miller for being with us today.
And actually I have a couple questions here. Someone's hoping for contact information for
you. I know that if you just search “Joint Economic Committee” you get the web site, but if
you're willing to pass along contact information, maybe you can do it by--ah, here it is.