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The News & Observer (Raleigh, NC)
September 3, 1995
Page F1
Is tobacco in line for on-line?
Advertising on the Internet would be difficult to regulate, making it accessible to minors.
By Stewart Ugelow
STAFF WRITER

The battle is on to see if there will ever be a tobacco road in cyberspace.

As the White House leads a campaign to lower underage smoking rates by placing sweeping restrictions on cigarette advertising, giddy anti-smoking activists hope to stub out the tobacco industry’s on-line efforts before they can take root. But tobacco companies have started to claim their little acre of the Internet.

Nearly 37 percent of on-line Americans are under the age of 18, according to a study commissioned by HotWired, the on-line version of Wired magazine. That’s the same age group that President Clinton said on Aug. 10 he wants to keep the tobacco industry from reaching.

While his proposals would ban everything from color magazine advertisements to logos on product giveaways, on-line ads have been overlooked.

Four federal agencies say they are investigating the issue. But none is sure which agency has jurisdiction over on-line tobacco ads - or if any of them do. Rules and regulations written for a different time have not translated well to the Information Age. More importantly, the global nature of the Internet may render Washington’s regulatory actions worthless.

Although the tobacco companies insist they have no plans to advertise on the Internet, both Philip Morris and RJ Reynolds Tobacco, the nation’s two largest tobacco companies, have taken steps toward establishing an on-line presence. And computer records indicate that Philip Morris may be preparing an on-line site built around its Parliament cigarette brand.

"We’re concerned. So many kids are out there. And the federal agencies don’t seem to know how to regulate it," said Makani Themba, associate director of the Marin Institute, which monitors marketing by alcohol and tobacco industries. "They say they are committed to preventing youth access. They should not want to be on-line if there are so many kids on-line."

Philip Morris and RJR have staked claims to Internet addresses. The addresses, which are known as domain names, help the computers that make up the Internet guide electronic mail messages to the proper recipients and help World Wide Web surfers find the home pages they’re seeking.

Those addresses are handed out on a first-come, first-served basis by InterNIC, a Herndon, Va., non-profit agency.

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Name of the game:

Philip Morris has received five distinct domain names so far and RJR has received three, InterNIC records indicate. Both companies say the addresses were registered as a pre-emptive measure, to prevent critics or competitors from using the names, and not for on-line advertising.

"We haven’t even been discussing the idea of Internet advertising," RJR spokeswoman Peggy Carter said.

"What we have done is registered trademarks and other names not for offensive reasons but defensive ones," Philip Morris spokeswoman Karen Daragan said. "We have no current plans to use it for brand communications."

But unlike RJR, whose three names are variations on the letters RJR, Philip Morris has taken defensive measures one step further.

Four of its names are abbreviations and variations of Philip Morris. But the fifth address is parliament.com, a reference to its Parliament brand of cigarettes.

The first four are connected to the Internet through computers at UUNet Technologies Inc., a national Internet access provider, according to records filed with InterNIC by Philip Morris.

But the parliament.com address is connected through computers at Leo Burnett, Philip Morris’ longtime ad agency.

That leads industry watchers to suspect that Philip Morris plans to launch an on-line site around the Parliament brand.

"We know they’ve reserved space," Themba said. "I think they’re waiting to see if politically they can step out. We hope they don’t."

Daragan said that Philip Morris set up the records that way "because, to register for a name, you need a web site. Leo Burnett has one and we don’t."

But although there are many requirements to register domain names, having a web site is not one of them, according to InterNIC rules.

A possible Parliament site is in keeping with Philip Morris’ apparent corporate strategy for Internet use. The company’s Kraft Foods subsidiary recently reserved 133 domain names, including grapenuts.com and velveeta.com.

Parliament was Philip Morris’ seventh best-selling brand in the United States last year, with sales of 3.21 billion cigarettes, up from 2.99 billion in 1993.

An on-line Parliament site could feature special promotions and giveaways for Internet users, as well as traditional advertisements. Many companies have used Internet giveaways to collect demographic data on its customers.

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Global value:

An on-line site could be particularly valuable because of the Internet’s global reach. Both cigarette sales and Internet use are booming internationally.

The tobacco companies have long conceded the Internet to anti-smoking groups, which have turned it into a powerful lobbying and rallying tool. In fact, Philip Morris admits that it registered only the Parliament brand because site names using its other brands had already been picked off.

"The antis and others have taken the other brand names," Daragan said.

Also, all sorts of anti-smoking studies and documents are on-line, including more than 4,000 pages of leaked internal Brown & Williamson papers on nicotine research. More than 65,000 computer users have read the papers since a California court allowed the documents to go on-line July 1.

The tobacco companies admit they are considering using the Internet to try to rally their supporters. An on-line site could be used to post information and research, coordinate smokers’ rights groups and communicate with those interested in the industry.

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Possible regulation:

But the companies may not be allowed to create an on-line presence.

The Clinton administration’s proposals, which could take effect as early as November if the tobacco industry fails in its efforts to block the regulations in court, could be construed to apply to on-line advertisements, industry watchers say.

"I imagine if there were on-line areas that have substantial underage use, they might be affected," said Kathy Mulvey, research director for INFACT, a corporate accountability activist group in Boston.

"So far, it’s been a low-tech debate," Tobacco Institute spokesman Tom Lauria said. "But I can’t imagine [Food and Drug Administration Commissioner] David Kessler overlooking any form of censorship."

But even the agencies that are supposed to be implementing the new regulations as well as existing ones are not sure whether they will apply to the Internet or whether they even have the authority to set them up that way.

Officials at the Federal Trade Commission referred calls about on-line advertising to the U.S. Department of Justice, which referred calls to the Federal Communications Commission, which referred questions back to Justice. At the White House, calls on the issue were directed to the Food and Drug Administration, where officials did not have an answer either. They referred calls back to the FTC.

While such exchanges are comical, they illustrate the real dilemma federal officials face in trying to enforce rules meant for television and print media in an on-line world.

While many sites like Netscape Communications Corp. already refuse on-line tobacco ads, and programs that allow parents to block certain material are available, some suggest that new legislation may be needed to prevent on-line tobacco ads from reaching minors.

But even an act of Congress would not be enough to thwart a tobacco company intent on advertising on-line.

The Internet is not really a network in the traditional sense, but a network of smaller networks. More than half of those networks are located outside the United States.

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The location dilemma:

Because the physical locations of computers that direct information are inconsequential - borders are meaningless on the Internet - a site set up in another country can be available anywhere in the United States. For instance, a number of sites focused on gambling have been created overseas to circumvent government restrictions here, leading others to suggest that tobacco companies could do the same.

Or at least that’s what Dennis Buettner is hoping.

Buettner, a self-described "idea man" who lives in Severna Park, Md., and works as a network controller for NASA, reserved the addresses cigarette.com and cigarettes.com. He has written letters to every cigarette manufacturer offering to either rent the names to them or handle the on-line marketing himself.

"With the restrictions on tobacco advertising, people are going to be looking for different ways to market their products," Buettner said. "I figure if you have a good domain name, then people who want cigarettes will type it in.

"I read the articles about how they are planning to restrict tobacco advertising and thought, ‘How un-American.’ I don’t know much about the ads. But my thought is, what about freedom?"