U.S. Senate Passes Bill Requiring Internet Filtering Such as Net Nanny in Schools and Libraries Receiving E-rate Funding

Business Wire, July 27, 1998

BELLEVUE, Wash.--(BUSINESS WIRE)--July 27, 1998--In a swift and unanimous vote on Friday, the U.S. Senate passed the fiscal 1999 appropriations bill for the departments of Commerce, State and Justice, with a provision that requires schools and libraries, receiving federal discounts on Internet access, to install filtering software on their computers to shield children from material that is "inappropriate for minors."

The amendment, co-sponsored by Senator John McCain (R-AZ) and Senator Patty Murray (D-WA), sends a strong message about the importance of using means to steer children away from this easily accessible material, but leaves the decision-making power in the hands of local jurisdictions to decide which filters to buy and which content to allow. This latest development, provided that it passes the House of Representatives, will mean a major increase in activity in the education market for Net Nanny Software International Inc. (NNS.V, NNSWF), leading developers of online child safetyand PC security software.

"The Senate has sent a clear message that kids need protection, but Senator McCain and Senator Murray rightfully stop short of deciding which content should be restricted and which tools should be used," said Gordon Ross, President and CEO of Net Nanny. "Net Nanny offers tools that allow people to make their own decisions. We have specifically designed our software to preserve First Amendment rights," Ross continued, "because it puts all of the decision-making power into local hands. The argument that the government or Net Nanny is censoring the Internet is not accurate. We encourage civil liberties groups and the press to educate themselves about what is available and help consumers choose between solutions that are overly restrictive and those that offer a high degree of flexibility. It doesn't make sense to leave children hanging in cyberspace when there are good tools available that cause few, if any, objections."

Net Nanny stands apart from the rest of the filtering industry because it provides a solution that is more flexible and comprehensive than its competitors' more rigid approaches. Users are able to see every entry on Net Nanny's lists of blocked sites and they have the hands-on advantage of adding or deleting sites based on their own local needs and concerns. Teachers can create their own specific lists of sites, or incorporate suggestions from other content providers, to enhance curricula using online resources. This gives them the ability to help keep children on task and out of material that is not suitable or productive in school. Libraries, which will be required to offer filtering on at least one terminal, also have the ability to turn the program on or off at will and can customize the list of filtered sites to reflect their own community standards and Internet use policies.

In addition to basic address blocking, Net Nanny offers a unique feature that allows the consumer to track conversations in email, chat rooms and personal one-on-one messaging systems -- programs in which children tend to be at the most risk -- using keywords and phrases that are defined by the computer administrator. These features allow children to communicate with others in cyberspace, but gives parents, teachers and others a strong measure of control over the content of the conversations taking place between the child and people whom they meet online. Net Nanny also filters content offline, so administrators can keep track of material that is typed in word processing and other computer applications. A useful audit trail can monitor and log activity, if the administrators see a need to do so.

E-RATE

Annual discounts for Internet access, known as "e-rates" and worth up to $1.2 billion and will be handed out this fall by the Federal Communications Commission under the nation's universal service fund. Institutions are eligible for discounts on technology of 20 to 90%, depending on the percentage of students who qualify for the school lunch program and whether the school is in a rural or urban district. All schools are eligible to apply regardless of whether they are public, private, or religious (similar rules apply to libraries). Institutions are required to submit a technology plan detailing the use of technology within the curricula. The plan must include information on staff training, hardware, internal and external connections and software that is necessary for network and Internet use. 30,000 eligible schools and libraries have already applied for Internet access funding (source: www.slcfund.org/reference).

NET NANNY SOFTWARE INTERNATIONAL INC.

In January 1995, Net Nanny Software International Inc. introduced the first filtering software product of its kind. Today, Net Nanny and NNPro for networks continue to be the preferred choice for parents, schools, and businesses that want flexible, editable software tools and free databases for protecting their families, their organizations and their digital data. The Company also holds an exclusive patent on keystroke dynamics, a biometrics security and access control technology that monitors how an individual types.