The Global Online Freedom Act of 2006 is approaching introduction in the US House of Representatives. What will it contain? How will it affect the way US internet companies do business with China? If preliminary leaks of the bill, authored by NJ Republican Chris Smith, are accurate almost everything Google, Yahoo, Microsoft, and Cisco is now doing to help the Chinese government censor the internet will made illegal.

A draft version of the bill reviewed by CNET News.com represents the first serious attempt to rewrite the ground rules controlling how U.S. Internet companies may interact with foreign governments. If enacted, it would dramatically change the business practices of corporations with operations in China, Iran, Vietnam and other nations deemed to be overly “Internet-restricting.”

The highly anticipated proposal, created by Rep. Christopher Smith (R-N.J.) in response to recent reports about censorship in China by Google, Yahoo and others, also makes it unlawful to filter search results or turn over information about users to certain governments unless the U.S. Justice Department approves. It would also impose new export restrictions to those nations.

The Global Online Freedom Act looks like it will be a massive step towards instilling ethical standards for American business’s operations in China. Yahoo, Microsoft, Google, and Cisco have the power to immediately change their operating procedures to protect the free flow of information into Tibet and China. They’ve refused to take the steps necessary to influence positive change inside China. Congressman Lantos put it well, “When I hear these companies say they have changed China, I think that China has changed them—for the worse.”

A strong sign that this legislation will continue to be pushed by Smith, Lantos, and the rest of the Congressional Subcommittee on Africa, Global Human Rights, and International Operations is that Lantos didn’t think much of these internet companies performance in the hearings Wednesday:

These are among the gems of American industry; they are bringing information globally to hundreds of millions of people and I passionately believe this is a very good thing. Obviously, I believe their performance at the hearing was worse than dismal. They were unprepared to admit to any mistake, to any shame, to any responsibilities for what their behavior had brought. For instance, one of the very simple questions I asked was, have they been in touch with the families of people who, as we speak, are in prison because of their actions. Of course not.

I asked them if there is any shame attached to having the prime purveyors of information simultaneously serve as blockages to information in repressive regimes. There was really no decent, honest, candid answer to that. I thought their performance was appalling.

The biggest problem in the progress of the Global Online Freedom Act is that there is no comparable version of it in the Senate. Even if the Act reaches the floor and passes a vote in the House — a long-shot given the strength of business interests in China — someone in the Senate would have to take up the issue and start gathering support (I’m looking at you, Pat Leahy).

Without thought towards the chance of it becoming law, the Global Online Freedom Act will represent a return to a higher expection for how American companies do business outside of our borders. Whatever power business has to liberalize a totalitarian society like China, it can only realize itself when companies act with the deliberate intention of preserving the values they promote in the free world. While Google, Yahoo, and Microsoft succeed at spreading information in the US, they’ve chosen to actively block access to the truth inside Tibet and China. This is unacceptable for many reasons, but most saliently because we’ve been told repeatedly that their presence will bring democratic change to China.

It’s reassuring to see that some members of Congress care about the power American businesses have to create positive change in repressive states. Holding companies that peddle information to a universal standard that preserves access to the truth, even in regimes that actively block “politically sensitive” information,” is a good step towards the day when other industries will take responsibility for doing business with repressive governments like China.

Cross posted at Tibet Will Be Free.