It seems to me that employers will deal with this as they now deal with employees who "moonlight" or otherwise have sideline businesses: as long as those second jobs or businesses don't interfere with the employee's ability to do his/her job, and don't create any kind of conflict of interest or confidentiality breach, there should be no reason to prohibit them.

The potential twist with telecommuting is the need to keep the main job and the second job or business physically separate. For example, the telecommuter shouldn't use the company's computer or phone for the second job.

I suspect that many, many more people have second jobs or moonlight than are realized by their employers. It's a fact of life today, either because households need the income or because people are practicing what the WALL STREET JOURNAL once called "defensive entrepreneurship" - having your own business to fall back on just in case your company starts downsizing.