Scott Belcher is the CEO of the Telecommunications Industry Association, the leading association representing the manufacturers and suppliers of high-tech communications networks.
As nearly every aspect of government, commerce, and individual life becomes increasingly digitized, the benefits of an all-IP world have become essential to consumers and the American economy. But a growing public policy movement by countries around the globe holds the potential to dramatically impact the future of communications here at home.
Barriers to Flow of Information
Individual countries are considering – and in some cases, implementing – policies that will create significant barriers to the cross-border flow of information. In addition, there is a trend to “localization,” in which countries require that data and data centers be located within their borders. These types of regulations threaten significant economic damage by limiting companies’ ability to sell products and conduct business overseas, and they hold the potential to create a balkanized Internet, reducing the many benefits of its open architecture.
To be sure, the U.S. will feel a direct, and significant impact if this movement becomes widespread. According to the U.S. International Trade Commission, “digitally intensive” U.S. businesses sold over $935 billion in products and services and purchased $471 billion in 2012. Data flow regulations will create a nearly impossible landscape for these innovative, data-driven companies.
The ability to send commercial data across borders with minimal restrictions is vital for U.S. companies of all sizes, whether they are conducting business here at home or around the world. And it’s not just the tech industry that will be impacted – restricting data flows will put at risk a wide range of business sectors. Small retailers, for example, are increasingly reliant on e-commerce as an essential way to expand their businesses and access global markets.
Tackling the Issue Head-On
With so much at stake, ensuring that data flows can move across borders without undue interference or restriction must be top priority for policymakers and the Obama Administration. It starts with sending a clear signal to our trading partners that our nation is prioritizing this issue, and is committed to fighting the global trend toward commercial data restrictions and data center localization.
In addition, we must promote the use of voluntary agreements that allow for the implementation of collaborative, multi-stakeholder solutions to data security and privacy. We’ve already seen how effective such agreements can be in protecting consumers, while avoiding unnecessary and heavy-handed government regulatory schemes.
For instance, both the U.S.-EU Safe Harbor, administered by the U.S. Department of Commerce, and the APEC Cross Border Privacy Rules System have built trust in the cross-border transmission of personal information by providing a mechanism for businesses to demonstrate that their privacy policies meet European Union or APEC Privacy Framework requirements.
These agreements have proven effective for data flows between the U.S. and Europe, which are the highest in the world according to the Brookings Institution. However, the growing economic might of Asia and Latin America, combined with the global nature of the Internet, provide a strong impetus to further develop the Cross Border Privacy Rules System so that it eventually includes all 21 APEC member economies.
The U.S. must also pursue strong open data-flow provisions in trade agreements that are now being negotiated – this includes avoiding both restrictions on where data can be stored and localization requirements for data centers or other related infrastructure. It is a good sign that these types of provisions are being negotiated in the Trans-Pacific Partnership (TPP) agreement, and we hope to see similar provisions in future trade agreements to which the U.S. is a party.
An Engine of Consumer Empowerment
By avoiding heavy-handed regulation and barriers to cross-border data flows, while promoting smart and collaborative data privacy agreements, we can help make sure that the Internet continues to be an engine of consumer empowerment and economic growth in the U.S. and around the globe.
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