American Enterprise Institute

[Commentary] As much as “making America (or any country) great again” addresses the consequences of flows of production offshore, it behoves policy-makers to consider the parallel responsibilities of ensuring that American consumers (and indeed those of all other jurisdictions) pay their fair share of taxes as part of the social contract with their fellow countrymen. Given new technologies coming available (such as blockchain technology), rethinking internet taxes to focus upon the primary interest — the consumption of goods and services by taxpayer-citizens — warrants further consideration.

[Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand.]

[Commentary] We’ve been discussing technological “convergence” in one way or another for at least 25 years. 25 years ago, convergence meant that we might soon be sending voice, data, and video over the same wire. Telephone, cable, fax, and television, in other words, might mush together.

In the last few years, however, the tensions between technological reality and our outdated communications laws have reached a breaking point. No matter which side one took in the network neutrality wars, it became apparent to nearly all — including legislators, regulators, and judges — that the 1934 and 1996 Acts governing communications no longer fit the world in which we live. Some tried to force our converged world into the old silos, but it didn’t work. Political upheaval in Washington may come with challenges. But one advantage is that it provides an opportunity to sweep away this legal clutter. With some luck and good will on both sides, it may even lead to a durable, bipartisan framework that can propel the technology economy for decades to come.

[Bret Swanson president of Entropy Economics LLC]

[Commentary] The short answer is, “No!” In an independent regulatory agency like the Federal Communications Commission, political alliances should be left at the door. That has not been the case the past few years and now is the time for change.

Politics isn’t the only thing to blame for the wide swings in FCC regulatory decision-making. The agency has also lost its way. Originally designed to regulate monopoly telephone companies, oversee broadcasters who had exclusive rights, and manage scarce radio spectrum, the FCC’s authorizing statues are badly outdated, despite having been updated in the Telecommunications Act of 1996. Now that competition is the norm, industry players seek to use the agency’s authority for ex ante regulations to hinder rivals, to the detriment of customers. A statutory change should direct the agency to focus on managing radio spectrum and, if needed, subsidies for broadband in rural, high cost areas where affordability is an issue. It should restrict the agency from engaging in ex ante regulation except in the case of actual monopoly, and when a rigorous cost-benefit analysis, followed up with evaluations, demonstrates that ex ante regulation improves outcomes for customers. Absent a statutory change, the commission itself can use its authority to forebear from regulation wherever there is competition and means test its subsidies.

[Mark Jamison is part of the FCC transition team for President Trump. He is the Gunter Professor of the Public Utility Research Center at the University of Florida]

[Commentary] There are a number of cybersecurity policies that could loom large in 2017, but two issues are certain to cause heated debate and conflict. The first is the contentious issue of encryption, which pits US intelligence and law enforcement agencies against privacy advocates and Silicon Valley. The second relates to the expiration of the Section 702 surveillance provision of the USA Freedom Act. This blog posting will take up the encryption debate, and a subsequent posting will analyze the coming struggle over Section 702 renewal.

[Claude Barfield is a former consultant to the Office of the US Trade Representative.]

[Commentary] In many areas of law and policy, the priorities of President-elect Donald Trump seem difficult to predict. But the context of intellectual property (IP) law and policy is different. Simply put, President-elect Trump will soon become – by far – the most experienced user of domestic and international IP rights ever to serve as the President of the United States. During his long business career, Trump pursued sophisticated, usually unified, branding strategies based upon his last name, had great success in the copyright industries, and has used the IP-like rights granted by state laws that protect reputational, privacy, and publicity rights.

The President-elect’s broad familiarity with US IP rights thus suggests a businessman’s approach to IP issues – one that focuses on practical issues, like cost-effective enforceability. Such an enforcement focus could also help strengthen middle-class America by ensuring that federal IP rights can be enforced by ordinary, local businesses, not just by coastal conglomerates. It could be implemented as follows:
Domestically, focus on improving private enforcement of US IP rights – particularly on the internet.
Internationally, focus on enforcing IP-related provisions of existing US trade agreements.

[Tom Sydnor previously served as Director of the Center for the Study of Digital Property at the Progress & Freedom Foundation.]

[Commentary] On Jan 4, it was announced that the New York Times app for Apple devices would no longer be available in China. This is notable, because the Times app bypassed Chinese internet censorship, and so Apple is meaningfully reducing Chinese access to unfiltered media.

According to Apple, this action was in response to a declaration by the Chinese government that the app violates local law. The story has been widely reported and has caused some concern about the precedent being set. Should US companies aid in Chinese censorship? This question in turn reflects a broader unease about the way that multinational technology companies enable government misbehavior.

[Ariel Rabkin was a postdoctoral researcher at Princeton University from 2012 to 2014.]

[Commentary] Reflecting on the deadweight loss of Christmas inevitably leads (for a technology policy scholar) to considering the deadweight losses associated with government and municipal beneficence in gifting fiber broadband networks to constituents. If fiber is to be gifted by governments, the deadweight loss of taxation attends every dollar of public funds applied to the network. This begs the question of whether, given competition for the use of these funds, a fiber network represents their most productive use. Would the same amount of money deliver more benefit if applied, for example, to improvements in other government or municipal infrastructures, such as roads or schooling? While this question appears self-evident, it rarely enters into discussion when government funding of fiber networks is proposed.

[Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand.]

[Commentary] Broadband speed has become a key metric for internet policy. Outgoing Federal Communications Commission Chairman Tom Wheeler has repeatedly emphasized that 25 megabits per second (Mbps) download speed should be “table stakes” for a 21st century network. Others have pushed for higher speeds. Susan Crawford, for example, has called for a nationwide gigabit network. But when pressed, advocates typically offer little to justify these benchmarks beyond a generic appeal to the truism that “more is better.”

Given the role that such benchmarks play in telecommunications policy, the incoming administration should consider establishing a robust, objective, activity-based definition of minimum broadband speed.

[Daniel Lyons an associate professor at Boston College Law School]

[Commentary] Liberal economists recently have begun to worry about industry concentration and market power. Some conservatives may even distrust these firms for their aggressive efforts over the last decade to push the Federal Communications Commission to regulate broadband and wireless network firms, better known as the “net neutrality” wars.

But turning against these titans of American innovation would be foolhardy for consumers, workers, and for the US economy. The best way to regulate the size, behavior, and prices of technology’s titans is by removing the obstacles to vibrant entrepreneurship, thus allowing the next Google or Amazon to challenge, displace, or transcend today’s titans.

[Bret Swanson is president of Entropy Economics LLC.]

Recently, the Telecom Regulatory Authority of India (TRAI) released its Recommendations on Encouraging Data usage in Rural Areas through Provisioning of Free Data. In February 2016 TRAI imposed a two year ban on differential pricing for data services, but it now acknowledges that free data can benefit the poor. In its latest decision, TRAI rejected three proposed models for free data and presents a new model in which “third party aggregators” create the market for free data. The aggregators may also be eligible to take advantage of India’s Universal Service Obligation Fund (USOF) to participate. Let’s applaud TRAI for recognizing the value of free data. Aggregation is a novel approach, but it is neither costless nor neutral. Moreover, the ruling creates a new problem of regulatory discrimination restricting how telecom service providers can participate in the market.