American Enterprise Institute

Innovation sweet spot: When technology meets business

[Commentary] In July, the Office of Science and Technology Policy and the National Economic Council requested public comments on the upcoming update of the Strategy for American Innovation.

While the notion of innovation as a market good is debatable, the common theme linking national innovation strategies, almost without exception, is the unquestioned assumption that the STEM disciplines (Science, Technology, Engineering, and Mathematics) are central to this policy endeavor.

Investment in educating and developing STEM workers, funding STEM research activities, and facilitating the advancement of the resulting outputs into patentable products and thriving businesses are central tenets. However, one of the challenges for innovation is that transforming STEM research into the commercial activities that will underpin growing economic prosperity requires a special sort of entrepreneurial human capital that includes both STEM knowledge and business acumen.

[Howell is general manager for the New Zealand Institute for the Study of Competition and Regulation]

The dynamic Internet marketplace at work: Consumer demand is driving Google and Yahoo encryption efforts

[Commentary] Google and Yahoo announced that they will both be creating secure, encrypted, spy-free email services by early 2015. One reason e-mail has not been encrypted until now is that there has not been market demand for it.

Living in a post-Snowden world where serious attention is paid to who is seeing what and why may have the positive effect of Internet operators, as they differentiate their levels of security services.

I look forward to the Internet giants implementing even more tools to keep our communications safe from hackers and governments. Hopefully the next step for these companies will be to train their over 600 million users in multi-factor authentication, a tool that would add another level of protection.

[Tews is Chief Policy Officer at 463 Communications]

Comments on network interconnection in communications markets

[Commentary] While interconnection mandates may appear at first blush to be costless, they are not. Rather, as with virtually every other economic institution or arrangement, interconnection has costs as well as benefits.

Such costs may take the form of reduced incentives for network owners to invest in their networks, the loss of specialization that accompanies forced standardization, or various other forms. That is why interconnection and interoperability are not ubiquitous.

In the Internet environment, the value of interconnection is very high -- which is why IP interconnection has been both ubiquitous and voluntary from the Internet’s inception -- but that does not mean that interconnection is always the right answer. The question for policymakers is whether the task of balancing the benefits of interconnection against the costs should as a general matter be made by administrative process, or by the marketplace.

Of monkeys and men (and copyrights)

[Commentary] In the well-framed photograph, the brown eyes of a female crested black macaque stare straight into the camera, and her lips curl back into the broad grin of someone who knows that she has just snapped what might become an Internet phenomenon.

According to well-known wildlife photographer David Slater, the now famous “monkey selfie” came about when a troop of macaques found and began playing with his cameras. Meanwhile, outside the jungle, this monkey-selfie has caused some of the macaque’s (theoretically) more advanced relatives to work themselves into one of the Internet’s periodic copyright-related tempest-in-a-teapot situations.

Meanwhile, mass Internet piracy on an unprecedented scale -- almost all of it perpetrated by humans against undeniably human creators who own perfectly valid copyrights – will continue, at least until we choose to resume respecting the fundamental human rights of all (human) creators.

AEI Scholars weigh in on interconnection as part of the #CommActUpdate

[Commentary] The House Commerce Committee concludes another round of public commenting on its effort to update the Communications Act of 1934. The focus of this round was what role Congress and the Federal Communications Commission should play in the market for interconnection of networks.

Daniel Lyons and Gus Hurwitz joined scholars from the Free State Foundation in their comments, highlighting the importance of flexibility and responsiveness in interconnection markets. They argue that interconnection among IP networks is very different and more technical than the interconnection between ILECs that are governed by the 1996 Act.

In my submission, I provide two stories of deregulation from Denmark.

[Layton is a researcher at the University of Aalborg, Denmark]

Will US courts regulate Internet naming?

[Commentary] The Internet Corporation for Assigned Names and Numbers (ICANN) argues that it cannot be ordered to transfer a domain because the United States government, not ICANN, is really in charge.

The US government is proposing to allow its agreements with ICANN to lapse, however. At that point, ICANN would become autonomous and accountable only to its Board of Directors. ICANN would seemingly lose this line of defense, and thus invite the courts to hold it responsible for domain allocation.

This suggests that Department of Commerce oversight is holding off the unhappy possibility that every US District Court would be free to give orders to ICANN. Perhaps we should not be so quick to give up the current legal arrangements.

[Rabkin is a professional software engineer]

NSA surveillance reform: A tilt toward privacy over security?

[Commentary] In the last week of July, the chairman of the Senate Judiciary Committee, Sen Patrick Leahy (D-VT), introduced a version of the USA Freedom Act that is far more restrictive on intelligence agencies’ operations than any other competing bill.

In explaining the distinct shift toward more privacy and transparency provisions in the competing bills, much weight has to be given to events occurring in the background: the slow drip of Snowden revelations, combined with more near-term political blunders by the intelligence agencies.

There is merit to the concerns that the new metadata process is so cumbersome and protracted that it may impair the ability to ward off future well-planned terrorist attacks. An open-minded, continuous assessment is thus in order. On the controversial change related to a public advocacy role before the FISA Court, however, there can be no doubt that ultimately the security agencies will reap a benefit.

One does not have to subscribe to the view that the FISA Court has been a “patsy” for the security establishment, to hold that an independent, internal “other pair of eyes” will enhance the credibility of future legal reviews of data requests.

A closer look: Netflix, Mozilla, and Title II

[Commentary] Netflix and Mozilla are leading the charge for the government to oversee the Internet as never before, however, it is important to understand -- and to refute, where warranted -- their positions.

Here we select and scrutinize just a few of the technical and economic arguments and assertions from their comments to the Federal Communications Commission.

[Swanson is president of Entropy Economics]

Rep McCaul’s cybersecurity information sharing center: If you build it, will they come?

[Commentary] The House of Representatives placed four cybersecurity bills -- all pieces of a larger cybersecurity legislative puzzle -- on the House suspension calendar.

The core bill, sponsored by House Homeland Security Committee Chairman Mike McCaul (R-TX), would establish the National Cybersecurity and Communications Integration Center, a coordination point for civil information sharing between sector-specific coordination groups and federal, state, and local government agencies. Should the bill pass, will its provisions be enough to bring cybersecurity to the top of the agenda in corporate America?

Chairman McCaul’s effort establishes a baseline for the importance of cooperating and coordinating the efforts of owners and operators of critical infrastructure. Cross-sector facilitation is needed to get to the next step in managing cybersecurity. Similar to the creation of the baseline organization of the Center for Disease Control and Prevention almost 60 years ago, cybersecurity information sharing could create benefits that would prevent and minimize incidents that affect multiple networks.

Creating the National Cybersecurity and Communications Integration Center would be the first major step towards creating such a system of prevention, preparation, and planning, and would likely be one that we would all benefit from.

[Tews is the Chief Policy Officer at 463 Communications]

The miracle of FTTH deployment in Spain

[Commentary] Fiber-to-the-Home (FTTH) deployment is booming in Spain. More than 15 years after the end of the legal monopoly, alternative operators are finally committing to deploying their own high-speed Internet access networks. After 15 years without Next Generation Network (NGN) deployment, suddenly all three operators – Orange, Tele2, and Jazztel -- decide to commit to costly investments in fixed networks. Why this spectacular turnaround? The FTTH miracle in Spain would not have been possible with regulated access to the FTTH network of the incumbent operator. At last, the dynamic competitive process for NGNs has been unleashed in Spain, and there will be one winner for sure: the consumer. [Herrera-González is Regulatory Economic Manager at Telefónica]