January 23, 2015

Technology Policy

Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

We live in a rapidly changing world where change is facilitated and made possible by technology. What is the proper policy approach to these life-changing devices, platforms, and machines? According to senior research fellow Adam Thierer there are, broadly speaking, two worldviews. Policymakers can take a “precautionary principle” approach and ban or severely restrict technologies in order to protect people from the hypothetical harms of a technology. Or policymakers can foster a principle of “permissionless innovation” where technology is allowed to develop, and culture, society, and law adapt to the shifting changes it brings. 

There are certain topics, such as cybersecurity, online privacy, and telecommunications regulations, that stay fixed in our interconnected society. The particulars of the debate may change, but the main themes, such as the need for secure data, will remain. Then there are other debates that seem to change before our eyes, such as the arguments over autonomous vehicles, commercial drones, and virtual currencies. Even two years ago, none but the most optimistic and specialized experts could have guessed policymakers would be asked to weigh in on these technologies. 

For technology debates that are ongoing and debates that are unpredictable, the scholars at the Mercatus Center’s Technology Policy Program offer consistent academic research to inform policy decisions. In each of the summaries below, the principle of permissionless innovation offers a positive alternative to heavy-handed, albeit well-intentioned, prohibitive regulation.

CONTENTS
Cybersecurity 
Online Privacy 
Regulation Emerging Technology 
Intellectual Property Rights 
Regulating the Internet 
Telecom Regulation 

CYBERSECURITY
Those whose property and information are at risk are in the best position to develop, implement, and maintain cybersecurity solutions. A top-down approach to cybersecurity can never identify and prioritize the many factors that are relevant to achieving effective cybersecurity, especially considering the pace at which technology develops.

  • Technocratic solutions like the recent Cybersecurity Framework executive order could weaken the current dynamic provision of cybersecurity.
  • Companies and firms, on their own, are best able to solve cybersecurity issues because they have the quickest access to information about relevant threats. The best evidence shows that private firms do, in fact, spend quite a bit on securing their assets.
  • Policy solutions should take into account the current best practices used in specific industries, rather than impose sweeping static solutions that could disrupt functioning processes. Formal legal rules would be less dynamic, induce less cooperation, raise costs, be less effective internationally, and limit peering, especially for smaller ISPs.
  • There are many different types of cyberattacks, and the rhetoric surrounding cybersecurity legislation should reflect this reality. The current rhetoric has exaggerated the existing threat.

ONLINE PRIVACY
Privacy policy debates often assume regulations are needed to ensure that privacy—especially children’s privacy—is protected online. But in reality, parents and families are responsible for determining which websites and what content are suitable for themselves and their children. It is an individual choice to visit certain websites.

  • Expectations of privacy differ wildly, which makes designing uniform privacy legislation difficult. Analysts and policymakers must attempt benefit-cost analysis, even though it is extremely challenging in the context of online privacy regulation.
  • Access to personal information such as content in Gmail messages has been perceived as a privacy problem. Yet websites’ use of personalized information in targeted ads allows them to provide services for free.
  • The costs of regulations may outweigh the benefits, especially in regard to free speech and the proven multistakeholder governance model of the Internet. We live in a world of tradeoffs, and regulation is not costless.

REGULATING EMERGING TECHNOLOGY
Emerging technologies like commercial drones, Bitcoin, autonomous vehicles, 3-D printing, wearable technology, and facial recognition all pose policy challenges. Policymakers should allow technology to develop, taking into account actual harms and society’s ability to adapt, rather than regulate out of concern for hypothetical harms. A framework of permissionless innovation can unleash the full benefits of these technologies.

  • Bitcoin—the world’s first decentralized digital currency—and other virtual currencies offer the potential of tremendous economic benefits, including cheaper products and accessibility to under-banked, often low-income populations. Regulators should take care that those benefits are not squashed by trying to prevent hypothetical harms.
  • Should the creators of new technologies seek the blessing of public officials before they develop and deploy their innovations? The Internet has demonstrated that incredible innovations emerge given a framework of permissionless innovation.
  • The Internet’s potential was not imagined by its developers; only when it became a platform for innovation did they see what it would eventually become. Like the Internet, the airspace, wearable devices and driverless cars could be the next platforms for innovation and provide enormous societal benefits.

INTELLECTUAL PROPERTY RIGHTS
Intellectual property rights—like copyrights and patents—are foundational to the success of multiple sectors in the American economy. The Constitution grants Congress the power to protect intellectual property to incentivize innovation and creation for the public good. Current intellectual property law is overbroad, burdensome, and captured by special interests. What framework then best promotes innovation and the public good?

  • The Constitution allows the enforcement of intellectual property rights to spur innovation, not to secure sources of revenue for special interests.
  • America’s Founders viewed copyright as a government-granted privilege with a limited term. Those who promote a limited government today should seek to reform the current copyright system because, as it is both nonrivalrous and nonexcludable, it grossly overreaches the bounds originally intended.
  • Intellectual property is inherently different from physical property and thus should be treated accordingly. For example, in criminal proceedings theft of physical property should warrant different punishment than theft of intellectual property for personal use.

REGULATING THE INTERNET
Regulation of the Internet is a topic currently discussed at international conferences, such as the April 2014 NETmundial conference in Brazil and the International Telecommunications Union Plenipotentiary Conference in November 2014. Rather than being centrally operated, the Internet comprises all of its users combined with a few nonprofit organizations. This scattered organization is known as multistakeholder governance.

Domestically, the administration’s decision to cede oversight of the global top-level domain name system (the Internet Assigned Numbers Authority, or IANA) to the Internet Corporation for Assigned Names and Numbers (ICANN) has brought into question the United States’ role in the oversight of core Internet functions. What principles should the United States maintain during this crucial period of debate?

  • The multistakeholder model of Internet governance should be upheld domestically as well as internationally so the Internet does not become the project of government.
  • Any proposed regulation of content on the Internet should be weighed against the impact such regulations would have on the current free and open model that has been central to the Internet’s success.
  • Some countries propose a system of tolls on the sources of Internet content in order to bolster poorer countries’ lagging telecommunications infrastructure. However, Mercatus research shows that collecting fees or tolls from companies in foreign countries does not correlate to infrastructure investment.

TELECOM REGULATION
Telecom regulations, enforced primarily through the Federal Communications Commission and state and local governments, impact the means through which we receive information technologies like the Internet, television, and phone services. It is important to remain mindful of what those impacts are and how they can be reformed to allow Americans greater, more affordable access.

  • Many television regulations were created in the 1960s and 1970s—before online video, satellite TV, and widespread cable—and should be repealed or modified for the modern media marketplace.
  • There are few alleyways of the administrative state more obscure or more littered with obstacles to efficient markets and improvements in consumer welfare than the interventions regulating ownership and licensing of TV stations and programs, including retransmission, must-carry, and satellite rules.
  • Foreign mobile broadband markets demonstrate that net neutrality regulations do not necessarily benefit the consumer. Reclassifying the Internet under new rules will not help consumers, either.
  • Both Congress and the Federal Communications Commission recognize that low-income universal service programs require reform. Reform that will truly help rural residents and the poor will require a combination of efforts like budget caps, participation fees, and reductions in per-line subsidies.
  • The government currently controls a majority of wireless spectrum and gives unused spectrum to companies via licenses. Spectrum is the means through which we receive signals and data on our cell phones. Applying market practices to this scarce resource will lower prices and promote accessibility.

release date: January 2015