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Remarks of Assistant Secretary Strickling at the OECD Workshop on Economic and Social Benefits of an Open Internet

September 30, 2015

Remarks of Lawrence E. Strickling
Assistant Secretary of Commerce for Communications and Information
OECD Workshop on Economic and Social Benefits of an Open Internet
Washington, D.C.
September 30, 2015

—As Prepared for Delivery—

I want to thank the OECD for inviting me here to speak on the need for research on the economic and social benefits of an open Internet.  As we all know, this is one of several key meetings leading up to the OECD’s 2016 Ministerial Meeting on the Digital Economy next June in Cancun, Mexico where the issue of how to preserve the open Internet will be high on the agenda.

At NTIA, we are focused on ensuring that the Internet remains an open engine for economic growth, innovation, and free speech. In the United States, we have seen first-hand how the open Internet is helping our economy and society. It has created a dynamic and growing digital economy that is producing jobs across the income spectrum. It has transformed how we look for jobs, learn, and socialize.

But the open Internet also presents significant challenges. The growth of sophisticated malware and other cyber security threats, the need to protect the privacy of Internet users and the mounting online theft of intellectual property online have challenged governments’ ability to balance these important interests with the equally important need for openness. Governments are increasingly feeling compelled to do something they see as meaningful—if not outright drastic—to protect their citizens and their businesses from these threats.

Regrettably, in their attempts to do something to protect their citizens and businesses, governments sometimes rush to put up digital walls between their countries and the rest of the world, between their citizens and people abroad.  In recent years, we have seen governments institute data localization laws, as well as impose limitations on data storage, data transfer, and data processing. Some nations have considered proposals to require mandatory local ownership of data storage equipment or have instituted costly and lengthy investigations of foreign online platforms and retailers.  The apparent intent of these policies seems to be that by keeping data stored within national jurisdictions, or by preventing data from traveling in and out of the country – by keeping things local – governments can better protect their citizens and businesses.

Historically, these kinds of restrictive policies have tended to be pursued by authoritarian governments that want to try to control information and monitor the activities of their citizens. In recent years, however, even democratic countries have considered restrictions on data flows.

Such proposals do far more harm than good. These kinds of restrictive policies fail to achieve their stated goals and can introduce a host of unintended consequences. By restricting data flows and competition between firms, such policies increase costs for Internet users and businesses, retard technological innovation, and may curb freedom of expression and transparency.

This assessment may seem like common sense to many of us in this room. But it is not accepted by everyone, in part because we lack the kind of hard quantitative evidence needed to back up our arguments. The OECD, which has been a leader in economic and social research over the years, is well-positioned to take on the important task of quantifying the economic and social benefits of an open Internet. The OECD has performed rigorous policy and quantitative analysis to support the adoption of sound economic policies. It has supported its member states in the formulation and adoption of the Internet Policymaking Principles, a landmark OECD effort to encourage governments to ensure that the Internet remains an open platform for innovation and growth.  The OECD has shown time and time again that it can help demonstrate the “why” as well as the “how” of good Internet policymaking. 

As such, we stand ready to assist the OECD with this important work. Promoting and preserving an open Internet is a top priority for the Commerce Department, as evidenced by our broad representation at this workshop.

The Department is engaged in a wide range of policy work to help support and promote the dynamic and open architecture of the Internet.  Earlier this year, Commerce Secretary Penny Pritzker launched the Digital Economy Leadership Team (the “DELT”), which is chaired by Alan Davidson, whom you will hear from in the next session. The goal of this team is to help coordinate the Department’s efforts to promote the digital economy and protect against policies that could harm the free and open nature of the Internet.  Under the auspices of this team, we have brought together representatives from all our Commerce bureaus with the goal of developing a concerted, coordinated effort to advance open Internet policies.

At NTIA, we have worked to protect the open Internet and resist protectionist or restrictive policies. Importantly, we have long supported the multistakeholder approach to Internet policy, an ideal embodied in the OECD’s Internet Policymaking Principles, as an important tool to preserve and protect the Internet as a platform for economic growth, innovation, and the free flow of information. The ongoing effort to transition our stewardship of the Internet’s domain name system is aimed at ensuring that stakeholders, not governments, set the future direction of the Internet.

Domestically, we have utilized the multistakeholder model to help enhance online security and privacy. We are convening stakeholders to develop privacy codes of conduct and cybersecurity best practices so consumers have greater confidence and trust that their personal data will be protected when they send their information over the open Internet.

We believe this approach strikes an important balance by enhancing security and privacy, while also enabling innovation and the free flow of information.

I look forward to today’s workshop.  The presentations today will ask a number of important questions to help chart a research and data gathering agenda.  At the end of the day, we hopefully will be closer to understanding how we can demonstrate the harmful impacts of data localization and other free-flow barriers on economic growth and innovation and how we can use that knowledge to preempt emerging threats to openness.

We look forward to the results of your work to detail the social and economic benefits of an open Internet. This important initiative will allow us to move beyond anecdotes and provide real data and analysis to back up what we have been saying for years: That the dynamic and open architecture of the Internet benefits everyone across the globe.

Thank you for listening.