Monthly Archives: June 2017

BECKERMAN: “This first-of-its-kind report affirms the critical role intermediary liability laws play in driving U.S. economic growth, innovation, and the best online experience for consumers.”

Washington, DC – Today, Internet Association released a new analysis that found reducing intermediary liability safe harbor protections would cost the U.S. 4.25 million jobs and reduce GDP by nearly half a trillion dollars over the next decade. Conducted by NERA Economic Consulting, the report represents the first quantitative measure of the value of safe harbor laws that protect internet platforms from being liable for wrongdoing by others.

“This first-of-its-kind report affirms the critical role intermediary liability laws play in driving U.S. economic growth, innovation, and the best online experience for consumers,” said Internet Association President & CEO Michael Beckerman. “Reducing these protections jeopardizes the growth of internet companies and their positive impact on the economy.”

Internet platforms operate as intermediaries – companies that connect third parties online – providing consumers with platforms to exchange information, book travel, engage in social media, and access countless other beneficial services. Underpinning the success of these platforms are safe harbors, specifically Section 230 of the Communications Decency Act and Section 512 of the Copyright Act.

The report uses consumer surveys and economic analysis to estimate the impact of reduced liability protections and finds that without intermediary liability protections:

• The U.S. will lose an estimated $44 billion and eliminate over 425,000 jobs each year. That number is equivalent to giving away the annual GDP of Iceland, Jamaica, and Nicaragua combined, and firing all McDonald’s workers in the U.S.
• Internet startups will face higher entry costs, limiting innovation. Entrepreneurs who drive the U.S. innovation economy rely on the ability to share content and test new ideas without facing unreasonable liability requirements. Reduced liability safeguards would hinder the formation of these startups by raising market entry costs.
• Consumers will face higher costs and a worsened online user experience. It is economically and technologically unfeasible for platforms to screen third-party content at scale. The threat of liability may turn ISPs and websites into gatekeepers and enforcement agents, incentivizing them to block legal user generated content to avoid unfair and unwarranted legal risk, making the web less open, collaborative, and innovative.

“The internet sector is one of the nation’s most dynamic and powerful economic engines, supporting nearly 3 million American jobs,” added Beckerman. “Strong intermediary liability protections are foundational to the continued success of the sector and the broader economy.”

To read a two-page summary of the report, click here.

To read the full report, click here.

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IA President & CEO Michael Beckerman issued the following statement on the departure of Gina Woodworth, Senior Vice President of Public Policy & Government Affairs:

“From just 14 members at launch  to nearly 40 today, Gina has helped Internet Association grow from startup to scale and expand the scope of our reach on behalf of internet companies across the country. While I will surely miss her counsel, I and the IA team wish her best as she brings her considerable talents to Snap.”

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BECKERMAN: “The internet industry believes strong, legally sustainable net neutrality rules are necessary to allow the entire internet ecosystem to flourish, and this policy paper illustrates that.”

Washington, DC – Internet Association released a new white paper entitled “Principles to Preserve and Protect an Open Internet” that details baseline net neutrality principles and policies needed to protect consumers and preserve the virtuous circle of broadband innovation.

“The internet industry believes strong, legally sustainable net neutrality rules are necessary to allow the entire internet ecosystem to flourish, and this policy paper illustrates that,” said IA President & CEO Michael Beckerman. “The 2015 Open Internet Order adheres to these principles and we support keeping these rules.”

The policy paper highlights the broad consensus among all internet ecosystem stakeholders – including internet service providers (ISPs) – about the need for strong, enforceable net neutrality rules. Too often the debate over net neutrality focuses solely on the FCC’s legal jurisdiction, rather than the substance of the underlying rules. However, the details of these rules matter and the paper outlines six principles and policies for preserving a free and open internet by which all proposals and potential changes to the rules will be judged:

1. Net neutrality rules preserve the success of the internet in driving economic growth, spurring innovation, and advancing individual expression and democratic discourse.
2. The FCC’s 2015 rules are working and the entire broadband internet ecosystem is thriving.
3. Ex ante rules remain necessary to preserve and protect an open internet.
4. Specific net neutrality rules are needed to preserve an open internet. These rules include: no blocking, no throttling, no paid prioritization, no unreasonable interference or disadvantaging of content by ISPs, and transparency and disclosure requirements.
5. Open internet protections should apply to broadband internet access providers on a platform-neutral basis, including wired, terrestrial wireless, and satellite connections.
6. Strong and effective enforcement of net neutrality rules is critical to ensuring that the benefits of the rules are realized. Absent legislation that fundamentally changes allocations of relevant federal agencies’ authority, net neutrality rules should be enforced by the expert agency in the field, namely the FCC.

Also featured in the paper are testimonials from three IA member companies: Etsy, TransferWise, and Vimeo.

From Etsy CEO Josh Silverman’s Testimonial: “Our sellers’ success depends on strong net neutrality protections. As microbusinesses, ‘internet fast lanes’ are more likely to be unaffordable, undermining their ability to compete with bigger, more established brands. We know that delays of just milliseconds negatively impact sales.”

From the paper: “A free and open internet remains vital to preserving and protecting the virtuous circle of broadband innovation that benefits edge-based innovators and entrepreneurs, businesses, ISPs, and, above all, consumers. The existing FCC rules are working and have not resulted in harms to ISPs, who continue to experience growth in investment, network capacity, and demand for BIAS services. Undoing the existing light touch rules will create uncertainty among edge providers, innovators, and consumers, and would threaten to unravel the most dynamic segment of our economy. Instead, policymakers should seek to preserve the current rules and ensure that they remain on a firm legal footing.”

To read the full white paper, click here.

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BECKERMAN: “Experts across disciplines, parties, and industries all agree: encryption makes America safer and grows the economy.”

Washington, DC – Internet Association today released new economic research detailing the integral role of encryption in protecting American interests. The report outlines the increasing risk of data breaches to America’s national security and economic growth, finding that encryption is the only viable solution to mitigating these risks.

“Experts across disciplines, parties, and industries all agree: encryption makes America safer and grows the economy,” said Internet Association President & CEO Michael Beckerman. “This research contributes even more evidence to the consensus that encryption is a necessary part of keeping our country safe. Mandatory security vulnerabilities or encryption back doors do not make us safer.”

IA estimates that nearly 6 billion records could be exposed in data security breaches and these breaches would cause almost $220 billion in damages by 2020 if no changes are made to better protect records.

“Strong encryption is the best – and frankly the only viable – way to protect America’s economic interest from criminals and state-based actors,” said Internet Association Chief Economist Dr. Christopher Hooton. “The economic and infrastructure risks of online security breaches are real and will continue to increase. The internet already represents about 6 percent of GDP and the quantity of both digitized records and internet-connected devices will continue to proliferate, making encryption all the more important.”

Internet Association examined online security breaches, the number of records exposed in breaches, the cost of security breaches, and several other factors in its research. Key findings include:

• The potential for damaging security breaches is increasing at exponential rates. The average annual costs of privacy breaches from 2005-2016 is estimated to be more than $5.5 billion with large outlier incidents comprising approximately $3.4 billion of that total. These numbers are set to increase.
• Encryption protects American interests. Experts all across the spectrum agree that encryption makes us, our data, and our nation safer. Engineering vulnerabilities into products and services makes us less safe.
• Encryption protects the U.S. companies and the government from foreign state-sponsored actors. State-sponsored cybercrime is increasingly a threat, especially from China. Many Chinese industries have turned to hacking as a replacement for research and development, calculating that it’s cheaper to copy American IP from a hack than to develop their own products.
• Unencrypted data is now a threat to every industry and internet user.  As more and more of our daily lives become integrated into the internet, the risk of a security breach increases both in terms of scope and scale.

To read a two-page summary of the report, click here.

To read the full report, click here.

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Internet Association Vice President, State Government Affairs, Dustin Brighton released the following statement on the marketplace nexus language in Minnesota’s budget:

“Minnesota’s new budget contains language that places harmful tax obligations upon online marketplaces that will stifle business in the state and make it harder for internet companies to operate. This language is likely unconstitutional and forces online marketplaces to collect and remit sales taxes.

“The internet economy represents 67,000 jobs and 9 percent of Minnesota’s economy. This marketplace tax will slow the growth of any North Star State company trying to do business online for years to come.”

Internet Association President & CEO Michael Beckerman issued the following statement on the nomination of David Redl to be Assistant Secretary for Communications and Information at the Department of Commerce and Administrator of the National Telecommunications & Information Administration (NTIA):

“The internet industry urges the Senate to promptly confirm David Redl as NTIA Administrator. Mr. Redl has a deep, technical understanding of the internet and telecommunications issues that will serve him well in this role.

“On a personal note, I’ve known David Redl for many years and he’s a dedicated public servant who will make a fantastic NTIA Administrator. We look forward to working with him to advance internet policy and grow the economy.”

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Washington, DC –Internet Association today released a new video highlighting remarks that internet service providers (ISPs) have made to the FCC and their shareholders regarding broadband investment since 2015.

Infrastructure investment is front and center in the net neutrality debate because ISPs claim network investment is depressed because of the 2015 Open Internet Order. Internet Association research shows investment increasing during this time.

“The entire internet economy benefits when ISPs invest in their networks. We’re as excited about new investment in broadband infrastructure as telecom executives,” said Michael Beckerman, Internet Association President & CEO Michael.

“Broadband investment enables a virtuous circle of innovation for the whole internet ecosystem. Innovative websites and apps fuel consumer demand for the internet, which in turn fosters further network investment, which then fosters further innovation by websites and apps. We are all in this together to deliver the highest quality and choice to consumers while simultaneously growing our economy. Strong, enforceable net neutrality rules allow this virtuous circle of growth to continue. We remain open to working with all stakeholders to protect the free and open internet,” concluded Beckerman

Watch the full video by clicking here.

For more information on net neutrality, click here.

BECKERMAN: “Promoting internet-friendly disciplines in NAFTA on data flows, balanced copyright, intermediary liability, and customs represents a massive opportunity for the internet sector and the U.S. economy as a whole.”

Washington, DC – Today, Internet Association released a white paper outlining the internet industry’s policy priorities for modernizing the North American Free Trade Agreement (NAFTA).

“NAFTA was approved before the proliferation of the commercial internet,” said IA President & CEO Michael Beckerman. “Today, U.S. businesses in nearly every sector and in every state leverage the internet to reach millions of customers across the globe and create quality American jobs. Promoting internet-friendly disciplines in NAFTA on data flows, balanced copyright, intermediary liability, and customs represents a massive opportunity for the internet sector and the U.S. economy as a whole.”

The internet sector represents 6 percent of U.S. GDP and employs nearly 3 million Americans. The internet has helped the United States establish a $159 billion global digital trade surplus, and a $41.8 billion services trade surplus with Canada and Mexico. And these benefits reach well-beyond the internet economy – 75 percent of the economic benefits of the internet go to traditional industries like manufacturing and agriculture.

Key policy recommendations include:

• Data Flows And Digital Services: NAFTA should include an e-commerce chapter with provisions designed to promote the free flow of information across borders and prevent forced data localization. NAFTA should also prohibit governments from making online services liable for third-party content. Mexico and Canada lack a clear legal principle like Section 230 of the Communications Decency Act, creating increased risks for U.S. internet service exporters.
• Intellectual Property: NAFTA should be updated to ensure copyright rules work for the digital environment and enable U.S. digital exports. Fair use provisions and copyright safe harbors foster innovation and investment – nearly 80 percent of venture capital investors are less likely to invest in services where safe harbors don’t exist.
• Customs/Trade Facilitation: Internet-enabled exporters are sometimes unable to reach international customers because outdated trade rules don’t accommodate small e-commerce exports. Complex trade rules – such as commercially insignificant de minimus thresholds – limit the growth and success of small internet-enabled U.S. sellers, sometimes even precluding them from exporting at all.

To read the full paper, click here.

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