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IT Matters

Technology policy insights

The IANA Transition Is Not Perfect, But Congress Should Approve It Anyway

In recent months, Sen. Ted Cruz (R-TX) has become the face of opposition to the U.S. government relinquishing its historic oversight of key technical functions of the Internet. This opposition will be on display today, as he holds a hearing to help Congress better understand the implications of such action. In some ways, Sen. Cruz’s opposition is justified—as ITIF has long argued, U.S. oversight of the Internet Corporation for Assigned Names and Numbers (ICANN) has been a crucial factor in its stability, and a transition away from U.S. oversight will create unique risks and challenges for Internet governance. But Sen. Cruz is still wrong to oppose the transition. Undoubtedly, the transition proposal is imperfect, but it has been vetted and approved by the global multistakeholder community. Therefore, any effort by the U.S. government to delay or derail the transition now would undermine the consensus developed by civil society and embolden other countries to intervene in the domain name system.

To understand today’s debate, a bit of historical perspective is necessary. In 1998, the Clinton administration announced plans to transition the management of the domain name system to the private

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Vietnam’s Proposed Law on Information Network Security Threatens to Imperil Its ICT Economy

Over the past decade, the information and communications technology (ICT) sector has made significant contributions to Vietnam’s economic growth. However, a proposed new Law on Information Network Security (LONIS)—which would apply onerous licensing and permitting requirements upon millions of ICT products containing cryptographic capabilities—threatens to short-circuit the robust levels of both ICT imports and exports that have underpinned the rapid growth of Vietnam’s ICT sector. Not only that, but LONIS potentially breaches commitments made by Vietnam in its World Trade Organization (WTO) accession report concerning imports of ICT products containing encryption as well as elements of the Trans-Pacific Partnership (TPP) trade agreement protecting trade in encrypted products.

ICT production and consumption have been key pillars in Vietnam’s stellar economic performance, with Vietnamese GDP growing, on average, more than 6 percent annually over the past 15 years. For example, the average annual growth rate of Vietnam’s ICT sector reached 55 percent from 2008 to 2013, while from 2004 to 2014, the percentage of ICT goods exports as a share of Vietnam’s total goods exports increased nine-fold, from 2.7 percent to 27 percent, making ICT goods the country’s largest export sector in

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Digital Trade on the Hill: Hearing on Expanding U.S. Digital Trade and Eliminating Digital Trade Barriers

Digital trade issues continue to grow in importance to the U.S. economy as people and businesses find new and innovative ways to use data and technology to deliver more goods and services via the Internet. However, the growth in entrepreneurship and innovation so vastly enabled by digital technologies is increasingly threatened by a growing range of digital trade barriers. On July 13, the U.S. House Committee on Ways and Means Subcommittee on Trade held an important hearing on the growing significance of digital trade to the U.S. economy, the rise of these digital trade barriers, and the ways in which U.S. trade policy, including through the Trans-Pacific Partnership (TPP), can help remove existing—and prevent future—barriers. ITIF Founder and President Robert Atkinson testified, alongside representatives from IBM, the Internet Association, PayPal, and Fenugreen (a tech startup). This post captures a few of the key takeaways.

Digital trade benefits a large segment of the U.S. economy and its workforce. Digital trade and data flows often go unrecognized (as they are often hard to see) for the important role they play in helping U.S. companies and workers, whether from firms big or

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A Welcome Expansion of the Information Technology Agreement Has Arrived

On July 1, the global production, trade, and usage of information and communications technology (ICT) products received a long-awaited boost when the expanded Information Technology Agreement (ITA)—a trade agreement that eliminates tariffs on hundreds of ICT products—came into force. The World Trade Organization (WTO) considers the initial ITA, concluded in 1996, as one of the most successful trade agreements ever. The expanded ITA is the biggest tariff-cutting deal in WTO history. It’s hoped that the deal will have similar success in driving ICT-based trade, productivity, and innovation as its successor.

The expanded ITA will build on the significant impact that the initial ITA exerted on growing global ICT trade. From 1996 to 2008, total global two-way trade in ICT products covered by the agreement increased by more than 10 percent annually, from $1.2 trillion to $4.0 trillion. The expanded ITA promotes affordability and accessibility to a new generation of ICT products by eliminating tariffs to trade on an updated list of 201 ICT products. The initial ITA cut tariffs on eight categories of ICT products, such as semiconductors, computers, and telecommunication products. The latest list includes scores of products

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Don’t Block Geoblocking

One reason information technologies have delivered huge benefits to the world—and promise even greater gains in the future—is that they lower the cost of producing high-value, information-driven products and services, from movies and games to software tools. Yet, because these information products are fundamentally different from physical goods or services, their pricing models have often led to confusion. An example of this is the current debate in Australia about geoblocking, the practice of varying the availability or price of a digital good or service, market by market, depending upon the location of the purchaser.

A recent draft report by the Australian Government’s Productivity Commission renewed longstanding complaints against geoblocking. Citing a previous report by the Australian House of Representatives, plus pricing data from 2012, the report found that Australians paid an average of 50 percent more for digital goods than did Americans. In response to this perceived unfairness, the commission urged copyright holders to provide more timely and less costly access to digital works. It also encouraged the government to affirm that consumers may use software that circumvents geoblocking technology without violating Australian copyright laws.

Such a policy could reduce

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World Intellectual Property Day – Highlighting How IP Incentivizes Innovation

Every April 26, the World Intellectual Property Organization (WIPO) celebrates World Intellectual Property Day to promote discussion of the role of intellectual property (IP) in encouraging innovation and creativity. Given the increasing tempest over the role of IP in the Trans-Pacific Partnership (TPP) trade agreement, the day provides an important reminder about the foundational role that IP plays in supporting innovation. IP is more important than ever as it is embodied in many economic sectors, especially across the digital economy, which means it affects not only innovation, but also trade, competition, taxes, and other areas of public policy and society. According to the OECD, investment in IP-protected capital is growing faster than investment in tangible capital.

To analyze this critical relationship between IP protection and innovation, ITIF compared the strength of IP laws and the effectiveness of anti-counterfeiting laws based on data from the World Economic Forum’s Global Competitiveness Report 2015-16 and creative output scores from the Global Innovation Index 2015, a report from Cornell University, INSEAD, and WIPO. The Global Innovation Index applies three distinct measures of creativity in an economy that taken together provide a measure

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Copyright Infringement: Science Pirates Are Still Pirates

The scientific community has become embroiled in a debate around online piracy after Alexandra Elbaykyan, a graduate student based in Russia, setup Sci-Hub—an online database of 50 million stolen scholarly journal articles. After encountering paywalls for scientific journals, she setup Sci-Hub because she said she believed that scientific information should be free to use and share. Elbaykyan can try to justify it in whatever way she wants, but what she is doing still involves the theft of property that is not her own.

Sci-Hub has garnered some support in the online piracy debate as the business model used by scientific publishing firms has clearly not caught up to the digital age and is in need of reform. The firms commonly charge as much as $35 for a digital copy of a journal article. Yet, an annual subscription to a top journal, such as The Lancet, costs $233 for both digital access and a print copy. This means, assuming four journal articles per weekly issue, that they charge 31 times more for a single digital article than a paper one, with zero marginal costs for the digital. While

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New Research Sheds Light on How U.S. Labor Market is Evolving

Although the American labor market is evolving, a scarcity of data has often made it difficult to know exactly what is going on and what to make of it. Having a better understanding of how the nature of work is changing would help individuals prepare for their role in it. It would also help policymakers pass appropriate laws that promote competition, protect workers, and encourage investment in both human and physical capital.

One of the leading academics in this field has been Alan Krueger, former chairman of President Obama’s Council of Economic Advisers. Dr. Krueger has coauthored two recent studies that provide policymakers with a better understanding of how labor markets are evolving on both the macro and micro levels.

Our understanding of macro changes to the labor market is limited by the fact that, because of funding limitations, the Bureau of Labor Statistics (BLS) last conducted its Contingent Worker Survey, which gathers data on people who have contingent and alternative work arrangements, in 2005. In a recent paper, Lawrence Katz, a Harvard economist, and Dr. Krueger included a version of this survey in the RAND American Life Panel,

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France Demands Right to Censor the Global Internet

In 2014, Europe’s highest court ruled that Europeans have the ability to request that search engines remove links from queries associated with their names if those results are irrelevant, incorrect, or outdated. As a result of this ruling, Google agreed to delist search results from country code level domains—such as for France—to remove offending results for European users, without affecting the rest of its users worldwide. Earlier this month, Google expanded its practice so that it now will delist offending results from all Google search domains, including, for all European users, based on geo-location signals, such as IP addresses. So a user in France would not see delisted URLs even if they visit instead of France is now saying that this is insufficient and Google must take down offending material for all users visiting any of its domains worldwide.

Last week, the French privacy authority, the Commission Nationale de l’informatique et des Libertés (CNIL), fined Google €100,000 ($112,000) for failing to remove links associated with French right-to-be-forgotten requests from its global search index. France is trying to force its domestic policies on the rest of

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Labor Law and the Gig Economy: Why Stick with an Antiquated System?

The rapid growth of the gig economy—workers using Internet platforms to deliver personal services such as rides, legal services, and plumbing to consumers—has sparked a discussion on their impact and relationship to current law. A major topic in this debate has been whether gig workers should be classified as employees or as independent workers. On March 15, Ross Eisenbrey and Lawrence Mishel of the Economic Policy Institute criticized an earlier paper that Seth Harris and Alan Krueger had written for the Hamilton Project at the Brookings Institution. The Harris and Krueger paper recommended establishing a third legal category for gig workers. But Eisenbrey and Mishel’s assertion that current law can handle gig marketplaces misses the central point. The real question is not whether a centuries-old distinction can be contrived to apply to the gig economy. It is whether doing so is in the best interest of society.

Eisenbrey and Mishel primarily focus on the case of Uber. This is unfortunate because Uber probably represents the closest case to an employer-employee relationship. But even in this case the authors acknowledge that courts have given different opinions. The waters are muddied even

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