Comment on the Aspen IDEA Project Report
Toward a Single Global Digital Economy:
The First Report of the Aspen Institute IDEA Project
The Report resulting from the two-year long IDEA Project discusses critical steps forward for establishing a fair, effective, and empowering multi-stakeholder system for governing the flow and use of data in a single global digital economy.
This report is written from the perspective of the Aspen Institute IDEA Project Staff. Unless attributed to a particular person, none of the comments or ideas contained in this report should be taken as embodying the views or carrying the endorsement of any specific individual, corporation or organization that participated during any stage of the Aspen IDEA Project process.
Please share your public comments on the Report in the form below.
Download: Toward a Single Global Digital Economy (PDF)
Comments
A few comments on the reprt from the perspective of adding proper balance and thereby credibility:
1. The chaper beginning page 45 on Chinese Indigenous Innovation though correctly captures a major point it misses one important element. Namely that the combined and consorted preassure through many major countries/regions and their industry/trade associations in fact was quite succesful in convincing China to take a step back and comply with global policies regarding trade. We beleive this fact should be mentioned in the text and/or as a footnote.
2. The sections (beginning page 25 and 44) on Google leaving China and the success of Baidu omits one piece. The success of Baidu is to a significant extent related to its popularity/attractive capabilities in China. Thus by making a search engine more based on Chinese language and Culture is one reason to Baidus success. Not just the reasons explained in the text on why Google left the market. We beleive this point should also be made clear in the text.
3. The discussion on Multistakeholder approaches and particularily the description of the Aspen Staff Experiment with the PCO/SMO governance arrangement etc neginning on page 39. Since this approach was considered "Interesting but impossible", since its legitimacy would be impossible to gain (kind of "creating tha Vatican in the Cyberspece"...) we belive this point should be captured by e.g. adding a statement like "although as a thought experiment the model provided ample space for constructive discussions, the model was thouigh recognised as not possible to implement and gain legitimacy...."
Best regards
Mats Nilsson
Ericsson, Governmet&Industry Relations
Telefónica is very pleased with the opportunity given to participate in the IDEA Project. We share the fundamental vision of a narrow window of opportunity for the public and private sectors in like- minded countries to work together to develop a new set of policy principles for the Internet. We understand that this is a crucial need to reap the benefits of Information and Communications Technologies, unleashing new market opportunities and facilitating innovation and growth.
Regarding our specific contributions to the IDEA Project, we were involved since the beginning of the discussions, participating as members of Working Group C on Network and Device Interconnection. We were very satisfied with the common understanding among working group members of the challenges that are threatening the economic sustainability of the Internet: challenges associated with traffic imbalances, business models and new services and offerings in a broadband world. In this sense, we were pleased with the agreed view among working group members that the Internet ecosystem could grow increasingly out of balance and irrational as revenue models struggle to support the next generation of network investment if peering and compensation models fail to reflect actual cost. The current decoupling for broadband services providers between traffic and revenues has been emphasized by Telefónica as a real threat to be addressed.
The fundamental notion of a dynamic commercial environment to allow business models that are able to support the next level of investment in infrastructure is kept in the final IDEA report. However the different iterations of the project in the search for consensus have ended up eliminating the bulk of our crucial reflections on the future challenges for Internet sustainability that run in parallel to the challenges for Internet governance. As the debate continues to evolve, consideration of the existing "stress factors" on meeting new demand for increased bandwidth, reliability and consumer expectations should be maintained as they are intrinsically linked to the availability of the connectivity infrastructure that will be needed for the Internet economy to achieve its full potential.
I have sharp differences some parts of the report, and I hope that my
feedback will help rectify some of the imbalances that I see.
In the section on "Stress Testing", there is a sub-section that deals with China's indigenous innovation policies.
In the report, you note:
"The Chinese government has developed a strategy for “indigenous innovation” that it hopes will allow Chinese companies to surpass current leaders in the United States, EU and Japan in ICT and other technology innovations. A set of guidelines created in 2006 encouraged Chinese government agencies to promote domestic innovation companies through preferential procurement, discriminatory standardization, tax incentives and financial support for research and development (R&D)."
None of these policies have been held to violate the GATT Agreement, nor any other international agreement. The United States also practices preferential procurement policies. Indeed, the Buy American Act was excluded from the coverage of the 1996 Agreement on Government Procurement. Furthermore, Article III.8 of the GATT Agreement provides an exception for "procurement by governmental agencies of products purchased for governmental purposes".
Whether to provide for preferential treatment for domestic companies, more often than not, comes down to a question of whether you believe benefiting the producers in your country is more important at the present time or benefiting the consumers. It is a policy decision to be made by each country, and there is nothing intrinsically bad in wishing to benefit domestic producers and building up domestic capacity. That in itself is not antithetical to free trade.
To single out the Chinese government for criticism, when the US and a great many other countries follow the same policies, seems unfair.
"Holders of intellectual property interests in other nations have been particularly concerned about China’s encouragement of “assimilating, absorbing and re-innovating” foreign technologies into Chinese companies."
Intellectual property is not the right to prevent technology transfer.
Indeed technology transfer is an intrinsic part of the TRIPS Agreement.
"Article 7 (“Objectives”) states that the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations."
Technology transfer is not the mere relocation of production facilities, but the transfer of the intellectual property that underlie the technology too. (See documents prepared by the International Centre for Trade and Sustainable Development, , by the Third World Network, , etc.)
The IDEA paper currently seems to be arguing against technology transfer requirements put in place by the Chinese government!
The report notes:
"First, several Principles relating to market access speak against China’s protectionist actions. Giving Chinese companies advantages through discriminatory procurement and standards setting fails to preserve technological neutrality in ICT and related markets. Second, respecting intellectual property rules in the ICT ecosystem is key to creating the trusted environment described in the Principles. China’s “assimilation” of technologies patented by parties in other nations may violate various international agreements governing intellectual property use."
That is incorrect. Technological neutrality does not mean that standards that are followed in the United States must be followed in China as well. Indeed, the United States does not follow the 220 volt standard that the rest of the world follows, yet no one accuses the US of abandoning "technology neutrality".
Technology neutrality in ICT standards does not, and indeed cannot, mean that a government cannot prescribe standards for technology use. Most developed governments have e-Government Interoperability Frameworks that specify standards to be used by government departments. Doing so does not violate technology neutrality.
Technology neutrality means that the regulation-setting should not require or assume particular technologies. By doing what the paper refers to as a "discriminatory standard-setting", what the Chinese government is in fact doing is minimizing its patent-related costs.
That is not "discriminatory" at all.
"Respecting intellectual property" means not violating IP. By circumventing patents in standards, they are not violating IP. The paper currently has no citations to demonstrate that China is not just circumventing patents, but is in fact violating them.
The paper seems to be suggesting that a government should go for expensive patented foreign technologies in the name of technology neutrality, and I believe that is a fundamental misunderstanding of the idea of technology neutrality.
Indeed, by that understanding, Recommendation 5.a. of the paper ("Allow IP-based services to enjoy maximum regulatory flexibility") is not technologically neutral, since it asks for a different kind of regulation for one technology (IP-based services) over another (PSTN).
One part of the paper notes:
"In response, many emerging market regulators are rolling out new industrial policies designed to turn their domestic markets into protected incubators for homegrown standards and firms, primarily by limiting the entry and presence of foreign standards and firms. Although these policies satisfy some short-term emerging market domestic interests, they also restrict competition, and that restricts longer-term emerging market innovation and growth."
DRM technology that prevents a person in India from viewing Blu-ray discs bought in the US have precisely the same effect as these forms of domestic standards, and I believe you should criticise such geography-restricting anti-free-trade DRM technologies as well.
The citation in footnote 14 does not support the assertion that:
"Despite a mixed response from other authorities, these three nations have vowed to bring Internet governance under broader state control."
The CIRP proposal emphasises the role of multi-stakeholderism and nowhere does it propose to "bring Internet governance under broader state control".
While I do not wholeheartedly agree with the CIRP, yet, I disagree with that assertion.
Principle C.1.e. states:
"Governments should enforce intellectual property rules as they relate to the Internet and the ICT ecosystem."
However, traditionally private parties have been responsible for the enforcement of their intellectual property. This should perhaps be reworded to state:
"Governments should [ensure that enforcement procedures are available under their law to enable the enforcement of] intellectual property rules as they relate to the Internet and the ICT ecosystem."
While privacy, security and IP rights (rightly) get a good deal of attention in this report, I think that the area of internet safety or, what is often called, child online protection, is worth greater consideration, in the context of how the net is governed.
The issue of online safety has had a long and somewhat checkered history. The US Senate first held hearings on Pornography and the Internet as far back as 1995. What emerged from those debates provided the basis for the Communications Decency Act of 1996 only for it to be struck down by the Supreme Court in 1997. Following the reversal of the CDA and later, the Child Online Protection Act which was also thrown out by the Supreme Court, was a flowering of what has become known as a multi-stakeholder approach to the issue of child protection, in the US and much of the West.
This has worked relatively well for the past decade or so. For the most part, industry, from the service providers to the search engines, the mobile carriers and the social network sites, have all stepped up in a number of ways with self-regulatory efforts, free parental controls, report buttons and the like. Similarly, NGOs have mobilized to provide resources to parents and teens, to convene the top thinkers and practitioners to collaborate and innovate in the space and to conduct original research into the actual challenges and emerging needs in the field of online safety.
Compare this with what we are seeing through the ITU's Child Online Protection initiative or COP. Unfortunately, the UN agency is taking a far more top-down approach to this issue with its efforts to persuade government leaders to adopt (or impose) a country-wide set of "codes of conduct" on industry. Of course, in some countries, the urge to protect children from harmful content is really an opportunity to limit or control many other types of speech which a government might find "offensive". Online safety concerns can be used to cloak a censorious regime of filters, enforcers and blocks.
So it is well worth keeping the issue of internet safety in mind when developing these Principles further. Finding the right balance between protecting kids and protecting free speech has never been easy. Failing to do so, however, can have a damaging impact on the free flow of information, commerce and innovation.
Stephen Balkam, CEO
Family Online Safety Institute
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