Jan 31 2014, 3:32am CST | by Forbes
Despite the hype surrounding the President’s January speech on NSA surveillance reform, his much-anticipated remarks placated few of his domestic and overseas critics. More importantly, the President failed to heed the advice of Silicon Valley, which has advocated common sense reforms and complained about the negative impact of U.S. spying. Obama merely paid lip service to these concerns by announcing several half measures and naming John Podesta – the former Clinton era White House Chief of Staff – to oversee a comprehensive review of “big data and privacy” that includes private sector input. The White House’s subsequent decision to allow technology companies to disclose general information about the quantity of government data requests is positive but just a start. If the President really wants to get serious about striking a better balance between national security, privacy protections, and Internet innovation, he should give the Department of Commerce a central role in his reform agenda.
To date, the Commerce Department has been largely absent from the public debate over the NSA revelations. The White House has not allowed Secretary of Commerce Penny Pritzker to publicly focus on this critical issue despite her Department’s stated core mission – to assist American companies domestically and overseas, promote job creation, and drive economic growth. The private sector drives the Internet, which consists in large part of privately-owned commercial networks and platforms. Even more so than the NSA, Commerce has a responsibility to help American companies mitigate the damage they are suffering as a result of U.S. government surveillance activities worldwide.
The Information Technology and Innovation Forum asserts that the American cloud computing industry stands to lose between $22 and $35 billion by 2016 as a result of NSA spying. That estimate assumes a loss of between ten and 20 percent of overseas cloud revenue – which is not a stretch given a recent survey by the Cloud Security Alliance that documented reduced foreign demand of U.S. cloud service due to NSA concerns. Forrester research believes the loss could be substantially higher – closer to $180 billion – which is equivalent to a 25 percent drop in overall revenue to information technology service providers.
Individual companies are already feeling the pinch. In November 2013, Cisco announced that revenues could fall ten percent in a single quarter. Sales were significantly depressed in former growth markets, such as Brazil, China, and Russia. Its shares dropped 11 percent on the news. Other companies, such as Symantec and Intel, are likely next because a large portion of their revenue (84 percent in the case of Intel) originate outside the United States. Even defense contractors are impacted – Boeing reportedly lost a $4.5 billion contract for 36 fighter jets because of Brazilian ire over NSA surveillance efforts.
Beyond being the lead U.S. government agency to promote American business, Commerce plays a critical role in supporting the free and open Internet and overall technological innovation. For starters, it has established critical encryption standards for electronic data through the National Institute of Standards and Technology since 1970. NIST’s encryption standards are supposed to ensure that emails and other data are safe from prying eyes. NIST is currently reviewing all of its previously issued recommendations due to concerns that the NSA secretly weakened NIST’s encryption standards.
The Office of Technology and Electronic Commerce – recently renamed the Office of Digital Services Industries – supports the growth of American technology firms’ business internationally. It removes barriers to market entry and promotes policies that support global electronic commerce.
Commerce also promotes the growth and evolution of the Internet via the National Telecommunications and Information Administration (“NTIA”). NTIA facilitates the functioning of the Internet’s Domain Name System (i.e. assignment of IP addresses and individual domain names) through the IANA Functions Contract. The Department inherited that role from the Pentagon in the 1990s once the Internet grew beyond its defense research roots.
The Commerce Department has technological know-how and policy expertise unique in the U.S. government. It is perfectly positioned to help drive the President’s rebalancing of surveillance activities because it combines technical skill with insight into American technology companies. Elevating the Department’s role in the surveillance debate is good for Internet users, American business, and the U.S. government alike.
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