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International Data Localization Laws Harm Emerging Tech Businesses

Experts advocate a new framework that better accommodates the global tech economy by removing data localization barriers.

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Jason Oxman, CEO of the Information Technology Industry Council

July 22, 2021–Data localization laws in countries around the world will hamper the future of data-intensive tech businesses and innovation, a conference heard Tuesday.

Data localization laws restrict the storage and movement of data to within a country’s borders, and global experts at an Information Technology and Innovation Foundation (ITIF) event on Tuesday said this will imperil future enterprise.

“Data localization makes the internet less accessible and secure, more costly, and complicated and less innovative,” said Cory, “the value of data comes from how it’s used–not where it’s stored.”

Those restrictions can include barriers to what information people can see on the internet, which is largely what tech giants like Google and other social media companies require to sustain their businesses.

In the past few decades, and especially during the pandemic, countries all over the world have begun to embrace digital transformation.

In a new report about global data localization barriers, panelist Nigel Cory, associate director of trade policy at the ITIF, explained the number of data localization policies in force have more than doubled over the last four years.

The ITIF data found that in 2017, 35 countries had implemented 67 barriers. Today, there are 62 countries involved with 144 barriers and dozens more under consideration.

Need new framework for laws to embrace global tech companies

With these statistics, the panelists urged policymakers around the world to develop a new framework that better accommodates the growing global tech economy by removing the “unnecessary and time-consuming” barriers.

“Among the many lessons that we learned during the pandemic, one of the clearest is digital technologies, data, and the internet are essential for the global economy to function,” said Jason Oxman, CEO of the Information Technology Industry Council, based in Washington, D.C..

Oxman said one in three small and medium enterprises would not have survived during the pandemic without access to digital tools. Over 60 percent of businesses say technology helped them overcome barriers to exporting their products and services.

Some governments are developing a digital policy approach that impacts the global innovation ecosystem and restricts the ability of businesses, workers, and consumers to deploy and make use of digital products and services across borders, the conference heard.

“These are an essential component to ensure the global economy can function, while also providing assurance to any users of digital services that their information is safe and secure,” Oxman said.

“Countries should create obviously robust data privacy and government frameworks that protect consumers and address national security concerns, but policymakers should do so in a transparent, targeted way,” Cory said.

The United States of America has a position that data localization is a threat to American businesses, and it has made that view part of its trade negotiations in treaties like the U.S.-Japan trade deal, the Trans-Pacific Partnership, and the United States-Mexico-Canada Agreement, which renegotiated and updated NAFTA.

According to the U.S. International Trade Commission, “protection from localization laws is essential for U.S. carriers seeking to manage data processing and network management functions from a centralized location.”

International

U.S. Visa Policy Decreases Opportunity for International IT Standards Leadership

The ability of the country to host standard-setting conferences is key to its status as a global giant.

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Screenshot of Phil Wenblomm, Intel's director of standards

WASHINGTON, June 6, 2022 – Policy experts in May highlighted challenges to U.S. leadership in information technology standards, with lack of visa access to foreigners entering the country emerging as a problem area for the country.

That’s because foreign participation in U.S.-hosted standards meetings have been shown, according to the experts, to attract more participation on those standards.

“[D]ifferent studies show that when you host a meeting in a country, you get more participants from that country,” Phil Wennblom, Intel’s director of standards, said at a US Telecom event last month.

“And right now the U.S. is a fantastic venue for standards meetings – people love to come to the U.S. Except for all the difficulties of getting a visa and entry in the country,” he added.

According to Chris Boyer, AT&T’s vice president of global security and technology policy and another participant in USTelecom’s event, most standards meetings are currently hosted overseas, emphasizing the need for continuous research and development to maintain American power, “The best way to influence standards is to have the best tech.”

Discussions on IT standards take place against the backdrop of a technological battle brewing between the West and China and Russia to advance global IT policy toward their own interests. Last week, a panel at an Atlantic Council event noted that it cannot be assumed that Russia won’t be the next representative of the United Nations’ technology regulator, the International Telecommunications Union, just because it is in the midst of a war.

Wennblom also emphasized than in order for adopted standards such as on cybersecurity to be trusted and accepted as methodologically sound, they must be developed in committees with “wide participation and wide visibility” and “when it is fully transparent and all sorts of diverse experts participate.”

Wennblom stated a need for visa barriers to be reduced so that the U.S. may host more of such meetings and create more opportunity for itself in dialoguing on global standards.

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International

Cannot Be Assumed Russia Won’t Represent UN Tech Regulator Despite Invasion, Experts Say

Experts warned Thursday that American leadership on the ITU is not a slam dunk.

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Screenshot of Justin Sherman

WASHINGTON, June 2, 2022 – Experts speculated Thursday that Russia’s invasion of Ukraine will not necessarily sway votes against a Kremlin representative sitting as the next secretary general of the United Nations’ technology regulator, the International Telecommunications Union.

The ITU exists to develop international connectivity standards in communications networks and improving access to information and communication technologies for underserved communities worldwide.

American candidate Doreen Bogdan-Martin runs against Russian candidate Rashid Ismailov in what former representative Chris Carney called the “most important election the American people have ever heard of.”

“We really need to not get ahead of ourselves and think that Russia’s invasion of Ukraine will necessarily hurt Ismailov’s chances of being elected,” said Mercedes Page, fellow at the International Strategy Forum, at an event Thursday held by the Atlantic Council. “There are many countries that are supportive of more sovereignty over the internet and internet governance in telecommunications more broadly… That is where the root of the election is.”

The new secretary general will replace China’s Houlin Zhao, who has served in the position for eight years. The election will take place during the plenipotentiary conference in September.

“How countries are going to vote is extremely up in the air right now,” added fellow at Cyber Statecraft Initiative, Justin Sherman. He indicated that there has been a shift of country support recently. For years, there were liberal governments favoring an open internet approach on one side and authoritarian countries on the other. Swing states like India and Brazil have started voting with more closed-internet policies.

Sherman mentioned that one week after Russia launched its invasion of Ukraine, the ITU, at the proposal of the US and other western democracies, held a vote to kick some Russian representatives out of certain working groups. The vote breakdown showed that swing and developing countries abstained – indicating that these countries may be willing to side with the Russian candidate in the upcoming election.

Ismailov has support from China, added Page, and there are many other countries that are sympathetic to Russia’s agenda.

What’s at stake

“This is a really important election for shaping two core things at the center of the internet,” said Sherman. “One is tech standards, and the other is processes and authorities for internet governance. We’ve seen how open multistakeholder tech standards [supported by democratic nations] have been really valuable for calling people in other countries and trying to bring internet access and broadband connectivity to low-income countries. It’s been enormously helpful for national security to have consistent standards.”

Russia seeks to limit these benefits by pushing greater state control of the internet and will attempt change ITU standards, alleged Sherman. It will have ITU take over and essentially destroy internet governance organizations.

Panelists concurred that if Bogdan-Martin does not prevail in the election, the United States must begin to consider the coming election in four years. The U.S. must be prepared to work with other countries to ensure the desired results, they said.

The candidates

Bogdan-Martin is currently the director of ITU’s Telecommunication Development Bureau, “where she is leading efforts to transform the global digital landscape to improve connectivity, close gaps in infrastructure, elevate youth voices, and make the digital future more inclusive and sustainable for all,” the ITU website said.

Rashid Ismailov has worked in the telecommunication sector for over 20 years and has held various positions in Ericsson Russia, the largest network provider in Russia. He will work to, according to the website, “rise to the major challenge of modernity, emphasizing the importance of individual human beings.”

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Big Tech

Big Tech Must Unite Against Russian Invasion of Ukraine, Just as America and EU

The head of the Center for European Policy Analysis said America and EU need to agree on Big Tech.

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Photo of Alina Polyakova by Theadora Soter

WASHINGTON, March 4, 2022 — In the wake of Russia’s invasion on Ukraine on February 24, big tech companies are grappling with how to respond. And on Monday, many leading thinkers on the role of internet in society urged them to do more.

Technology companies in the Western world need to agree on an approach to handling misinformation regarding the invasion, said Alina Polyakova, CEO  of the Center for European Politics Analysis, speaking at the State of the Net conference here on Monday.

Polyakova’s plea came during a panel regarding the U.S. and EU relations at the annual Washington policy event that takes place during the week of the State of the Union address. She said that international tech giants were being forced to grapple with what role the might be able to play in response to the Russian invasion.

Platforms including Facebook, Google and Twitter have all significantly reduced Russian-backed ads. Meanwhile, YouTube, Meta’s Facebook and TikTok are blocking Russian media organizations, like RT and Sputnik, from using their platforms within the European Union.

But Polyakova said that tech giants shouldn’t be making these decisions without government help.

“If the United States and Europe are divided on the tech agenda front, then we’ll be divided on the values front. I think we need to start really pushing our governments to not leave companies fighting the large authoritarian states on their own,” she said.

Collective action by U.S. and EU, collective action by big tech

The implementation of aggressive sanctions, including banning many Russian banks from using the international payments system SWIFT on Saturday, demonstrated a united front, at least as Ukrainians began mounting their strong defense of their capital city Kyiv as Russian forces began attacks on the city on February 25 and Saturday.

Speaking on Monday, Polyakova said she was optimistic about the cooperation between the American and Europe, stating, “Hopefully the unity we’re seeing right now between Europe and the United States in response to Russia will be channeled into greater cooperation on this agenda as well.”

Still, the lack of a united front  by the big tech companies does create a disconnect, she said.

Twitter may flag a propaganda post from the Russian government, yet Facebook may not. That adds fuel to the fire of misinformation, Polyakova said: It hinders “our ability to counter disinformation across narratives on the online space.”

She urged general regulations of big tech. “We still don’t have just a basic, regulatory framework that will give companies some guidance on what they should or should not be doing,” she said.

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