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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.”

Reporter Sophie Draayer, a native Las Vegan, studied strategic communication and political science at the University of Utah. In her free time, she plays mahjong, learns new songs on the guitar, and binge-watches true-crime docuseries on Netflix.

Cybersecurity

Biden On Lookout for Cyberattacks with Russia Massing on Border of Ukraine

The president says that, in the past, Russia has taken covert military actions.

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Photo of President Joe Biden on Thursday

WASHINGTON, January 20, 2022 – President Joe Biden said Thursday that the administration will be on the lookout for Russian cyberattacks in Ukraine as Russia’s President Vladimir Putin may be edging closer to invading Ukrainian territory.

Biden warned that, in the past, Russia has launched aggressive computer attacks that, while perhaps falling short of overt military action, have been daunting cyber-offensives of “military” officials not wearing Russian uniforms.

The comments came at the beginning of Thursday’s meeting of Biden’s Infrastructure Implementation Task Force. Biden briefly addressed rising tensions surrounding Ukraine.

Many critics of Russia, including Biden, have said that they Putin will pounce.

During his remarks, Biden said Moscow would “pay a heavy price” should it move any Russian troops across the Ukrainian border.

Following his foreign policy comments, Biden turned his attention to the planned task force talks on implementing the Infrastructure Investment and Jobs Act signed on November 15, 2022.

He turned to former New Orleans Mayor Mitch Landrieu, the administration’s unofficial “infrastructure czar,” to offer comments on the administration’s progress to press.

Biden specifically addressed the law’s implications for ongoing supply chain issues.

Since the back half of 2021, the world has faced historic shipping delays on a variety of commercial goods as global manufacturing systems continue struggling to grapple with the coronavirus pandemic and workforce shortages exacerbated by it.

Specifically, the tech industry has faced chronic shortages of semiconductor chips, perhaps worse than most other commodities. The shortages have crippled many digital industry supply chains. products.

Biden said that with the infrastructure law investment in physical infrastructure, including additional highways to alleviate traffic on the nation’s roads, will allow goods to be transported faster through existing supply chains.

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International

Global Collaboration Important for Long-term Resolution on Supply Chain Concerns

America and Europe are working together to address supply chain concerns.

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Lise Fuhr (top left), Jonathan Spalter (top right), Ruth Berry (bottom left), Thibaut Kleiner (bottom right)

WASHINGTON, January 13, 2022 – American and European leaders discussed Wednesday how they were working to build closer partnerships with global players to reduce the impact of supply chain issues that have constricted supply of consumer and business items and have contributed to inflation scares.

A mix of federal aid, low interest rates and coronavirus-induced supply chain problems have led to a reported seven percent increase in the price of goods in December compared to the previous December.

Jonathan Spalter, CEO of broadband association USTelecom, the White House National Security Council’s Director for Digital Technology Policy and International Economics Ruth Berry, and the European Commission’s Thibaut Kleiner noted Wednesday that they were working together on a long-term resolution to supply chain concerns, including increasing funding and coordination between their governments and coordinating with non-government stakeholders to exchange ideas.

Berry, Spalter, and Kleiner agreed that there is a major issue with the supply chain with respect to things including chips, fiber optic cable and circuit boards. According to Berry, this issue is key to the Biden administration and they are making investments, expanding domestic production, and partnering with other entities to resolve this issue.

Berry focused on the idea that the views of stakeholders should be prioritized. She said there is value in the exchange of ideas and in considering the views of people across the industry, with Spalter and Kleiner agreeing.

Kleiner said the European Commission is speaking with America, Japan, Singapore, and South Korea to find like-minded ways to address this issue. One of the contributing problems is that chips and other materials are designed in the European Union and in the United States, but are produced in Asia, making the industry dependent on Asian production, said Kleiner.

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China

FCC Orders China Telecom to Stop Providing Services in the U.S. Over National Security Concerns

The move is in line with FCC’s tough posture on national security risks emanating from China.

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FCC meeting Tuesday included reasons for revoking China Telecom authorizations.

WASHINGTON, October 27, 2021The Federal Communications Commission voted Tuesday to revoke the operating authorizations of China Telecom’s U.S. subsidiary, effectively ending its ability to provide services in the country.

The company had initially challenged the process of revoking its authorizations that started last year under the Donald Trump presidency, but lost in court.

The FCC found that China Telecom Americas’ ties to the Chinese government raises “significant national security and law enforcement risks” to U.S. communications. The telecom must discontinue any services within sixty days after the order is released.

The FCC’s analysis concludes that “the present and future public interest, convenience, and necessity” is no longer served by allowing the company’s operations in the U.S. The commission found that China Telecom Americas is “subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government request without sufficient legal procedures subject to independent judicial oversight.”

The order also found that the company’s conduct toward the commission demonstrates “a lack of candor, trustworthiness, and reliability that erodes the baseline level of trust that the Commission and other U.S. government agencies require of telecommunications carriers.”

FCC Chairwoman Jessica Rosenworcel praised the vote, calling the decision to stop China Telecom “ an important and necessary step” to protecting U.S. communications infrastructure.

“This is not a decision we make lightly. It has support from each of my colleagues. It has support across the federal government,” she said. Continuing to allow China Telecom Americas to operate in the U.S. “could lead to real problems with our telecommunications networks through surveilling information, misrouting traffic, or disrupting service,” she added.

Revocation in-line with FCC focus on weeding out threats

The vote to block China Telecom’s services also comes as the FCC fields comments about its proposal to blacklist products and services that pose national security threats.

The U.S. government is also responding to China’s influence over digital services. In July, the Biden administration formally accused the Chinese government of hacking Microsoft’s email system. Digital policy experts have raised concern about how China’s use of digital tools threatens human rights agendas and democracy around the world.

Last June, the permanent subcommittee on investigations released a report finding the Chinese government engages in cyber efforts against the U.S. and may use telecommunications carriers to interfere with U.S. network systems.

The ban on China Telecom follows a Canadian order to ban another company — China Mobile — from operating in the country, citing similar national security concerns. The company, which had an agreement to resell services of telco giant Telus, was told in August that it couldn’t continue operations. The company has since filed an appeal in the federal court.

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