Commerce Department has critical role in promoting digital economy

The Senate began its confirmation hearings for Commerce Secretary nominee Penny Pritzker Thursday. If confirmed, it is vital that Pritzker promote growth in our ever-evolving, fast-paced innovation economy.
 
It’s been reported that the Internet economy accounted for approximately $68.2 billion in 2010. By 2016, that number could pass $100 billion. But there are many challenges to maintaining and growing this success, and this is where Commerce needs to focus its efforts.
 
Threats to an open Internet proliferate around the globe. In December, the U.S. and 54 other countries left the World Conference on International Telecommunications (WCIT) without signing the treaty after language was added placing some issues of Internet governance under treaty authority managed by a U.N. organization. The move was a step toward upending the current multi-stakeholder model, which has led to the Internet’s unprecedented growth. Some governments driving this agenda clearly want to use the expanded control to censor Internet content. The Commerce Department can help lead other parts of the government to respond to this challenge.
 
Threats to interoperability between privacy regimes also persist. The Commerce Department should resist entreaties to modify U.S. laws as a condition for allowing data to cross borders freely. As the representative for the U.S. government, the department should emphasize that international privacy frameworks must be interoperable, and individual countries should not be permitted to invoke privacy laws to erect trade barriers. In particular, it should ensure that the U.S.-EU Safe Harbor framework is preserved during ongoing EU Data Regulation negotiations.
 

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Meanwhile, flaws in our patent system are slowing innovation. My organization has argued for some time that the thicket of low quality, overbroad, overlapping software patents issued over the last 15 years have created a minefield for everyone from startups to major tech companies. Even worse, the deficiencies in the patent system have created a cottage industry of opportunists known as patent trolls. Troll lawsuits cost the U.S. economy $80 billion in 2011 and productive companies made $29 billion in direct payouts that year to trolls.
 
By instituting the Software Partnership this year, the Patent and Trademark Office has acknowledged the need to improve patent quality and sought input. We applaud that effort. There’s more that Commerce, alongside the PTO, can do to improve software patent quality. They should implement plans to improve the technical and legal training for patent examiners and should encourage more rigorous enforcement of the patentability standards to software patents. They could provide leadership to improve databases of software prior art available to examiners, and standardize patent application terminology for software-related inventions.

There is also more that Commerce can do to promote balanced copyright policy. The department should make sure policy discussions include diverse stakeholders — Internet users, creators, venture capitalists and online services.

The secretary can inject fresh thinking into the copyright debate, which for too long has focused on how to outlaw new services that threaten existing business models. Discussions can be encouraged on how the music and film industries can better promote user access to authorized material and simplify licensing rules to expand market opportunities for creators.

Also, recent reports indicate that Commerce personnel may be impeding progress toward an international solution to ensure that copyright does not deny books to the blind. While this is not a “technology” issue, it is further proof that our intellectual property laws aren’t keeping up with the times. A fresh look at copyright will reveal that IP doesn’t really function like property, and needs to be understood as a vast regulatory system. Like all complex systems, it can evolve in ways that undermine the benefits it aspires to create — if not regularly pruned by a careful custodian. 

NTIA, a division of the Commerce Department, oversees all terrestrial and satellite spectrum allocations for federal government and commercial telecommunications uses. NTIA must continue to be a constructive player in driving more efficient utilization of public spectrum to support growing demand for mobile wireless broadband connectivity.

And of course all these issues are often interrelated to an historic core Commerce role in enhancing international trade and commerce, where its expertise and insights can guide an enlightened trade agenda.

The nation needs a leader at the helm of the Commerce Department who can balance legitimate, competing interests to deliver the biggest economic benefits for the country. While that may sound simple, staying that course amid the winds of powerful parochial interests in Washington is no easy task.


Black has been president and CEO of the Computer & Communications Industry Association (CCIA) since 1995. Earlier in his career he served as a senior congressional liaison for several secretaries of State and Commerce. Black is past chairman of the State Department's Advisory Committee on International Communications & Information Policy and past president of the Washington International Trade Association & Foundation and Chairman of the Pro-Trade Group.