The Niskanen Center has submitted its comments on questions pertaining to the Internet of Things (IoT) to the National Telecommunications Information Administration (NTIA). We indicate that the Defending Innovation and Growing the Internet of Things (DIGIT) Act would be a welcome legislative vehicle for addressing many of the issues and concerns associated with the IoT. In addition, we offered two recommendations for NTIA, as well as federal agencies in general, as to how they ought to approach dealing with the emerging IoT:
- The tenets of the “Framework for Global Electronic Commerce” should guide the federal government’s approach to regulating the IoT.
- NTIA and other federal agencies should refrain from IoT-specific mandates, multistakeholder processes, or other efforts that would act as bureaucratic impediments to innovation.
In particular, we emphasize throughout the comments that the need to embrace the first recommendation is paramount to ensure the continued growth of the IoT.
The Framework for Global Electronic Commerce was developed by the Clinton Administration as the government’s official regulatory guideline for handling the emerging Internet. Its tenets remain as relevant today as they were in the 1990s; and it can be just as effective for guiding the development of the IoT with a gentle hand. In particular, the government ought to embrace the four primary pillars of the Framework, substituting “IoT” for “Internet.” As such, we believe a framework for an effective government policy towards the IoT would look akin to the following:
- “The private sector should lead.” The framework specifies that “governments should encourage industry self-regulation wherever appropriate and support the efforts of private sector organizations to develop mechanisms to facilitate the successful operation of the” IoT. “Even where collective agreements or standards are necessary, private entities should, where possible, take the lead in organizing them.”
- “Governments should avoid undue restrictions” on the IoT. “Unnecessary regulation of commercial activities will distort development of the electronic marketplace by decreasing the supply and raising the cost of products and services for consumers. … [G]overnment attempts to regulate are likely to be outmoded by the time they are finally enacted, especially to the extent such regulations are technology-specific. Accordingly, governments should refrain from imposing new and unnecessary regulations, bureaucratic procedures, or taxes and tariffs on commercial activities that take place via the” IoT.
- “Where governmental involvement is needed, its aim should be to support and enforce a predictable, minimalist, consistent and simple legal environment for commerce.” The framework specifies that “where government intervention is necessary to facilitate” the development of the IoT, “its goal should be to ensure competition, protect intellectual property and privacy, prevent fraud, foster transparency, support commercial transactions, and facilitate dispute resolution.”
- “Governments should recognize the unique qualities of the” IoT. “Regulation should be imposed only as a necessary means to achieve an important goal on which there is broad consensus. Existing laws and regulations that may hinder electronic commerce [and the continued development of the IoT] should be reviewed and revised or eliminated to reflect the needs of the new electronic age.”
When it comes to the IoT, the government should acknowledge and embrace the same framework that helped grow the Internet into the global economic powerhouse it is today. In so doing, it will most effectively ensure that private sector innovation and economic development in this space continues apace.
Read the full comments here.