International Agreements, International Disagreements: Robbie's Round-Up (October 5-9, 2015)

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Robbie’s Round-Up
Week of October 5-9, 2015

Roundin' Up The Week's Top Telecommunications and Media Policy Stories

Some of the biggest stories impacting the US this week came to us from abroad. Most stem from uncertainties and the uncharted future of Internet governance. The big question: How do countries work together to come to international agreements to ensure prosperity, free speech, privacy, and freedom in the seemingly borderless, free-flow Internet economy? Some are deeply concerned with where we are headed. Paul Rosenzweig said, “Something is rotten at the core of our conception of Internet governance. Almost unnoticed, nations are trying to impose -- often successfully -- sovereign borders and legal demands on a digital realm that is inherently borderless. Left unchecked, this instinct to create sovereign barriers risks fracturing the Web in ways that will jeopardize its economic, political, and social utility.” This instinct is also increasing the importance of implementing smart, fair agreements on Internet policy.

This week was all about those agreements and those disagreements, and the impact they could have on communications in the US.

The Trans-Pacific Partnership is Announced
Twelve Pacific Rim nations including the U.S., Australia, Canada, Japan, and Mexico announced a deal on the Trans-Pacific Partnership (TPP), the largest regional trade accord in history. The White House reports the TPP, “Levels the playing field for American workers and American businesses by eliminating over 18,000 taxes that various countries impose on Made in America exports.”

What Does This Have To Do with Communications Policy?
The TPP will eliminate import taxes on communication technology exports to TPP countries, and includes rules to promote Internet-based commerce. The TPP will also help preserve the single, global, digital marketplace, and bans “forced localization” -- the discriminatory requirement that certain governments impose on US businesses that they place their data, servers, research facilities, and other necessities overseas in order to access those markets.

The deal now faces months of scrutiny in Congress. The debate will unfurl against the backdrop of a presidential campaign in which populist, anti-free trade talk against the deal is already prominent.

Data Transfer Pact Between US and Europe Was Ruled Invalid
Europe’s highest court, the European Court of Justice, struck down an international agreement from 2000 that allowed companies to move digital information like people’s web search histories and social media updates between the European Union and the United States.

The ruling said the so-called Safe Harbor agreement was flawed because it allowed American government authorities to gain routine access to Europeans’ online information. The court said leaks from National Security Agency whistleblower Edward Snowden made it clear that American intelligence agencies had almost unfettered access to the data, infringing on Europeans’ rights to privacy.

Large Internet companies like Google and Facebook have been preparing for the decision, as their lawyers have been working to come up with legal mechanisms to keep them in compliance with EU data protection laws. But they’ve also been spending billions building data storage and processing facilities on European soil, reducing the need to transfer data to the U.S. in the first place.

With the court’s decision, officials from the U.S. and EU hope to come up with a new agreement soon before transatlantic digital commerce grinds to a halt and the Internet becomes balkanized by the world’s two leading economies. Their work should help set new global standards on data privacy.

Why Does This Matter?
The ruling is another indicator that we are in a post-Snowden world, a world where surveillance and the collection of data by government entities are going to conflict with international expectations on rights to privacy. Due to the way the European Court of Justice perceives the NSA collection of data, big companies, many of which rely on the easy flow of data for lucrative businesses like online advertising, now face operational uncertainty. For now, large Internet companies are able to continue normally, but the decision and subsequent uncertainty means smaller Internet companies looking to expand to the EU may face regulatory difficulty.

What’s Next?
Industry executives and trade groups have called on the European Commission to complete a new safe harbor agreement with the United States, a deal that has been negotiated for more than two years and could limit the fallout from the European Court of Justice’s decision.

Google Told by Russian Regulator to Unbundle Android Search
Russia’s Federal Anti-Monopoly Service ordered Google to amend agreements with smartphone producers, saying that the current agreements disadvantage third-party applications on devices running the Android operating system. In September, the Service ruled that Google is abusing its market dominance through Android, acting on a complaint from Russian search engine provider Yandex NV, which has been losing market share to its U.S. rival on mobile devices. The accusation was that Google was allowing Android-phone producers to use Google Play on the condition that the producers also pre-install services from Google , including search, and prioritize those icons on screens.

Google could face a fine of up to 15 percent of the revenue from the pre-installed apps in Russia. Morgan Stanley has estimated that Russia accounts for about $560 million of Google’s annual revenue, or roughly 1 percent.

Claims of antitrust violations by Google could have a tremendous impact on the smartphone marketplace, disrupting a growing sector and asserting a public interest precedent for the app economy.

Quick Bits

Weekend Reads (resist tl;dr)

Events Calendar for the Week of October 13-16, 2015

By Robbie McBeath.