The Economist: Tech Regulation
Regulating America’s Tech Firms: Logging Off
Two tech regulators bid farewell
SILICON VALLEY has long tried to keep Washington, DC, at arm’s length. But as Google, Facebook and other web firms have grown too big for the government to ignore, their executives have been spending more time in the nation’s capital. They don’t expect to be left alone—who does? But they wouldn’t mind being regulated with a light touch. Among their ports of call are the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC), two big agencies whose chairmen are changing.
On March 4th Edith Ramirez, one of five FTC commissioners, became the agency’s new supremo, replacing Jon Leibowitz, who had been chairman since 2009. And on March 22nd Julius Genachowski, the head of the FCC, announced that he, too, plans to step down in the next few weeks. As The Economist went to press, Barack Obama had yet to announce a replacement for Mr Genachowski, who, like Ms Ramirez, got to know the president when they were all at Harvard Law School. These appointments come at a tricky time for some big tech firms, amid much fretting about their market power and their use of personal data.
During Mr Leibowitz’s tenure, the FTC homed in on web firms’ use of data, requiring companies such as Google and Facebook to sign “consent decrees” under which they agreed to strengthen their privacy programmes and submit them to regular independent audits. Consumer groups were overjoyed and hope Ms Ramirez will take an even stricter stance on privacy, though her record as an FTC commissioner suggests she is more likely to favour self-regulation over government action.
Under Mr Genachowski’s reign, which also began in 2009, the FCC has focused on improving America’s broadband provision. Use has expanded and average download speeds have almost doubled during his tenure, though America is still slower than Turkey and Portugal, according to the OECD, never mind Japan and South Korea. Critics gripe that the FCC should have promoted more competition between broadband providers.
The FCC’s record on encouraging the spread of superfast 4G wireless networks has been more impressive. Thanks in part to Mr Genachowski’s efforts to free spectrum for wireless operators, America has gone from a laggard to a leader in the mobile arena and has pioneered the app economy. Keeping it on top will be a challenge for Mr Genachowski’s successor, rumoured to be Tom Wheeler, a venture capitalist and a former head of wireless and cable-TV industry groups.
Another task will be to defend the FCC’s “network neutrality” rules. Introduced in 2010, these enshrine the principle that no restrictions should be placed on content and services carried over the web. That means internet service providers cannot favour their own offerings (or those of third parties willing to pay them a premium) over those of competitors. Verizon and MetroPCS have filed a legal challenge to the rules and a court hearing is likely later this year. Both Ms Ramirez and her counterpart at the FCC will be busy.