A tech policy agenda for aspiring presidential nominees

What the candidates should promise in 2016


Virtually everyone is running for president these days.

Unfortunately, many of the candidates have paid little attention to technology policy in their careers. The first Republican debates had brief references to “cyberwalls” (not a real thing) and cyberwar (not a good way to describe what is happening), but no substantive discussion of real technology policy issues. Technology has not been a centerpiece of Hillary Clinton’s and Bernie Sanders’s campaigns either.

To help all the candidates out, here is a turn-key agenda of tech policy reforms from me and my colleagues at Mercatus.

Intellectual property

  • Eliminate software and business method patents. Software and business method patents are the worst kinds of patents. They are often highly abstract, obvious, poorly described, and subject to independent invention. Many of them would not be valid were patent law effectively and consistently applied. Amending § 101 to explicitly disallow software and business method patents would save the economy millions of wasted man-hours in court.
  • Abolish the Court of Appeals for the Federal Circuit. Because the Federal Circuit is a specialized court that hears all appeals arising from federal patent trials, it has been captured by IP maximalists. It is responsible for a huge increase in the number of patents granted annually over the last three decades. Abolish the court and restore patent appeals to all of the circuit courts.
  • Shorten copyright terms to life + 50 years. Honestly, I’d go lower, but as signatories to the Berne Convention, life + 50 is as low as we can go. The Founders’ first copyright law in 1790 protected works for 14 years, renewable once for a total of 28 years of protection. It’s hard to see why 28 years of protection would not be enough to incentivize creation. Few authors and artists expect to create a work that still produces significant revenue streams several decades out. Past copyright term extensions have been cronyist giveaways to existing rightsholders, which is why they were implemented retroactively. This retroactive extension makes no sense on policy grounds.
  • Eliminate the anti-circumvention provisions of the Digital Millenium Copyright Act. Companies are using § 1201 of the DMCA for purposes unrelated to copyright protection, such as preventing cellphone unlocking or tinkering with garage door openers. The law is not only harmful, it is pointless. If people are circumventing copy controls in order to infringe on intellectual property, they can be sued for the infringement itself. It makes no sense to criminalize the circumvention as well.

Telecom policy

  • Commute broadcast TV licenses into fee-simple property rights. Broadcasters are sitting on billions of dollars of prime spectrum that is being used to provide network television to the tiny fraction of the population that does not have cable, satellite, or IPTV service. That is not the spectrum’s highest valued use. If we converted these licenses to unrestricted property rights, the spectrum would probably be sold to the wireless carriers, who would use it to expand their mobile broadband offerings.
  • Free up more federal spectrum. US government agencies are sitting on around a trillion dollars worth of spectrum without paying anything for it. They are making astoundingly poor use of it. The value of the spectrum should appear as a cost on agency balance sheets. The easiest way to do that is to auction it off to commercial users and let the agencies that need it rent it back. A modest portion of the federal spectrum could also be reserved for unlicensed use.
  • Eliminate complicated video licensing rules. Broadcast and cable licensing rules are way more complicated than they need to be. Cable companies are required to carry some channels even if they don’t want to (think Wayne’s World), and they cannot take free content broadcasted unencrypted over the public airwaves and retransmit it without consent. Simplify this mess by eliminating the whole morass of rules. Why shouldn’t cable companies be able to license content the same way that Netflix and Amazon Prime can?
  • Dismantle the FCC. This is one of the last-remaining industry-specific New Deal-era regulators. Just as we got rid of the Interstate Commerce Commission and the Civil Aeronautics Board, we can get rid of the FCC. The Commission was created to oversee the AT&T phone monopoly — now dead for thirty years. Since we now auction off spectrum instead of assigning it through beauty contests, independence is less of a concern. In addition, the Obama White House has applied significant pressure on the FCC over the last year, raising doubts about its real independence. We might as well eliminate the fiction by giving its pared-down functions to the Department of Commerce.

Cybersecurity

  • Focus federal efforts on reducing federal breaches. Federal agencies now experience around 70,000 information security incidents per year. Many of these are caused by basic mistakes like giving administrator access to contractors in foreign countries, not using strong authentication techniques, not applying software updates, and leaving sensitive equipment lying around. The government is not in a credible position to help the private sector secure itself until it improves on these margins.
  • Support strong encryption and stop withholding information about zero-day vulnerabilities. The best way to ensure that we are protected from cyberespionage from countries like China and Russia is to ensure that encryption is strong and turned on by default. And if the government wants US systems to be secure, it should report any vulnerabilities it discovers to vendors within 30 days and to the public within 120 days.
  • Repeal or reform the CFAA to allow security research and hacking back. The Computer Fraud and Abuse Act was designed to stop fraud and abuse. Instead, it is being used to chill legitimate research and self-help. People should be allowed to probe systems for vulnerabilities in order to discover them. And they should be allowed to retaliate when their systems are attacked, bearing full liability for damage they cause to innocent parties. Consider it the equivalent of a digital Second Amendment.
  • Eliminate duplicative cybersecurity programs. The dirty secret of cybersecurity policy is that there are dozens of federal cybersecurity programs that operate under near-identical mission statements. This is not an effective way to coordinate efforts across the federal government. Most of these agencies can and should be eliminated.

Bitcoin

  • Preempt state money transmitter licensing to make compliance easier. Bitcoin startups aiming for a national presence have to apply for licensing in 48 states, with differing compliance requirements in each state. This is federalism gone wrong. Instead of competition between the states for best licensing regime, we have burdensome and unnecessary duplication of effort. The federal government should articulate some minimal consumer protection rules that preempt this state regulation.
  • De minimis tax exemption. If you buy Bitcoin, it goes up in value, and then you buy a cup of coffee with it, you have incurred a capital gain and you owe taxes on it. That’s a lot of record-keeping for not a lot of tax revenue. Congress should pass a law dispensing with this record-keeping for small transactions, say up to $1000. This would allow most people to use Bitcoin as a day-to-day currency (should they want to) without worrying about the tax implications.

Internet governance

  • Support the IANA transition. It is time to fully privatize the Internet. Much of the push from foreign governments to have a bigger role in Internet governance comes from dissatisfaction with the extensiveness of the US role. If we relinquish ultimate control of the IANA resources to the global multistakeholder community, we can disarm this attack on Internet freedom.
  • Support borderlessness on the Internet. The Westphalian nation-state does not map well onto cyberspace, much to the dismay of some of the world’s worst tyrants. We need to be explicit about our desire to explore new governance modalities that do not try to fit everything into the nation-state bucket. The American foreign policy apparatus should cheerlead for Internet exceptionalism.

Drones

  • Support a minimally burdensome framework for integration of commercial drones into US airspace. The FAA has been slow to fulfill its statutory obligation to do this; some pressure from the White House could perhaps accelerate the integration. Some rules, such as line-of-sight requirements, will need to be relaxed if we want to experience the best of what commercial drones have to offer, such as Amazon’s Prime Air delivery service or the mythical TacoCopter.
  • Modernize air traffic control. The rules governing airspace are designed for a few thousand flights a day. They use human air traffic controllers and airport towers. This is not going to scale well to millions of drone flights per day. We need a more bottom up system to ensure aircraft separation between drones and manned aircraft. NASA and the FAA are working on a NextGen airspace plan, but it’s not clear that they go far enough.

Immigration

  • Support more H1B and investor visas. The hardest part of running any business, but especially a high tech one, is finding the right talent. Right now, a lot of that talent resides overseas and is not allowed to come to the United States. We need more visas for skilled immigrants if we want the tech sector to grow faster. And because we can always use more investment, increase the number of investor visas.
  • Allow foreign students to stay after graduation. It’s crazy that we require people educated in our world-leading universities to contribute to some other economy other than our own. Staple a green card to their diplomas if they want to stay.

Health tech

Surveillance

  • Reform the FISA Amendments Act. The USA Freedom Act brought much-needed reform to the Patriot Act’s surveillance provisions, but there are other sources of surveillance authority that are arguably more severe. Relatedly…
  • Create a new Church Committee. We need an across-the-board review of federal mass surveillance practices. How much information is the government collecting, on whom, and on what authorities?
  • Support ECPA reform. We need to firmly establish in law that private documents remain under Fourth Amendment protection even if they are entrusted for safekeeping to a third party, such as Apple, Google, or Facebook.

Sharing economy

  • Preempt anti-competitive practices by the states. Local and state governments apply some of the baldest cronyist regulations imaginable. The FTC should take an aggressive stance in rooting out pro-incumbent anti-competitive laws of the kind that have been used against companies like Uber and Airbnb.

Robocars

  • Get autonomous vehicles on the road as quickly as possible. The US experiences more than 30,000 deaths on the roadways each year. Robotic cars will cut that death toll in half or less, and prevent many injuries and much damage to property. The federal government should remove regulatory barriers to autonomous vehicles so that we can experience these gains as soon as possible.

The bottom line: fostering a culture of permissionless innovation

The Internet has succeeded because in the late 1980s it became a space where, by default, anyone could become an entrepreneur without seeking approval from the government or a private cartel.

We need the same sort of freedom in all areas of technology, not just online. In the areas discussed above, we need policy change to enact that vision. In other policy areas, like robotics and big data, we need restraint to preserve it.

I hope that presidential candidates in both parties will pledge to fight for maximizing the innovative potential of our economy through the spread of the principle of permissionless innovation.


Eli Dourado is a research fellow at the Mercatus Center at George Mason University and director of its Technology Policy Program. Follow @elidourado on Twitter.