By Jim Sensenbrenner
Published on November 20, 2013
Technology companies revolutionized the global economy by creating an interconnected, high-speed international marketplace.
Internet and telecommunication companies empower businesses to conduct complex transactions and connect with customers, clients and governments across the globe, placing a premium on privacy, accountability and transparency. These principles are the currency of their success, because as private citizens, we entrust these companies with very personal information.
The overreach by the National Security Agency (NSA) does more than infringe on American civil liberties. It poses a serious threat to our economic vitality. Reports from the business community are clear: indiscriminate collection of data by the NSA damages American companies' growth, credibility, competitive advantage and bottom line.
US companies seeking to expand to lucrative markets in Europe and Asia will find regulatory environments much less receptive to mergers and acquisitions because of NSA programs. German regulatory officials have made it clear, for instance, that AT&T, a massive American telecommunications company that provided customer telephone numbers to the NSA as ordered by the Foreign Intelligence Surveillance Court (known as the Fisa court), would undergo intense scrutiny to ensure it complies with German privacy laws before it can acquire a German telecommunications company. This mandate would certainly impede efforts to expand its presence in the region.
Of course, US tech companies do not exist in a vacuum, free from competition. Companies like Google, which exhibit clear dominance in the United States, compete intensely with foreign competitors around the world. American businesses will lose considerable market share if foreign competitors and regulators paint them as pawns of the US intelligence community. Cisco Systems warned that its revenues could fall by as much as 10% because of the level of uncertainty or concerns engendered by NSA operations. Cisco saw its new orders fall by 12% in the developing world, 25% in Brazil and 30% in Russia. This is in contrast to the 8% growth Cisco saw in the previous quarter.
The cloud computing industry will also suffer. Since many industries rely heavily on this technology, any disruption would ripple across all segments of the national economy. According to the Information Technology and Innovation Foundation, the US cloud computing industry could lose between $22 and $35bn (pdf) over the next three years because of the NSA's overreach. And smaller cloud service providers that partner with U.S. companies have already cancelled contracts.
After the revelations of abuse surfaced in June, I knew Congress must act to mitigate the negative effects on our civil liberties and economy. With these concerns in mind, I introduced the USA Freedom Act with Senate Judiciary Chairman Patrick Leahy (Democrat from Vermont).
As part of its business provisions, the USA Freedom Act increases transparency by giving internet and telecom companies the ability to publicly disclose the number of Foreign Intelligence Surveillance Act (Fisa) orders and national security letters they received, as well as how many orders they complied with. It will also allow companies to divulge how many users or accounts on whom information was demanded under the Fisa orders and national security letters.
In a joint letter, Microsoft, Apple, Yahoo, Facebook, AOL, Google and LinkedIn wrote: "Transparency is a critical first step to an informed public debate, but it is clear that more needs to be done. Our companies believe that government surveillance practices should also be reformed to include substantial enhancements for privacy protections and appropriate oversight and accountability mechanisms for those programs."
Mozilla praised the Freedom Act as "an important step toward rebuilding user trust by adding limitations on government collection of data in the name of national security. The idea is simple. The NSA should not have a blank check to access user data from technology companies."
The Software Alliance understood the international implications of the legislation, explaining, "It is critical that we restore the public's trust by improving transparency and showing the world that the United States is striking the right balance between national security needs and individual privacy."
These endorsements send a clear message: transparency and privacy are paramount for internet and telecommunication companies. It is the bedrock of their credibility and stability as corporate entities.
Unfortunately, on 31 October, the Senate Intelligence Committee – created to conduct oversight on these programs – abdicated leadership and responsibility by voting for the first time in our country's history to allow unrestrained spying on innocent Americans.
But with over 100 cosponsors covering the political spectrum, my colleagues and I will continue to work pragmatically towards the balanced approach supported by the American people, businesses and our friends abroad.
Genuine reform is a Constitutional and economic necessity. If the USA Freedom Act is brought to the floors of Congress for an up or down vote, I am confident it will pass with strong bipartisan support.
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