March 14, 2017

Regulatory Uncertainty in Emerging Technologies



The Niskanen Center submitted comments today in advance of the Bureau of Industry and Security’s meeting of the Emerging Technology and Research Advisory Committee (ETRAC). In keeping with previous comment filings to other federal agencies, we argued that ETRAC, in its capacity advising on the issuance of new regulations, ought to embrace the same general regulatory framework recently advocated by the National Telecommunications Information Administration in its Green Paper on the Internet of Things. In short, this involves embracing industry-led standards as a first-pass at establishing best practices and guidance, followed by a multistakeholder forum convened by regulators to assess next steps. This way, regulators can ensure they fulfill their charge to protect the public interest without unduly hampering innovation.

While the Bureau of Industry and Security primary mandate is ensuring the “security of the United States,” its charter also notes that a primary mechanism through which such security is achieved is through “ensuring the health of the U.S. economy and the competitiveness of U.S. industry.” As my colleague Joshua Hampson and I note in our comments:

Striking the correct balance between security and growth and innovation—especially with regards to emerging technologies of a dual-use nature—is no easy task. However, we believe that, on net, regulatory forbearance will go much further in achieving these twin goals than a regime that over-emphasizes strict regulatory precaution.

From the executive summary:

Balancing appropriately-tailored regulation of emerging technologies while protecting U.S. national security interests is a notoriously difficult needle to thread. Dual-use technologies are certainly capable of falling into the wrong hands. However, it is just as true that heavy-handed regulations can have massive distortionary effects on the competitiveness of domestic firms, driving investment capital and innovation overseas. To that end, the Niskanen Center recommends the Emerging Technology and Research Advisory Committee embrace the same emerging technology framework recently reaffirmed by the Department of Commerce: The Framework for Global Electronic Commerce. This framework can help guide effective policymaking in the regulatory rulemaking environment for emerging technologies. By ensuring a vibrant and innovation-friendly market environment, American firms will continue contributing to the growing digital economy. A growing economy, in turn, is the lynchpin of American security—at home and abroad.

Read the full comments here.