CHARLES RIVKIN'S REMARKS ON FREE AND OPEN INTERNET IN TOKYO, JAPAN

FROM:  U.S. STATE DEPARTMENT
The Importance of a Free and Open Internet
Remarks
Charles H. Rivkin
Assistant Secretary, Bureau of Economic and Business Affairs
Japan Association of the New Economy (JANE), New Economy Summit
Tokyo, Japan
April 7, 2015
Remarks as prepared

Good morning and my special greetings to everyone here at the New Economy Summit in this remarkable and bustling city.

The title of this conference, “The New Economy,” highlights a timely point for me about the Internet. It isn’t just an essential component of the new economy. It really is the economy.

As early as 2011, the global digital economy’s impact on GDP growth in G7 countries had already surpassed the energy and agriculture sectors. It is rapidly transforming the emerging markets that are the key to future growth and globally shared prosperity. More and more, everything we do in the economic, commercial and financial realms is either leveraged by, or dependent upon the Internet.

In fact, the Internet has become one of the greatest and most important change agents of our lives. Three billion people are connected to the Internet today. Some estimate that number will rise to five billion by 2020. More than two-thirds of us have mobile phones.

The Internet is not only pervasive; it can cross borders and time zones at the click of a mouse. Cross-border Internet traffic grew 18-fold between 2005 and 2012. It continues to flow, day upon day, hour upon hour, microsecond after microsecond.

Clearly, the Internet is indispensable in everything we do, whether we are communicating with those we hold dear, seeking economic opportunity, or addressing the greatest shared challenges of our time, from the effects of climate change to finding cures for chronic diseases.

With something so essential, beneficial and central, to modern life, it’s imperative that we do everything in our power to preserve this precious asset. We must do so thoughtfully and with our eyes firmly focused on the futures of our children.

I spoke yesterday before the Japanese National Press Club about the importance of preserving data flows, which is essential, if we are to truly safeguard the viability of the Internet. I told them that, in many ways, the Internet is like the golden goose in a well-known children’s story; one that has been retold across centuries and many cultures, from Aesop’s Fables to the Buddhist book of Vinaya.

The details differ, depending on the culture, but the story is essentially the same. A family comes into possession of a magical goose – or a bird – that provides golden eggs – or in some versions, golden feathers. But in their zeal to further exploit this remarkable goose, the family ultimately kills the bird.

The story serves as a cautionary tale for how important the Internet is to all of us – and how we must all work together to make sure we don’t destroy humanity’s golden asset. It’s timely too, for as we meet, this is a critical moment in the fast moving evolution of the Internet, when important decisions lie before us.

The world community – in multilateral and other forums – faces complex and difficult choices, such as whether states – and the intergovernmental institutions they control – should be in the drivers’ seat for managing how the Internet works. Also in the debate is how we can find a balance between protecting people’s privacy and preserving the free and open flow that makes the Internet so dynamic. These and other questions are hugely impactful; not only for the world but for both our nations.

My country is proud to stand shoulder to shoulder with Japan on so many issues in this space. Our two countries are more than partners in this effort and our faith in our alliance is strong. We are not only among the Internet’s biggest producers and consumers, we are some of its strongest advocates.

In multilateral forums and negotiations, and in our own continuing bilateral dialogues, we continue to promote and support the decentralized, multi-stakeholder approach to Internet governance because it is in the best interest of continued innovation and broadly shared prosperity.

We also pursue other related agendas, such as how we can construct rules for the collection, use and distribution of data in our markets in a way that protects privacy while supporting innovation.

As Assistant Secretary of State for Economic and Business Affairs, I am humbled to lead the office at the State Department which has such a leading and integral role, not only in Internet governance, but in trade and related matters, such as intellectual property rights. All three come to bear in one of our most important and ongoing negotiations: The Trans Pacific Partnership – or TPP.

This high standard multilateral trade deal will not only open new channels of trade and investment, and set high environmental, labor and consumer standards. It will encourage and support private sector investments in the transmission of data across borders. It will also work towards the certainty of a safe space where the Internet can continue to grow.

Whether we are engaging as bilateral or multilateral partners, or speaking on national issues in the U.S. Congress or the Japanese National Diet, we recognize that no decision can only affect our own nations and citizens. The Internet impacts everyone, for better or worse, and therefore must stay free and open. Japan highlighted this support for Internet openness when it joined the Freedom Online Coalition at its meeting in Estonia in April last year.

We know that, as we address what seem to be the most domestic issues, such as the privacy of our citizens, we must also consider their wider application and consequences. We must strike a balance between our understandable caution and the need for the Internet to be accessible to everyone.

The United States does not claim to have all the answers. But we strongly believe that, when it comes to the question of protecting data, corporations have some of the strongest motivations and the best resources to safeguard them.

By holding them accountable to best practices and sound rules, instead of creating walls, we believe we can provide a more dependable and enforceable defense. It is our hope that more countries, especially those who value democracy, openness and freedom, can adopt this or similar models.

As we work to maintain a free and open Internet, we are also focused on another critical issue: developing and expanding the Internet to create opportunities for developed, emerging, and developing economies alike.

According to many studies, more than half the world’s population is offline. It is also estimated that 1.8 billion people around the world will enter the consuming class by the year 2025. Almost all of them will be from emerging markets. This will create increased demand and global production, which means economic opportunities for both our countries, as well as improved goods and services for emerging and developing country consumers.

Digital technologies enable even the smallest companies and entrepreneurs to become “micro-multinationals” – selling products, services, and ideas across borders. In emerging and developing nations, whose small businesses are so often the backbone of their economies, this access to global markets would have dramatic results.

By linking more entrepreneurs and SMEs to global supply chains; and by connecting more people to each other and the information and services available, we could help ensure that all populations have access to technology. We can also ensure that no singular group is excluded due to barriers such as prohibitively high costs, lack of network connectivity, or social or cultural hurdles.

If you’ll permit me to return to my earlier metaphor, the Internet – like the goose of those children’s books – is something we cannot afford to lose. That is why the United States and Japan continue to expand connectivity, keep digital trade routes open, and make the Internet more accessible, as we also work to drive innovation and grow our economies.

There can be few more ambitious goals than these, but with partners like Japan, and the transformative potential of the Internet, we are confident that we can achieve them.

A generation ago, most of us would never have dreamed technology could leverage human aspirations at this kind of scale. It is a remarkable sign of our times that we can even think to do so. Let us not waste this unprecedented opportunity. Let us move forward together with vision, respect for one another, and an even greater sense of responsibility for our greater global community.

Thank you.

AMBASSADOR SEPULVEDA ON TRADE PROMOTION AND OPEN INTERNET FIGHT

FROM:  U.S. STATE DEPARTMENT
Trade Promotion and the Fight to Preserve the Open Internet
Remarks
Ambassador Daniel A. Sepulveda
Deputy Assistant Secretary and U.S. Coordinator for International Communications and Information Policy, Bureau of Economic and Business Affairs
U.S. Chamber of Commerce and Association of American Chambers of Commerce in Latin America
Los Angeles, CA

February 11, 2015

Three billion people are connected to the Internet today. And trillions of devices are set to join them in the Internet of Things. Together, the connectivity of people and machines is enabling economic and social development around the world on a revolutionary scale.

But it will take open markets, the cooperation of leaders around the world, the participation of a vibrant and diverse range of stakeholders, and strong trade agreements, with language preserving the free flow of information, to protect the Internet’s potential as the world’s engine for future growth, both at home and abroad.

As the number of Internet users worldwide has ballooned from 2 to 3 billion, the increase in Internet use creates significant economic potential. The Obama Administration is working to unlock the promise of e-commerce, keep the Internet free and open, promote competitive access for telecommunications suppliers, and set digital trade rules-of-the-road by negotiating new trade agreements. Trade Promotion Authority legislation and the pending trade agreements we expect Congress to consider over the coming months and years will provide that kind of protection. These agreements aim to ensure that the free flow of information and data are the default setting for nations. This will preserve the architecture that has empowered the Internet and global communications to fuel economic growth at home and abroad. It is in our interest, across parties and ideology, to ensure we move forward and approve TPA and the pending agreements for many reasons, but promoting the preservation and growth of global communications and the open Internet is one of the strongest.

Senator Ron Wyden, the ranking member on the Senate Finance Committee, has made the argument well, stating, "America’s trade negotiating objectives must reflect the fact that the Internet represents the shipping lane for 21st Century goods and services… Trade in digital goods and services is growing and driving economic growth and job creation all around the country. U.S digital exports are beating imports by large margins, but outdated trade rules threaten this growth by providing opportunities for protectionist policies overseas. The U.S. has the opportunity to establish new trade rules that preserve the Internet as a platform to share ideas and for expanding commerce..."

Senator Wyden is absolutely correct. Our pending agreements with nations in the Pacific community will establish rules for the preservation of those virtual shipping lanes as enablers of the transport of services and ideas, allowing startups and the voices of everyday people to challenge incumbent power in markets and ideas.

If we are successful, the partnership of nations across the Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Partnership regions coming behind agreements to preserve the free flow of information will serve as a powerful counterweight to authoritarian governments around the globe that have demonstrated a clear willingness to interfere with open markets and an open Internet. And make no mistake about it, if we do not seize every opportunity at our disposal to win commitments to an open, global Internet, we risk letting others set the rules of the road.

Authoritarian regimes view the Internet’s openness as a threatening and destabilizing influence. The Russian government, just last month, pressured social media companies to block access to pages used to organize peaceful political protests. In China, authorities have blocked Gmail and Google’s search engine. In addition to ongoing and systematic efforts to control content and punish Chinese citizens who run afoul of political sensitivities, such measures are an effort to further diminish the Chinese people’s access to information, while effectively favoring Chinese Internet companies by blocking other providers from accessing its market. And we know they are urging others to take similar action. These trade barriers harm commerce and slow economic growth, and they produce socially oppressive policies that inhibit freedom.

The rules of the road for commerce, and Internet-enabled trade and e-commerce, are up for grabs in Asia. We’re working harder than ever to bring home trade agreements that will unlock opportunities by eliminating barriers to U.S. exports, trade, and investment while raising labor, environment, and other important standards across the board. Right now, China and others are negotiating their own trade agreements and seeking to influence the rules of commerce in the region and beyond. These trade agreements fail to meet the high standards that we strive for in our free trade agreements, including protection for workers’ rights and the environment. And they don’t protect intellectual property rights or maintain a free and open Internet. This will put our workers and our businesses at a disadvantage.

We know that both old and new American businesses, small and large alike, are dependent on the global Internet as the enabler of access to previously unreachable consumers. In the U.S. alone, American Internet companies and their global community of users contribute over $141 billion in annual revenue to the overall U.S. GDP, simultaneously employing 6.6 million people. And the Internet is not simply about the World Wide Web, it is the communications platform for managing global supply chains, distributing services, and acquiring the market information necessary to succeed anywhere.

Many countries no longer primarily produce products. Rather, businesses produce product components and provide services, many of which are delivered digitally. In order to remain competitive globally and promote the capacity of businesses to innovate, the United States and our partners in the Western Hemisphere must build the Americas into a shared, digitally connected, integrated platform for global success. By working with our trade partners in Latin America and Asia to conclude the Trans-Pacific Partnership we are advancing this vision and making it a reality. We will set the standards with twenty-first century trade agreements.

We know that not everyone is convinced of the merits of open markets. And to win their hearts and minds, we have to demonstrate and communicate how these two values – open markets and the open Internet - are interconnected. And we have to show that Trade Promotion Authority and our agreements embrace the values that underpin the Internet today.

As Ambassador Froman has said, “Trade, done right, is part of the solution, not part of the problem.” And, because it is true, our progressive friends should recognize that the fight for open markets is the position most consistent with our progressive tradition and values.

It was Woodrow Wilson who said, “The program of the world's peace, therefore, is our program; and that program, the only possible program, as we see it, is this” and he listed his fourteen points. Among them was number three: “The removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance.”

It was Franklin Roosevelt who asked the New Deal Congress for the first grant of trade negotiating authority.

In his remarks at the signing of the Trade Expansion Act of 1962, it was JFK who said, “Increased economic activity resulting from increased trade will provide more job opportunities for our workers. Our industry, our agriculture, our mining will benefit from increased export opportunities as other nations agree to lower their tariffs. Increased exports and imports will benefit our ports, steamship lines, and airlines as they handle an increased amount of trade. Lowering of our tariffs will provide an increased flow of goods for our American consumers. Our industries will be stimulated by increased export opportunities and by freer competition with the industries of other nations for an even greater effort to develop an efficient, economic, and productive system. The results can bring a dynamic new era of growth.”

And it is consistent with the sentiments of these giants in our tradition, our progressive tradition, that President Obama most recently stated, “Twenty-first century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and our businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but are also fair. It’s the right thing to do.”

Friends, we have both a political and economic interest in promoting open markets and an open Internet. Preservation of these ideals is and should remain a bipartisan, and broadly held goal. It is critical to our future and contained within the language we are asking Congress to approve.

COMPANY SETTLES FTC CHARGES OF INADEQUATE DATA HANDLING

FROM:  FEDERAL TRADE COMMISSION 

Medical Transcript Services Settles FTC Charges That It Failed to Adequately Protect Consumers’ Personal Information
Settlement with GMR Transcription Marks the 50th Data Security Case Settled by the Agency

A company that provides medical transcription services has agreed to settle Federal Trade Commission charges that its inadequate data security measures unfairly exposed the personal information of thousands of consumers on the open Internet, in some instances including consumers’ medical histories and examination notes.

In its complaint against California-based GMR Transcription Services, Inc. and the company’s two principal owners, the FTC alleges that GMR hired contractors to transcribe audio files received from the company’s customers.  The contractors downloaded the files from the company’s network, transcribed them, and then uploaded transcripts back to the network.  GMR then made the transcripts available to customers either directly or by e-mail.

Because of inadequate security, the complaint alleges, medical transcript files prepared between March 2011 and October 2011 by Fedtrans, GMR’s service provider, were indexed by a major internet search engine and were publicly available to anyone using the search engine.  Some of the files contained notes from medical examinations of children and other highly sensitive medical information, such as information about psychiatric disorders, alcohol use, drug abuse, and pregnancy loss.

The FTC’s consent order with GMR marks the 50th  data security case the Commission has settled since undertaking its data security program 12 years ago.  The Commission issued a statement today reaffirming the basic principles behind the FTC’s data security enforcement program.

“What started in 2002 with a single case applying established FTC Act precedent to the area of data security has grown into a vital enforcement program that has helped to increase protections for consumers and has encouraged companies to make safeguarding consumer data a priority,” the Commission statement says.

In the case of GMR, the files handled by the company included sensitive information about consumers, including their driver’s license numbers, tax information, medical histories, notes from children’s medical examinations, medications and psychiatric notes, according to the FTC’s complaint.

According to the complaint, GMR’s privacy statements and policies promised that “materials going through our system are highly secure and are never divulged to anyone.” However, the company never required the individual typists it hired as contractors to implement security measures, such as installing anti-virus software.  In addition, an independent service provider GMR hired to transcribe medical files stored and transmitted the files in clear and readable text on a server that was configured so that they could be accessed online by anyone without authentication.

Under the terms of GMR’s settlement with the FTC, GMR and its owners are prohibited from misrepresenting the extent to which they maintain the privacy and security of consumers’ personal information.  They also must establish a comprehensive information security program that will protect consumers’ sensitive personal information, including information the company provided to independent service providers.  In addition, the company must have the program evaluated both initially and every two years by a certified third party. The settlement will be in force for the next 20 years.

The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through March 3, 2014, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments in electronic form should be submitted online and following the instructions on the web-based form. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC requests that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.