Mt. Vernon Register-News

Opinion

February 11, 2014

World gets spooked by NSA, makes dumb economic decisions

All around the world, governments are devising creative ways to torment American technology companies. It started last year after leaks revealed that the U.S. government basically uses services like Google and Facebook as arms of the surveillance state. In response, some countries — including Germany, Brazil and now France — have toyed with the idea of forcing Internet companies to route traffic or store data locally.

As public policy, this is inept both technologically and economically. As symbolism, it illustrates the damage that overly ambitious espionage can cause — and reinforces, yet again, how insecure the foundations of the digital marketplace really are.

Since the intelligence contractor Edward Snowden began exposing surveillance programs by the National Security Agency last June, trust in U.S. technology companies has plummeted overseas. In some cases sales have slowed. And foreign regulators have been licking their chops in anticipation of a crackdown. Estimates of the cost to these companies have ranged from $21.5 billion to $180 billion by 2016.

Now, more than a dozen governments are considering laws to require Internet companies to store information collected on their citizens at onshore data centers. This is a bad idea for all the usual reasons protectionism is a bad idea: It will obstruct the free flow of trade (in this case, bits of data), inhibit innovation, increase inefficiency, raise business costs and slow economic growth. If adopted widely, it could threaten the trust and openness the Internet is built on. Not to mention the logistical inanities it will cause.

One thing this idea will not do: offer much protection from spying. Quite the opposite. The NSA, under authorities granted by Executive Order 12333, has extremely broad latitude to conduct intelligence gathering outside the U.S., without oversight from the Foreign Intelligence Surveillance Court. And U.S. technology companies would still be required to turn over data on specific users at the government’s request, regardless of where they store it.

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