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Silicon Valley tech execs: Surveillance is harming digital economy

Giving dire warnings that federal surveillance programs are threatening to cripple the U.S. digital economy and business opportunities around the globe, Silicon Valley technology leaders joined Senator Ron Wyden (D-Oregon) in Palo Alto Wednesday to urge government reforms.

"It is time to end the digital dragnet, which is harming America's liberty and economy without making America safer," said Wyden, chairman of the Senate Finance Committee and graduate of Palo Alto High School, who held the roundtable discussion in the Paly gymnasium. "The government ought to stop requiring American companies to participate in this suspicion-less collection of customers' data."

Wyden invited technology heavy hitters from Google, Facebook, Microsoft, Dropbox and venture-capital firm Greylock Partners to demonstrate industry support for government action, including passage of the USA Freedom Act, a bipartisan effort that is wending its way through Congress.

The technology executives sketched out the consequences that surveillance programs such as the National Security Agency's PRISM have already wrought -- and could wreak in the future.

"The fundamental issue ... is trust," said Brad Smith, executive VP and general counsel of Microsoft. "And it is personal. Just as people would not put their money in a bank they don't trust, they will be reluctant to store their personal information in a data center or on a phone that they don't trust.

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"These issues have undermined people's trust in American technology, and it's a shame and it's a problem and we need to address it," he said.

He warned that new regulations, created in countries around the globe and intended to protect their citizens from U.S. spying, could hamper America's digital economy.

"If we don't address it, we'll lose ... the ability to keep growing this industry, keep creating these jobs, keep strengthening American competitiveness, keep building a world that is better connected," Smith said.

Alarmed about U.S. surveillance, 20 foreign governments in the past few months have proposed that technology companies must store their data in centers located in those countries, said Ramsey Homsany, general counsel of Dropbox. In effect, the proposals act as trade barriers.

The expense to companies of setting up data centers across the globe, known as data localization, would be prohibitive, he said.

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"That would make it impossible for us to serve users in those countries – and this from a company that's already made it," he said, referencing Dropbox's 300 million users, 70 percent of whom are outside of the United States.

Furthermore, Homsany warned, the requirement could severely curtail entrepreneurship.

"It would make starting these companies . .. impossible," he said.

Colin Stretch, general counsel of Facebook, said that service to users would become less efficient, slower and less personalized because of companies' inability to take advantage of cloud-based storage that a well-networked Internet enables.

Likened to a Balkanization or splintering of the Internet, data localization, Stretch said, makes public at large less secure. Foreign countries may not respect the laws governing security, resulting in more access by state-sponsored surveillance or espionage. Also, companies are more vulnerable when there are more points of access, he said.

Wyden said that concerns over federal surveillance could cost U.S. cloud computing companies one-fifth of their foreign market shares, which translates to a loss of jobs at those American companies. Although people view U.S. government surveillance as necessary to securing freedom and fighting terrorism, other countries take a dimmer view.

"When I was in China this summer, Chinese officials likened cybertheft of U.S. trade secrets for the benefit of Chinese companies as no different than the surveillance carried out by the U.S. government," he said.

Given the distrust in the US. government that has already been cast, the tech executives urged the government to end requirements of companies to provide technological means for accessing consumers' data but instead to work within the court system.

"Forcing companies to provide (technological) backdoors is not the answer," Homsany said.

Eric Schmidt, executive chairman at Google, agreed. Law enforcement doesn't need technology access in order to obtain the information it wants, he said.

"There are many other ways to get data ... in investigations," he said.

Smith said the country and industry need to move forward in two ways: One, establish international rules for when countries can get information from other countries' governments pursuant to international law, and two, ensure no new trade barriers are erected.

"We need these to more forward to ensure market access is kept open," he said.

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Jocelyn Dong
 
Jocelyn Dong is the editor of the Palo Alto Weekly/PaloAltoOnline.com and editorial director for the Weekly's parent company, Embarcadero Media. Read more >>

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Silicon Valley tech execs: Surveillance is harming digital economy

by / Palo Alto Weekly

Uploaded: Thu, Oct 9, 2014, 10:12 am

Giving dire warnings that federal surveillance programs are threatening to cripple the U.S. digital economy and business opportunities around the globe, Silicon Valley technology leaders joined Senator Ron Wyden (D-Oregon) in Palo Alto Wednesday to urge government reforms.

"It is time to end the digital dragnet, which is harming America's liberty and economy without making America safer," said Wyden, chairman of the Senate Finance Committee and graduate of Palo Alto High School, who held the roundtable discussion in the Paly gymnasium. "The government ought to stop requiring American companies to participate in this suspicion-less collection of customers' data."

Wyden invited technology heavy hitters from Google, Facebook, Microsoft, Dropbox and venture-capital firm Greylock Partners to demonstrate industry support for government action, including passage of the USA Freedom Act, a bipartisan effort that is wending its way through Congress.

The technology executives sketched out the consequences that surveillance programs such as the National Security Agency's PRISM have already wrought -- and could wreak in the future.

"The fundamental issue ... is trust," said Brad Smith, executive VP and general counsel of Microsoft. "And it is personal. Just as people would not put their money in a bank they don't trust, they will be reluctant to store their personal information in a data center or on a phone that they don't trust.

"These issues have undermined people's trust in American technology, and it's a shame and it's a problem and we need to address it," he said.

He warned that new regulations, created in countries around the globe and intended to protect their citizens from U.S. spying, could hamper America's digital economy.

"If we don't address it, we'll lose ... the ability to keep growing this industry, keep creating these jobs, keep strengthening American competitiveness, keep building a world that is better connected," Smith said.

Alarmed about U.S. surveillance, 20 foreign governments in the past few months have proposed that technology companies must store their data in centers located in those countries, said Ramsey Homsany, general counsel of Dropbox. In effect, the proposals act as trade barriers.

The expense to companies of setting up data centers across the globe, known as data localization, would be prohibitive, he said.

"That would make it impossible for us to serve users in those countries – and this from a company that's already made it," he said, referencing Dropbox's 300 million users, 70 percent of whom are outside of the United States.

Furthermore, Homsany warned, the requirement could severely curtail entrepreneurship.

"It would make starting these companies . .. impossible," he said.

Colin Stretch, general counsel of Facebook, said that service to users would become less efficient, slower and less personalized because of companies' inability to take advantage of cloud-based storage that a well-networked Internet enables.

Likened to a Balkanization or splintering of the Internet, data localization, Stretch said, makes public at large less secure. Foreign countries may not respect the laws governing security, resulting in more access by state-sponsored surveillance or espionage. Also, companies are more vulnerable when there are more points of access, he said.

Wyden said that concerns over federal surveillance could cost U.S. cloud computing companies one-fifth of their foreign market shares, which translates to a loss of jobs at those American companies. Although people view U.S. government surveillance as necessary to securing freedom and fighting terrorism, other countries take a dimmer view.

"When I was in China this summer, Chinese officials likened cybertheft of U.S. trade secrets for the benefit of Chinese companies as no different than the surveillance carried out by the U.S. government," he said.

Given the distrust in the US. government that has already been cast, the tech executives urged the government to end requirements of companies to provide technological means for accessing consumers' data but instead to work within the court system.

"Forcing companies to provide (technological) backdoors is not the answer," Homsany said.

Eric Schmidt, executive chairman at Google, agreed. Law enforcement doesn't need technology access in order to obtain the information it wants, he said.

"There are many other ways to get data ... in investigations," he said.

Smith said the country and industry need to move forward in two ways: One, establish international rules for when countries can get information from other countries' governments pursuant to international law, and two, ensure no new trade barriers are erected.

"We need these to more forward to ensure market access is kept open," he said.

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