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COVID-19 has demonstrated the folly of some tech policies | American Enterprise Institute


Many onerous and outdated government regulations have been lifted during the COVID-19 pandemic. Americans for Tax Reform keeps a running list; highlights include the relaxing of rules by the Food and Drug Administration for COVID-19 testing, loosening medical privacy requirements to expand telemedicine, the tripling of the Transportation Security Administration’s liquid allowance for hand sanitizer, the relaxing of the Small Business Administration’s criteria for disaster assistance loans, easing of the Department of Education’s restrictions for online courses, and an extension of the tax filing deadline by the IRS. There are also a number of key gains in deregulation for health care, such as making it easier for health care practitioners to transfer their licenses across state borders. In the tech policy world, while we’ve argued in this space previously that regulations such as net neutrality, the EU’s General Data Protection Regulation, and California Assembly Bill 5 (AB 5) were bad for people in the tech economy, the COVID-19 pandemic has only made this more clear.

European Internal Market Commissioner Thierry Breton speaks during the presentation of the European Commission’s data/digital strategy in Brussels, Belgium February 19, 2020 – via REUTERS

Net neutrality: Deterring investment and
innovation in broadband networks

While our lives have been upended by the coronavirus outbreak, many have transitioned to working, studying, receiving healthcare, and living the rest of life from home — all over broadband networks. Traffic is up 75 percent or more on many US networks, but they are still performing. Hundreds of communications providers have signed Federal Communications Commission (FCC) Chairman Ajit Pai’s Keep Americans Connected Pledge, a commitment that broadband and telephone services run for the next 60 days without late fees or termination due to unpaid bills. We should thank our lucky stars that Title II net neutrality regulations were repealed by the FCC in 2017. In doing so, the US avoided the fate of much of Europe today, where broadband networks are strained and suffering from a lack of investment and innovation.

European policymakers are now eating crow and entreating video platforms to downgrade the quality of their streams, an about face from the regulatory dogma that “all data is equal” and that regulations are needed to keep internet service providers (ISPs) from harming their own networks. The latest self-rebuke comes from Thierry Breton, European Commissioner for Internal Market and Services, who requested Netflix downgrade its service to standard definition and save scarce network capacity so that people could work and study from home. Breton complimented Google for its “strong responsibility” to “preserve the smooth functioning of the Internet” by switching traffic to SD by default. At last, policymakers are admitting what engineers have long explained: platforms, not ISPs, control the quality of video streams. Recognizing the benefits of prioritization, the EU has also designated “fast lanes” across Europe to deliver goods for the crisis.

GDPR: Limiting volume of personal data
when it’s needed most

In another example of a policy prescription resulting in the opposite of what benefits people, the GDPR’s forced data minimization has dulled the effectiveness and granularity of data from mobile apps, devices, and networks which can help manage quarantine efforts and ideally lessen restrictions in uninfected zones. Nevertheless, mobile service providers are cooperating with authorities, even though they risk fines of 4 percent of their revenue for unwitting violations. In the US, the government has asked Silicon Valley for help. Moreover, policymakers around the world use American advertising-supported platforms to deliver news, public health alerts, and other vital information. Let’s hope this experience is a wakeup call to overzealous antitrust authorities, who left to their devices could destroy the very systems that provide critical functions during the crisis.

AB 5: Restricting Californians from
earning income

Those suffering most during this crisis include independent contractors. Policymakers and thousands independent contractors, gig economy workers, and freelancers have implored California Governor Gavin Newsom to use his emergency powers to suspend AB 5’s restrictions on independent contracting. They note that COVID-19 exacerbates the problems created by AB 5, limiting California contractors’ ability to work. Under the current circumstances, this hits California’s independent healthcare professionals and online tutors especially hard when they are needed most. AB 5 wasn’t written for the good of California’s workers (who are now reeling), but rather, by the AFL-CIO to insulate their members from technological competition and secure votes for California incumbents.

The speed of emergency deregulation contrasts with the imposition of quarantines, lockdowns, isolation, and social distancing. We now see what it’s like to live in the world of the precautionary principle, and it’s miserable. The antidote to this economic malaise is enterprise. Technology gives us better information to manage pandemics — and ideally to prevent them in the future.

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