Encryption, Net Neutrality, FTC Reauthorization and More: Berin Szoka, President, TechFreedom

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Washington think tank TechFreedom advocates from a law and economics perspective that sees technology as a driver of social progress and human well-being.

Bloomberg BNA Senior Legal Editor Joseph Wright posed a series of questions to TechFreedom President and Founder Berin Szoka about a wide range of technology and e-commerce issues on which TechFreedom is currently active.

Berin Szoka

Bloomberg BNA:

No technology issue has garnered more attention thus far in 2016 than the Apple-FBI encryption situation. How does TechFreedom weigh in on the Apple-FBI fight and the larger encryption issues it raises?

Berin Szoka:

First of all, it's important to note that the conflict between Apple and the FBI was over device security, not encryption; the two issues are related but distinct. Device security is a sliding scale. It's possible to find a balance in which the user's device is protected without unnecessarily inhibiting law enforcement's ability to pursue investigations. We're wary of government meddling but do recognize that some balancing is inevitable.

End-to-end encryption, on the other hand, is all-or-nothing. Either you have access to a secure system in which only the sender and receiver can access the encrypted communications, or you don't. There's no such thing as a “back door” that only the good guys can access. Any vulnerability that provides law enforcement with access can also be exploited by harmful actors, undermining the security of law-abiding Americans who make up the vast majority of encryption users.

Unfortunately, for largely political reasons, both sides have conflated these issues. We think the two will eventually have to be disentangled because legislation in this area is just a matter of time. That's because, as a legal matter, we think law enforcement will likely eventually win on the statutory interpretation question of whether the All Writs Act applies to device security cases like the ones fought over in San Bernardino and Brooklyn this year.

If so, privacy advocates will no longer hold the strategic high ground. They— we—will need Congress to put clear statutory limits on law enforcement's ability to meddle with device features, and to reaffirm that Americans have a right to end-to-end encryption, something the Commission on Accreditation for Law Enforcement Agencies already essentially says.

Bloomberg BNA:

You've been a vocal opponent of the Federal Communications Commission's approach to net neutrality. How do you think the FCC should refocus its regulatory efforts?

Szoka:

The best thing the FCC can do is return to the “light touch” regulatory approach adopted in the ‘90s that has allowed the Internet to flourish. That approach unleashed over $1.4 trillion in broadband investment. Instead of highly regulated monopolies and artificial resellers, as in most countries, America has real broadband competition: cable and telcos continually trying to outdo each other, new providers like Google Fiber offering a third pipe to the home, and 4G wireless increasingly competing with wireline.

The FCC should exercise what former chairman Bill Kennard called “vigilant restraint”—enforcing existing laws, and, when those fail, finding narrowly tailored solutions. That requires ending its decade-long effort to expand its regulatory authority. The “net neutrality” issue could have been resolved back in 2006, when the House passed a Communications Act Update that would have given the FCC appropriately limited but clear authority over “net neutrality” concerns. Or, even better, Chairman Martin could have let the Federal Trade Commission handle the Comcast-BitTorrent case, instead of insisting he would be the “decider.”

Congress needs to act. Ideally, we'd prefer to see the FCC dismantled, merging its consumer protection and competition functions with the FTC, which has already become the de facto Federal Technology Commission— except for broadband. A general-purpose regulator is much less prone to being captured by the companies it regulates, politicians or angry mobs. And for all its shortcomings in practice, the FTC has plenty of legal authority, the right basic standards and the most talented bunch of economists inside any government agency in America.

But more realistically, we'd settle for giving the FCC narrow authority, modeled on the 2010 Open Internet Order, over core net neutrality issues—and letting the FTC handle everything else.

Until that happens, the FCC will either continue to flounder in litigation for years. Or the Commission will be free to exercise the vast powers it has claimed. Title II reclassification likely won't stop with broadband. The Open Internet Order's rationale for reclassifying mobile broadband has already erased the clear line the FCC drew between the Internet (Title II) and the telephone network (Title II) in its 2004 Pulver Order. And the FCC's preposterous reinterpretation of Section 706 gives it a blank check to regulate edge providers as well as ISPs.

The courts could close these Pandora's Boxes, but we can't count on it, given the vast deference enjoyed by regulators. Congress must act.

Bloomberg BNA:

The Open Internet Order that emerged from the net neutrality debate is still on appeal in the courts, and you've intervened in that litigation. What do you think comes next, depending on how the decision turns out?

Szoka:

Scenario #1: We win completely: the court blocks the FCC from applying Title II to broadband. The FCC has to pick up where Chairman [Julius] Genachowski left off in 2010: negotiate legislative compromise—or at least stop blocking it. Getting a deal done shouldn't be hard, since Republicans have already introduced legislation to codify the 2010 Order.

Scenario #2: We lose completely, and the plaintiffs appeal to either the full District of Columbia Circuit panel or the Supreme Court. The case is more likely to go to the full D.C. Circuit than it seemed at first. [Justice Antonin] Scalia's death means the Supreme Court will probably deadlock, which would leave the D.C. Circuit decision standing. And the balance on the D.C. Circuit en banc panel has shifted more in our favor, with Chief Judge Merrick Garland recusing himself and Senior Judge Stephen Williams getting to sit on the en banc panel because he's on the panel hearing the case. That means Democratic appointees would have only a one-vote advantage on the en banc panel that would re-hear the case.

Scenario #3: The FCC wins on wireline reclassification but loses on wireless broadband and interconnection for failing to provide proper notice. The court remands those issues proceeding to the FCC and the whole political s***show starts all over again—just in time for the Digital Left to use this as a rally cause for Democrats in the general election.

Scenario #4: The FCC wins on wireline reclassification but the court rules that wireless is statutorily immune from Title II. The FTC would regain full jurisdiction over wireless, so there wouldn't be any gap in consumer protection, but the split jurisdiction might still bring Congressional Democrats to the table to negotiate with Republicans.

Of course, there are numerous other scenarios that could play out, but these are the easiest to conceptualize for now. In any case, there will be uncertainty without legislation. Only Congress can finally end this decades-long, intractable fight.

Bloomberg BNA:

The FTC hasn't been reauthorized since 1994. Given the chance, how would you reimagine the FTC's role in relationship to the Internet and tech?

Szoka:

The FTC is a uniquely powerful agency. With jurisdiction over practically every company in the country, and incredibly broad standards, it's the closest thing we have to a second national legislature.

For better or worse, the FTC has become the Federal Technology Commission. Except for broadband, the FTC is increasingly handling the consumer protection and competition issues raised by the Internet. In principle, the FTC is the right agency to handle these things. Its basic standards for deciding what is “unfair” or “deceptive” are sound. And it has the most talented team of economists of any regulatory agency in the world. Again, ideally, the FTC would take over communications regulation from the FCC.

The problem is that the FTC increasingly pays only lip service to its balancing tests. They get away with that because they've built 16 years of case law purely through settlements. Their “common law of consent decrees,” combined with reports that recommend supposedly voluntary “best practices,” function as de facto regulation of data security, privacy and, more recently, user interface design. Companies settle because the FTC uses its inquisitorial powers to ensure that companies don't fight them in court.

Congress hasn't made any significant changes to the FTC since 1994—and before that, 1980. So process reforms are long overdue. The House has taken up a slew of bills that would be a good start but don't go nearly far enough. Of course, you'll hear the usual knee-jerk response that these reforms would hamstring the Commission.

Don't buy it. The FTC has essentially unchecked discretion today. Requiring the staff to do more to, for example, justify bringing a complaint—or having the Bureau of Economics weigh in with a separate recommendation—would impose trivial costs on the FTC but could go a long way to better grounding the FTC”s enforcement actions in its Policy Statements.

Even slightly increasingly the willingness of companies to litigate could fundamentally shift the Bureau of Consumer Protection's approach to something more like that of the Bureau of Competition, where the courts help shape doctrine over time.

Bloomberg BNA:

Would you tell us a little about your path from practicing in big law to leading TechFreedom and what advice you might have for young attorneys seeking a similar public policy career?

Szoka:

I'm doing basically what I wanted to do in college. I fell in love with tech policy after reading Virginia Postrel's The Future and Its Enemies: The Growing Conflict Over Creativity, Enterprise (1998), Hal Varian and Carl Shapiro's book Information Rules: A Strategic Guide to the Network Economy (1998) and Clayton Christensen's The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (1997). I took every tech policy class I could at UVA law and worked on the Virginia Journal of Law & Technology.

I was clerking for a federal judge in 2005 when Burt Rutan won the X-Prize for flying the first reusable vehicle into space twice. I caught the space bug again, and decided I'd try to launch a space law and policy think tank while working for a boutique communications law firm in D.C. Fortunately, I pulled the plug on that and went to work at Latham & Watkins' communications law group. After two years, I moved to The Progress & Freedom Foundation to expand their Internet law program. From its founding in 1993, PFF had been the first D.C. think tank to work on Internet policy.

PFF closed in 2010, and I launched TechFreedom to continue what I had been doing—and do more of what PFF should have been doing, especially on civil liberties and surveillance, without getting bogged down in the intellectual property wars, the Vietnam of Tech Policy. Five and a half years later, TechFreedom has, I hope, filled a void of principled thought leadership. Everything we do boils down to what Virginia Postrel called dynamism: accepting the messiness of the future, rather than trying to manage it from the top down. That's broader than knee-jerk libertarianism, and it allows us to find common cause with people across the political spectrum, depending on the issue.

My advice for lawyers who want to go into tech policy? Don't fixate on copyright. That's all most of the law students we interview care about. But there's so much more out there to think about. Marry a legal education with as much economics and technical training as you can handle. We could certainly use more Ph.D. economists in the field. With a J.D./Ph.D., you could write your own ticket.

But what really makes you a lawyer is practicing. A clerkship is ideal, but law firms are basically boot camp for legal skills—except they pay you. Find a regulatory practice, where you're less likely to get stuck doing doc review. Stick it out for at least two to three years. Definitely don't go straight into the policy world. You'll never get the kind of training there (or in most government jobs) you'll get in private practice.

The top three skills of any lawyer are the ability to spot issues, reason by analogy, and explain. Writing and speaking clearly to lay people is important for lawyers, but essential for policy wonks. And never stop reading—history, economics, policy, law, tech, business—these are the raw material of good tech policy work.