Yes, I know, this Weekly Update is focused on tech and telecom and there are two massive spending bills being debated. We are keeping a very close eye on these bills and will have updates on our website as more happens in Congress. Quite frankly, I am shocked that Democrats are still moving forward with these bills after Sen. Joe Manchin (D-W.Va.) said that he has major problems with the $1.8 trillion social spending bill. We were so shocked by what House Speaker Nancy Pelosi (D-Calif.) is doing, as the headline of our press release ([link removed]) was “Taxpayer Group Confused and Shocked by New House Reconciliation Bill.” It’s beyond unreasonable for Democrats to look at Tuesday’s election results and think this is what taxpayers asked for.
App Security
I own an Apple iPhone and I have for quite some time. What I like about my iPhone is that it has a bunch of apps already installed. I also like that it’s a “closed” operating system which means that Apple has control of which apps are “allowed.” This is like having a security guard protecting my phone. Bipartisan legislation introduced in both chambers of Congress now threatens to kneecap the ability of these companies to protect their customers. The fact is that almost everyone with a smartphone has downloaded a third-party application without looking at, let alone researching the developer. People routinely breeze past the terms of service and put the app on the same device that now contains the most sensitive information about them. With the ability to securely store and act as credit cards, identification cards, house keys, and car keys (to name a few apps), smartphones have become the only thing you need when you leave the house. Thanks to the policies put in place by the major
device providers, it is very rare that this dynamic causes problems for the average consumer. Unfortunately, the dubiously named American Innovation and Choice Online Act would upend the ability of Apple, Google, and others from offering the same security expectations they do now. The legislation would force the manufacturers and developers of smart devices to allow third parties sweeping access to Americans' phones, tablets, and personal computers, tear down existing safeguards in their current app stores, and force them to host third-party app stores.
The proponents of this kind of legislation claim it will be a boon for competition in the app developer space. The opposite is true for a simple reason. Existing app store policies, though varied, allow for the trust consumers put in very large, very public brands like Apple and Google to extend down to smaller developers offering various apps that do countless things, all without interfering with or harming the core functions of the device. This is extraordinary progress. For those of us that remember the days of LimeWire and other peer-to-peer file sharing services, our blasé use of third-party apps today sounds downright insane when you really think about it. Within the lifetime of a millennial American, downloading anything from an unvetted source was like playing Russian Roulette with your computer. In effect, the brand power of major companies is being lent to small developers who have useful products, but not a big enough brand name. Developers that follow some basic rules of the
road can focus on competing on the functionality of their apps, without worrying about proving their trustworthiness. In turn, this all-but eliminates security-related frictions Americans have in selecting an app that looks good from a company they otherwise know nothing else about.
Now imagine Americans’ current app security expectations evaporating overnight. From ransomware to identity theft there would be a surge in cyber attacks brought about by a false sense of security before Americans could adjust their risk radars. Consumers have already experienced the damage these attacks can do on a widespread basis with existing safeguards. Let’s not forget the Colonial Pipeline incident, or the attack that took down Sinclair Broadcasting in just the past few days. Over the long term, Americans would certainly adjust and become more cautious, but third-party application markets would suffer. Instead of enhancing competition for small developers, Americans would undoubtedly retreat to the software provided by brands they already know and trust, like Apple and Google. In short, online security would be forever damaged and competition would be worse-off for those this legislation purports to help.
Net Neutrality Redux?
One of the few bright spots of COVID was how the internet held up under the pressure of the surge in demand. Inexplicably, a Federal Communications Commission (FCC) under the Biden administration may revisit the failed idea of heavy-handed regulations of the internet known as Title II net neutrality. Gigi Sohn, a former FCC counsel and self-described “net neutrality pioneer,” recently received the nomination for the open fifth seat on the commission in the same week that FCC commissioner Jessica Rosenworcel was named permanent chair. Both women are big proponents of reimplementing the Title II regulations that the FCC imposed under former chairman Tom Wheeler that were reversed under former chair Ajit Pai.
As TPA has reported, there is little to show that the regulations are necessary. The Title II rules, as previously implemented, prevented internet service providers from blocking, throttling or prioritizing data, but there was scant evidence that providers commonly engaged in such behavior before net neutrality was implemented. TPA, in a 2019 investigation, found few complaints of bad actions by providers after the rules were reversed. Still, a net neutrality showdown at the FCC is expected. Sohn, a co-founder of left-leaning advocacy organization Public Knowledge and a Georgetown law fellow, served as a top aide for Wheeler during the Obama administration.
A Vienna University of Economics and Business study showed that net neutrality rules harmed the growth of fiber infrastructure and high-speed internet adoption across the world. In an examination of net neutrality policies in 32 of the 37 countries in the Organisation for Economic Co-operation and Development (OCED), researchers found that the introduction of net neutrality led to an overall decrease in new fiber investment by about 45%. Domestically, providers have invested nearly $2 trillion in broadband infrastructure in the past 25 years. That investment flattened after net neutrality was implemented. And, not surprisingly, private sector investments rose again after the rules were repealed. The result of the repeal of Title II net neutrality rules has been a sturdy American network that required no slowdown of data during the height of the COVID-19 pandemic as more heavily regulated European networks suffered. The internet isn’t broken so there’s no need to fix it. The Democrat-led FCC
should take a more hands-off approach to internet policy. American consumers would benefit from fewer regulations on providers so they can focus on continuing to expand infrastructure and closing the digital divide.
BLOGS:
Monday: FCC Nominee Sohn Misguided on Net Neutrality Policy ([link removed])
Tuesday: Taxpayer Watchdog Warns of Counterproductive False Claims Legislation ([link removed])
Wednesday: Taxpayer Group Slams Proposed Prescription Drug Pricing Plan ([link removed])
Thursday: Taxpayer Group Confused and Shocked by New House Reconciliation Bill ([link removed])
Friday AM: TPA Sends Letter on BBB: No CBO Score; Vote No ([link removed])
Friday PM: Powerful Congressman Forgets How Stores Work ([link removed])
MEDIA:
October 28, 2021: WBBF Fox45 quoted TPA in their story, “After questions raised about IG advisory board make-up, city leaders remain silent.”
October 29, 2021: The Boston Herald (Boston, Mass.) quoted TPA in their op-ed, “Biden plan could break IRA system: experts.”
October 29, 2021: The Highland County Press (Hillsboro, Ohio) ran TPA’s press release, “TPA blast Democrats' spending spree 'framework’.”
November 1, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about Supply chain issues.
November 1, 2021: VP of Policy Patrick Hedger appeared on Wall to Wall with Greta Wall on OANN to discuss the reconciliation bill and the state of the economy.
November 2, 2021: Townhall.com ([link removed]) ran TPA’s op-ed, “Time for United States to Embrace All Forms of Harm Reduction.”
November 4, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about COVID relief funds for Baltimore County
November 4, 2021: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about unemployment and inflation.
Have a great weekend!
Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])
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