Appendix F: Policy Issues and Questions

CIC's unique role in developing the science and technology base for future information and communications systems and services requires that the committee play a key role in identifying and resolving relevant policy and regulatory issues. To this end, CIC will work closely with the IITF and other key government agencies including the National Telecommunications and Information Administration (NTIA) and the Office of Science and Technology Policy.

The following sections describe key policy issues which CIC will help to address in concert with other government agencies.

F.1 Financial, Regulatory and Legal Barriers

• Regional test beds will be essential to demonstrate technology advances and capabilities in a manner that stimulates capital formation in the private sector for implementation and deployment of next generation systems and services. Financial and/or political incentives should be developed to encourage local and regional test beds and infrastructure projects. Federally sponsored technology programs with industry and academia should be structured to perform such testbed demonstrations wherever feasible.

• Public telecommunications and open networks must be reliable. The right mix of technology, standards, and regulatory policy must be developed to ensure that networks are highly reliable, particularly as the entire fabric of society becomes increasingly dependent on the information infrastructure for essential services on a daily basis.

• There are many components to the challenge of maintaining American competitiveness in global information and communications markets. Government policies should foster appropriate pre-competitive alliances with and among stakeholders in industry to ensure that America maintains its competitive advantages. CIC will encourage technology R&D partnerships and alliances in the programs of its member agencies where appropriate.

• Current communications infrastructures are a collection of regulated and unregulated systems that prevent seamless end-to-end use by the consumer. A regulatory framework must be built to promote interconnectivity, interoperability, and open access.

• Universal service is a central objective in the NII vision. Technical and regulatory solutions must be developed to provide low cost universal access to NII services.

• The research community must explore approaches to utilize high-capacity networking and high performance computing on a long term basis at affordable costs. For example, regulatory provisions could make it possible for "dark fiber" to be utilized at low cost by the research community?

• Lowering the cost of capital for industry R&D will help to leverage government R&D investments. Issues to be addressed include: Are the current software capitalization rules of the financial accounting board appropriate to stimulating R&D on software? Can the current investment tax credit be made permanent to provide industry with confidence that current incentives will remain in place? Does the proposed FASB treatment of stock options increase the cost of capital for R&D and if so, what position should the government take regarding this issue?

• Current regulation of professional services (such as medicine) within each of the states inhibit collaborative, interstate activities and may slow the development of the national information infrastructure. Federal leadership is necessary to break these regulatory barriers.

F.2 Standards and Mandates

• Government standards and mandates can significantly influence the drive towards interoperability. The U.S. government R&D community, together with regulatory agencies, should determine if it would be beneficial to mandate specific development languages or standards in light of rapidly changing commercial technology. There are complex pros and cons to this issue and they must be carefully considered. Similarly, the government acquisition community should consider whether changes in procurement policy would stimulate the development of new technologies and the exploitation of existing Government funded activities in the commercial domain?

• Interoperability in terms of "information appliance" interfaces and applications level interoperability is a challenging goal for the NII. Such interoperability may require interface standards to be developed for common application areas that are capable of scaling to a global information infrastructure. Defining the appropriate government role for encouraging interoperability through coordination and cooperation of industry-led open standards activities is an important issue. The extent to which definitive public policy should be crafted in pursuit of this goal is a complex decision process in which the R&D community must participate. An example might be consideration of a public policy goal encouraging a common, universal information network addressing scheme.

• One of the goals for the NII is provide universal service without cross-subsidization. This is a difficult economic challenge, but one where technology may offer some assistance. The R&D community should investigate potential technological solutions to this dilemma, which might also be helpful in simplifying the current intricate tariff structures that govern how telecommunications carriers derive revenue for services provided.

F.3 Security and Privacy

• Development of security and privacy capabilities is an integral part of the NII vision. To date, an adequate solution that provides security and privacy features that the user trusts implicitly have not yet been reconciled with the need for features that are "law enforcement friendly." Technology may yet offer an acceptable solution that simultaneously satisfies the NII user as well as the legitimate needs of law enforcement and national security.

• Another security component of the desired NII architecture is reliability, particularly from hostile or even capricious attacks on databases, computing systems, and networks. Technology must be developed to ensure that the integrity of the network, including its data repositories, is immune from destructive or malicious acts.

F.4 Intellectual Property

• Intellectual property rights must be guaranteed if the NII is to flourish. National and international technical mechanisms must be sought to address criminal activities such as software piracy and theft of intellectual property.

F.5 International Cooperation/Exchange

• The U.S. must encourage the development of early demonstration systems and test beds with other nations in order to promote international cooperation and technical exchanges.

• The U.S. and other nations must cooperate to develop interoperable mechanisms for securely exchanging information and data in order to facilitate international commerce.

• In order to avoid creation of "data havens," international cooperation is needed to allow open access for cross country data flows and to provide equal data access across national boundaries.

F.6 International Policy Issues for the GII

• The free movement of information is key to the development of interconnection, interoperability, and standards. The GII also requires a coherent vision and development of an open services architecture and non-proprietary interfaces that can survive technology changes and allow for insertion of new technology at any point in the architecture.

• All users should enjoy the benefits of "open networks." .The development of applications on the GII requires interoperability and cost-effectiveness.

• The critically important standards-setting process should be open, voluntary, and private-sector led.

• Official standardization bodies should adopt procedures which are faster and more flexible.

• As a means to interoperability and interconnectivity, cooperative testbeds must be designed and encouraged.

• Approved standards must be non-exclusive and interoperable according to criteria agreed upon by the standardization process.

• A coordinated approach to privacy at the international level is necessary to iron out differences in the degrees of protection provided at regional and national levels so as to encourage the citizen's use of the GII, and to promote international commerce. Unless carefully defined, uneven privacy requirements could inhibit the transmission of data used routinely by banking and credit card companies, for example.

• Network reliability and security are essential components for a successful transition to the information society. Users of any communications network must feel that their transmissions are secure and reliable. There are complex issues that will require balancing the interests of: users, national security concerns, and law enforcement requirements. Privacy concerns may have to be balanced with legitimate law enforcement needs, and the privacy laws of each nation may vary thus complicating matters further.

• Adequate and effective protection of intellectual property both nationally and globally continues to be essential for the successful development of the NII and GII. Creators must be protected against the unauthorized use of their works. At the same time, creators and producers of derivative works must have the means to acquire and exercise rights in protected works. This will be of particular importance to ensuring that multimedia works play a significant role in the content of the GII. The "fair use" topic in a digital environment is a complex and multidimensional issue that will require continued analysis and discussion.

• Employment, job creation, and productivity are at the top of the international political agenda. A rapid, predictable, and successful transition to the information society will maximize job creation. Reorganization of business processes will be necessary in order to take advantage of information technology. Telework or telecommuting is potentially beneficial.

• In terms of cultural and linguistic aspects of the information society, the challenge will be to ensure that market diversity in taste, languages, and cultures are served without creating a mandatory framework for serving these audiences that acts as an inhibitor to market access, technologies, and services.