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State of the Net

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AS PREPARED FOR DELIVERY
Tuesday, January 28, 2014
CONTACT OFFICE OF PUBLIC AFFAIRS
202-482-4883

A few months ago, we launched the Commerce Department’s new priorities at a local incubator here in Washington called 1776.  I am sure that many of you have experienced the energy and excitement at that innovation hub.

That incubator – and many others across the country – grew out of the President’s Startup America initiative, which is celebrating its 3rd anniversary this week.

Throughout the country, entrepreneurs are launching web-based startups at these unique hubs.  As a result, truly revolutionary ideas are finding their way to market.

Internet companies are gaining traction in tandem with the overall growth in our economy – with 10 straight quarters of GDP growth…
all-time record exports… and 8.2 million jobs created over the past 4 years.

Looking back on my 27 years in business, the Internet heavily influenced how we operated…

  • For example, at one firm, our real estate development team was able to conduct site visits virtually instead of in-person…
  • And, at TransUnion, where I served as Executive Chairman of the Board, we marketed services directly to consumers through the web.

Now as Secretary, I see first-hand how the digital economy is becoming an integral factor in our private sector’s ability to innovate and create jobs.

For example, I was just at CES in Las Vegas.

I walked the floor and saw how the Internet is serving as a dynamic platform for powerful devices ranging from smartphones…
to thermostats…to fitbits…and much more.

The facts are compelling:  Today, 6 million Americans work in technology and innovation fields… More than a half-a-million jobs have been created by “apps” since the iPhone debuted in 2007.  

And, just yesterday, the Commerce Department released new data that shows that more than $357 billion dollars in services exports could be categorized as “digitally deliverable” in 2011 – which represents more than 60 percent of our total services exports.

All of these facts lead to this conclusion:

Policies that support the growth of America’s DIGITAL economy… are critical to the growth of America’s OVERALL economy.  

That statement has deep implications for how the federal government should partner more closely with leaders like YOU.

The good news is that our President and the people in his Administration get it.  

At the Commerce Department, for example, our new “Open for Business Agenda” includes priorities such as driving innovation and unlocking more federal data – both of which are closely tied to the digital economy.

Also, we have a number of talented people at the Department who make up our “innovation team.”  They are proactively working to support e-commerce and smart Internet policies.  

This includes:

  • Pat Gallagher, my “number 2” who also serves as the Director of the National Institute of Standards and Technology…
  • Larry Strickling, who leads our National Telecommunications and Information Administration…
  • Michelle Lee, the acting head of our Patent and Trademark Office – who came from Google…
  • Kendall Burman, our Deputy General Counsel who was formerly with the Center for Democracy and Technology.
  • Ted Dean, our Deputy Assistant Secretary at ITA, who is helping lead our efforts on the safe harbor issue.
  • Jim Hock, my director of public affairs who came from 4-6-3 Communications…
  • My policy advisors on all-things-Internet-and-innovation -- Andy Grotto and Josh Mandel... and a number of other talented people in our department...

Already, this team has worked with many of you for years.  We look forward to continued collaboration

Given our renewed focus on supporting the work that you do,

I thought this would be a good moment to RE-introduce the Commerce Department to this community.

Many of you know bits and pieces of what our bureaus do

But when we put it all together, we get a clear picture of a Department that is broadly committed to supporting the right Internet policies and resources to help entrepreneurs and businesses as well as civil society leaders and other stakeholders.

At the most basic level, the Commerce Department helps provide a strong infrastructure for the digital economy to operate and grow.  This is best shown in NTIA’s work on broadband and spectrum.

With $4 billion dollars from the Recovery Act, NTIA helped lay broadband in communities across the country.   

This is bringing opportunities for entrepreneurs and others to tap into high-speed Internet where it simply did not exist before – in places ranging from inner-cities to rural Native American communities.

I am pleased to say that we recently hit a major milestone – 100,000 miles of broadband laid since 2009.   

And I should note that these projects have connected or upgraded around 10 percent of America’s schools and libraries – an important down-payment on the President’s recent pledge in that area.

NTIA also takes the lead on spectrum management. The President’s goal is to free up 500 megahertz of federal and nonfederal spectrum for wireless broadband by 2020.

NTIA has made significant progress in taking the first step –identifying spectrum for release.  

So far, NTIA has identified more than 400 megahertz for this purpose.  We are working closely with the FCC, the Defense Department, and other agencies to meet the goal of actually freeing up all of this spectrum.

In addition, NTIA also brings stakeholders together to form consensus on emerging issues.

For example, last year, the President asked NTIA to hear from leaders like you about consumer privacy issues.  

We began the national discussion by focusing on privacy disclosures for mobile apps.   

NTIA brought together more than 300 key stakeholders on this issue.  Together, they developed a voluntary code of conduct for app developers.  

Ultimately, this code of conduct will enhance privacy notices on apps, helping consumers make better decisions about which apps to download and use.

This year, NTIA is taking the same approach to tackle a second area – facial recognition technology.  If you are interested in privacy issues surrounding that technology, please bring your voice to the table.

And, also this year, my team is engaged in the review of big data and privacy that is being led by John Podesta, at the President’s request.

This process will help ALL of us understand how to promote the free flow of information while also supporting privacy and security.

NTIA’s highly-collaborative approach is the same approach used by a second Commerce Department bureau – the National Institute of Standards and Technology – NIST.

As you might know, NIST worked with industry to develop a framework to protect the cybersecurity of America’s critical infrastructure –including companies that support our nation’s water and energy needs.

NIST held meetings in 5 cities across the country – each of which were attended by hundreds of leaders from industry, government, and other stakeholders.  We also received hundreds of written comments.

Over the past year, we published several drafts of this framework, the most recent of which is posted online.  

The final framework is due in a few weeks.  And I am confident that we will deliver a framework that is flexible, scalable, and cost-effective for industry.

A third Commerce Department bureau that is actively partnering with your community is the U.S. Patent and Trademark Office.  

Part of our mission is to protect the creative ideas that form the backbone of businesses and our digital economy – a huge challenge in the information age.

These efforts are particularly important for content creators.  

In fact, a few months ago, the Commerce Department calculated the impact of arts and culture for the very first time.  We announced that this creative industry contributes more than $500 billion dollars to our annual GDP.

Obviously, it is crucial that we support the songwriters, artists, and others who depend on strong intellectual property protections for their livelihood.

For that reason, we recently conducted the most comprehensive analysis of digital copyright policy in nearly 20 years.

Flowing from that analysis, our Patent and Trademarks Office and NTIA want to partner with you to develop smarter copyright policies for the 21st century.

Our first effort is to improve the process for removing online content that infringes on intellectual property rights – the “notice and takedown system.”

To be successful, we will need leaders from this community at the table – including Internet service providers, consumer groups, copyright holders and creators themselves.

I am pleased to say that we will launch this new forum here in Washington, D.C., in March.  Stay tuned for more details.

Let me just close by noting that – as someone who grew up in the heart of Silicon Valley – I understand how crucial our digital economy will be in the 21st century.

I commit to you today that the Commerce Department will serve as the chief federal champion for good Internet policy that supports America’s entrepreneurs, businesses, workers, and the consumers who go online to buy their products.

That means – in addition to the work of our bureaus – the Department will continue to take seriously our role as the voice for business and innovation in Administration policy discussions ranging from surveillance and disclosures… to big data and privacy… and more.

But let me be clear – On all of these issues, we need your partnership every single day…  because the policy landscape shifts quickly as new technologies and ideas in this space continue to emerge and evolve.

Together, we must be nimble... and we must constantly adapt to stay ahead of the curve.

I rely on our Commerce team to have a strong finger on the pulse on what leaders like all of YOU are thinking.  The fact is we need constant input from businesses, policymakers, civil society leaders, and others.

I believe it is critically important that our team understands ALL of the points of view on these issues – even when groups and companies within this community take different positions.

If we continue to walk arm-in-arm, we can ensure that Washington takes actions that help – not hurt – this community’s ability to create jobs, while also fostering a free and open Internet in the United States and throughout the world.  

I will close with an excerpt from a statement by Pope Francis, who has 3.5 million Twitter followers.  Yes, I am a bit jealous.

Just recently, in a long piece discussing the merits and pitfalls of communications technology to society, he wrote this:
“The networks of human communications have made unprecedented advances.  The Internet, in particular, offers immense possibilities for encounter and solidarity.  This is something truly good.”   

I could not agree more.  And I am pleased to be in a room full of leaders who understand that good Internet policy can turn revolutionary technologies into revolutionary benefits for our society.

As partners, let’s do all we can to develop, implement, and protect the Internet’s potential to improve the lives of our fellow Americans.

And I commit to you that the Commerce Department -- and the Administration -- will continue to work day and night to ensure that the State of America’s Net remains strong, vibrant, and an engine for economic growth and job creation.

Thank you.

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