First city I know that has regulated Uber - Canberra

From the Australian Broadcasting Corporation

http://www.abc.net.au/news/2015-10-30/uber-launches-in-canberra/6898514

Updated 30 Oct 2015, 2:38pm

Uber X was launched in the ACT on Friday, with Canberra becoming the first city in Australia to regulate ride sharing. On Thursday, the ACT Government passed legislation to allow ride share services, like Uber, to operate in the Territory. As of 12:00pm Friday, Canberrans were be able to catch a lift with the service. 

Uber's Australian general manager David Rohrsheim told 666 ABC's Canberra's Philip Clark that there were about 100 approved Uber drivers in Canberra who were ready to work. He said Canberra's new regulations enshrined in law what his company has already been doing in most other states and territories. "They (the ACT Government) put in place regulations around background checks, vehicle inspections and insurance, all of which we've had from day one," he said. "And now that's the law in Canberra." He congratulated the ACT Government on its approach to ride sharing. "What the Chief Minister has done here is actually taken a look at opportunities, not just to open up to new things like ride sharing... but also how can they improve options for the taxi industry," he said. "They've actually lowered a lot of the fees and the red tape ... and actually made it easier for people to launch taxi apps. "So I think you'll see a whole bunch of innovation inside the taxi sector. And it will always be another choice to help you get around."

How Many American Cities Are Preparing For The Arrival of Self-Driving Cars? Not Many.

From.

http://techcrunch.com/2015/11/09/cities-self-driving-cars/?utm_content=bufferdccf4&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#.5dyqogp:dWem

Only about 6 percent of the country’s biggest cities are planning for or thinking about autonomous vehicles or self-driving cars in their long-range transportation plans, according to the National League of Cities.

What’s even more surprising is that only 3 percent of these cities’ transit plans are even taking into account the impact of ride-hailing companies like Uber and Lyft even though they already operate in 60 of the 68 largest markets in the U.S. That’s according to a content analysis of transportation planning documents from the country’s 50 most populous cities.

Change is coming fast. Seven auto manufacturers and technology companies including Cadillac, Tesla, Google, Volvo, Audi, Mercedes-Benz and Nissan have said they expect to bring driverless cars to market by 2020.

 This mismatch is kind of a big deal because the key driver in whether autonomous vehicles will lead to a neo-dystopian repeat of the mid-20th century policies that fueled sprawl and isolated living in neighborhoods with little walkability or not is — land-use policy.

......

Australia's electricity system will need up to $1 trillion of investment by 2050

http://www.abc.net.au/news/2015-12-03/electricity-networks-need-up-to-$1-trillion-of-investment-ena/6996200

Australia's electricity system will need up to $1 trillion of investment by 2050, regardless of whether consumers are providing their own energy or buying it from the grid, according to a new industry report.

The Energy Networks Association (ENA) is working with the CSIRO to develop a 10-year roadmap for the industry, to help it cope with a rapidly changing market.
"We're expecting to see a lot more of the decision-making being done by customers, and customers deciding what technology they'll install," the association's chief executive John Bradley told AM.

The CSIRO has modelled four different scenarios for Australia's energy market: one where consumers "set and forget" their energy use, the rise of the "prosumer" who is actively involved in sourcing their energy, another where people leave the grid altogether, and finally a market of 100 per cent renewables.

More here

http://www.ena.asn.au/electricity-network-transformation-roadmap

U.S. Space mining law

A shout out to The Space Resources Sigils by Helene Lavoix @HLavoix for this.

http://www.cbc.ca/news/technology/space-mining-us-treaty-1.3339104 CBC News Posted: Nov 26, 2015 7:12 PM ET

U.S. President Barack Obama signed legislation on Wednesday providing a framework for space companies to mine ore from asteroids and other bodies, but legal critics are worried the measure could lead to violations of international law.

The Space Resource Exploration and Utilization Act gives any American who successfully extracts natural resources from outer space the property rights over the haul.
That could mean anything from water found in asteroids as blocks of ice to iron or platinum from near-Earth objects. And the profits could be huge.

But it has long been agreed between countries that outer space is not to become another Wild West, some legal scholars argue, and the new law risks privatizing a realm that is meant to belong to all of humanity.

 "My view is that natural resources [in space] should not be allowed to be appropriated by anyone — states, private companies, or international organizations," said Ram Jakhu, a professor at McGill University's institute of air and space law.

 He said the 1967 Outer Space Treaty, signed by the U.S. and other countries, makes it clear that the surfaces and contents of asteroids and other celestial bodies are protected from commercial harvesting.

The treaty's Article 2 reads, "Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means."

"There really shouldn't be any private property rights in outer space," he said.

That view isn't unanimous among legal scholars, however. Some say small asteroids don't qualify as "celestial bodies," while others say it's not "appropriating" an asteroid to extract minerals from it. And the new law does contain a clause making it clear the U.S. isn't asserting sovereignty or exclusive rights over any celestial body.

But Jakhu said the overarching purpose of the treaty is clear from its first clause, which reads: "The exploration and use of outer space … shall be carried out for the benefit and in the interests of all countries … and shall be the province of all mankind."

Jersey and Bitcoin

Jersey.

Jersey is a self-governing parliamentary democracy under a constitutional monarchy, with its own financial, legal and judicial systems,^[11] and the power of self-determination.^[12]The island of Jersey is the largest of the Channel Islands. Although the Bailiwicks of Jersey and Guernsey are often referred to collectively as the Channel Islands, the "Channel Islands" are not a constitutional or political unit. Jersey has a separate relationship to the British Crown from the other Crown dependencies of Guernsey and the Isle of Man.^[13] It is not part of the United Kingdom,^[14] and has an international identity separate from that of the UK,^[15] but the United Kingdom is constitutionally responsible for the defence of Jersey.^[16] The Commission have confirmed in a written reply to the European Parliament in 2003 that Jersey is within the Union as a European Territory for whose external relationships the United Kingdom is responsible. Jersey is not fully part of the European Union but has a special relationship with it, notably being treated as within the European Community for the purposes of free trade in goods.^[17]

https://en.wikipedia.org/wiki/Jersey



The Jurisdiction of Jersey is planning to introduce a regulatory framework for bitcoin.
When actual details are available I will post links and excerpts.


http://www.bbc.com/news/world-europe-jersey-34616053 BBC calls it a 'light touch' system.

http://fintech.je/ - the conference where the announcement was made.

http://www.hedgeweek.com/2015/10/21/232913/jersey-planning-regulate-virtual-currency

Speaking at the conference Senator Ozouf said: “Virtual currency systems can be significant building blocks of a modern digital economy and the introduction of an appropriate and proportionate regulatory regime in this area is intended to encourage confidence and innovation in the sector. “And the exciting thing about combining new technology and a free market is that the evolution of this area is uncertain and no-one can predict exactly how these new forms of financial technology will develop. “What governments can do, however, is create the best environment in which this financial innovation can flourish. The release of this policy today, is a stepping stone along that path for Jersey.”

Comments

As I regularly point out regulation is often a necessary construction to enable innovation.

TPP and policy

Is is still unclear what the new TPP will include but there are a few hints.

1. Biologics
http://www.abc.net.au/news/2015-10-06/pacific-nation-ministers-negotiators-lock-in-tpp-trade-deal/6829368

The US allows pharmaceutical companies an exclusive period of 12 years to use clinical data behind the approval for a new biological drug, and was pushing for that in the TPP.But Mr Robb said Australia would not move further than five years, despite the US pushing for a compromise eight-year period. In the end, US trade representative Michael Froman said the deal would offer at least five years' protection for biologic drugs, plus some time for other measures. He said the goal was to have a comparable outcome for such drugs across the 12 TPP countries. Ruth Lopert, from George Washington University in the US, told the ABC that the medicines involved were often those derived from living organisms and were amongst the most expensive on the market. "Many [of these] drugs are used for the treatment of various cancers, for multiple sclerosis, for many conditions, and because they're derived from living organisms they tend to be more complex to develop and they tend to carry much higher price tags," she said. "So there is a lot of money at stake in any potential delay to getting these biologics onto the PBS.[pharmaceutical benefits scheme] "

2. Data
http://www.theglobeandmail.com/technology/tech-and-the-tpp-whats-at-stake-for-canadas-innovation-sector/article26711535/

The final agreement could also bar countries from requiring that data be stored on local servers. Many data localization initiatives evolved in response to heightened surveillance efforts by the United States in the post-9/11 era, Mr. Parsons says. But leaks from Edward Snowden revealed that the National Security Agency was able to access information stored outside U.S. borders through agreements with its counterpart agencies in allied countries. “I remain somewhat dubious that data localization – from a practical sense, not a legal sense – actually provided a significantly higher degree of privacy.”
In any case, two Canadian provinces – British Columbia and Nova Scotia – have legislation that mandates certain types of government information be stored locally, he says, adding that those requirements could be challenged under the terms of the TPP.

European Court and Data (again)

http://www.abc.net.au/news/2015-10-06/european-unions-top-court-strikes-down-us-eu-data-transfer/6832206

A deal that allows thousands of companies to transfer data from Europe to the United States has been ruled invalid, in a landmark decision that follows revelations of mass US government snooping. Many companies, particularly tech firms, have said the Safe Harbour agreement helps them get round cumbersome checks to transfer data between offices on both sides of the Atlantic, including payroll and human resources information and also lucrative data used for online advertising. But a decision by the Court of Justice of the European Union (ECJ) could sound the death knell for the system, set up by the European Commission 15 years ago and used by more than 4,000 firms including IBM, Google and Ericsson.

OECD on digital security

The OECD's document is surprisingly vague and unclear for what is becoming a serious threat to economies, companies, governments and individuals around the world. When the U.S. government can hacked repeatedly this is a serious issue. This document does not seem to have the sense or urgency expected, however.

Australia Patent Law - New decision

From.
http://www.abc.net.au/news/2015-10-07/palombi-human-genes-are-not-inventions/6834610


For a period of time Australian and U.S. patent law interpretation were in disagreement but not in the way you might expect. The Australian Federal Court allowed the patenting of genes of economic potential that had been isolated but not manipulated while the 2013 judgement in the USA disallowed patenting of such genes.

Now the Australian High Court has overturned that decision and brought the Australian situation in line with the current U.S. position.

When proper regard is paid to their emphasis on genetic information, the subject matter of the claims lies at the boundaries of the concept of "manner of manufacture". That it does lie at the boundaries is further evidenced by the odd consequence that if the claims are properly the subject of a patent, the patent could be infringed without the infringer being aware of that fact. That consequence coupled with the very large, indeed unquantified size of the relevant class of isolated nucleic acids, all of which bear the requisite information, raises the risk of a chilling effect upon legitimate innovative activity outside the formal boundaries of the monopoly and risks creating a penumbral de facto monopoly impeding the activities of legitimate improvers and inventors.

Read more here.
http://www.hcourt.gov.au/assets/publications/judgment-summaries/2015/hca-35-2015-10-07.pdf

What the "robots are taking jobs" debate ignores

Everything I have read so far about in the robots are taking jobs debate - some suggesting it is really serious and other suggesting it will be alright are both forgetting one thing.

Society hangs together on the pillars of trust and the power of the state to use force. If people start to BELIEVE their futures are in danger then watch out.

It is not just about what is a rational expectation of the future but the emotional understanding of body mind and soul as well that is important in this situation. Governments need to rapidly get their heads around this SINGLE fact about the digital future. Determining whether new technologies will create jobs is almost impossible for a government to analyse and foretell - it is an act of hope or faith.

But, governments can begin to develop policies that engage society in building trust that they will help navigate their economies through what changes occur. This is big picture but it is the work of innovation policy.

The Robots and Jobs debate

This is quite a good discussion about jobs and technology. Its long but worth watching.

Taxing the digital economy: more complex than imagined

One of the most challenging areas of regulating the new digital economy is in the area of tax. 

Digital economy firms are some of the most adept at paying virtually nothing in tax to anybody.

Surprisingly this didn't get a mention in the 'innovation policy' statement that was commented on earlier in this blog.

OECD criticises tech firms over tax

BBC World Business Report

BBC News

Technology companies need to stop "extremely aggressive" tax planning, the man charged with reforming global tax rules has told the BBC.

He says these "push the boundaries of what is legal".
Pascal Saint-Amans, who runs the OECD's Centre for Tax Policy, said that new standards would require companies to pay more tax in the countries where they sold goods or created revenues.

He also said companies should not use tax havens to shelter their profits.
Mr Saint-Amans' intervention comes after years of complicated negotiations and endless summits on reforming the toxic issue of where large multi-national companies pay their taxes.

He revealed that there should be international agreement on new tax laws ready for the G20 summit of global leaders in November. The implementation phase should then mean the rules are in place "well before" 2020. And, according to Mr Saint-Amans, that should mean technology companies such as Facebook, Apple and Google paying more tax to the UK Treasury. They will also be required to pay more tax in a number of other countries and publish, country-by-country, how much they pay.

The OECD is doing great work at coordinating new tax rules, but I don't envy their task.

In the report OECD/G20 Base Erosion and Profit Shifting Project Addressing the Tax Challenges

of the Digital Economy there are lots of interesting comments.

[base erosion and profit shifting (BEPS)]

Because the digital economy is increasingly becoming the economy itself, it would be difficult, if not impossible, to ring-fence the digital economy from the rest of the economy for tax purposes. Attempting to isolate the digital economy as a separate sector would inevitably require arbitrary lines to be drawn between what is digital and what is not. As a result, the tax challenges and BEPS concerns raised by the digital economy are better identified and addressed by analysing existing structures adopted by multinational enterprises (MNEs) together with new business models and by focusing on the key features of the digital economy and determining which of those features raise or exacerbate tax challenges or BEPS concerns. Although many digital economy business models have parallels in traditional business, modern advances in ICT have made it possible to conduct many types of business at substantially greater scale and over longer distances than was previously possible. These include several varieties of e-commerce,
online payment services, app stores, online advertising, cloud computing, participative networked platforms, and high-speed trading.

Work on the actions of the BEPS Action Plan will take these issues into account to ensure that the proposed solutions fully address BEPS in the digital economy. These include:

• Ensuring that core activities cannot inappropriately benefit from the exception from permanent establishment (PE) status, and that artificial arrangements relating to sales of goods and services cannot be used to avoid PE status
• The importance of intangibles, the use of data, and the spread of global value chains, and their impact on transfer pricing
• The possible need to adapt CFC rules to the digital economy: Although CFC rules vary significantly from jurisdiction to jurisdiction, income from digital products and services provided remotely is frequently not subject to current taxation under CFC rules
• Addressing opportunities for tax planning by businesses engaged in VAT-exempt activities

------

This is a complex subject but the report is perhaps more informative about the complexities of the digital economy that the usual stuff that gets written about from an innovation perspective. 

------

More info is available in here but it is 'a bit' technical.

NEW DISCUSSION DRAFT ON ACTION 7 OF THE BEPS ACTION PLAN 

(PREVENT THE ARTIFICIAL AVOIDANCE OF PE STATUS)

http://www.oecd.org/tax/treaties/revised-discussion-draft-beps-action-7-pe-status.pdf

Tax challenges of the digital economy
http://www.oecd-ilibrary.org/taxation/addressing-the-tax-challenges-of-the-digital-economy_9789264218789-en

An UBER court ruling for Uber Inc

Court ruling goes against Uber - drivers are employees - at least in California.

http://uk.businessinsider.com/california-labor-commission-rules-uber-drivers-are-employees-2015-6?r=US

The California labor commission has ruled Uber drivers are employees, Reuters reports. The decision was made after a San Francisco driver, Barbara Ann Berwick, filed a claim against the company. The commission sided with her largely because it deemed Uber was "involved in every aspect of the operation."

It's potentially a huge blow to Uber's business model, at least in California......Let's keep in mind that this ruling is only in California. Uber, which was last valued at ~ $50 billion, has more than 1 million drivers world wide. While California is Uber's largest market, the company operates in 311 cities and 58 countries, so this is a small percentage of Uber's global business. If this ruling stays confined to a single state, Uber's problems will be much easier to overcome. Also, this ruling is far from official. This could all be tied up for years in court.

Both Uber and Lyft have been hit with lawsuits from drivers asking to be made official Uber employees. The companies insist their drivers should be independent contractors. By the way, this ruling isn't just a huge deal for Uber and Lyft. There have been a lot of "Uber for X" startups to follow in their wake: $1 billion startup Instacart, for example, has contract workers deliver groceries; $250 million startup Shyp has regular people mail things for customers. If these companies, which are referred to as the 1099 economy, can no longer have independent contract workers, all of their business models are shot.

Read more: http://uk.businessinsider.com/california-labor-commission-rules-uber-drivers-are-employees-2015-6?r=US#ixzz3dL6Y9yHt

Uber Filing

OECD Ministerial on Innovation Policy - Gets it wrong

Sorry Andy (Wyckoff) but this latest document from the OECD just gets it wrong.


OECD INNOVATION STRATEGY 2015 AN AGENDA FOR POLICY ACTION
Meeting of the OECD Council at Ministerial Level Paris, 3-4 June 2015

I assume that member country Governments had a big say in this document.

a quick overview.

(p2) New sources of growth are urgently needed to help the world move to a stronger, more inclusive and sustainable growth path following the financial crisis. Innovation – which involves the creation and diffusion of new products, processes and methods – can be a critical part of the solution. While not a goal in itself, innovation provides the foundation for new businesses, new jobs and productivity growth and is thus an important driver of economic growth and development....

Governments play a key role in fostering a sound environment for innovation, in investing in the foundations for innovation, in helping overcome certain barriers to innovation, and in ensuring that innovation contributes to key goals of public policy. The OECD Innovation Strategy 2015 sets out a concrete agenda to strengthen innovation performance and put it to use for stronger, greener and more inclusive growth. The Strategy sets out 5 priorities for policy makers that together provide the basis for a comprehensive and action-oriented approach to innovation, much of which can also be applied in the context of fiscally constrained economies. These priorities are: 

1. Strengthen investment in innovation and foster business dynamism
2. Invest in and shape an efficient system of knowledge creation and diffusion
3. Seize the benefits of the digital economy
4. Foster talent and skills and optimise their use
5. Improve the governance and implementation of policies for innovation

(p7) OECD analysis suggests that innovation thrives in an environment characterised by
the following features, all of which are explored in detail in the OECD Innovation Strategy 2015:

• A skilled workforce that can generate new ideas and technologies, bring them to the market implement them in the workplace, and that is able to adapt to technological and structural changes across society.

• A sound business environment that encourages investment in technology and in knowledge-based capital, that enables innovative firms to experiment with new ideas, technologies and business models, and that helps them to grow, increase their market share and reach scale.

• A strong and efficient system for knowledge creation and diffusion, that invests in the systematic pursuit of fundamental knowledge, and that diffuses this knowledge throughout society through a range of mechanisms, including human resources, technology transfer and the establishment of knowledge markets.

• Policies that encourage innovation and entrepreneurial activity. More specific innovation policies are often needed to tackle a range of barriers to innovation. Many of these actions include policies at the regional or local level. Moreover, well-informed, engaged and skilled consumers are increasingly important for innovation.

• A strong focus on governance and implementation. The impact of policies for innovation depends heavily on their governance and implementation, including the trust in government action and the commitment to learn from experience. Evaluation of policies needs to be embedded into the process, and should not be an afterthought.

(p7ff)
Priority 1: Strengthen investment in innovation and foster business dynamism ... Structural reforms in product, labour, and financial markets are important to get the most out of investment in KBC, by enabling resources – capital and labour – to flow to the most productive, often KBC-intensive, firms ...Priority 2: Invest in and shape an efficient system of knowledge creation and diffusion
Government plays a critical role in providing some of the foundations for innovation. New 

OECD research shows that basic research, in particular, drives long-run productivity growth by enhancing 

the mobility of economies to learn from innovations at the global frontier (OECD, 2015c). Public funding 

is needed to address the inherent under-investment in basic research of private firms, linked to the large 

knowledge spillovers of such research ...

Priority 3: Seize the benefits of the digital economy
Priority 4: Foster talent and skills and optimise their use
Education and training systems are core to innovation and productivity, including in realising the benefits of the next production revolution (OECD, 2015a). However, OECD assessments show that on 

average, only one-third of all adults have the skills necessary for a technology-rich environment (i.e. levels 

2 or 3 in the OECD Survey of Adult Skills, see Figure 8). Many disciplines are relevant, as are broader 

competences such as creativity and critical thinking. A key principle should be the creation of an 

environment that enables individuals to choose and acquire appropriate skills and supports the optimal use 

of these skills at work

Priority 5: Improve the governance and implementation of policies for innovation
To be effective, innovation policies and the related governance system need to be adapted to the specific challenges faced by each country. Countries differ considerably in their basic conditions for innovation, such as the level of economic development, the structural make-up and trade  specialisation of 

the economy, as well geography. They also differ in their institutional characteristics and approaches to 

policy, e.g. as regards the role of government and different private and public actors in the economy. As a 

result, policy needs and policy agendas will differ across countries and specific challenges.

So lets summarise.

1. deregulate labour markets and financial markets etc to increase productivity.

2. invest in basic research

3. invest in broadband but watch the downsides of privacy, oh and "Promoting a culture of digital risk management across society" which is the least scary possible way of saying cybersecurity - which it happens is basically the No 2 reason for a lack of investment in the digital economy in Canada.

4. invest in education 

5 improve governance and evaluation.

This is a doing nothing different strategy.

Nothing here about:

1. digital companies avoiding tax;

2. digital technologies and companies creating significant disruption to regulated industries from bitcoin to Uber and creating massive levels of precarious employment;

3. reforming market shaping policies such as carbon pricing, energy buying practices (micro-energy generation) etc;

4. massive technological change that is now changing industries - autonomous vehicles (the ones already operating), e-commerce delayering retail etc etc;

5. you can't create policy without measuring the right things and currently we we are getting further from that than ever.

The big challenges - meaningful job creation and sustainability and understanding the velocity of change - when to act and when to hold off.

Venture capitalists and startups

Even Venture Capitalists are now focused on the regulation issue.

http://www.wired.com/2015/05/leap-suspension-shows-regulators-are-watching-startups/?mbid=social_twitter

Regulators may be savvier about startups, but Silicon Valley has gotten smarter about dealing with regulators, too. Leap is backed in part by top venture capital firm Andreessen Horowitz, which launched anew policy and regulatory affairs unit last month with the goal of ensuring that startups in the company’s portfolio are prepared to deal with regulatory demands—in other words, to get along with government, not defy it.

Leap, for its part, said in its Facebook post that the finalization of its “permitting process has been held up due to various clerical issues,” though it did not elaborate what permits were not complete. (Leap did not immediately respond to WIRED’s request for comment.) But the fact that it’s bothering to get them at all feels like a stepping away from the “move fast and break things” attitude that has generated so much Silicon Valley success but also earned it so much ire.

To be sure, the seemingly endless legal challenges faced by Uber, Airbnb, and their competitors haven’t ultimately undermined their businesses. Arguably, they are more powerful today than ever before. And Leap would not doubt like to find the kind of success those more senior startups are enjoying. “We hope to be back on the road in no time,” Leap said in its post. Just not, apparently, by taking the same route.

Autonomous cars legislation in South Australia

This is the first I've seen of progress in legislation in Australia for autonomous vehicles.
The article was from April 2015, and is centred on the idea that South Australia is investigating legislating for autonomous vehicles research.


From the Australian Broadcasting Corporation http://www.abc.net.au/news/2015-04-22/driverless-cars-adelaide-trials-closer-according-to-raa/6411102

A motoring group is keen to see trial use of driverless cars in Adelaide, possibly as shuttles between airport terminals or to help elderly people stay connected with the wider community when they can no longer drive themselves around.

The South Australian Government said recently it was keen to update the state's road laws to legally pave the way for the driverless cars of the future, and has now said it planned to introduce legislation to State Parliament before the end of this year.

Motoring organisation RAA wants Adelaide to lead the way with technological advances on the roads such as cars which drive themselves.

.... 

Google's legal troubles in the EU

Time for an update on Google in the EU? Its complicated, but I came across this summary the other day.

4 May 2015 http://qz.com/394273/does-europe-hate-google-or-america/

Does Europe hate Google or hate America?

On the same day European regulators filed formal antitrust charges against Google last month, they also announced a new investigation into Google’s Android operating system. Meanwhile, the company faces fines in several European countries for its 2012 privacy policy change. It is confronting a web of new, harsher data-protection laws, grappling with a European Court of Justice ruling on the right to be forgotten, and awaiting a decision on another case that will decide whether European data-sharing exemptions for American firms should be stopped.

And the policy hurdles keep coming, whether stemming from serious considerations (see the European Union’s recent draft documents on regulating Google) or weak attempts to play to the peanut gallery (see the European Parliament’s recent vote to break up Google).

Taken together, these events and rulings and proposals certainly look like a concerted effort to tame Google specifically and Silicon Valley more generally. But the responses to Google’s dominance and behavior in Europe do not represent one voice. They come from different branches of the Union, from member states that represent their own national interests rather than European ones, and even from within different branches of the European Commission, the executive arm of the EU......

When software eats the world... startups and regulation

On a16z.com there was a very interesting interview with Ted Ullyot. It is a very interesting piece that I bring to your attention.

When Software Eats the Physical World, Startups Bump Up Against Regulations: A Conversation with a16z’s Ted Ullyot

https://a16z.com/2015/04/22/ted-ullyot-policy-regulatory-affairs/

Editor’s Note: Ted Ullyot recently joined Andreessen Horowitz to head up its first-ever operating group for policy and regulatory affairs. Before joining a16z, Ted was General Counsel at Facebook, joining the company in 2008 when it was just 500 people and leading the legal team through IPO until 2013. Prior to Facebook, Ted spent most of his career as a Washington, D.C., lawyer, including as a Supreme Court law clerk for Justice Scalia; an Associate White House Counsel and later Deputy Staff Secretary for President George W. Bush; and at the Justice Department as Chief of Staff to Attorney General Gonzales. Ted also was General Counsel for AOL Time Warner Europe, and spent time as a partner at Kirkland & Ellis, where he focused on regulatory and antitrust litigation among other things. He grew up in, and now lives in, the Bay Area with his wife and three children ages 13, 11, and 8.

Just one snippet to give a flavour of the conversation.

a16z: How do regulators figure out where fear-mongering ends and legitimate safety issues begin? And how can startups help them?

Most regulators are good people trying to do their jobs, which generally speaking is protecting consumers. By the same token, companies like Airbnb don’t want bad experiences for their homeowners/renters either, so they’re even more incented to enforce ratings and reporting and other mechanisms for trust and safety. Their business wouldn’t survive without this.

In this sense, startups are actually very aligned with the ultimate goals of regulators. The key is to find the thoughtful, progressive regulators who understand what you’re trying to do and know you’re acting in good faith, just like they are.

If you begin before you even have an ask, you can start from a place where you’re saying “How can the tech community help build products that address your concerns?” Or, “I’ve got a new way to do this that’s a lot safer for consumers.” For example, when was the last time you had a bad taxi ride and actually called the taxi commission phone number (do you even know where that is, by the way?) to file a complaint? It’s much more frictionless to input a rating or file a complaint on your mobile app and then get a response within 24 hours instead of within months if at all.

In this last scenario, you’re essentially saying to regulators, “Hey, let us help you make your job easier, especially since things are moving into mobile anyway.” Chances are you can find some regulator out there who is thoughtful and can be a leader in that shift to mobile (or whatever tech trend).

.......

AI regulation

From the Economist. http://www.economist.com/news/leaders/21650543-powerful-computers-will-reshape-humanitys-future-how-ensure-promise-outweighs 

May 9th 2015 - Print Edition

...I know how to curse
But even if the prospect of what Mr Hawking calls “full” AI is still distant, it is prudent for societies to plan for how to cope. That is easier than it seems, not least because humans have been creating autonomous entities with superhuman capacities and unaligned interests for some time. Government bureaucracies, markets and armies: all can do things which unaided, unorganised humans cannot. All need autonomy to function, all can take on life of their own and all can do great harm if not set up in a just manner and governed by laws and regulations.

These parallels should comfort the fearful; they also suggest concrete ways for societies to develop AI safely. Just as armies need civilian oversight, markets are regulated and bureaucracies must be transparent and accountable, so AI systems must be open to scrutiny. Because systems designers cannot foresee every set of circumstances, there must also be an off-switch. These constraints can be put in place without compromising progress. From the nuclear bomb to traffic rules, mankind has used technical ingenuity and legal strictures to constrain other powerful innovations.

The spectre of eventually creating an autonomous non-human intelligence is so extraordinary that it risks overshadowing the debate. Yes, there are perils. But they should not obscure the huge benefits from the dawn of AI.

Commentary.

I usually resist commenting on this blog regarding analysis of regulatory approaches to technology. But this particular leader from The Economist is silly. It makes n attempt to define the parameters for what regulatory structures might look like or how they would be enforced.

Cooperation for Governance of Emerging Technologies - Saner

CITATION: Marc A. Saner and Gary E. Marchant, Proactive International Regulatory
Cooperation for Governance of Emerging Technologies, 55 Jurimetrics J. 147–178
(2015).

ABSTRACT: This article provides a systematic checklist to guide proactive bilateral
and international regulatory cooperation (in the sense of “alignment” or “harmonization”) in the context of emerging technologies. The article is structured along a lifecycle starting with preregulatory activities and ending with postregulatory processes. The background research is based on a series of interviews with American and Canadian experts carried out in late 2013 as well as studies of previous international regulatory alignment examples. Our aim is to inform the regulatory debate on how to best develop proactively aligned regulatory programs for emerging technologies in bilateral (e.g., United States-Canada) and international contexts.

Conclusions

Regulatory harmonization, coordination, cooperation, and alignment are often discussed as a binary all or none decision. Our analysis hopefully demonstrates that the goal of bilateral or multilateral regulatory consistency is both more complex and richer than often assumed. We have identified 18 specific aspects of regulation that can be the target of alignment efforts, each illustrated by a real-world example. We consider these to be comparatively “long-hanging fruit” as we judge them both important and feasible—but our list is not exhaustive.

 The list of 18 regulatory alignment targets we have identified will no doubt be supplemented with even more alignment opportunities and targets now and in the future. In the future, this initial list will provide a rich menu of opportunities for regulatory officials and stakeholders to consider when contemplating bilateral or multilateral regulatory alignment, as well as several examples and related cases to foster the broad and creative thinking on this subject. Given that the need for, and interest in, regulatory alignment will surely continue to expand in the future, especially in the context of governance of emerging technologies, the 18 regulatory priorities identified here will undoubtedly be further interrogated, refined, elaborated, and expanded in future discussions and alignment efforts.

The Collingridge dilemma for governing new technologies

I was not able to attend this seminar but the abstract alone was interesting enough to post here.
I am hoping that at some point either slides or a video of the seminar will be posted on the website
http://issp.uottawa.ca/en .

Marc Saner: The Collingridge Dilemma and the Proactive Governance of Emerging Technologies

Thursday, May 7, 2015

5:00 - 6:30pm 

Room 4004, Faculty of Social Sciences (FSS) Building
120 University, University of Ottawa

Presentation Abstract

Advocates of emerging technologies (such as nanotechnologies, biotechnologies, information technologies, and robotics) promise tremendous potential for change. The development of these technologies is justified by their potential to lessen most of our key problems including, energy security, food security, climate change, global health, extreme poverty, and so forth. This promise of rapid global change, however, also leads to skepticism regarding the direction of change: who will be the beneficiaries and who will bear the potential downsides?

In the context of the governance of emerging technologies, the "Collingridge Dilemma" expresses the relevant problem particularly clearly. On the outset, we are facing an information deficit -- we simply do not know if the technology is going to be "good or whack" (to quote comedian Ali G.). Later on, as we start to understand the impacts, we often face a power deficit -- it is often too late to effectively control the diffusion and consequences of the technology.

Despite this difficult dilemma, many practical management and governance practices exist. ISSP Director Marc Saner will illustrate the current issues and discuss ideas for the proactive governance of emerging technologies.

ECONOMIST - A striking number of innovative companies have business models that flout the law

From The Economist 2 May 2015 http://www.economist.com/news/business/21650142-striking-number-innovative-companies-have-business-models-flout-law-shredding

PIONEERING entrepreneurs have often had an uneasy relationship with the law. America’s ruthless 19th-century “robber barons” believed it was easier to go ahead and do something, and seek forgiveness later, than to ask permission first. (It helps if you take the precaution of buying up the politicians who dispense the forgiveness.) The first carmakers had to battle against rules of the road that had been designed for the horse and cart. Britain’s “pirate” radio stations in the 1960s had to retreat to international waters to bring pop music to the masses.

 The tension between innovators and regulators has been particularly intense of late. Uber and Lyft have had complaints that their car-hailing services break all sorts of taxi regulations; people renting out rooms on Airbnb have been accused of running unlicensed hotels; Tesla, a maker of electric cars, has suffered legal setbacks in its attempts to sell directly to motorists rather than through independent dealers; and in its early days Prosper Marketplace, a peer-to-peer lending platform, suffered a “cease and desist” order from the Securities and Exchange Commission. It sometimes seems as if the best way to identify a hot new company is to look at the legal trouble it is in.

There are two big reasons for this growing friction. The first is that many innovative companies are using digital technology to attack heavily regulated bits of the service economy that are ripe for a shake-up.

 The second is the power of network effects: there are huge incentives to get to the market early and grow as quickly as possible, even if it means risking legal challenges.

There are risks .....

 So companies need to be able to pivot to new strategies...

 There may be a lot of such pivoting ahead as disrupters are forced to explain themselves in court. The judge presiding over the Lyft lawsuit has noted that, in being asked to decide whether its drivers are employees or contractors, “the jury in this case will be handed a square peg and asked to choose between two round holes.”

 But for more fragile firms, it would be better still if legislators and regulators responded to the emergence of so many innovative, law-testing businesses by revving themselves up to internet speed and adapting their rule books for the digital age.

Regulation and innovation dynamism

Paper alert.

Is Regulation to Blame for the Decline in American Entrepreneurship?

Nathan Goldschlag 

George Mason University

Alexander T. Tabarrok 

George Mason University - Department of Economics
December 1, 2014

GMU Working Paper in Economics No. 15-11 


Link to paper.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2559803


Abstract:      

Mounting evidence suggests that economic dynamism and entrepreneurial activity are declining in the United States. Over the past thirty years, the annual number of new business startups and the pace of job reallocation have declined significantly. A variety of causes for these trends have been suggested, including an increasing ability of firms to respond to idiosyncratic shocks, technology induced changes in the costs of hiring and training, and increasing regulation. This research combines data from the Statistics of U.S. Businesses, which contains measures of the decline in economic dynamism, with RegData, a novel dataset leveraging the textual content of the Code of Federal Regulations. RegData contains annual industry level measures of the stringency of regulation. By combining these data, we are able to estimate the extent to which changes in the level of federal regulation can explain decreasing entrepreneurial activity and dynamism. We find that Federal regulation has had little to no effect on declining dynamism.

UK considers regulating wearables & IOT

Privacy and spectrum are both issues for the emerging wearables tech industry. The UK seem to be analysing both.

From: WT VOX.

News from IoT and wearables regulations: Ofcom has joined forces with the government and ICO to develop regulation for the Internet of Things (IoT) across all industry verticals in the UK. Ofcom will work closely with government, the Information Commissioner’s Office and IoT industry in order to understand the range of issues that might affect successful development of IoT in the UK.

Six years ago the number of “things” connected to the internet surpassed the number of people, with experts estimating that in 2015, there will be more than 25 billion connected devices, and by 2020, that number will increase to 50 billion.

It is for this reason that UK regulators, Ofcom and the Federal Trade Commission (FTC) in the US are taking steps to create a regulatory framework that will protect consumers, though they are aware that any decision must be designed in such a way that it does not harm innovation in the technology sector.

Ofcom has taken steps to accommodate the Internet of Things (IoT) market, in a bid to bolster investment, regulations and innovation for IoT and Wearable related technologies. As part of its plans, the regulator is monitoring the IoT’s spectrum needs to identify if additional spectrum is needed and to explore new ways in which to deal with data privacy in IoT and Wearables.

Read the whole article here: https://wtvox.com/2015/02/uk-ofcom-ico-getting-serious-iot-wearables-regulations/

Legal framework for cloud computing

Readers of this blog on innovation policy maybe interested in this commentary from The Conversation. Again as always with these news snippets I have not reproduced the full article - pls follow the link.

From The Conversation

http://theconversation.com/a-new-legal-framework-for-the-age-of-cloud-computing-37055Dan Jerker Author of the original  B. Svantesson Co-Director Centre for Commercial Law at Bond University

The Problem

"Cloud computing, by its very nature, transcends location, geography and territorial boundaries. Data accessed in one country might be stored half way across the world, or even in servers in multiple countries.

International law, on the other hand, sees the world through the lens of various jurisdictions, which are inherently linked to location, geography and territorial boundaries.

So when cloud computing and international law interact, sometimes the results can be highly problematic.

For example, in December 2013 the US government served a search warrant on Microsoft under the Electronic Communications Privacy Act of 1986. The warrant authorised the search and seizure of information associated with a specific web-based email account that is stored at Microsoft’s premises in Dublin, Ireland."

A New Paradigm

"To move forward, we must recognise that the territoriality principle, and the other Harvard Draft principles, are merely proxy principles for underlying core principles. They were, after all, constructed to reflect the legal practise at the time.

Particularly when we are trying to apply the law to novel phenomena that need to become the subject of clear legal rules, we need to cut away the undergrowth of such proxy principles and identify the core principles that are reflected in them. Only then will we be able to focus on the considerations and values that truly are to be balanced.
It seems to me that the essence of the jurisdictional principles currently used may be distilled into three core principles.

Jurisdiction may only be exercised where:

• there is a substantial connection between the matter and the state seeking to exercise jurisdiction

• the state seeking to exercise jurisdiction has a legitimate interest in the matter

• the exercise of jurisdiction is reasonable given the proportionality between the state’s legitimate interests and other competing (state) interests."

The Silk Road Trial

An update on cybersecurity legal maneuvers.

MOST internet entrepreneurs dream of transforming an industry. On January 13th, one who may have done just that went on trial in federal court in Manhattan, accused of drug-trafficking, money-laundering and operating a criminal enterprise. Ross Ulbricht, a 30-year-old Texan physics graduate, is accused of being “Dread Pirate Roberts”, the founder and administrator of the Silk Road. 

Mr Ulbricht says he was framed: the real Dread Pirates remain at large. His lawyers also claim that the FBI may have used illegal methods to identify and seize the Icelandic server on which the Silk Road was hosted, and from which much of the evidence comes. The FBI says the site contained a vulnerability which revealed where it really was, despite Tor. But several technical specialists think this implausible. Sadly for Mr Ulbricht, it may not matter much. In a ruling in October, a judge concluded that since he has not admitted any legal interest in the Silk Road server, he is unable to claim under the Fourth Amendment that it was illegally searched, and so the evidence from the server is admissible however it was found. This, the judge admitted, “might appear to place Ulbricht in a catch-22”. If he admits to an interest in the server, he would weaken his defence at his trial; if he doesn’t, he has no chance of getting the evidence against him dismissed. 

Mr Ulbricht’s defence, which has been generously funded by online donations, is thus likely to focus on the strength of the evidence linking him to the online activities of Dread Pirate Roberts. Nonetheless, cyber-criminals—as well as other users of the dark web—will be watching closely. Since the Silk Road was taken offline, several similar market-places have been started, and many closed by the authorities. But it is still far from clear whether police forces can crack the anonymity given by technology such as Tor, or how deeply they can legitimately snoop on the web to uncloak the hosts of criminal networks.

From the Economist http://www.economist.com/news/united-states/21639525-one-dread-pirate-trial-what-about-others-bitcoin-buccaneers

Carbon trading in the combined California and Quebec Market

From http://www.canadianenergylaw.com/

On November 25, 2014, the California Air Resources Board and Quebec’s Ministry of Sustainable Development, Environment and the Fight against Climate Change held the first joint auction of greenhouse gas allowances since the two governments linked carbon markets on January 1, 2014 (the Auction). The joint Quebec-California program allows companies to trade carbon allowances across jurisdictions to comply with greenhouse gas emission limits. For example, a Quebec company could purchase allowances from a certified greenhouse gas emissions reduction project in California to comply with provincial targets, and vice versa. Supporters of the program expect the linkage will improve trade liquidity in both markets.

The Auction, which was oversubscribed, sold out of all 23,070,987 2014 vintage allowances for $12.10 per allowance, an increase of $0.76 over this year’s $11.34 floor price. Another 10,787,000 2017 vintage allowances also sold out at $11.86 per allowance. Each allowance permits the release of 1 metric ton of carbon dioxide. The vintage year refers to the year in which the carbon reduction takes place by the certified greenhouse gas emissions reduction project.

During the Auction, companies submit confidential bids for a specified number of allowances. The highest bidder is awarded permits first, then the second-highest, and so on until all allowances for sale have been accounted for. All bidders then pay the price of the lowest winning bidder. Proponents are optimistic that the Quebec-California program is paving the way for a North American market-based solution to reducing greenhouse gas emissions, with hopes that it will serve as a model for other provinces, states and countries in the future.

http://www.canadianenergylaw.com/2014/12/articles/climate-change/quebec-and-california-hold-first-joint-auction-of-greenhouse-gas-allowances/ 

Woops: charging for news copyright in Spain

LONDON — Google News is saying goodbye to Spain.

The website, which compiles headlines and summaries of news articles from various sources, will go dark in Spain on Dec. 16. Google plans to shut the site there in protest of a new law that would force the company and other news aggregators to pay Spanish publishers for the use of their content.The rules, which come into force in January, do not specify how much Google and others like Yahoo News would have to pay per article. But they carry a potential one-time $750,000 fine if companies do not comply with the law.

 The legislation follows similar rules in other countries, including France and Germany, that allow publishers to charge when parts of their articles are included in Google’s news aggregation. In those countries, the company has tended to come to terms with the publishers, rather than withdraw from the field. But the Spanish rule will not allow local publishers to forgo such payments.

And in the case of Spain, it is not clear what parties, if any, will benefit from the new rules.

While the law is aimed at providing much-needed revenue to Spanish publishers, which are struggling to generate income from their online offerings, the loss of Google News and the traffic that it sends to local newspapers may end up hurting publishers that often rely on the company’s service to direct people to their websites. In Germany, some publishers have opted to waive their right to demand fees, rather than lose the traffic Google sends their way.

But Google’s dominance of Europe’s online world — its search business holds a market share of about 85 percent, bigger than in the United States — has European officials trying to rein it in.

http://bits.blogs.nytimes.com/2014/12/11/google-to-drop-its-news-site-in-spain/?_r=0


According to BBC Tech Tent http://www.bbc.co.uk/programmes/p02dk0t5 broadcast 12 Dec 2014 the proponents of the law in Spain, following Google's withdrawal started to suggest the law should be reversed because they have seen that the lack of traffic will be more costly that the income potential from Google.