Remarks at TIA's 16th Annual Spring Policy Summit

Ambassador Daniel A. Sepulveda
Deputy Assistant Secretary and U.S. Coordinator for International Communications and Information Policy, Bureau of Economic and Business Affairs
Telecommunications Industry Association
Cambridge, MD
April 17, 2015

As prepared

Good evening and thank you. I am honored to receive the TIA Spirit of Innovation Award and accept it on behalf of my staff and colleagues in the Administration.

I am particularly honored to receive the award from TIA. Your people and the companies you represent are thoughtful, honest, and straightforward advocates for your positions. Your work and advocacy are appreciated.

I am also honored because this award places me in the company of public servants I greatly admire. Among them is my friend and colleague, Assistant Secretary Strickling, who received this award last year, and I was here to celebrate that with him.

Under the direction of this Administration, we have worked to create a space - through advocacy, law, and public policy - for American firms to be able exercise and implement their ideas and innovations as freely as possible in the market at home and abroad.

Whether you are bringing the Internet of Things to life in tangible and visible ways or working to unleash the potential of our airwaves as a vehicle for high speed broadband deployment, this Administration is working for you.

At this year’s World Radio Conference, we will advocate for the further allocation of space in the airwaves for mobile broadband deployment. At the ITU Plenipotentary in Busan last year, we fought to promote voluntary standards development through private sector-led processes for Internet protocol-based communications. We work annually on a bilateral basis to remove onerous testing requirements and other barriers to entry for your exports. We are negotiating to open new markets and ensure that you receive fair treatment in existing markets.

As an Administration, we have argued consistently that the role of government in this space is to create an enabling environment for innovation, not to pick winners and losers or to favor any one stakeholder over others. For us, that means supporting the existing multistakeholder-led approach to Internet governance, releasing spectrum for mobile broadband, encouraging competition in both wired and wireless communications, and preserving the global Internet as an open platform on which to distribute ideas, goods, and services.

We believe that those policies are both good for us and serve the global public interest. I have seen how people and economies are now benefiting from strong broadband adoption rates and thriving e-commerce markets. Where that is happening, it is happening in large part because of smart public policies and a commitment to creating an environment in which telecommunications and other digital technologies can enable innovation and entrepreneurship, and create opportunities, across every sector of human activity.

We know that communications penetration and investment is strong in the United States, Europe, and other OECD economies. We continue to engage these economies, and we are also engaging thought leaders, policy makers, and regulators and encouraging innovation and openness in other dynamic markets.

The APEC Telecommunications and Information Ministerial, recently held in Malaysia, represents recognition from APEC ICT leaders that mutual understanding, cooperation and capacity building will be vital to building more resilient and inclusive economies, which because of digital technologies are increasingly integrated and borderless.

As we move forward this year, our aim is to ensure that the Internet continues to grow and benefit an increasingly wide and diverse global population. We are urging our counterparts abroad to promote policies that increase broadband access and facilitate the free flow of information across borders.

First – broadband access. We remain concerned that not every country fully shares in the Internet’s benefits, particularly countries in the developing world. Of the developing world’s 1.4 billion extremely poor people, 70 percent live in rural areas. Lives can be transformed by connecting villages to the web, bringing telemedicine to remote rural health centers, providing accurate weather information to farmers and fishermen, and supplying up-to-date market information to producers.

In September 2013, the United States and non-governmental partners announced the creation of the Alliance for Affordable Internet. This multinational, multi-stakeholder coalition advises government policymakers in developing markets on how to build stronger markets to attract investment and lower prices for their citizens. Since its launch, the Alliance has signed agreements with Ghana, Nigeria, Mozambique, the Dominican Republic, and Burma. Through public-private initiatives like the Alliance, we can dramatically accelerate economic growth in developing countries.

We are also working bilaterally and regionally to support many governments’ efforts to bridge the digital divide and promote ICT sector development. For instance, we are engaging with India on their “Digital India” initiative, which aims to extend broadband access from India’s cities to 250,000 villages in the country’s vast rural areas. We’ve also partnered with the African Union Commission to establish and implement a 2015 ICT Work Plan, which aims to double the number of adopted national broadband plans and boost spectrum and Universal Service Fund utilization. These are just two examples of our global efforts to expand connectivity.

A second priority is ensuring the preservation and promotion of an open Internet. Economically, companies of all types and sizes share in the benefits of cross-border data flows – not just companies that we think of as digital. A recent study, for example, highlighted how 75 percent of the value added by data flows on the Internet accrues to “traditional industries,” like oil and gas or manufacturing and retail companies.

However, policies that restrict data flows, such as localization requirements, impair this economic growth. Imagine a world where every country adopted such requirements, a world in which data stops at national borders, and then is examined to see whether it is allowed to leave the country, and possibly taxed when it does. In such a world, all technology or Internet companies would face higher costs, and start-ups, in particular, would face much higher barriers to market entry. They would have to lease or build local physical infrastructure in every jurisdiction in which they operate. Such infrastructure costs can be staggering.

To provide a real world example, to build a data center in Brazil, Chile or the United States, according to some estimates, a technology start-up would have to spend $60.9 million in Brazil, $51.2 million in Chile, and $43 million in the United States, with enormous additional energy and other operating costs. These costs not only inhibit the entry of new Internet and technology companies into the marketplace; they are also passed on to downstream users of internet services, which inhibits innovation, stifles the development of digital ecosystems, and puts a drag on overall economic growth. Working together with our friends, we are opposing such localization efforts.

Working with like-minded governments and all of the Internet’s stakeholders, including all of you here today, we look forward to ensuring that the Internet remains open and vibrant and continues to be a conduit to better the lives of people worldwide.

Thank you.