The Business Roundtable, a prominent association of CEOs from major corporations such as Microsoft, AT&T, and Verizon, is ramping up efforts to challenge local data server mandates both in the U.S. and internationally. In a report released Thursday, the group stressed that government-imposed restrictions on the free flow of data across borders are detrimental to U.S. technology, commerce, and, by extension, economic growth and job creation.
According to the report, numerous countries have already implemented or are considering laws that impose strict requirements on data flow. One notable example highlighted is Russia, which mandates that critical infrastructure for core payment processing services be located within Russian Federation territory.
Randall Stephenson, Chairman and CEO of AT&T, as well as the head of the Business Roundtable’s Global IT Policy Subcommittee, emphasized that economic growth is at the heart of the issue. “A globally connected economy accelerates commerce and promotes prosperity worldwide,” Stephenson said. “However, local data server mandates introduce unnecessary complications that threaten to slow this momentum. It is crucial to ensure that these barriers do not become a systemic problem.”
Though the issue is often framed in international terms, it is also relevant to U.S. policy. The U.S. government’s cloud computing contracts have begun to incorporate clauses specifying the locations of data centers, contributing to the growing concern.
Daniel Castro, senior analyst at the Information Technology and Innovation Foundation, noted the contradiction in current policy. “On one hand, the U.S. promotes the free flow of data, while on the other hand, it sometimes imposes restrictions that contradict this stance,” he said.
The Business Roundtable advocates for the U.S. government to publicly reject local data storage mandates and take a leading role in discouraging similar practices worldwide. The group also seeks to include provisions in the upcoming Trans-Pacific Partnership trade agreement to prevent such restrictions from becoming widespread.
In line with these efforts, the Obama administration has taken initial steps to address the issue. The White House’s International Strategy for Cyberspace report, released last year, called for the preservation of an open, free-flowing internet and opposed actions that create unfair advantages by disrupting the global flow of information.
The U.S. Commerce Department is also looking into the matter. The department’s Internet Policy Task Force is examining the reasons behind the imposition of data flow restrictions, assessing their impact on innovation, global trade, and investment, and exploring potential solutions to mitigate any negative effects. A final report on the matter is expected by the end of the year.
As the issue gains more attention, business leaders and policymakers alike continue to weigh the implications of local data server requirements for the future of global commerce and technological innovation.
