Archive for April, 2012

Lenard to NTIA: Cost-Benefit Analysis can Ensure all Internet Users are Represented in Privacy Code of Conduct

Wednesday, April 4th, 2012

On Monday, Tom Lenard filed comments with the National Telecommunications and Information Administration (NTIA) regarding the proposed multistakeholder (MSH) process for developing a code of conduct.

Among the 80 comments filed with NTIA, many referenced the need to ensure both firms and Internet users were represented in the process.  In his comments, Tom identified one way to ensure the needs of all involved parties are taken into account: requiring a cost-benefit analysis of any proposed code of conduct.

Since the code will apply to many more consumers and firms than can be directly involved in the process, code provisions should be analyzed in much the same way as a regulation in order to assure that they produce benefits in excess of costs.  Tom also described the proposed code of conduct as similar to agency guidance, which is subjected to the regulatory review requirements of Executive Order 12866, including “a reasoned determination that its benefits justify its costs.”

In addition to urging a cost-benefit analysis of any proposed codes, Tom also warns of the need to try to protect against anticompetitive behavior.  NTIA and the MSH process should ensure any privacy code is neutral with respect to technology, business models and organizational structures.  In addition, procedures should guard against the process and resulting code being dominated by incumbents, which could raise the costs of entry and inhibit innovation in the Internet space.

Read more of Tom’s comments here.