No Need for New Federal Internet Agency

Former President Bill Clinton grabbed headlines earlier this month when he argued it was time for the United States to create a new independent regulatory agency to fight Internet rumors and misinformation. Speaking on the television network CNBC, Clinton expressed support for a new federal agency whose “mandate would be narrowly confined to identifying relevant factual errors.”

In expressing this view, Clinton joins many Americans who worry about online misinformation, loss of privacy, and identity theft. As I note in a new Brookings Press book, The Next Wave: Using Digital Technology to Further Social and Political Innovation, a large number of Americans are concerned about the online world. For example, 62 percent of adults in a national poll felt that digital records make it more difficult to ensure personal privacy. In addition, 75 percent of Internet users worried about websites sharing information without user permission.
Recent accusations that Apple’s popular iPhone stores data on geographic location further spooks consumers. They worry that companies will use this material data for commercial purposes or that the material will compromise individual privacy. On the heels of controversies involving Google, Facebook, Sony, and many other companies, these episodes focus attention on the risks of the digital world.

Yet despite these fears, it is not a good idea to create a new federal agency. Technology moves too quickly for the government to control it. Rumors or misinformation can be spread within minutes on the Internet. Seeking to deal with them through a new government agency would stifle innovation and be ineffective to boot. With a crowded government oversight structure that already includes the Federal Trade Commission, the Federal Communications Commission, and the Department of Justice, having another agency would dilute existing authority and responsibilities. 

It is ironic that Clinton supports a regulatory agency because it was his administration that ushered in our largely libertarian approach to the Internet. When radio and television were created in the 20th century, leaders felt these were such powerful communications media that the government had to regulate them. Companies were required to petition the government for broadcasting licenses, and there were rules of television and radio conduct that included fairness and community responsibility.

With the Internet, though, the United States adopted a different course. In 1997, Clinton advisor Ira Magaziner led an interagency task force that published a document called “Framework for Global Electronic Commerce.” It proposed a “hands off the Internet” strategy based on the principles of “the private sector should lead” and “governments should avoid undue restrictions on electronic commerce.” 

This was the period right after the 1994 Republican landslide, so there was little appetite for new government regulation. But that decision led directly to our current government approach toward the Internet and a reluctance even to allow states to collect sales tax on online transactions. 

Fourteen years after Clinton’s policy decision, we continue to debate the proper line between individual freedom, technology innovation, and government action. We should take action to protect consumer privacy by demanding better transparency and disclosure, but not the creation of a new government agency.