Multistakeholder, Other Informal Models Oversee More New Tech, Drawing Some Concerns
As technology rapidly advances, approaches to regulation are changing. Agencies such as the Department of Commerce, Department of Transportation and the Food and Drug Administration are increasingly relying on a multistakeholder process -- or other informal approaches -- to bring a wide range of people to the table to quickly craft rules for technologies from autonomous vehicles to drones, experts said. On Wednesday, NTIA, which recently hosted wide-ranging collaborations on drone and facial recognition privacy, will convene a new multistakeholder process on how to upgrade IoT cybersecurity (see 1609160048). Some told us the approach keeps pace with technology without hindering innovation, while others say it leaves open questions about accountability.
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Whether it's about drones, driverless cars, IoT or wearable technologies, "we are witnessing a fundamental shift in the governance mechanisms that are applied to those technologies," said Adam Thierer, senior research fellow at George Mason University's Mercatus Center. He said the new preferred governance approach is a shift away from a traditional top-down, by-the-book approach of implementing laws and administering regulations to one of "soft law and agency threats."
When DOT issued guidelines for autonomous vehicles in September (see 1609200039 and 1609160038), Thierer wrote in a blog post that the department said the guidelines weren't mandatory, while in the same breath hinted they could eventually become regulations. He wrote the agency is essentially using the models of soft law -- an "informal governance mechanism to influence private decision-making" -- and threats that are essentially anti-democratic and not by the book.
This new form of governance is a "response to the increasing gap between the pace of technology and the pace of traditional governance, something I call the Pacing Problem," emailed Arizona State University law professor Gary Marchant, who co-edited a book called Innovative Governance Models for Emerging Technologies. He said the current model is an improvement over the "old negotiated rulemaking" approach in the 1980s and 90s, which also tried to create regulations using a multistakeholder process. Studies showed that old approach didn't shorten time to adopt regulations or reduce the rate of litigation, he said.
Some problems of that process apply to the current multistakeholder process, such as who gets a seat at the table and what to do if an agreement can't be reached, as happened in the NTIA facial recognition process, said Marchant. Civil liberties and consumer advocates walked out last year over several differences with industry and other business-related participants (see 1606150040). "Still, I believe this 'soft law' mechanism is a valuable approach, as it has potential to expedite process, is collaborative rather than adversarial, and gets expertise that the government does not have to the table," he said. "Although the output is not directly enforceable, the FTC can enforce them indirectly, as a company that signs on to voluntary guidelines or best practices but then does not follow them is arguably engaged in unfair or deceptive business practices."
Thierer said this new governance approach raises issues. Does the Paperwork Reduction Act, which requires agencies to get Office of Management Budget approval if they want to collect information from the public, apply? Does a cost-benefit analysis apply? Can one use the Freedom of Information Act process for such an informal system? He questioned how binding such guidelines, best practices, codes of conduct and other soft law mechanisms are, among other consequences. "We don’t get any answers and we’re left in this new weird, extralegal Twilight Zone where it’s not really clear where the accountability lies in this system or if there really is any," said Thierer.
But John Verdi, vice president-policy for Future of Privacy Forum, emailed that it's not clear why FOIA wouldn't apply to agency records on a multistakeholder process. Verdi, who before joining FPF earlier this year moderated the drones and facial recognition multistakeholder processes on privacy as NTIA director-privacy initiatives, said he's done a fair amount of FOIA work as a lawyer and there would be no reason to treat agency records any differently because they involve a multistakeholder engagement. He also said whether it's a government- or private sector-led multistakeholder or self-regulatory process, the FTC has -- and has used -- the authority to ensure companies keep their promises. "I can't think of any reason the commission wouldn't do so again," he said.
Verdi said with the multistakeholder approach participants can reach "consensus" quicker than legislators can pass laws and regulators can approve rules. "Stakeholder groups can revisit their agreements more often and more efficiently. This is particularly important in light of rapid changes to emerging technologies and business practices," he said. The processes he was involved with and those operated by others in the Obama administration were open to everyone and decisions were made in public meetings that were webcast, he said. "We made clear that NTIA would rely on the stakeholders to reach consensus -- the government didn't weigh in with our position on substantive issues or make determinations."
NetChoice Senior Policy Counsel Carl Szabo, a lead participant in the NTIA facial recognition process, told us such discussions and processes are valuable to get a "plurality of input" since laws and regulations can't keep pace with technology. He said it's important the new NTIA process on IoT is being held in Austin, Texas, and outside Washington, D.C. "If nothing else," he said, "it gives more people input into what is otherwise an opaque process."