The Consumer Electronics Show and Public Policy: Can There Be Separation of Tech and State?

The buzz and pre-show anticipation have begun for the 2018 Consumer Electronics Show(#CES2018) hosted by CTA, the Consumer Technology Association.

This happens to be the 51st annual show, getting underway Tuesday. There are already previews and tech roundups from the likes of Wired and CNNMoney.

Less known than the flashy technologies are the nonetheless equally important public policy panels and conferences like the SuperSessions that examine the legal and regulatory environments with and within which technologies must grapple.

These discussions will cover, for example, Federal Trade Commission observations on the tech sector and government officials’ and insurers’ views on self-driving cars.

The parallel CES Innovation Policy track will host representatives from the White House, Federal Communications Commission commissioners, panels on automation technology’s effect on the “Future of Work,” autonomous vehicles and their incorporation into cities, as well as social media platforms and worrisome threats to impose liability upon them for users’ behavior.

Out on the show floors, along with the ever-present gigantic thin TVs, artificial intelligence and machine learning, drones and autonomous vehicles, virtual and augmented reality, smart home technologies and digital health innovations are among the showcased innovations. Count on spotting wandering robots around many corners.

Flying cars arrived at CES in recent years, but were long ago derailed in the U.S. by automobile regulations despite having been invented over a half century ago. While Google co-founder Larry Page has taken an interest, and the likes of Google could navigate or capture regulators, other nations may dominate this one.

But seriously, what is the propensity for government regulators like the Federal Aviation Administration, the Federal Communications Commission and other national regulators, let alone states and localities, to embrace what Adam Thierer calls “permissionless innovation” in these important new technologies?

Can we have a near-hands-off approach I prefer, given that light touches can easily become ham-fisted?

So far, no; it’s all “Mother May I.” (And not just in tech, but in areas like finance and education and health care. Technology and these sister sectors actually have much to learn from one another.)

Simply consider the Federal Aviation Administration’s drone regulations and its approach to airspace allocation and permitted activities. One Innovation Policy panel session will ask, “is consensus on drones really possible?“

Ten or so years ago, before drones deeply entered the public consciousness, there was a 2007 FAA rule interpretation on drones via a Notice of Policy that actually outlawed commercial activity (a move in violation of the Administrative Procedure Act). That roadblock was fortunately reversed by the National Transportation Safety Board.

Then the 2012 FAA Modernization and Reform Act (unwisely in my view) certified FAA’s authority to regulate drones within a section on “Integration of Civil Unmanned Aircraft Systems Into National Airspace System.” It included a call for a “Comprehensive Plan” complete with mandatory reports and a government “roadmap.”

(International bodies (the UN’s International Civil Aviation Organziation, or ICAO) likewise seek a “global framework,” but let’s stick with FAA, it’s plenty.)

Next in June 2016 the FAA issued a 624-page final drone rule, “Operation and Certification of Small Unmanned Aircraft Systems.” The rulemaking contained “excessively precautionary approaches,” as my colleague Marc Scribner writes, such as (incredible and industry nuking) line-of-sight operational requirements, and a ban on night-time operations—ignoring the ability of technological and contractual solutions to address risk.

The agency also refused to stand down to local law enforcement solutions to routine problems (likely things such as buzzing or trespass). Entrepreneur John Chisholm has helpfully proposed simple, organic regulatory approaches like vicious animal and peeping-tom laws.

No need to break down a wall when there’s a door to walk through.

Worse, the final rule also contains declarations from FAA regarding case-by-case waivers and securing blessings. It also foretells a large quantity of future significant guidance decrees (not new laws from Congress nor even new public notice-and-comment regulations, but unpredictable guidance and directives). Sweeping issues to be governed not by competitive market processes and discipline like new liability and insurance products include:

• Industry best practices;
• Risk assessment;
• External load operations;
• Guidance associated with not dropping objects in ways that damage persons or property;
• Advisories on training and direction to air traffic control facilities;
• Preflight checks for safe operation;
• Vehicle conditions for safe operations;
• Guidance “on topics such as aeromedical factors and visual scanning techniques.”

 Consider, just for one example from this list, FAA’s treatment of the otherwise ordinary freedom to operate multiple drones without asking permission:

The FAA also acknowledges the benefits of research and development associated with the simultaneous operation of multiple unmanned aircraft and agrees that additional flexibility is called for in this rule so that the agency can administratively allow these types of operations based on operation-specific mitigations. Accordingly, the FAA has made the prohibition on the simultaneous operation of multiple small unmanned aircraft waivable on a case-by-case basis. To obtain a waiver, a person will have to demonstrate that his or her simultaneous operation of more than one small unmanned aircraft can safely be conducted under the terms of a certificate of waiver.

One must acquire a waiver for the most mundane of operations. This approach will, rest assured, set the industry on a path to getting a handful of licensed, dominant operators controlling, for example, the national package-delivery market.

This is sad. The very kinds of locational and tracking technologies on display at CES even apart from the drones themselves conceivably allow us to divvy airspace up and exploit it far more efficiently than anything FAA will embrace.

This is par for the course, mirroring how 100 years ago, competitive electricity and communications services  were eliminated in favor of monopoly franchises and a permanent regulatory superstructure to manage it all, rather than the overlapping, redunant and cyber-secure hyper-infrastructures we could by now have instead.

At this point it would be no surprise to know that the FAA sought to derail a flight-sharing airborne “Uber”-style air venture.

As it stands, and we’ll see what the CES panelists say, but if the Mother May I, case-by-case approach persists, it’ll cause drones to fly into a restrictive regulatory black hole, in the form of keeping the commercial operations sector dominated by a handful of players with specialized licenses, and political barriers to entry for others. But the agency will be largely unaccountable, shielded by the presence of a regulatory coalition that agrees with it.

Parallel developments in land-based autonomous vehicle operations, also part of CES discussions and certain ominous “smart city” deliberations, also foretell what’s in store without a course correction.

In September 2016, the National Highway Traffic Safety Administration (the NHTSA is an arm of the Department of Transportation , as FAA is) issued its Federal Automated Vehicles Policy guidelines. These purport “to speed the delivery of an initial regulatory framework and best practices to guide manufacturers and other entities in the safe design, development, testing, and deployment of highly automated vehicles.”

This guidance offered some worthy proposals, minding, however, my colleague Scribner’s caveat here that “NHTSA must work to limit its precautionary impulses, which have the potential to delay and increase the cost of automated vehicle deployment—meaning more preventable crashes, more injuries, and more deaths.”

More troublesome is the regulatory mindset implied in Washington’s attempted foray into vehicle-to-vehicle (V2V) communications standardization mandates, and, worse, even vehicle to infrastructure (V2I) guidance from the Federal Highway Administration.

Government versions of “smart cities” should concern people and raise at least some red flags. “Modern” sewer infrastructure can’t even handle baby wipes.

There are so many variables, so many technologies. It says here that a Separation of Technology and State is preferable to the default precautionary regulatory model.

Decades-old airspace models and regulatory fixations are not where today’s — nor certainly tomorrow’s — technologies would have us stall out.

Overly ambitions regulatory approaches are merely protectionist for the agencies, and for the firms that capture them. In our drones example, the collusion derails the thinking needed to address issues of property rights in airspace and airsheds simply by ignoring them and imposing rules instead.

It should become easier, not harder, to manage technologies (and airspaces). Here’s hoping future CES SuperSessions and Innovation Policy summits discuss close calls only, not new bureaucracies governing the innovations showcased here.

Originally published to Forbes.