Julius Genachowski in Forbes: “What’s going on here? In cities and states across the country, two forces are engaged in battles with major consequences for the future of the Internet and the U.S. innovation economy.
The first force is new ventures harnessing technology—particularly the Internet and mobile—to challenge incumbents in a growing number of industries: From hotels (Airbnb) to rental cars (ZipCar, RelayRides, Car2Go) to taxis (SideCar, Lyft, Uber) to car dealerships (Tesla) to parking lots (Parking Panda) to textbooks (Chegg) to lending and fundraising (Lending Club, Kickstarter) to restaurants (food trucks) to boating (Boatband, GetMyBoat) to errand running services (TaskRabbit) to Internet service (Chattanooga, TN; Lafayette, LA; Google Fiber).
Many of these ventures are part of the new “sharing economy.” ….
The second force in these battles is city and state governments, which typically have long and deep relationships with established industries. Not surprisingly, and acting rationally from their perspective, existing businesses have been lobbying state and local officials to restrict new entrants.
And across the country, new laws are being proposed and enacted—and existing but out-of-date laws are being enforced—to protect incumbents from new Internet- and mobile-based competitors….
There are lessons here for the current battles in city halls and state houses. We suggest four simple principles for every state and local official considering regulatory decisions affecting the sharing economy and other disruptive Internet- and mobile-based businesses:
- Stand with innovation. The benefits of innovation can be hard to appreciate fully early on, but we know from our history that innovation drives consumer benefits and economic growth. Give innovative new services the benefit of the doubt. And where there are issues to address, take a tailored, technology-neutral approach.
- Focus on consumers. Consider the full range of benefits new services provide consumers. Most innovators and their investors are putting up their time and money because they see a gap in the market—ways in which consumers are not fully served by existing businesses. The results of a fair-minded consumer-focused analysis might be different than some first instincts. For example, Airbnb and Uber provide insurance to protect consumers; grey-market home stays and unlicensed livery cabs may not. Weigh the benefits of moving grey-market activities out of the shadows.
- Keep an open mind. Spend the time to understand new businesses and new technologies, including by speaking with new service providers and their users. Don’t just rely on opponents’ characterizations.
- Use the service. Before deciding to regulate an innovative service, public officials should use the service. Because they’re new, innovative services can be hard to fully appreciate without experiencing them—and using them will provide hands-on insights on their benefits as well as tailored ways to address any issues. At the FCC we launched a Technology Experience Center so that agency staff could use cutting-edge communications devices and services potentially affected by agency rules.
- Innovation is a core competitive advantage for the U.S. and a primary driver of economic growth and job creation across the country. In today’s fast-moving global economy, capital and talent can flow anywhere. Pro-innovation policies are critical to growing jobs and investment in U.S. cities.”