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Internet Association President & CEO Michael Beckerman welcomed guests to the VC on the Hill conference, highlighting the ties between IA’s annual Virtuous Circle event in California and the day’s event in DC to bring together thought leaders on innovation policy.

Congresswoman Anna Eshoo (D-CA) gave a keynote address emphasizing the ongoing importance of net neutrality rules for online platforms. Congresswoman Eshoo also emphasized the need to ensure digital issues remain bipartisan issues, and recognized the ongoing need for more high skilled immigration to ensure the best and brightest remain in the US.

Senator Ron Wyden delivered a keynote address on the state of digital trade, calling for an updated NAFTA framework that includes key provisions for the digital economy, including modern customs rules, balanced IP framework, and intermediary liability protections modeled after Section 230 of the Communications Decency Act.

A panel of IA companies, including Etsy, eBay, Google, and Amazon, discussed opportunities for new digital trade provisions in the upcoming NAFTA negotiation. Etsy, Amazon and eBay highlighted the need for small sellers to be able to cross borders without onerous customs provisions, and all companies emphasized the need for the free flow of data and balanced IP.

Senator Shelly Moore Capito (R-WV) discussed the importance of the internet to businesses nationwide, highlighting her focus on broadband access as a new member of the Senate Commerce Committee as well as the Capito Connect Initiative in her home state.

IA Chief Economist Christopher Hooton presented the findings of a new report from NERA on the economic value of the U.S. safe harbors, Section 230 of the Communications Decency Act and Section 512 of the Copyright Act. A panel of experts from R Street, Engine, FreedomWorks, and the Center for Democracy and Technology discussed the ongoing need for both safe harbors to remain robust for the promotion of innovation and creativity. The panel agreed that US leadership in this area was critical for both free speech and startup growth, and agreed that even attempted to “narrowly” amend the laws would undermine positive growth for the online ecosystem.

Senator Cory Gardner (R-CO) discussed the ongoing need to innovate here in the US and around the world, advocating for free trade agreements and a strong commitment to free market development of new idea and technologies.

Online sellers and micro businesses held a luncheon discussion about the ability to engage in the flexible economy through online platforms. Participants highlighted that opportunities provided by the gig economy allowed them to supplement earning potential with the freedom to chose their own hours according to individual needs, and the ease of entering into these new ventures was a key driver of their success.

IA Senior Vice President Gina Woodworth led a fireside chat with Matt Lira, Special Assistant to the President for Innovation Policy and Initiatives. Matt highlighted that the White House’s tech week in June was the start of a continuing dialogue over how to modernize government and harness the power of technology to improve operations. Matt also emphasized the importance of an inclusive and robust conversation with thought leaders and technologists to achieve shared goals across the political spectrum.

Our work to save net neutrality is not over, but with your help, the FCC has millions of new comments calling for the preservation of strong net neutrality rules.

We wanted to take a minute to thank everyone who visited IA on the Net Neutrality Day of Action to help preserve the free and open internet.

If you didn’t get a chance to file a comment yet, it’s not too late! Just visit IADayofAction.org and follow the instructions at the bottom of the page.

Stay tuned as we continue defend a free and open internet. You’ll hear from us when we have updates on net neutrality or other internet issues, livestreamed interviews with policymakers, or anything else we think you might be interested in.

One of the most important parts of the internet – and what makes it so attractive and useful to so many people – is the ability to search for and store information at the click of a button. Intermediary liability safe harbors play a critical role in making that possible.These safe harbors protect internet platforms (called intermediaries) – such as Google, Dropbox, Facebook, Snap, among others – from being held liable for the content of their users, ensuring consumers can experience the internet that we’ve come to know and love.

Put in place in 1996 and 1998 respectively, Congress established two intermediary safe harbors – Section 230 of the Communications Decency Act and Section 512 of the Copyright Act enacted by the Digital Millennium Copyright Act – to create space for innovation and spur investment to further develop the internet’s capabilities.

So what would happen if they disappeared?

New economic analysis from NERA Economic Consulting took a look at the very question by estimating the impact of reducing the protections offered by safe harbor laws.

The analysis finds weakening intermediary liability safe harbor protections would significantly reduce economic activity in the internet sector, causing the U.S. economy to lose 4.25 million jobs and nearly half a trillion dollars in the next 10 years. That’s equivalent to giving away the annual GDP of Iceland, Jamaica, and Nicaragua combined and firing all McDonald’s workers in the U.S each year.

As one of America’s most dynamic and successful industries, the internet sector is driving economic growth, doubling its share of the U.S. economy between 2007 and 2014. Reducing liability protections not only hurts the internet sector; it harms the entire U.S. economy.

To quantify the impact of making intermediaries responsible for all user content, researchers used consumer surveys focused on two internet intermediary services – search engine and cloud storage – to calculate the average decrease in consumer use of these services and resulting estimated decrease in revenue. The findings? The fall in consumer demand due to more advertisements (in search engines) and higher costs (for cloud services) would result in a combined 10 percent revenue drop for these services, resulting in lost jobs and reduced economic activity.

But internet intermediaries include far more than these two services; they span data storage, internet access, internet telephony, cloud computing, social media, internet advertising, and e-commerce to name a few. The NERA analysis applies the 10 percent revenue drop as an indicator of the economic impact to the entire internet sector, of which search engine and cloud services make up only 18 percent.

By applying the findings to all intermediaries, the study finds that without internet liability:

• The U.S. economy would lose an estimated $44 billion in GDP & more than 425,000 jobs each year. That’s equivalent to giving away the annual GDP of Iceland, Jamaica, and Nicaragua combined and firing all McDonald’s workers in the U.S.
• Internet startups would face higher entry costs, limiting innovation. Without intermediary liability safe harbors, startups – and the VC’s that fund them – won’t be able to test new ideas without facing unreasonable liability and high expenses.
• Consumers would face higher costs and worsened online user experience. It is economically and technologically unfeasible for platforms to screen third-party content at scale. Loss of the intermediary liability safe harbors would mean fewer and worse services online.

Safe harbor protections were put in place for a reason. With a thriving internet economy, American businesses and consumers are able to connect with billions of people to access and share information. Even more, they are now depending on services such as ride-sharing apps, e-commerce sites, and social media – all of which are enabled by an internet that allows for free expression and content creation.

Safe harbor laws provide a foundation for innovation and drive economic growth. Preserving them is key to ensuring the best internet and economy for America.

Read NERA’s full report here.