Interview, Podcast
a16z Podcast | Innovation and Regulation -- What Happens When Policy Lags Behind Technology?
- The U.S. House Energy and Commerce Committee, chaired by Fred Upton (R-MI) with Greg Walden (R-OR) chairing the Communications and Technology Subcommittee, holds jurisdiction over a vast portfolio including telecommunications, commerce, manufacturing, healthcare, environment, and energy.
- The current regulatory framework relies on the Telecommunications Act of 1934, amended in 1996; the 1996 revision mentioned the word "Internet" only six times.
- Representatives Upton and Walden advocate for removing legacy regulations to prevent them from stifling private-sector innovation, citing examples like the "pay me now or pay me later" philosophy applied to regulatory burdens.
- The committee successfully navigated the transition from analog to digital broadcasting despite industry opposition, a move that improved picture quality and freed up spectrum for mobile devices.
- A global-first reverse and forward spectrum auction is scheduled for the first quarter of 2016, projected to generate between $35 billion and $70 billion in taxpayer revenue.
- A prior spectrum clearance project (AWS3), previously deemed unsellable by Washington analysts, sold for $41.9 billion in the current year, fully funding the creation of an interoperable broadband public safety network mandated by the 9-11 Commission.
- Upton criticizes the FCC's recent attempts to regulate the Internet under legacy telephone monopoly frameworks, specifically citing concerns over the misapplication of Section 222 regarding IP addresses and the potential stifling of innovation.
- Both representatives argue that market forces and consumer feedback (e.g., app ratings) are increasingly becoming the primary regulators of behavior, reducing the need for heavy-handed government intervention.
- There is an ongoing debate regarding the definition of "medical devices," specifically questioning whether software-driven hardware like Fitbits or iPads should be subject to the same regulatory scrutiny as traditional life-critical devices like pacemakers.
- The 21st Century Cures Act passed the House in a rare bipartisan vote in mid-July and is pending Senate action.
- The Act aims to address the trend where venture capital investment in medical innovation has shifted 50% overseas over the last five to six years, threatening U.S. leadership in drug and device approval.
- Legislation includes an earmark of nearly $2 billion annually for the NIH to accelerate research at universities like Stanford and MIT.
- The Act seeks to streamline FDA approval processes for drugs and devices, enabling faster patient access to treatments and reducing costs.
- Upton emphasizes urgency in passing the bill because NIH funding begins in fiscal year 2016; delays in Senate action risk slowing the approval of research grants.
- The bill incorporates a "Patient-Centered Outcomes Research" approach, allowing patients to voluntarily share genomic data to accelerate targeted therapies for diseases like breast cancer and cystic fibrosis.
- A specific "innovation fund" is included within the Act to support the development of new medical technologies.