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U.S. Cloud Providers Cite Obstacles to Growth Abroad U.S. Cloud Providers Cite Obstacles to Growth Abroad

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U.S. Cloud Providers Cite Obstacles to Growth Abroad

CORRECTION: An earlier version of this story had incorrect information about a warning from industry representatives to Congress regarding foreign barriers to cloud computing. The warning was made on Wednesday.

Industry representatives Wednesday warned a House Judiciary subcommittee that barriers being imposed by foreign governments could stifle the growth of U.S. cloud computing providers.

U.S. companies including Amazon and Google are moving aggressively to offer cloud services around the world, which involves the use of hosted services via the Internet. But they worry that new policies imposed by some foreign governments could hamper the ability of U.S providers to market their services abroad. Cloud computing has been touted as a way to provide its users with access to more computer power at lower costs by relying on a third-party to buy and operate expensive computer networks.

"Countries around the world desperately hope to copy the model of technology-driven economic growth that powers the US economy," Business Software Alliance President and CEO Robert Holleyman told the Judiciary Intellectual Property, Competition, and the Internet Subcommittee, in his written testimony. "Far too often they would do so by throwing up protectionist barriers aimed to hurt international cloud providers and by adopting policies that would chop the cloud into country-sized pieces."

Holleyman and others say foreign governments are using a variety of barriers to help their domestic cloud providers at the expense of U.S. firms. They include spreading false claims that the U.S. anti-terrorism law known as the Patriot Act gives the U.S. government unlimited access to data stored by U.S. companies in the cloud and requiring that any data generated in a country must be stored on servers in that country.

"Strong U.S. leadership is needed to combat trade practices that other countries are using to block foreign competitors," Daniel Castro, a senior analyst with the Information Technology and Innovation Foundation, said.

Castro, Holleyman and others said the U.S. government needs to do more to dispel myths about U.S. laws like the Patriot Act. Holleyman said the State Department has been aggressive but said he would like to see other agencies such as the U. S. Trade Representative use trade deals to try to combat attempts to limit competition from U.S. cloud providers.

They also called on Congress to improve privacy protections for data. This includes updating the 1986 Electronic Communications Privacy Act, which deals with government access to electronic communications. Industry and privacy advocates say that the law is out of date, given advances in technology.

Senate Judiciary Chairman Patrick Leahy, D-Vt., introduced an ECPA reform bill last year but has yet to mark up the bill in his own committee. Supporters of that legislation say efforts to overhaul ECPA have been stifled by resistance from the Justice Department, which opposes legislation that would require a warrant for access to most electronic communications.

While acknowledging the obstacles U.S. cloud providers face, House Judiciary Chairman Lamar Smith, R-Texas, did not address calls to update ECPA and instead focused on barriers being imposed by foreign governments.

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