trans-border data flowsschool of information trans-border data flows (tbdf) yale braunstein school...

Trans-Border Data Flows School of Information

Trans-Border Data Flows (TBDF)

Yale BraunsteinSchool of Information

UC Berkeley

Trans-Border Data Flows (TBDF)

Yale BraunsteinSchool of Information

UC Berkeley


Past Lectures as Context• International issues

– George Schultz speech

• Border broadcasting• Telecom interconnection • TRIPS• Privacy• Compatibility standards• Other public policy issues with international

aspects– Health information


De-constructing TBDF - 1

• Q: Does “data” imply “digital” ?– Probably not, but growth of high-speed, high-

volume networks has changed the terms of the debate


De-constructing TBDF – 2a• Timeline tidbits:

– Transatlantic telephone service was originally radio-based; started in 1927 it cost £9 (or roughly $16 USD) for three minutes and handled around 2000 calls a year (Wikipedia)

– CBS (“Morrow’s boys”) live radio broadcasts from Europe (late 1930s)

– The first transatlantic telephone cable was laid between Oban, Scotland and Clarenville, Newfoundland (1956)

• Capacity = 36 voice circuits ( Video from the CBC . 13 min. Note: communications is by both teletype and telephone; capacity from Canada to UK = 6 voice circuits.)

• TAT-2 installed 1959; capacity = 48 additional voice circuits

"Laying of the world's first transatlantic telephone cable was started recently at Clarenville, Newfoundland with dignitaries of the U.S., Britain, and Canada in attendance. Photo shows the first segment of the cable being pulled ashore from the hold of the Monarch. largest cable ship in the world. The cable was pulled ashore on gasoline drums. The project is the combined venture of the long lines department, American Telephone and Telegraph Company and Canadian agencies. "


De-constructing TBDF – 2b• Timeline tidbits:

– First link of undersea phone cable to serve the British Commonwealth, connecting England and Canada is inaugurated 1961 (Audio from the CBC )

The cable stored aboard the Monarch is stored in one of four cable tanks. The cable laying vessel can carry about 2,000 miles of cable at one time. The Monarch took a total of seven months to complete laying operations.


De-constructing TBDF – 2c• Timeline tidbits:

– Telstar 2, launched on 7 May 1963, carried both telephone channels and one television channel

– A pre-fiber transatlantic telephone cable can carry 130 simultaneous conversations (1965; reported in Swerdlow 1995)

The first transatlantic face-to-face television broadcast occurred on October 15, 1963, on "The Christian Revolution". Eric Sevareid in New York faces Lauren Cardinal Rucambwa of Tanganyika, in Rome, as he speaks to Dr. Franklin Clark Fry (obscured, left), the president of the Lutheran Church of America, as he sits in Princeton, New Jersey. A picture of the Telstar II satellite, which carried the program, hangs between them.


De-constructing TBDF - 3• TBDF consists of (i.e., not a real definition):

– International trade in information products and services

• This is very different from former definitions that focused on specific media and technologies, such as:– Newspapers, mail, film, radio, telephone, letter

& parcel post– News, advertising, entertainment, propaganda,

“third-party” messages


De-constructing TBDF - 4

• Current examples include:– Ownership & use of databases– Ownership & use of database networks– Ownership & use of communications networks– Ownership, use & movement of content (files, etc.)– Outsourcing the production of applications– International marketing of applications– Others?

• Commercial, cultural, economic, political, scientific aspects and concerns


Software Output: Selected Countries

China U.S. Japan Ireland India S. Korea Global

1999 sales 5.3 220 54 8.4 6.8 5.9 527.4

% of world market 1.0 42 10.2 1.6 1.3 1.1 100

2000 sales 7.2 240 57.2 8.9 8.9 8.3 596

% of world market 1.2 40.2 9.6 1.5 1.5 1.4 100

Source: China Software Industry Association, 2000 Annual Report of China Software Industry (Beijing, 2001) as reported in AnnaLee Saxenian, “Government and Guanxi: The Chinese Software Industry in Transition.”


IT Output by Country($ mil., 1998-99)

1999 Rank Country 1998 1999(Estimated)

Growth Rate1998-99 (%)

1 U.S.A. 90,630 95,162 5

2 Japan 42,558 44,051 4

3 Taiwan 19,240 21,023 9

4 Singapore 18,660 18,473 -1

5 China 14,196 18,455 30

6 British 15,398 15,552 1

7 Ireland 8,667 9,360 8

8 Germany 8,844 9,197 4

9 South Korea 8,169 8,862 8

10 Brazil 8,395 8,227 4

Source: AnnaLee Saxenian, “Taiwan's Hsinchu Region: Imitator and Partner for Silicon Valley” (2001)


WTO Classification


Conceptual Issues

• Trade in information services is a sub-set of trade in services– Intangible, (sometimes) non-storable– Roles of international demand, specialization

in production (including comparative advantage) [Is digression on CA needed here? Explain “gains from trade”.]

– Trade in services can have very different patterns of transactions and transportation costs than trade in goods


Legal and Policy Concerns - 1

• Law lags commercial activity: increase in trade in services, in general, and in information services, in particular, leads to pressure on GATT and WTO– Importance on non-tariff barriers to trade– “Uruguay round” focuses on trade in services– TRIPS adopted

• Regardless of one’s view of TRIPS, etc., there is a common realization that flows of information are crucial to the growth of non-information trade.



• It may be useful to distinguish between market and non-market flows.– Growth of the modern shrink-wrap applications

industry and the internationalization of media and entertainment have led to significant growth of market flows.

– Generally, non-market flows occur within a firm. These flows may still “outweigh” the marketable flows, but useful measurements are difficult to obtain.

– The “visible” gets more attention than the “invisible”.



• Trans-border data flows vulnerable to “opt-in” style restrictions

• Data Security & National Security

• Non-tariff barriers, bi-lateral or multi-lateral framework

• No risk of WTO retaliation


Privacy & TBDF – One View

"I am concerned that the privacy of American citizens is being exported in the service of global trade. The implications for identity theft by gangs, breaches of homeland security by al Qaeda, and criminal misuse and abuse by multinational corporations are frightening."

Rep. Edward Markey (D-Mass)


Privacy: Data Protection Strategies

•Ex-ante Strategy• Regulatory negotiation, mutual recognition, MOUs•Hybrid instruments: Safe Harbor•Self-regulation (Best practices, binding corporate rules, model clauses)•Technology solutions

•Ex-Post Strategy• Complaint/dispute resolution (ADR, ODR)•Law enforcement•Cross-border enforcement

•OECD Guidelines•Cooperation among all countries•Safe Harbor


Regulation Strategies of TBDF

Strong Weak

Education - Information

Model Contracts

Binding Corporate Rules Dispute

Resolution, Enforcement

Cross-Border Enforcement


Legal Concerns & Approaches

•APEC / OECD principles–Non-binding principles–Possibility to apply the principles in total or only in parts–No specific requirements for the implementation w.r.t the national regulatory approach

•EU Data Protection Directive

–Directive is binding for 25 member states–Complete implementation into national law is necessary–Implementation requires a comprehensive regulatory approach


New Challenges for TBDF - 1

• Anti-terrorism laws as a unique barrier (preview of next class)• New dangers for global companies due to an increased

trans-border access for secret services to data of companies providing financing, telecom, mail or travel services (e.g. economic espionage with regard to trade secrets and company strategies)

• Problems linked to the implementation of new legal obligations (e.g. respecting the lists of persons of the UN or the EU decrees

• New dimensions of data protection risks for companies and governments


New Challenges for TBDF - 2• Increasing interconnection between data

sources– Convergence of information and communication

technologies enables worldwide networking and standardization

– Marketing and sales idea: systematic structuring of the markets

– Using existing data sources to categorize customers for the purpose of CRM (e.g. scoring-procedure, data mining)

– Growing significance of international data transfers and centralized data storage


New Challenges for TBDF - 3

• Other future concerns• Effects of Ubiquitous Computing• RFID and Mobile Devices• Continually growing density of regulations

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