International Policy Veteran Helps Telecom Clients Navigate Foreign Regulatory Environments

Saturday, June 22, 2013 - 13:22
Richard C. Beaird

The Editor interviews Richard C. Beaird, Senior International Policy Advisor in the International Telecommunications Practice of Wiley Rein LLP.

Editor: Dick, would you tell us about your background at the State Department and your involvement with the Organisation for Economic Co-operation and Development (OECD)?

Beaird: I was at the State Department for 25 years, serving in the Office of International Communications and Information Policy and in the Bureau of Economic and Business Affairs. I was the Senior Deputy U.S. Coordinator for the former, and in that role I had the opportunity to be at the OECD for over 20 years, where I chaired for 12 years the principal OECD committee for Information, Computer and Communications Policy (ICCP). In the capacity of both participating at the OECD and chairing this committee, I took part in the evolution of telecommunications and information policy as its scope dramatically grew from telecommunications to today’s Internet economy. Together with the OECD secretariat and the members of the ICCP committee, I developed various policy positions that facilitated liberalization of telecommunications, and I believe we were greatly influential – not only within the OECD membership but beyond that – in creating liberalization models that set the stage for the Internet’s extraordinary growth.

Editor: What role did you play in APEC’s telecommunications working group?

Beaird: In 1989, Secretary of State James Baker decided the U.S. should participate in the Asia-Pacific Economic Cooperation (APEC) forum, and I had the good fortune to create the telecommunications working group within APEC in July of 1990. From 1990 to 2013, we were able not only to contribute to telecommunications liberalization in the Asia-Pacific region, but also to set the stage for the Internet economy.

We also did early work on streamlining customs approval through electronic means, which was quite revolutionary at the time. Until then, most customs work had been done manually. Previously, for a ship to attain customs clearance for its cargo a considerable amount of time and labor was required. We were able to develop models for electronic systems that allowed customs to review descriptions of the ship’s cargo before coming into port, thereby speeding up the process dramatically. This was one component of an agenda we established early on to promote electronic commerce and trade in the Asia-Pacific region. The telecommunications working group continues this work and much more; as a matter of fact, the United States will be hosting the telecommunications working group in Hawaii in September this year.

Editor: You worked on greater liberalization of telecom services in the late ’80s and early ’90s. What obstacles do you see to open telecom and Internet today?

Beaird: There were several aspects to our work on the liberalization of telecom, and number one was the liberalization of the use of leased lines. We sought to create a proper regulatory environment in which competition would be ensured, which involved establishing a regulatory system by which new market entrants could compete with  dominant players. Certain governments responded by creating barriers to leased-line liberalization. We worked hard to overcome these barriers to create the liberalized telecommunications environment that blossomed in the 1990s.

Today, we’re witnessing an interesting development in the Internet space:  a recurrence of forced localization rules, particularly in the context of  “cloud services.” These rules, which discriminate against foreign companies, might include regulations requiring that data processing occur locally, for example, or that technology be transferred to domestic companies. In China, this latter practice is referred to as “indigenous innovation.” Forced localization also includes import constraints and restrictions on the flow of data.

We’ve already seen this phenomenon to some extent in Brazil, and we are seeing it develop in Argentina, Vietnam, some of the African nations, and in a number of other countries around the world. From the point of view of the United States, which depends so heavily on global trade, this trend is disturbing. We’re very concerned about these developments because the Internet is essentially a “borderless” service that depends very heavily on the easy flow of data across borders.

Editor: What other Internet policy issues are currently emerging between the U.S. and other countries, and to which should corporate counsel be paying particular attention?

Beaird: In addition to the issues of “forced localization,” which can cover a wide range of restrictive regulations, of course, privacy is a key issue. Privacy issues cross virtually all regions and most countries as a top policy concern, and Wiley Rein is looking very closely at it. As our use of  “cloud services” increases, for both business and private purposes, concerns about privacy arise with greater frequency.

As far as providing counsel to clients, we are increasingly asked about the regulatory environment that may permit or restrict market entry in these various global regions. Through Wiley Rein’s considerable experience, we are able to offer knowledgeable advice on how to enter these markets, given the many challenges that companies may face.

Editor: Please tell us about your work with the Maitland Commission.

Beaird: Led by the UK’s Sir Donald Maitland, the Maitland Commission was formed in 1984 at the International Telecommunication Union. Its purpose was to examine the relationship between economic development and telecommunications – telecommunications being the “missing link” in economic development. I had the great privilege of serving as the government’s advisor to that commission. We spent a lot of time in key countries in Africa, where we saw powerful demonstrations of how telecommunications was serving as an engine of economic growth across many sectors of the economy. The commission’s findings enabled us to convince foreign governments to support the development of telecommunications. Obviously, the same can be said of the importance of a free and strong Internet today. Governments that do not support a favorable Internet environment put the development of their own nation’s economy at risk.

Editor: I understand you were also chair of the International Telecommunications Union Council. What is the mission of the ITU? What did you accomplish while there?

Beaird: The ITU Council is the governing board of the ITU.  Of the 193 member countries of the ITU, 48 are directly represented on the Council. In 2002, I became the first American to be elected council chair since the ITU’s modern creation in 1947. The ITU has its origins in 1865, when European countries came together to develop agreements regarding telegraph messages between nations. As the oldest UN organization – indeed, predating the UN itself – the ITU continues to be a leader in telecommunications cooperation to this day. Its responsibilities involve global radio allocation, telecommunications infrastructure development and standardization of telecommunications products. However, its principal function has historically been to coordinate the allocation of spectrum for both civilian and non-civilian use. So it is of tremendous importance to our private sector as well as to our Department of Defense and to NASA, which are deeply involved in ITU radio communication conferences, which occur every four to five years.

Editor: Speaking of global spectrum harmonization, how will you build alliances between your telecom clients and key government agencies that also share an interest in global harmonization of spectrum use?

Beaird: Spectrum is a scarce resource, and while it is certainly good news that more and more spectrum-based services are becoming available, more services means greater demand for technologies that allow spectrum to be shared without interference. Obviously, it’s critical that our national security agencies’ essential spectrum-based activities are not impacted by interference from civilian use.

But it’s also very important for civilians to have access to spectrum, which is the basis of so much economic activity. We all use advanced wireless services through our 4G smartphones (with higher speeds right around the corner), and these are placing tremendous pressures on the demand for spectrum, particularly as the use of that spectrum is devoted to video, for example. We have to find new ways for government and civilian users of spectrum to cooperate so that we can both protect our national security and advance our economy.

We have a considerable number of clients who are interested in that subject, and I believe Wiley Rein can bring a unique set of skills to bear on these issues.

Editor: Must the spectrum demands of telecom clients be in alignment with those of government agencies in order to share spectrum?

Beaird: The history of technology has demonstrated that people are always coming up with new techniques to leverage scarce resources. From a client counseling perspective, we hope to build a bridge between our civilian clients’ needs and those of government users, such that they can trust each other and perhaps collaborate on technologies that are of mutual benefit. We need to combine the considerable intellectual resources of both the government and the private sector to solve these problems.

Editor: Please speak to how you will counsel clients looking to enter foreign markets.

Beaird: First, clients want to understand the regulatory environments they’re entering. I personally, as well as Wiley Rein, bring unique skills to that set of regulatory issues. We have considerable familiarity with key government leaders and regulatory agencies in many countries around the world; indeed, I’ve spent a career dealing with them. Second, as clients begin to understand the global regulatory environment, our mission is to gain access to those markets where they see opportunities. Because we both know the regulatory environment in many regions of the world and the leading policy-makers in them, Wiley Rein can help clients shape their strategies in a way that is consistent with the reality of the markets they plan to enter.

Editor: Did you have any other specific goals in mind for Wiley Rein and its clients?

Beaird: We will bring an awareness of the many dimensions of the Internet economy and match our clients’ requirements to them, so that in areas where there are considerable opportunities, such as the Middle East or Asia, we can counsel them to their benefit. Wiley Rein is uniquely positioned to do this. We are also uniquely positioned to advise clients on how best to interact with the various international organizations – such as the ITU, OECD or APEC – involved in telecommunications and Internet policy. Many clients don’t fully understand how these organizations may impact their market plans and, as a consequence, may not engage effectively with them to advance their own interests. Our extensive historic relationships with these organizations – on both the government and the civilian sides – will enable us to show clients how to do so successfully.


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