Industry Groups, Academics Urge Caution as BIS Considers Foundational Tech Controls

More than 20 industry groups urged the Bureau of Industry and Security to be cautious as it considers controls over foundational technologies (see 2008260045), saying the wrong approach could stifle innovation, damage U.S. competitiveness and lead to costly shifts in global supply chains. The groups said any new controls should only be imposed after a calculated process with significant input from industry, and should include license exceptions and exclusions.

“Unless any new controls meet the rigorous thresholds established in” the Export Control Reform Act, “new restrictions on technologies based on their ‘foundational’ status are unnecessary,” the Information Technology Industry Council (ITI) said in Nov. 9 comments. The group added that the controls “will be ineffective in limiting the global development and proliferation of these already-ubiquitous technologies, and ultimately undermine short- and long-term U.S. national security objectives.”

In a separate set of comments, the Association of University Export Control Officers warned that “casting a broad net” over foundational technologies could impact fundamental research at U.S. colleges. The group said the controls could lead to more of an administrative burden for licensing and “management of research in labs,” and place “constraints on publication of research findings.” The controls also could lead to less collaboration with international researchers and hurt the U.S.'s ability to attract foreign students and faculty.

“Foundational technologies have been incorporated into products that have been commercially available globally for years if not decades,” the AUECO said in comments to BIS last month. “Therefore, trying to regulate something that has already been in global distribution for years is trying to control something that can no longer be controlled.”

Other industry groups said BIS’s lack of a “narrow, carefully crafted definition” for foundational technologies “may lead to export controls becoming a blunt instrument.” Before the agency announces any controls, it should first establish a clear definition, assess whether the restrictions will impact “downstream nascent industries” and more heavily coordinate with U.S. allies, 19 technology groups said in a Nov. 9 letter. “For a control to be effective -- and to not raise the risk of excluding the United States from global supply chains -- the U.S. Government must prioritize the use of multilateral controls with allies,” said the groups, including the Semiconductor Industry Association, the Consumer Technology Association and the Software and Information Industry Association.

While a careful process and coordination with allies will help BIS narrowly tailor the controls, the ITI said the agency should also request more government resources to help with the effort. The group urged the Commerce Department to ask Congress for more resources to “support the continuous review of U.S. export controls” and to “ensure adequate implementation and enforcement.”

The group also said it is “concerned” that BIS’s pre-rule for foundational technologies included “not only ‘technology’ but also ‘commodities’ and ‘software.’” ITI said ECRA does not provide authority “to regulate commodities or software” and that BIS should limit its foundational technology control to strictly abide by ECRA. “While BIS has the authority to administer controls for commodities and software through the [Export Administration Regulations] and other aspects of ECRA,” the group said, “ITI urges BIS to limit its consideration of ‘foundational technologies' to technologies as reflected” in ECRA “for the purposes of this particular rulemaking.”

ITI also said BIS should seek to control technologies that only exist in the U.S., saying the “majority of foundational technologies have global availability, are taught at universities, are manufactured in different places around the world, or have matured to a publicly available or obtainable technology.” Controlling items that are globally available will simply cause customers to seek out foreign buyers, the letter said.

The comments were released about a week after the Computer and Communications Industry Association voiced similar concerns, saying the controls could cede U.S. technology leadership (see 2011020057). BIS has so far released just three public comments on the pre-rule despite receiving more than 60 submissions. A BIS spokesperson said the agency takes industry comments “very seriously” and will use them to inform its foundational technology process.