Speaking alongside other tech executives and Sen. Ron Wyden (D-Ore.) at a Silicon Valley event, Schmidt said the revelations about U.S. surveillance could prompt countries to wall off their networks.
ADVERTISEMENT“The simplest outcome: We’re going to end up breaking the Internet,” Schmidt said, “because what’s going to happen is governments will do bad laws of one kind or another, and eventually what’s going to happen is: ‘We’re going to have our own Internet in our own country, and we’re going to do it our way.’ ”“It is fundamentally about breaking the Internet,” echoed Facebook General Counsel Colin Stretch. “The Internet is a medium without borders, and the notion that you would have to place data and data centers and the data itself [in a particular location] ... is fundamentally at odds with the way the Internet is architectured.”
In response to former NSA contractor Edward Snowden’s leaks — which showed that the NSA was spying on foreigners’ emails, chats and other communications through services like Google and Facebook — consumers and governments around the globe have taken steps to enact new limits on American companies.
Technology & Cybersecurity Best Sellers:No Place to Hide: Edward Snowden, the NS…Glenn Greenwald$17.95Ghost in the Wires: My Adventures as the …Kevin Mitnick$21.9512>Privacy Some countries, including Russia, have taken steps to require that companies keep data centers within their geographic borders — a potentially prohibitive cost for start-ups and small companies.
Others have enacted protectionist measures, which Schmidt called “trade barriers,” that give preference to homegrown companies over American ones.
According to analysis firm Forrester Research, the losses for the tech industry from the NSA backlash could amount to as much as $180 billion over the next two years.
“I was surprised, because I thought that these disclosures would come out, people would adapt, but something more fundamental occurred,” Schmidt said, “and what occurred was a loss of trust between America and other companies.”
Wyden, who is the chairman of the Senate Finance Committee, has been a vocal critic of the NSA and has pushed for major reforms to U.S. intelligence.
“Friends, this is going to cost America jobs — good paying American jobs — when wage growth is one of the premier economic issues of our time,” he said.
“It is time to end the digital dragnet, which is harming America’s liberty and our economy without making America safer.”
Executives from Microsoft, Dropbox and the venture capital firm Greylock Partners attended Wednesday’s event in Palo Alto, Calif.
Lawmakers trying to reform the NSA have a steep hill to climb.
Legislators in the Senate are pushing the USA Freedom Act, which would end the spy agency’s bulk collection of Americans’ phone records and allow companies to report more details about the kinds of information they have to hand over to the government.
The effort has received opposition from some critics on the Senate Intelligence Committee, however, and Senate leaders have not committed to making any progress in the narrow lame duck window before the end of the year.
“Today, the conventional wisdom inside the Beltway is that Congress will come back, and it will not act,” Microsoft General Counsel Brad Smith acknowledged.
“Yet, I think we need to look the world’s dangers in the face and we need to resolve that we will not allow the dangers of the world to freeze this country in its tracks."