Obama's Government Takeover of WiFi

At every turn, it seems like the Obama administration has found a new way to insert itself into our everyday lives. And, the administration’s most recent encroachment could impact our quality for years to come. The rapid technological improvements we’ve seen over the last few decades could slow or even stop if the administration and its band of cronies have their way.


The prevalence of Wi-Fi access we enjoy today and technologies like wireless charging for phones and other devices are changing the way we live our everyday lives. And what’s most amazing is that my Wi-Fi-enabled computer and phone connect as well in Tokyo and London as they do in Houston and Detroit. This interoperability is made possible by standards created by private industry groups that work together around the world.

Industry standardization of emerging technologies helps bring products to market more quickly than ever before. To put this standardization in simple terms, companies gather at standard-setting organizations to pick which technologies work best and should be included in the standard. The result is that consumers have more choices and prices are lower. More money is pumped into the economy because there are more players in the industry.

It’s a great system.

But the Obama administration, with its regulate-rather-than-investigate approach, thinks this mutually beneficial and well-functioning system needs to be fixed. Here is where to story gets even wonkier, but stay with me – this is important.

The standards arm of an organization called the Institute of Electrical and Electronic Engineers, or IEEE, sets technical standards for Wi-Fi and other technologies. And like other standard-setting organizations, it makes a deal with invention companies: If their patented technologies are so strong that a vast majority of the other companies want to include it in the standard, they must agree to let all willing licensees use the patented technology under fair, reasonable and non-discriminatory (FRAND) terms.


For decades, this arrangement has incentivized and protected innovation while letting any newcomers to the industry access the same standard technologies the big incumbent product makers use. But in 2013, a small group of large companies set out to fundamentally upend this arrangement and the Obama Administration is apparently willing to help. Specifically, the Department of Justice and a few companies with uncomfortably close ties to the White House are pressuring the IEEE to change its current patent policy to shift power away from innovators–imposing price caps and weakening patent enforcement rights of all innovators who contribute to IEEE standards.

While it has not made headlines, many American members of the IEEE expressed concern about these policy changes. And what upsets them isn’t just the dangers of the rule changes but the fact that the whole process was done secretly, without any explanation for why the rules were being changed. All the IEEE members know is that the proponents of the policy changes are companies that stand to profit the most from lower patent values and lower royalty fees.

So, the question is, why the DOJ would involve itself in a technical organization’s internal rule making process. Did I mention the DOJ isn’t saying anything public about this either?

One of the scariest consequences of this whole conspiracy is the message it sends to our international trading partners. It will be increasingly difficult to negotiate strong intellectual property rights in our trade agreements when our government endorses policies that resemble China’s Big Brother treatment of foreign intellectual property. The changes being proposed through the IEEE are very similar to China’s anti-monopoly laws, which are being used to lock out foreign competitors. And as law professor Richard Epstein has pointed out, American officials must be careful to ensure their actions do not “lend cover or support to China’s misuse of its own antitrust law.” The current approach unfortunately does just that.


Erik Telford is Acting President at the Franklin Center for Government & Public Integrity


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