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NSA tech spying hurts economy: Sen. Wyden

PALO ALTO (Calif.): Google Chairman Eric Schmidt and other Silicon Valley executives say controversial government spying programs are undercutting the Internet economy and want Congress to step up stalled reform.

"We're going to end up breaking the Internet," warned Google Inc.'s Schmidt during a public forum Wednesday convened by U.S. Sen. Ron Wyden, D-Ore., who has been an outspoken critic of electronic data-gathering by the National Security Agency. Schmidt and executives from Facebook Inc, Microsoft Corp. and other firms say revelations of extensive NSA surveillance are prompting governments in Europe and elsewhere to consider laws requiring that their citizens' online data be stored within their national borders.

Rules like that would drive up costs and create technical obstacles to the way the Internet currently operates, making it "profoundly difficult in terms of our ability to deliver services," said Facebook general counsel Colin Stretch.

Brad Smith, general counsel for Microsoft, said some European customers are worried their data will be more vulnerable to U.S. government snooping, although he declined to give specific examples.

"The reality is this is a real problem for American tech companies," said Smith. "If trust falls, then the prospects for business are hurt."

Wyden, a member of the Senate Intelligence Committee and chairman of the Finance Committee, convened the roundtable in the Palo Alto High School gym, where he played basketball as a student in the 1960s.

He said he will take the executives' message back to Washington, where bills to curb surveillance have stalled. Prospects for passing a reform bill this fall are shrinking, Wyden told The Associated Press.

"I'm going to my best to use this. What I'm going to do is say there's a clear and present danger to the Internet economy," Wyden said.

Wyden contends that the government's "digital dragnet" of phone calls, emails and online communications doesn't make the country safer, and only hurts the U.S. economy.

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NSA tech spying hurts economy: Sen. Wyden