Latest Soft Law Development: DoT’s NETT Council Report

by on July 31, 2020 · 0 comments

Cover of the Pathways DocumentOn July 23rd, the U.S. Department of Transportation (DoT) released Pathways to the Future of Transportation, which was billed as “a policy document that is intended to serve as a roadmap for innovators of new cross modal technologies to engage with the Department.” This guidance document was created by a new body called the Non-Traditional and Emerging Transportation Technology (NETT) Council, which was formed by U.S. Transportation Secretary Elaine L. Chao last year. The NETT Council is described as “an internal deliberative body to identify and resolve jurisdictional and regulatory gaps that may impede the deployment of new technologies.”

The creation of NETT Council and the issuance of its first major report highlight the continued growth of “soft law” as a major governance trend for emerging technology in the US. Soft law refers to informal, collaborative, and constantly evolving governance mechanisms that differ from hard law in that they lack the same degree of enforceability. A partial inventory of soft law methods includes: multistakeholder processes, industry best practices or codes of conduct, technical standards, private certifications, agency workshops and guidance documents, informal negotiations, and education and awareness efforts. But this list of soft law mechanisms is amorphous and ever-changing.

Soft law systems and processes are multiplying at every level of government today: federal, state, local, and even globally. Such mechanisms are being tapped by government bodies today to deal with fast-moving technologies that are evolving faster than the law’s ability to keep up.

The US Department of Transportation has become a leading candidate for Soft Law Central at the federal level. The agency has been tapping a variety of soft law mechanisms and approaches to deal with driverless cars and drone policy issues in particular. (See the essays listed down below for more details).

The NETT Council represents the next wave of this governance trend. We might consider it an effort to bring a greater degree of formality and coordination to the agency’s soft law efforts. The DoT’s overview of the NETT Council explains its purpose as follows:

Inventors and investors approach USDOT to obtain necessary safety authorizations, permits, and funding and often face uncertainty about how to coordinate with the Department. The NETT Council will address these challenges by ensuring that the traditional modal silos at DOT do not impede the safe deployment of new technology. Furthermore, it will give project sponsors a single point of access to discuss plans and proposals.

In its new guidance document, the NETT Council seeks to outline how it will work to develop “the principles informing the [DoT] policies in transformative technologies,” as well as “the overarching regulatory framework for non-traditional and emerging transportation technologies.” A lot of stress is placed on “how the Council will engage with innovators and entrepreneurs” to strike the balance between continued safety and increased innovation.

Although much of the document simply discusses existing agency regulatory authority, the Council also identifies how the agency and its subdivisions will seek a more flexible governance approach going forward. A premium is placed on expanding dialogue among affected parties. The section discussing environmental review requirements is indicative of this, noting: “The Department encourages innovators, project sponsors or proponents to engage in a dialogue with the NETT Council when the proponent anticipates seeking Federal financial assistance or an authorization.”

“Any innovator can approach the NETT Council with its ideas,” the document says in another section, although engagement level may vary by issue and department. It continues on to note that, “during the formation stage, the NETT Council would likely be willing to have an informational meeting and establish a point of contact to maintain a level of awareness for Department staff regarding the new project.” “Successful collaboration tends to be characterized by industry initiation and leadership with a limited and defined federal role,” it notes. Several examples are highlighted.

In addition to the importance of early dialogue between innovators and regulators, the document stresses the dangers associated with regulatory uncertainty. It also includes some discussion about the problems associated with a lack of regulatory flexibility in some instances “and the potential deterrent to innovation caused by attempting to ‘shoehorn’ a particular technology into a regulatory regime that does not fit.” There is also some discussion of how international or private sector standards might help provide governance solutions in some instances.

Again, these are all examples of soft law mechanisms. To be clear, the NETT Council is not proposing the abandonment of hard law enforcement efforts. To the contrary, the document repeatedly reiterates what those powers are and how they might be used. But it is equally clear that the DoT realizes that the old regulatory systems are being severely strained by the “pacing problem,” or the notion that technological developments are often moving considerably faster than traditional regulatory processes.

The NETT Council report is a welcome effort to broaden the dialogue about what sort of governance systems might make the more sense going forward for emerging technologies. This is a pressing problem for the DoT because of the convergence of digital and analog sectors and technologies. AI and machine-learning technologies are invading the crusty old world of transportation networks and regulations. Momentous changes are happening. Law will need to adapt. Soft law systems will increasingly be tapped to help out if for no other reason than there isn’t a better backup plan. If America hopes to be a leader in transportation innovation, new governance approaches will be essential.

Below you will find some additional essays on the growing soft law-ization of technological governance in the US. Many of them are about transportation technologies and recent developments at the federal and state levels. I also recommend this new essay by John Villasenor over at Brookings on “Soft law as a complement to AI regulation.” Finally, if you want to do a deep dive in the nature of soft law and the full range of governance issues associated with it, then you absolutely must follow the work being done by Gary Marchant and his impressive team of colleagues at Arizona State University. Begin with this essay on “Soft Law Governance Of Artificial Intelligence,” and then get your hands on this huge book on the topic that Marchant co-edited. It’s the best thing I have read on soft law and alternative governance systems for emerging technologies.

In the meantime, give the new DoT NETT Council report a glance because, for better or worse, this is what the future of technological governance looks like.


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