The arrival of what AOL founder Steve Case dubbed the “Third Wave” of internet companies will require revisiting the discussion of how tech companies will need to interact with regulators, according to a new policy short by R Street Senior Fellow Mike Godwin.

Case argues that the “first wave” of internet companies blazed regulatory trails that allowed the “second wave” to be more successful.

“The third wave will require re-engagement with the material or ‘offline’ world, because it includes delivery of physical products and services. Case’s third wave includes the so-called ‘internet of things,’ but he asserts that it’s really the ‘internet of everything,’” Godwin writes. “This ‘three wave’ taxonomy is a good starting point for today’s tech entrepreneurs who want to offer new internet-based and internet-mediated services.”

Two recent public-policy failures – Facebook’s regulatory defeat in India and the electoral loss by ridesharing companies Uber and Lyft in Austin, Texas – offer lessons in how tech companies will have to build and maintain new, positive public-policy frameworks, including the importance of honest dialog and a deft, diplomatic handling of opposition.

Godwin concludes, “In other words, the ‘internet of everything’ will require thinking about how to persuade governments — and the people they govern — to craft workable, functional, humane regulatory frameworks. That will mean avoiding the kinds of policy-process mistakes into which Facebook and the TNCs, working on opposite sides of the world and with the best of intentions, both managed to fall.”

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