US unhappy with Australian governments' attitude to offshore cloud

"A number of U.S. companies have voiced concerns that various Australian government departments, just as the Department of Defense, the National Archives of Australia, the Department of Finance and Deregulation's Australian Government Information Management Office, and the State of Victoria Privacy Commissioner, are sending negative messages about cloud computing services to potential Australian clients in both the public and private sectors, implying that hosting data overseas, including in the United States, by definition entails greater risk and unduly exposes consumers to their data being scrutinized by foreign governments," the report states.

The case of the United States

"In the case of the United States, many such concerns appear based on misinterpretation of applicable U.S. law, including the U.S. Patriot Act and regulatory requirements. In November 2011, new draft legislation was introduced into Parliament that would prohibit the overseas storage of any Australian electronic health records. This would pose a significant trade barrier for U.S. information innovation companies with data centers located in the United States or anywhere else outside of Australia. The bill has been referred to a Senate committee for inquiry. The U.S. business community has submitted comments recommending a risk-based approach to ensuring the security of sensitive data as opposed to a geographical one."

While praising the establishment of NBNCo, which "could improve the nondiscriminatory access to network services, including for U.S. companies", the report slammed continued restrictions on foreign ownership of Telstra.