Microsoft called on Congress to create cloud-computing rules that protect business and consumer information.

The company's head counsel, Brad Smith, raised the issues in a speech at the Brookings Institute in Washington, D.C., this morning, proposing a Cloud Computing Advancement Act.

"The world needs a safe and open cloud — a cloud that is protected from the efforts of thieves and hackers and also that serves as an open source of information to all people around the world," Smith said, according to speaking notes Microsoft posted.

Microsoft and many of its competitors, such as Google and Amazon.com, are making major investments in cloud computing, where applications and data will run on remote servers owned by companies such as Microsoft. Users would access the applications and data through a Web browser. An early harbinger of the cloud was Web-based e-mail such as Hotmail, where messages and contacts are stored remotely and accessed through an Internet browser. Another example is Facebook. The next generation of cloud applications will include business software and data.

Smith urged regulators to consider rules focused on privacy, security and international sovereignty.

For example, PCs cannot be examined by the government without a search warrant, but that protection does not extend to personal information stored on a server run by a third party. Smith encouraged Congress to extend the same protections to information on servers.

Smith also said Congress should update federal protections so that penalties for attacks on servers that may contain a multitude of files would be higher than a hack on a single computer. The current rules do not differentiate between the two situations.

He also called for "truth in computing" principles to be made available to businesses and consumers so they understand the privacy and security protections they have.

Smith cited the recent cyberattacks from China on Google as an example of why these new rules are needed.

Here is a link to the full text of the speech.

(Photo: Microsoft)