Tech Industry: Obama's NSA reforms 'insuffiecient'

Obama did agree to at least one major concession to the technology industry by pledging "to make public more information than ever before about the orders they have received to provide data to the government." The companies are hoping greater transparency will show that the U.S. government has only been demanding information about a very small fraction of their vast audiences.

But the promise of more disclosure didn't satisfy two different groups focused on online privacy and other digital rights.

"Far more needs to be done to restore the faith of the American people and repair the damage done globally to the U.S. reputation as a defender of human rights on the Internet," said Greg Nojeim, senior counsel at the Center for Democracy & Technology.

Cindy Cohn, legal director for the Electronic Frontier Foundation believes there's still a long way to go. "Now it's up to the courts, Congress, and the public to ensure that real reform happens, including stopping all bulk surveillance - not just telephone records collection," she said.

Recent revelations about how much information the U.S. government has been vacuuming off the Internet threaten to undercut the future profits of technology companies that depend on the trust of Web surfers and corporate customers.

U.S. Internet companies are worried that more people, especially those living outside the U.S., will use their products less frequently if they believe their personal data is being scooped up and stored by the U.S. government.

Less online traffic would result in fewer opportunities to sell the ads that bring in most of the revenue at companies such as Google, Facebook and Yahoo. There is also concern that foreigners will be reluctant to do business with a wide range of U.S. companies that sell online storage and software applications that require an Internet connection.

Obama's proposal made "progress on the privacy side, but it doesn't address the economic issues," Castro said. "I don't see anything in the speech that will prevent companies in other countries from using what the NSA is doing to gain a competitive advantage over the U.S. companies."