July 2010

In a startling guest column on CNET yesterday, Paul Misener, vice president for global public policy at Amazon.com, for all practical purposes reversed his company’s stand on network neutrality, particularly the controversial non-discrimination rule, which would prohibit ISPs from creating and charging providers of large-scale content, applications and commerce for faster broadband connections and tiered quality of service.

In his column, Misener concedes what many TLF bloggers and friends have argued for years: that the net neutrality rules are a solution in search of a problem, and that large providers like Amazon already invest in techniques that ensure quality delivery of content and apps, albeit at the edge, not within the network cloud. Misener writes:

First, there have been almost no Net neutrality violations. Opponents of Net neutrality rules say this record demonstrates that regulation is unnecessary–that Net neutrality is “a solution in search of a problem.” But actually, the threats of legislation (since 2007) and FCC regulation (since 2009) have kept the network operators on their best behavior.

Moreover, Net neutrality has become a populist consumer issue in a way that few FCC issues ever have (try Web-searching the terms “Net neutrality” or, more humorously, “series of tubes”). So, it’s hard to imagine policymakers adopting laws or rules that would condone popular notions of Net neutrality violations.

Second, the legal/regulatory uncertainties have, understandably, dissuaded network operators from making investments in new technologies and services that might subsequently be found to violate Net neutrality. Unfortunately, some observers seem to think that this uncertainty hurts only the network operators and their suppliers, but consumers and content providers also are suffering, albeit unwittingly, from the lack of new services that might otherwise be available.

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Over at MediaFreedom.org, a new site devoted to fighting the fanaticism of radical anti-media freedom groups like Free Press and other “media reformistas,” I’ve started rolling out a 5-part series of essays about “The Battle for Media Freedom.” In Part 1 of the series, I defined what real media freedom is all about, and in Part 2 I discussed the rising “cyber-collectivist” threat to media freedom.  In my latest installment, I offer an analytical framework that better explains the major differences between the antagonists in the battle over media freedom.

Understanding the Origins of Political Struggles

In his many enlightening books, Thomas Sowell, a great economist and an even better political scientist, often warns of the triumph of good intentions over good economics. It’s a theme that F.A. Hayek and Milton Friedman both developed extensively before him. But Sowell has taken this analysis to an entirely differently level in books like A Conflict of Visions: Ideological Origins of Political Struggles, and The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy. Sowell teaches us that no matter how noble one’s intentions might be, it does not mean that those ideas will translate into sound public policy. Nonetheless, since “the anointed” believe their own intentions are pure and their methods are sound, they see nothing wrong with substituting their will for the will of millions of individuals interacting spontaneously and voluntarily in the marketplace. The result is an expansion of the scope of public decision-making and a contraction of the scope of private, voluntary action. As a result, mandates replace markets, and freedom gives way central planning.

Sowell developed two useful paradigms to help us better understand “the origins of political struggles.” He refers to the “constrained” versus “unconstrained” vision and separates these two camps according to how they view the nature of man, society, economy, and politics:

“Constrained Vision” “Unconstrained Vision”
Man is inherently constrained; highly fallible and imperfect Man is inherently unconstrained; just a matter of trying hard enough; man & society are perfectible
Social and economic order develops in bottom-up, spontaneous fashion. Top down planning is hard because planners aren’t omnipotent. Order derives from smart planning, often from top-down. Elites can be trusted to make smart social & economic interventions.
Trade-offs & incentives matter most; wary of unintended consequences Solutions & intentions matter most; less concern about costs or consequences of action
Opportunities count more than end results; procedural fairness is key; Liberty trumps Outcomes matter most; distributive or “patterned” justice is key; Equality trumps liberty
Prudence and patience are virtues. There are limits to human reason. Passion for, and pursuit of, high ideals trumps all. Human reason has boundless potential.
Law evolves and is based on the experience of ages. Law is made by trusted elites.
Markets offer benefit of experience & experimentation and help develop knowledge over time. Markets cannot ensure desired results; must be superseded by planning & patterned justice
Exponents: Aristotle, Adam Smith, Edmund Burke, James Madison, Lord Acton, F.A. Hayek, Ludwig von Mises, Milton Friedman, James Buchanan, Robert Nozick Exponents: Plato, Rousseau, William Godwin, Voltaire, Robert Owen, John Kenneth Galbraith, John Dewey, Earl Warren, Bertrand Russell, John Rawls

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“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Thus did Ronald Reagan capture the essence of big government. The two biggest challenges facing defenders of free markets in technology policy lie in Reagan’s second point:

  • Telling the “Good News Story” about how “it” (human ingenuity—what the great economist Julian Simon called our “Ultimate Resource”) keeps “moving” (by inventing new hardware, software, services, etc.)
  • Holding the line against efforts to extend the regulatory regimes of the past over new technologies, and chipping away at those regimes as best we can

So one might think that believers in limited government would celebrate a company like Google as a great American success story: A university research program launched by two smart kids (one of whom fled Communist oppression) that grew from a garage start-up into a global tech titan whose wide-ranging innovations are revolutionizing more and more of the economy. Surely free marketeers would rally to the defense of such a company when, say, the New York Times—that if-it-moves-regulate-it bastion—calls for bringing “into the regulatory fold,” right?

Unfortunately, all too many free marketeers seem willing to hang Google out to dry, or at least stay silent because they resent the pro-regulatory policy positions taken by the company or the political leanings of its employees and leadership. The company has hardly been a champion of digital capitalism in Washington, allying itself with a number tax/regulate/subsidize groups, pushing for net neutrality regulation, and using antitrust as a sword against its rivals (some of whom seem willing to return the favor). But the principles at stake are too important for free marketeers to gloat, as Adam Thierer argued in an op/ed for National Review Online earlier this week: Government vs. Google: Why Free Marketeers Should Rally Against “Search Neutrality.” Continue reading →

It’s been a tough week for the personal genomics testing marketplace.  First there were two long days of FDA meetings, and then today an Energy and Commerce Committee held hearings where the GAO announced the results of a “sting” operation into direct to consumer (DTC) genomics companies.   Below is the (brutal) GAO video.  As Daniel MacArthur has pointed out, today there exist both legitimate and not-so-legitimate testing firms, but the GAO has lumped them all in together, which will make it easier for pro-regulatory forces to get their hooks into the industry.  I urge you to read MacArthur’s entire analysis here, since he follows the industry closely and is saddened by the fact that:

The momentum seems to be well and truly in favour of the bureaucrats now. The prospect of increased regulation (specifically from the FDA) seemed to be enthusiastically received by the Committee today; there was explicit mention of increased money for the FDA to support such a move. The shape of this regulation is as yet unclear, but I’m now extremely pessimistic about the industry’s prospects of escaping excessive, innovation-crushing regulation in the US.

This is very bad news for those of us who wish to see personal medicine flourish.

If I ever had any hope of “keeping up” with developments in the regulation of information technology—or even the nine specific areas I explored in The Laws of Disruption—that hope was lost long ago.  The last few months I haven’t even been able to keep up just sorting the piles of printouts of stories I’ve “clipped” from just a few key sources, including The New York Times, The Wall Street Journal, CNET News.com and The Washington Post.

I’ve just gone through a big pile of clippings that cover April-July.  A few highlights:  In May, YouTube surpassed 2 billion daily hits.  Today, Facebook announced it has more than 500,000,000 members.   Researchers last week demonstrated technology that draws device power from radio waves.

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Internet governance is often thought of as ICANN and domain names, but the Internet Governance Forum, a body of the UN, takes a broad approach. Tomorrow I’ll be speaking on a panel about online safety at IGF-USA,  a national body that reports to the full IGF.  We’ll discuss the recent NTIA OSTWG “Youth Safety on a Living Internet” report, among other online safety issues such as sexting, cyberbullying, and proposed state legislation.

UPDATE:  Here’s a summary and video excerpt of my presentation.

Here’s the panel:

Moderator: Danny Weitzner, Associate Administrator, Office of Policy Analysis and Development U.S. Department of Commerce

Panelists:

  • Michael W. McKeehan, Executive Director, Internet and Technology Policy, Verizon
  • Braden Cox, Policy Counsel, NetChoice Coalition
  • Anne Collier, via remote participation [Invited]
  • Jennifer Hanley, Family Online Safety Institute (FOSI)
  • Stacie Rumenap, Stop Child Predators

Respondents:

  • Morgan C. Little, Elon University Graduate, Political Science, American University
  • Jane Coffin, NTIA: comments on some of the global activities
  • Bessie Pang, Executive Director, POLCYB

Check it out and come for the other panels on cybersecurity, cloud computing and global governance for governments. Registration is free.

You may have seen this recent article about Lila Kerr and Lauren Theis — two Rice University undergraduates who figured out how to turn a kitchen “salad spinner” into a centrifuge that can separate blood into plasma and red cells in about 20 minutes.  The inventors hope it will have a lot of applications in developing countries, because it will allow clinics to check blood samples for anemia on location and in real time, instead of transporting blood samples miles to the nearest facility with a centrifuge.

If the field tests go well, the inventors surely deserve to be lauded for the lives their invention will save. 

But I also think the students should be recognized for another aspect of their feat — namely, they figured out how to turn a really lame and pretty useless kitchen device into something useful! We have one of these (someplace). One attempted use was enough. I’m glad they found a way to unlock the true potential of this technology.

In light of the Delahunt “Main Street Fairness Act” (HR 5660) introduced earlier this month, over at the NetChoice blog Steve DelBianco describes why it is important to consider that “where you sit determines where you stand”  when it comes to Internet taxes:

Big-box stores like Walmart and Target support a federal mandate that forces everyone to collect sales tax, even for states where they have zero presence.  So why would these giant chains  — who already have to collect taxes on their web sales — stand for this?

Because from where Walmart sits, any simplification – even a little – helps reduce their costs.  And because these big boys want to impose new tax collection costs on their small online competitors.

He’s also reacting to a post at BNET last week, where Chris Dannen described how big retailers are supporting the so-called “streamlined sales tax”:

“Brick-and-mortar retailers — many of whom have operations online — are some of the most vocal proponents of the new online tax laws. The members of the pro-tax lobby, which includes Best Buy, WalMart ,Target and others, already collect sales tax online, regardless of the buyer’s state, and see Web-only retailers as having an unfair advantage, from How to Tax E-Commerce without Killing Entrepreneurship (and eBay)”

As part of its excellent “Room for Debate” series, the New York Times has an interesting new online symposium up now asking, “Will Networks Go Wild, With No Decency Rules?”  It was in response to last week’s Second Circuit decision, which again slapped down an effort by the Federal Communications Commission to defend the agency’s indecency enforcement regime.  I was honored to be asked to contribute a short essay on the subject. Here are the other contributors and their essays.  Take the time to check them out:

I was particularly interested in former FCC’s Chairman Michael Powell’s admission that “The [FCC's] fleeting expletive policy was a mistake,” and that “the real problem is the now-flawed constitutional foundation on which the law is built.” Powell goes on to argue that, “We cannot have one First Amendment for broadcasting and another one for every other medium. This vestige of a bygone era provides fertile ground for mischief — culture wars, political agenda and moral mandates. It’s high time for the high court to bring our laws into the 21st century.”

I wholeheartedly agree, and I wrote a lengthy law review article on just that topic back in 2007 entitled,“Why Regulate Broadcasting: Toward a Consistent First Amendment Standard for the Information Age.” If you find it too boring, just watch this video I made summarizing the key points, which I called “America’s First Amendment Twilight Zone.”

Check out national security reporter Shaun Waterman’s report on lapses in security using techniques that only recently became known as “social engineering.”

Ms. Sage’s connections invited her to speak at a private-sector security conference in Miami, and to review an important technical paper by a NASA researcher. Several invited her to dinner. And there were many invitations to apply for jobs.

“If I can ever be of assistance with job opportunities here at Lockheed Martin, don’t hesitate to contact me, as I’m at your service,” one executive at the company told her.

Then there’s former DHS policy official Stewart Baker’s unusually harsh attack on the “privacy lobby” and Wired reporter Ryan Singel at Volokh.com. The comments are good-quality and interesting.

Knowing how canny Baker is, I would guess that his unusually shrill tone is a ploy to start a fight that helps him sells more copies of his book. But maybe he’s just losing his cool.