August 2011

I can’t help but think that there might be  a big advantage of having the AT&T-T-Mobile merger go to court.  For once, the high-profile action everyone pays attention to will occur in an antitrust forum where the decision criterion is the effects of the merger on consumer welfare, period.   Regardless of what one thinks about the merger, it’s nice to see that we’ll finally have a knock-down, drag-out fight based on whether a big telecommunications merger harms consumers and competition.  That’s the antitrust standard the Department of Justice has to satisfy in order to prevent the merger. 

This will be a refreshing change from the Federal Communications Commission’s “public interest” standard, which allows the commission to object on grounds other than consumer welfare and demand all manner of concessions that have nothing to do with remedying anticompetitive effects of a deal. Case in point: Comcast must now offer broadband service for $9.95 per month to low-income households as a condition for getting approval to buy 51 percent of NBCUniversal. Now, I’m all for seeing low-income households get access to broadband, but subsidizing one subset of customers has little to do with mitigating any possible anticompetitive effects of allowing a cable company to own NBCUniversal. As FCC Commissioners McDowell and Baker said in their statement on that transaction, “Any proposed remedies should be narrow and transaction specific, tailored to address particular anti-competitive harms. License transfer approvals should not serve as vehicles to extract from petitioners far-reaching and non-merger specific policy concessions that are best left to broader rulemaking or legislative processes.” 

In short, if AT&T wins in court, the FCC should approve the merger promptly without additional conditions.

[Cross posted at Truthonthemarket]

As Josh noted, the DOJ filed a complaint today to block the merger. I’m sure we’ll have much, much more to say on the topic, but here are a few things that jump out at me from perusing the complaint:

  • The DOJ distinguishes between the business (“Enterprise”) market and the consumer market. This is actually a good play on their part, on the one hand, because it is more sensible to claim a national market for business customers who may be purchasing plans for widely-geographically-dispersed employees. I would question how common this actually is, however, given that, I’m sure, most businesses that buy group cell plans are not IBM but are instead pretty small and pretty local, but still, it’s a good ploy.
  • But it has one significant problem: The DOJ also seems to be stressing a coordinated effects story, making T-Mobile out to be a disruptive maverick disciplining the bigger carriers. But–and this is, of course an empirical matter I will have to look in to–I highly doubt that T-Mobile plays anything like this role in the Enterprise market, at least for those enterprises that fit the DOJ’s overly-broad description. In fact, the DOJ admits as much in para. 43 of its Complaint. Of course, the DOJ claims this was all about to change, but that’s not a very convincing story coupled with the fact that DT, T-Mobile’s parent, was reducing its investment in the company anyway. The reality is that Enterprise was not a key part of T-Mobile’s business model–if it occupied any cognizable part of it at all– and it can hardly be considered a maverick in a market in which it doesn’t actually operate.
  • On coordinated effects, I think the claim that T-Mobile is a maverick is pretty easily refuted, and not only in the Enterprise realm. As Josh has pointed out in his Congressional testimony, a maverick is a term of art in antitrust, and it’s just not enough that a firm may be offering products at a lower price–there is nothing “maverick-y” about a firm that offers a different, less valuable product at a lower price. I have seen no evidence to suggest that T-Mobile offered the kind of pricing constraint on AT&T that would be required to make it out to be a maverick.

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On the podcast this week, Gerald Faulhaber, Professor Emeritus at the Wharton School at the University of Pennsylvania and Penn Law School, discusses his new paper in Communications & Convergence Review entitled Economics of Net Neutrality: A Review. Faulhaber delves into the network neutrality debate noting that consumers do not want complete neutrality since they approve of ISPs blocking content such as child pornography or malware. He explains that there is little evidence that violations of net neutrality have actually occurred, so that consumers today getting as much neutrality as they want. Faulhaber submits that implementing prophylactic regulations will only stifle innovation and encourage rent seeking.

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Republished from The Mark News

Privacy advocates are attacking Google again, this time for requiring that field-testers of its new, invite-only Google+ social network use “the names they commonly go by in the real world.” After initially suspending Google+ accounts flagged as pseudonymous, Google has clarified that such users will be given four days to add their real names to their profiles. Users who don’t like the policy can export all data they’ve put into Google+ and leave.

Cyber-sociologist Danah Boyd calls “real name” policies “an authoritarian assertion of power … [by] privileged white Americans … over vulnerable people [like] abuse survivors, activists, LGBT people, women, and young people.” In 2003, she denounced the “Fakester genocide” perpetrated by Friendster, the first major “real name” social network. Facebook later faced similar criticism from her and others for its purge of “Fakebookers” – those using fake names on the popular social network.

Boyd and others are right that anonymity can be “a shield from the tyranny of the majority,” as the U.S. Supreme Court has said while striking down laws requiring speakers to identify themselves. But, like the rest of the First Amendment, the right to anonymous speech limits government, not private actors. In other words, while the First Amendment bars government from forcing us to identify ourselves, those who sign up for Google+ must play by Google’s rules.

Boyd wants to regulate social-media giants as public utilities, but – unlike government bans – we can opt out of these services. Google and Facebook merely offer trusted communities that compete with sites like Twitter, where pseudonyms thrive alongside real names. With over 200 million users, Twitter has met the very demand Boyd cites –but she’s not satisfied.

As a gay activist myself, I’m sympathetic to her privacy concerns. But, as much as I respect Boyd, I find her obsession with “privilege” unhelpful. The engineers who design new social-networking tools may indeed tend to under-value the concerns of particularly privacy-sensitive users or groups. But their critics under-value authenticity’s benefits even more – or simply refuse to acknowledge that privacy is in tension with civility and usability, among other values. Continue reading →

My new book, 100 Plus, is about how science and technology will allow us to live longer and healthier – and how that will change the world.  This topic may be newish for this site, but many of the key issues are not.  What happens to economic growth in this tech revolution?  How does innovation play a part in resolving problems such as environmental waste?  Should we be worried about a divide between the haves and the have nots?  I address all these questions and more, including the impact on religious institutions.  The final chapter of the book details how leaders, including many in the traditional technology industry, are pushing ahead with reverse-engineering the human body – the next big thing.

Here is an excerpt of the book in the Wall Street Journal.

Hot-tempered police offers, pushover judges, and vague laws make for a dangerous combination. In July, a controversy erupted in Renton, Washington (a Seattle suburb) when the town’s police department launched a legal assault on an anonymous YouTube user for merely uploading a few sarcastic videos poking fun at the department’s scandals.

In an op-ed in The Seattle Times, Nicole Ciandella and I explain what happened in Renton and discuss the saga’s implications for constitutional rights in the digital age:

According to Washington state law, a person is guilty of criminal “cyberstalking” if he makes an electronic communication using lewd or indecent language with the intent to embarrass another person. In other words, a Washingtonian who creates a raunchy email message, blog post or Web video to embarrass a foe isn’t just playing dirty; he’s technically breaking the law. One YouTube user recently learned this lesson the hard way.

Last month, the scandal-ridden Renton Police Department launched a criminal cyberstalking investigation against a YouTube user known only as “MrFuddlesticks.” The user had uploaded a series of lewd, animated videos poking fun at recent allegations of wrongdoing by Renton police officers. In one video, a character talks about his civilian superior’s lack of law-enforcement experience; in another, characters discuss the impropriety of a police officer who slept with a murder suspect.

Even though none of MrFuddlesticks’ videos mention the city of Renton or any police officers by name, Renton police managed to convince a county judge to issue a warrant to compel Google, YouTube’s parent company, to disclose identifying information about MrFuddlesticks’ accounts, including credit-card details and even contents of Gmail messages.

You can read the rest of the essay here. (For more on the controversy, see Jacob Sullum at Reason’s Hit & Run; also see Mike Masnick at Techdirt. For an exploration of the case’s constitutional implications, see Eugene Volokh at The Volokh Conspiracy.)

Here on the TLF, we’ve repeatedly cautioned lawmakers about the dangers of criminalizing cyberstalking  (1234). Back in 2006, CNET’s Declan McCullagh explained why all Internet users should be worried about vague, overbroad cyberstalking laws. As the troubling actions of Renton’s finest illustrate, the potential for such laws to be abused is very real. Let’s hope lawmakers in Washington and in the numerous other states with cyberstalking laws on the books take a hard look at their laws.


On the podcast this week, Adam Thierer, Senior Research Fellow at the Mercatus Center at George Mason University in the Technology Policy Program, discusses his new paper, Kids, Privacy, Free Speech & the Internet: Finding the Right Balance. For kids, using the Internet has become second nature, but when sites that track a child’s online activity can raise privacy concerns. A number of well-intentioned lawmakers are introducing regulatory measures that aim to expand the Children’s Online Privacy Protection Act (COPPA). Thierer discusses the unintended consequences that could result from regulations, like mandatory age verification and an Internet “eraser button.” He proposes an alternative to regulation, which includes education and empowerment, placing importance on personal and parental responsibility.

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To keep the conversation around this episode in one place, we’d like to ask you to comment at the webpage for this episode on Surprisingly Free. Also, why not subscribe to the podcast on iTunes?

Here’s a terrifically useful chart from CTIA that offers some international wireless use and spectrum availability comparisons. [Click on chart to expand.] The average minutes of use and average revenue per minute differences are fairly staggering. But the really important takeaway from this chart is the last line, which depicts how little spectrum is dripping out of the faucet right now. Having just 50 MHz of “potentially usable spectrum in the pipeline” is troubling and needs to be addressed by policymakers immediately. America’s wireless demands continue to explode, but supply isn’t keeping up.

My latest Mercatus Center white paper is entitled “Kids, Privacy, Free Speech & the Internet: Finding The Right Balance.” From the intro:

Concerns about children’s privacy are an important part of [the ongoing privacy debate]. The Children’s Online Privacy Protection Act of 1998 (COPPA) already mandates certain online-privacy protections for children under the age of 13. The goal of COPPA was to enhance parents’ involvement in their children’s online activities and better safeguard kids’ personal information online. The FTC is currently considering an expansion of COPPA, and lawmakers in the House of Representatives introduced legislation that would expand COPPA and apply additional FIPPS regulations to teenagers. Some state-based measures also propose expanding COPPA

While well-intentioned, efforts to expand privacy regulation along these lines would cause a number of unintended consequences of both a legal and economic nature. In particular, expanding COPPA raises thorny issues about online free speech and anonymity. Ironically, it might also require that more information about individuals be collected to enforce the law’s parental-consent provisions. There are better ways to protect the privacy of children online than imposing burdensome new regulatory mandates on the Internet and online consumers. Education, empowerment, and targeted enforcement of unfair and deceptive practice policies represent the better way forward.

The paper can be downloaded on SSRN, Scribd, or directly from the Mercatus website at the link above.

For CNET this morning, I offer five crucial corrections to the Protect IP Act, which was passed out of committee in the Senate back in May.

Yesterday, Rep. Bob Goodlatte, co-chair of the Congressional Internet Caucus, told a Silicon Valley audience that the House was working on its own version and would introduce it in the next few weeks.

Protect IP would extend efforts to combat copyright infringement and trademark abuse online, especially by websites registered outside the U.S.

Since Goodlatte promised the new bill would be “quite different” from the Senate version, I thought it a good time to get out my red pen and start crossing off the worst mistakes in policy and in drafting in Protect IP.

The full details are in the article, but in brief, here’s what I hope the House does in its version:

  1. Drop provisions that tamper with the DNS system in an effort to block U.S. access to banned sites.
  2. Drop provisions that tamper with search engines, indices, and any other linkage to banned sites.
  3. Remove a private right of action that would allow copyright and trademark holders to obtain court orders banning ad networks and financial transaction processors from doing business with banned sites.
  4. Scale back current enforcement abuses by the Department of Homeland Security under the existing PRO-IP Act of 2008.
  5. Focus the vague and overinclusive definition of the kind of websites that can be banned, limiting it to truly criminal enterprises.

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