Technology, Business & Cool Toys

Over at the International Association of Privacy Professionals (IAPP) Privacy Perspectives blog, I have two “Dispatches from CES 2015″ up. (#1 & #2) While I was out in Vegas for the big show, I had a chance to speak on a panel entitled, “Privacy and the IoT: Navigating Policy Issues.” (Video can be found here. It’s the second one on the video playlist.) Federal Trade Commission (FTC) Chairwoman Edith Ramirez kicked off that session and stressed some of the concerns she and others share about the Internet of Things and wearable technologies in terms of the privacy and security issues they raise.

Before and after our panel discussion, I had a chance to walk the show floor and take a look at the amazing array of new gadgets and services that will soon hitting the market. A huge percentage of the show floor space was dedicated to IoT technologies, and wearable tech in particular. But the show also featured many other amazing technologies that promise to bring consumers a wealth of new benefits in coming years. Of course, many of those technologies will also raise privacy and security concerns, as I noted in my two essays for IAPP. Continue reading →

I want to highlight an important new blog post (“Slow Down That Runaway Ethical Trolley“) on the ethical trade-offs at work with autonomous vehicle systems by Bryant Walker Smith, a leading expert on these issues. Writing over at Stanford University’s Center for Internet and Society blog, Smith notes that, while serious ethical dilemmas will always be present with such technologies, “we should not allow the perfect to be the enemy of the good.” He notes that many ethical philosophers, legal theorists, and media pundits have recently been actively debating variations of the classic “Trolley Problem,” and its ramifications for the development of autonomous or semi-autonomous systems. (Here’s some quick background on the Trolley Problem, a thought experiment involving the choices made during various no-win accident scenarios.) Commenting on the increased prevalence of the Trolley Problem in these debates, Smith observes that:

Unfortunately, the reality that automated vehicles will eventually kill people has morphed into the illusion that a paramount challenge for or to these vehicles is deciding who precisely to kill in any given crash. This was probably not the intent of the thoughtful proponents of this thought experiment, but it seems to be the result. Late last year, I was asked the “who to kill” question more than any other — by journalists, regulators, and academics. An influential working group to which I belong even (briefly) identified the trolley problem as one of the most significant barriers to fully automated motor vehicles.

Although dilemma situations are relevant to the field, they have been overhyped in comparison to other issues implicated by vehicle automation. The fundamental ethical question, in my opinion, is this: In the United States alone, tens of thousands of people die in motor vehicle crashes every year, and many more are injured. Automated vehicles have great potential to one day reduce this toll, but the path to this point will involve mistakes and crashes and fatalities. Given this stark choice, what is the proper balance between caution and urgency in bringing these systems to the market? How safe is safe enough?

That’s a great question and one that Ryan Hagemann and put some thought into as part of our recent Mercatus Center working paper, “Removing Roadblocks to Intelligent Vehicles and Driverless Cars.Continue reading →

I’ve spent much of the past year studying the potential public policy ramifications associated with the rise of the Internet of Things (IoT). As I was preparing some notes for my Jan. 6th panel discussing on “Privacy and the IoT: Navigating Policy Issues” at this year’s 2015 CES show, I went back and collected all my writing on IoT issues so that I would have everything in one place. Thus, down below I have listed most of what I’ve done over the past year or so. Most of this writing is focused on the privacy and security implications of the Internet of Things, and wearable technologies in particular.

I plan to stay on top of these issues in 2015 and beyond because, as I noted when I spoke on a previous CES panel on these issues, the Internet of Things finds itself at the center of what we might think of a perfect storm of public policy concerns: Privacy, safety, security, intellectual property, economic / labor disruptions, automation concerns, wireless spectrum issues, technical standards, and more. When a new technology raises one or two of these policy concerns, innovators in those sectors can expect some interest and inquires from lawmakers or regulators. But when a new technology potentially touches all of these issues, then it means innovators in that space can expect an avalanche of attention and a potential world of regulatory trouble. Moreover, it sets the stage for a grand “clash of visions” about the future of IoT technologies that will continue to intensify in coming months and years.

That’s why I’ll be monitoring developments closely in this field going forward. For now, here’s what I’ve done on this issue as I prepare to head out to Las Vegas for another CES extravaganza that promises to showcase so many exciting IoT technologies. Continue reading →

Earlier this week I posted an essay entitled, “Global Innovation Arbitrage: Commercial Drones & Sharing Economy Edition,” in which I noted how:

Capital moves like quicksilver around the globe today as investors and entrepreneurs look for more hospitable tax and regulatory environments. The same is increasingly true for innovation. Innovators can, and increasingly will, move to those countries and continents that provide a legal and regulatory environment more hospitable to entrepreneurial activity.

That essay focused on how actions by U.S. policymakers and regulatory agencies threatened to disincentivize homegrown innovation in the commercial drone and sharing economy sectors. But there are many other troubling examples of how America risks losing its competitive advantage in sectors where we should be global leaders as innovators looks offshore. We can think of this as “global innovation arbitrage,” as venture capitalist Marc Andreessen has aptly explained:

Think of it as a sort of “global arbitrage” around permissionless innovation — the freedom to create new technologies without having to ask the powers that be for their blessing. Entrepreneurs can take advantage of the difference between opportunities in different regions, where innovation in a particular domain of interest may be restricted in one region, allowed and encouraged in another, or completely legal in still another.

One of the more vivid recent examples of global innovation arbitrage involves the well-known example of 23andMe, which sells mail-order DNA-testing kits to allow people to learn more about their genetic history and predisposition to various diseases. Continue reading →

What sort of public policy vision should govern the Internet of Things? I’ve spent a lot of time thinking about that question in essays here over the past year, as well as in a new white paper (“The Internet of Things and Wearable Technology: Addressing Privacy and Security Concerns without Derailing Innovation”) that will be published in the Richmond Journal of Law & Technology early next year.

But I recently heard three policymakers articulate their recommended vision for the Internet of Things (IoT) and I found their approach so inspiring that I wanted to discuss it here in the hopes that it will become the foundation for future policy in this arena.

Last Thursday, it was my pleasure to attend a Center for Data Innovation (CDI) event on “How Can Policymakers Help Build the Internet of Things?” As the title implied, the goal of the event was to discuss how to achieve the vision of a more fully-connected world and, more specifically, how public policymakers can help facilitate that objective. It was a terrific event with many excellent panel discussions and keynote addresses.

Two of those keynotes were delivered by Senators Deb Fischer (R-Neb.) and Kelly Ayotte (R-N.H.). Below I will offer some highlights from their remarks and then relate them to the vision set forth by Federal Trade Commission (FTC) Commissioner Maureen K. Ohlhausen in some of her recent speeches. I will conclude by discussing how the Ayotte-Fischer-Ohlhausen vision can be seen as the logical extension of the Clinton Administration’s excellent 1997 Framework for Global Electronic Commerce, which proposed a similar policy paradigm for the Internet more generally. This shows how crafting policy for the IoT can and should be a nonpartisan affair. Continue reading →

Capital moves like quicksilver around the globe today as investors and entrepreneurs look for more hospitable tax and regulatory environments. The same is increasingly true for innovation. Innovators can, and increasingly will, move to those countries and continents that provide a legal and regulatory environment more hospitable to entrepreneurial activity. I was reminded of that fact today while reading two different reports about commercial drones and the sharing economy and the global competition to attract investment on both fronts. First, on commercial drone policy, a new Wall Street Journal article notes that:

Amazon.com Inc., which recently began testing delivery drones in the U.K., is warning American officials it plans to move even more of its drone research abroad if it doesn’t get permission to test-fly in the U.S. soon. The statement is the latest sign that the burgeoning drone industry is shifting overseas in response to the Federal Aviation Administration’s cautious approach to regulating unmanned aircraft.

According to the Journal reporters, Amazon has sent a letter to the FAA warning that, “Without the ability to test outdoors in the United States soon, we will have no choice but to divert even more of our [drone] research and development resources abroad.” And another report in the U.K. Telegraph notes that other countries are ready and willing to open their skies to the same innovation that the FAA is thwarting in America. Both the UK and Australia have been more welcoming to drone innovators recently. Here’s a report from an Australian newspaper about Google drone services testing there. (For more details, see this excellent piece by Alan McQuinn, a research assistant with the Information Technology and Innovation Foundation: “Commercial Drone Companies Fly Away from FAA Regulations, Go Abroad.”) None of this should be a surprise, as I’ve noted in recent essays and filings. With the FAA adopting such a highly precautionary regulatory approach, innovation has been actively disincentivized. America runs the risk of driving still more private drone innovation offshore in coming months since all signs are that the FAA intends to drag its feet on this front as long as it can, even though Congress has told to agency to take steps to integrate these technologies into national airspace.  Continue reading →

Sharing Economy paper from MercatusI’ve just released a short new paper, co-authored with my Mercatus Center colleagues Christopher Koopman and Matthew Mitchell, on “The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change.” The paper is being released to coincide with a Congressional Internet Caucus Advisory Committee event that I am speaking at today on “Should Congress be Caring About Sharing? Regulation and the Future of Uber, Airbnb and the Sharing Economy.”

In this new paper, Koopman, Mitchell, and I discuss how the sharing economy has changed the way many Americans commute, shop, vacation, borrow, and so on. Of course, the sharing economy “has also disrupted long-established industries, from taxis to hotels, and has confounded policymakers,” we note. “In particular, regulators are trying to determine how to apply many of the traditional ‘consumer protection’ regulations to these new and innovative firms.” This has led to a major debate over the public policies that should govern the sharing economy.

We argue that, coupled with the Internet and various new informational resources, the rapid growth of the sharing economy alleviates the need for much traditional top-down regulation. These recent innovations are likely doing a much better job of serving consumer needs by offering new innovations, more choices, more service differentiation, better prices, and higher-quality services. In particular, the sharing economy and the various feedback mechanism it relies upon helps solve the tradition economic problem of “asymmetrical information,” which is often cited as a rationale for regulation. We conclude, therefore, that “the key contribution of the sharing economy is that it has overcome market imperfections without recourse to traditional forms of regulation. Continued application of these outmoded regulatory regimes is likely to harm consumers.” Continue reading →

This Thanksgiving holiday season, an estimated 39 million people plan on traveling by car. Sadly, according to the National Safety Council, some 418 Americans may lose their lives on the roads over the next few days, in addition to over 44,000 injuries from car crashes.

In a new oped for the Orange County Register, Ryan Hagemann and I argue that many of these accidents and fatalities could be averted if more “intelligent” vehicles were on the road. That’s why it is so important that policymakers clear away roadblocks to intelligent vehicle technology (including driverless cars) as quickly as possible. The benefits would be absolutely enormous.

Read our oped, and for more details check out our recent Mercatus Center white paper, “Removing Roadblocks to Intelligent Vehicles and Driverless Cars.”

Last week, it was my pleasure to speak at a Cato Institute event on “The End of Transit and the Beginning of the New Mobility: Policy Implications of Self-Driving Cars.” I followed Cato Institute Senior Fellow Randal O’Toole and Marc Scribner, a Research Fellow at the Competitive Enterprise Institute. They provided a broad and quite excellent overview of all the major issues at play in the debate over driverless cars. I highly recommend you read the excellent papers that Randal and Marc have published on these issues.

My role on the panel was to do a deeper dive into the privacy and security implications of not just the autonomous vehicles of our future, but also the intelligent vehicle technologies of the present. I discussed these issues in greater detail in my recent Mercatus Center working paper, “Removing Roadblocks to Intelligent Vehicles and Driverless Cars,” which was co-authored with Ryan Hagemann. (That article will appear in a forthcoming edition of the Wake Forest Journal of Law & Policy.)  I’ve embedded the video of the event down below (my remarks begin at the 38:15 mark) as well as my speaking notes. Again, please consult the longer paper for details.


Continue reading →

The sharing economy is growing faster than ever and becoming a hot policy topic these days. I’ve been fielding a lot of media calls lately about the nature of the sharing economy and how it should be regulated. (See latest clip below from the Stossel show on Fox Business Network.) Thus, I sketched out some general thoughts about the issue and thought I would share them here, along with some helpful additional reading I have come across while researching the issue. I’d welcome comments on this outline as well as suggestions for additional reading. (Note: I’ve also embedded some useful images from Jeremiah Owyang of Crowd Companies.)

1) Just because policymakers claim that regulation is meant to protect consumers does not mean it actually does so.

  1. Cronyism/ Rent-seeking: Regulation is often “captured” by powerful and politically well-connected incumbents and used to their own benefit. (+ Lobbying activity creates deadweight losses for society.)
  2. Innovation-killing: Regulations become a formidable barrier to new innovation, entry, and entrepreneurism.
  3. Unintended consequences: Instead of resulting in lower prices & better service, the opposite often happens: Higher prices & lower quality service. (Example: Painting all cabs same color destroying branding & ability to differentiate).

Continue reading →