Here’s an excerpt from my column at TNW today:

Currently, 60 percent of Facebook’s teen users have implemented privacy controls, compared with only 25 percent to 30 percent of adult users. This is an interesting statistic, given the common assumption that members of the younger generation don’t care who sees their data. It is probably also a sign to entrepreneurs that there will be greater demand in the future for people to do more with their profiles, meaning more than one. That particular question brought up more controversy than one might expect.

If people could have more than one profile, argued Facebook’s Chris Kelly, the user experience would break down.

“It is important to have a single identity, and you may want to show different parts to different people,” he said.

Not everyone was convinced. Indeed, as Jim Dempsey pointed out, in real life people often showcase very distinct identities in different situations.

When at work, for example, people have a career persona. When at a spouse’s event, they don their spouse persona, and when picking up their children from school, they show their parent persona. Many people like to keep these personas separate. Now, of course, people often tell coworkers about their kids, but they don’t necessarily want to be defined that way in the context of their workplace. Being able to keep these identities apart in a more convenient way may very well be the next big social network innovation that consumers can’t wait to embrace.

[...]

“It’s stressful and degrading and my nose and chin look shiny,” says a one-time TLF blogger (not pictured here).

The woman pictured here was arrested for driving without a license. Perhaps because she didn’t want to get her picture taken at the DMV.

Say No to the national ID law - and to those trips to the DMV!

This technology sounds like an excellent solution to a serious problem:  The illicit use of cell phones inside correctional facilities by prisoners across the country.  In particular, the technology appears to be “directional,” meaning that unlike traditional jammers, which simply block signals within a certain radius around the jammer, this technology appears to be capable of blocking signals inside the confines of a particular room or building.  In fact, I’m sure millions of Americans would love to see such technologies implemented in cinemas, theatres, and other performing arts venues across the country.  I, for one, am tired of having the exquisite acoustic delicacies of Bach interrupted by annoying ring tones, such as  the (painfully) immortal “Who Let the Dogs Out?”

So Much for The Rule of Law

But there’s one important problem: The FCC isn’t waiving a rule here against cell phone jammer. unless I’m missing some subtle statutory quirk, they’re essentially “waiving” a statute—specifically 47 U.S.C. 533:

No person shall willfully or maliciously interfere with or cause interference to any radio communications of any station licensed or authorized by or under this chapter or operated by the United States Government.

You don’t need to be an administrative lawyer to know that agencies can’t just ignore acts of Congress—no matter how good the policy reason for the waiver is. That’s a big part of what the “rule of law” means.  Period.  Do not pass ‘Go’.  Do not collect $3,101.09 (today’s equivalent of $200 in 1935, when Monopoly debuted).  

Fortunately, as noted in the WSJ article Adam cited, at least one legislator realizes this and thinks it’s worth fixing:  U.S. Rep. Kevin Brady (R., Texas) told the Journal that his office is “drafting the necessary legislation to remove this outdated FCC roadblock.”  The FCC, of course, sped right past that particular roadblock.  But then, what should we expect from an agency that has, under its outgoing (and none-too-soon!) chairman Kevin Martin, simply disregarded statutory limits on its authority when it found Comcast in violation of the agency’s non-binding net neutrality principles this summer?  (My PFF colleague Barbara Esbin as eloquently condemned this violation of the rule of law in, “The Law is Whatever the Nobles Do: Undue Process at the FCC” (PDF).)

Now, when Congress considers this question, let us hope that they draw the right lesson from this episode:   Whatever the wisdom of outright bans on particular technologies, writing such bans into statutes is a really bad idea.  At least if such decisions were left up to regulatory agencies, they would have the flexibility to decide when to depart from a general ban.  Thus, the best approach would be to repeal the ban altogether.  The FCC probably already has the authority to ban jammers under Section 302a, which provides that:

The Commission may, consistent with the public interest, convenience, and necessity, make reasonable regulations:

(1) governing the interference potential of devices which in their operation are capable of emitting radio frequency energy by radiation, conduction, or other means in sufficient degree to cause harmful interference to radio communications…

A Legislative Solution

Now, if Rep. Brady wanted to establish an orderly procedure for replacing Section 533’s outright ban on cell phone jammers with a more reasonable, and flexible, rule, the bill repealing Section 533 might also simply give the FCC the authority to issue Special Temporary Authorizations like the one the FCC just issued to the DC Department of Corrections—but also require that the agency complete a rule-making proceeding within, say, a year to establish new regulations specifying precisely which jammers would be banned.  At a minimum, the new regulations could achieve legally what the FCC is trying to achieve illegally:   banning cell phone jammers except for use in correctional facilities and only subject to certain technical requirements intended to ensure that the jamming was sufficiently “directional” not to obstruct cell phone reception nearby such facilities.

But if such directional jamming is really possible, why not allow the use of jammers in performance venues?  Of course, some consumers might not actually prefer to suffer through a few stray ring-tones during a movie if it means being able to receive calls on vibrate or text messages or email in case of emergency.  But I’d rather leave that decision to private property owners and consumers.  These are not questions Congress should attempt to answer:  Those answers would necessarily be enshrined in statute, and therefore very difficult to change.  Instead, these decisions should be left up to the FCC and resolved through the normal rule-making process.  If the initial rule-making bans private uses of jammers, at least there would be an established procedure whereby the rule could be more easily changed in the future, as technology develops.

A Future Without a Jammer Ban

With all such technologies banned today, there is probably little incentive to develop better jamming technology that can be more carefully tailored.  But if at least some uses of jamming technology were allowed, there would be a market that could drive the development of better jamming technologies in the future.  So if the FCC’s concern were that today’s jammers caused unacceptable levels of unintentional interference to cell phone networks, that problem might yet be solved through technological innovation.

Lest anyone argue that once any use of jammers was allowed, the “cat” would be “out of the bag”—resulting in the disruption of cell phone networks by pranksters, criminals or even terrorists—let me simply suggest Googling “cell phone jammer.”  It may not be legal, but Americans can already buy cell phone jammers.  The reality is that, without a global totalitarian state, or at least completely sealed borders (an impossibility), completely banning any technology is impossible. 

Since today’s ban—and harsh penalties—seems to work well enough to protect cell networks from widespread disruption—or even occasional disruption sufficient to attract attention—it’s not unreasonable to think we might get by just fine if we kept those same penalties in place under a new rule that carefully circumscribed which private users would be allowed to use which technologies.  Perhaps then we might all be able to enjoy a movie, concert or other performance in peace—if we chose to. 

The Alternative

Many people would probably prefer that solution over the alternative:  incorporating into cell phones the kind of  ”digital manners policy” (DMP) technology recently patented by Microsoft that would allow a DMP transmitter to order all devices within range that have a DMP receiver to turn off their ring tones, etc.  There’s something to be said for Microsoft’s solution from a technical perspective:  The DMP could be set to allow me to continue to receive text messages, use the vibrate setting for calls, or use the wireless data network.  So a DMP transmitter would certainly be a less blunt instrument than a cell phone jammer.  But it wouldn’t be entirely effective unless every cell phone had a DMP chip, which means that the only way to “make the ringing stop!” would be to mandate the adoption of such technology by cell phone managers, banning the sale of non-compliant cell phones, and—if we really wanted to be thorough—sending out the cell-phone Gestapo to round up all the old, non-compliant cell phones out there.  

I’m not suggesting any nefarious intent on Microsoft’s part.  Like Hamlet (” There is nothing either good or bad, but thinking makes it so“), I don’t believe a technology can be inherently evil.  Indeed, even partial adoption of DMP technologies in cell phones would certainly help solve our “crisis of digital manners.”  But I’m more than a little uncomfortable with the idea of creating this kind of architecture of control, by which a third party (not me or the carrier) could manipulate the settings of my cell phone.  The potential for abuse of that technology seems even scarier than the potential for abuse of jammers.  Even if Microsoft limited the DMP chip’s interface with the cell phone to controlling, say, ring volume or vibrate settings, I’d have to wonder what a good hacker could do with that kind of technology.  So while I wouldn’t suggest banning DMPs either, I would hate to see DMP technologies become industry standard merely because the FCC refused to reconsider its decades-old outright ban on radio jammers.

Rep. Brady, our nation turns its lonely eyes (and even more annoyed ears) to you.

So what does this have to do with technology policy?  To start with, this figure comes from Congressional Budget Office estimates, which “don’t account for the huge economic stimulus bill Obama is expected to propose soon to try to jolt the economy.”  So, while the Obama team has talked about big “public works” and ”infrastructure” spending (which used to be called, variously, “make-work,” ”pork barrel” and “corporate welfare”), there’s sure to be huge pressure not to waste more taxpayer money on top of this staggering figure.  Whatever blame Bush deserves, Obama probably doesn’t want to go down in history as the man who finally caused the U.S. government to default on its unmanageable debt burden.

One certainly could make an argument that the kind of technology-related “infrastructure” stimulus Obama has talked about (e.g., broadband subsidies) would be less of a waste of money than, say, simply building more bridges (as Japan did in the 1990s, its “lost decade”) or other reflexively Keynesian responses.  But even so, I suspect that the total amount of funding made available for such projects won’t be anywhere near enough to satisfy the technology policy Left.  

This could result in increased pressure on the Administration to increase regulation of the technology sector in order to implement tech-leftist ideas about “protecting” users’ privacy, promoting media diversity or “fairness”, mandating net “neutrality,” “opening up” spectrum, etc.  Such  proposals might seem attractive precisely because they generally wouldn’t require increased Federal expenditures other than the cost of hiring more bureaucrats (which means more government employee union jobs anyway—hardly a bad thing for Democrats)—while the economic consequences of such proposals for companies and consumers will probably surely be trivialized.  For example, if the advocates of government control at the so-called “Free Press” can’t get universal broadband, they’ll probably press that much harder to cripple online advertising and traffic management by ISPs, just to name two popular bogeymen.

One might think that a sharp economic decline would cause policy-makers to think twice before undermining the business models that have supported IT innovation and real infrastructure investment.  But one has only to look at the policies of FDR’s first two terms to see how even an amiable, soft-spoken president elected on a mantra of change and “uniting” the nation in a time of crisis could consistently choose to place “Reform” (i.e., increased regulation) over “Recovery” (i.e., the health of the economy)—with devastating economic consequences.

Even if Obama isn’t a fanatic about the ideals of the technology policy Left, it remains to be seen whether he will be able to resist the ideological agenda of Congressional Democrats on technology policy.  I suppose the first indication we’ll have as to whether the Administration will chart a more reasonable course will be whom he appoints to head the FTC and FCC and as CTO.  Since the first two appointments are to independent agencies, Obama will have to choose someone who appreciates how much damage the “Reform” agenda could do—lest he find, as Bush has with the phony-free-marketeer Kevin Martin, that his Chairmen are fair more radical regulators than he is.  Obama’s appointment of Cass Sunstein as head of the Office of Information and Regulatory Affairs is hardly encouraging, for the reasons Adam has noted.

We may also find that the Administration has better things to do than worry about Internet, communications or media policy—and is therefore all too willing to defer to their appointees (as Bush did with Martin).  If that happens, all Obama’s lofty talk of non-partisanship won’t make any difference if his appointees start taking their marching orders from the hardcore advocates of “Reform.”

Sunstein certainly possess excellent qualifications for the job. During his time at the University of Chicago and Harvard Law School, Sunstein has established himself as a leading liberal thinker in the field of law and economics. And, as I have joked in writing about him before, he is so insanely prolific that it seems every time I finish reading one of his new books a new title by him lands on my desk. I am quite convinced that both he and Richard Posner are actually cyborgs. I just don’t understand how two humans can compose words so rapidly!

Anyway, Professor Sunstein’s new position as head of OIRA gives him the ability influence federal regulatory decisions in both a procedural and substantive way. In terms of substance, it gives him an important platform to subtly “nudge” the regulatory philosophy and direction of the Obama Administration on many matters, including Internet policy. So, what has Professor Sunstein had to say about Internet policy in his recent work? Sunstein has developed his thinking about these issues primarily in his two recent books: Republic.com (2000) and Infotopia: How Many Minds Produce Knowledge (2006). But he’s also had a few relevant things to say about Internet issues in his recent book with Richard Thaler, Nudge: Improving Decisions About Health, Wealth, and Happiness (2008).

There are 3 Internet policy-related things from his work that I’d like to focus on here because I find them all quite troubling.

(1) Is the Net Creating Anti-Democratic Man?

The first is Sunstein’s general outlook about the Internet and what it is doing to society. In Republic.com, Sunstein argued that the Internet is destroying opportunities for a mingling of the masses and shared social experiences. The hyper-customization that specialized websites and online filtering technologies (blogs, portals, listservs, political websites, etc.) offer Americans is allowing citizens to create the equivalent of a highly personalized news retrieval service that Sunstein contemptuously refers to as “The Daily Me.”

Actually, the phrase “The Daily Me” was coined by Nicholas Negroponte in his brilliant 1995 book Being Digital to describe what he argued would be a liberating break from traditional, force-fed media. But what irks Sunstein about “The Daily Me” is not the amazing new array of choices that the Internet offers Americans, it’s that the Internet and all these new technologies allow citizens to filter information and tailor their viewing or listening choices to their own needs or desires. While Negroponte welcomed that filtering and specialization function, Sunstein seems to live in fear of it, believing that it creates extreme social isolation and alienation. He argues that unrestrained individual choice is dangerous and must be checked or countered in the interests of “citizenship” and “democracy.” In his own words: “A system of limitless individual choices, with respect to communications, is not necessarily in the interest of citizenship and self-government. Democratic efforts to reduce the resulting problems ought not be rejected in freedom’s name.”  In other words, as I noted in my review of his book in Regulation magazine back in 2000, Sunstein is essentially saying that the Internet is breeding a dangerous new creature: Anti-Democratic Man. And government should not hesitate to act to counter it.

Sunstein’s argument is highly elitist. To Sunstein, the Internet is apparently guilty of the unspeakable crime of offering citizens and consumers too much of exactly what they want! But, according to his logic, the masses just don’t know what’s good for them so they must be aggressively encouraged (and potentially forced) to listen to things that others — namely, Sunstein — want them to hear. As Thomas Krattenmaker and Lucas Powe, authors of Regulating Broadcast Programming, argue: “Sunstein has dressed an older argument in more modern garb, but at bottom it is the persistent belief of some elites that if only they could gain power, they would use it to impose their views of the good on those who are less enlightened.” It’s what my favorite political scientist Thomas Sowell refers to as “The Vision of the Anointed.”

And a look at the world around us shows that Sunstein’s view that the Net is leading to close-mindedness, homogenization, and the death of deliberative democracy is generally overblown. (Although Lee Siegel and Andrew Keen would agree with him). Indeed, I think quite the opposite is the case. While it’s true that citizens do face an overwhelming number of media and informational choices today, that isn’t really such a lamentable development. The very fact there are so many distinct media and informational options available to citizens is better for a healthy democracy than a limited range of media options, even if some people flock to sites they find more agreeable.

Finally, it is simply impossible for me to believe the argument that citizens are somehow exposed to fewer viewpoints today than in the past. Such a suggestion is simply revisionist history. Never before have we humans been exposed to such a cornucopia of informational inputs of all flavors.

(2) A Fairness Doctrine for the Internet

Sunstein’s views about the Internet and what it is doing to society are troubling enough. Far more problematic, however, is what Sunstein has suggested we should do to deal with this supposed problem. After Sunstein worked himself up to a boil about all this in Republic.com, he tossed out what I believe is the single most dangerous public policy idea for the Internet suggested in the past 10 years: mandatory “electronic sidewalks” for cyberspace.

Sunstein called for popular or partisan websites to be forced to carry links to opposing viewpoints. Think of it as a combination of must carry mandates and the Fairness Doctrine for the Internet. Thus, the National Rifle Association (NRA) would be forced to run links or editorials by anti-gun groups, and abortion rights groups would be forced to contend with links and editorials from pro-life organizations. Apparently in Sunstein’s world, people have many rights, but one of them, it seems, is not the right to be left alone or seek out the opinions one desires.

Problems abound with such a philosophical paradigm. It is impossible to know how or where to draw regulatory lines under such a regime. For example, under Sunstein’s model, how many links to opposing viewpoints should citizens be subjected to on the Net before he believes they are fully assimilated into democratic society? If the NRA only offered one or two links to anti-gun groups, would that be enough? Moreover, it remains unclear who in government is really in the a position to dictate or referee all of this and how they will go about enforcing it. Whether any of this will pass constitutional muster is another question not explored by Sunstein.

Importantly, in his 2006 book Infotopia, Sunstein seemed to pull back from these views and proposals somewhat, although he still bemoaned the supposed dangers of “The Daily Me.”  But in this November 2007 interview with Salon, Sunstein seemed to completely abandon his old proposal:

I have thought over the years of whether it makes sense for the government to have a regulatory role [for the Internet]. But the Internet is too difficult to regulate in a way that would respond to these concerns. The first book ["Republic.com"] had suggestions that government should consider fairness-doctrine-type mandates on Web sites. It suggested that it’s reasonable for government to think about creating the equivalent of linking obligations and pop-ups, so that you’d be on one site — say, a conservative site — and there’d be a pop-up from a liberal site. I now the believe that the government should not consider that — that it’s a stupid and almost certainly an unconstitutional suggestion.

Salon then asked him: “What changed your thinking?” Sunstein responded:

Hearing counter-arguments and seeing the nature of the Internet as it unfolded over time. “Republic.com” made a mistake of applying to the Internet some ideas that were developed in a world of three or four television networks. … But the kinds of regulation that would respond to my concerns [about deliberative democracy], they’re not really feasible and they probably wouldn’t help. Most problems are best solved privately, not through government. There’s a problem of discourtesy in the world, which is best handled through social norms, which are indispensable. But you wouldn’t want the government to be mandating courtesy.

Thus, I have to give Prof. Sunstein credit for recognizing the complexities and dangers associated with his old ideas.

(3) A Cooling Off Period Before Posting on Blogs

In Nudge, a book about how small proposals or policies can have major social influences, Sunstein and his co-author Richard Thaler describe as their “favorite proposal,” a so-called “Civility Check” for online speech and interactions. Here’s what they say:

The modern world suffers from insufficient civility. Every hour of every day, people send angry emails they soon regret, cursing people they barely know (or even worse, their friends and loved ones). A few of us have learned a simple rule: don’t send an angry email in the heat of the moment. File it, and wait a day before you send it. (In fact, the next day you may have calmed down so much that you forget even to look at it. So much the better.) But many people either haven’t learned the rule or don’t always follow it. Technology could easily help. In fact, we have no doubt that technologically savvy types could design a helpful program by next month.

We propose a Civility Check that can accurately tell whether the email you’re about to send is angry and caution you, “warning: this appears to be an uncivil email. do you really and trulywant to send it?” (Software already exists to detect foul language. What we are proposing is more subtle, because it is easy to send a really awful email message that does not contain any four-letter words.) A stronger version, which people could choose or which might be the default, would say, “warning: this appears to be an uncivil email. this will not be sent unless you ask to resend in twenty-fourhours.” With the stronger version, you might be able to bypass the delay with some work (by inputting, say, your Social Security number and your grandfather’s birth date, or maybe by solving some irritating math problem!).

When I first responded to Sunstein and Thaler’s “Civility Check” notion, I went a little hard on them calling that idea “absurd and horrendously elitist.” What I should have made clear is that there is a difference between suggesting this sort of thing as an industry “best practice” as opposed to mandating it by force of law.

Indeed, in October of last year, Google launched a new Gmail feature called “Mail Goggles” that, according to the launch message on Google’s Gmail Blog, will help users “stop sending mail you (will) later regret.” The feature — perhaps better labeled a “Drunk Check” — “will check that you’re really sure you want to send that late night Friday email” by asking you to “solve a few simple math problems after you click send to verify you’re in the right state of mind.” It’s not identical to what Sunstein and Thaler have in mind, but it’s close. And I’m fine with Google adding such a feature to their Gmail service, especially since you don’t have to use it if you don’t want to.

Sunstein and Thaler aren’t really clear about how far they would go in forcing their Civility Check on Internet operators, however. For example, would they alter Section 230 immunity standards to hold the threat of liability over the necks of website operators who refused to play ball? They just don’t say. But with rising concerns about online cyberbullying, harassment, and defamation, the really interesting question going forward becomes just how far the law should go to encourage or demand that site operators better police their sites for poor “Netiquette.”

The danger here is that, if the liability equation was to tip in the other direction, it would have a profoundly chilling effect on online free speech and expression. While Sunstein and Thaler obviously hope that chilling effect associated with such a Civility Check would only be freezing caustic, offensive, or potentially libelous forms of speech, much more speech would likely be affected.

Conclusion

Will Sunstein continue to push any of these views in his new position as Obama’s regulatory czar at OIRA? If so, how much impact will Sunstein’s views have on others in the Obama Administration, especially at the FCC? Or, have his views changed enough that we really shouldn’t worry?

Who knows. It may be that Sunstein will be too busy trying to mediate fights between agencies and other “czars” in the Administration — of which there seems to be no shortage these days! If, however, Sunstein’s views on the supposed dangers of the Internet and his proposals about how to address them do come to hold sway with others in the Obama Administration, we may be looking at even more insidious Internet regulation than I expected from this new crew. Sunstein’s thinking and proposals would have a profound impact on online freedom and the First Amendment rights of all online sites and speakers.

The idea of abolishing the FCC used to be a right-wing fantasy. But now Silicon Valley-booster Lessig is on board.

With so much in its reach, the FCC has become the target of enormous campaigns for influence. Its commissioners are meant to be “expert” and “independent,” but they’ve never really been expert, and are now openly embracing the political role they play. Commissioners issue press releases touting their own personal policies. And lobbyists spend years getting close to members of this junior varsity Congress. Think about the storm around former FCC Chairman Michael Powell’s decision to relax media ownership rules, giving a green light to the concentration of newspapers and television stations into fewer and fewer hands. This is policy by committee, influenced by money and power, and with no one, not even the President, responsible for its failures.

Relaxing media ownership rules was and is a good idea, but aside from that Lessig is absolutely correct. The FCC has a history of inhibiting innovation, protecting favored clients and persecuting politically-unpopular industry segments who stand up for their legitimate rights. But politics are nasty, so none of this should be surprising.

Lessig is also correct that

The solution here is not tinkering. You can’t fix DNA. You have to bury it. President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good.

Yet, Lessig would create a new agency:

Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: “minimal intervention to maximize innovation.” The iEPA’s core purpose would be to protect innovation from its two historical enemies—excessive government favors, and excessive private monopoly power …. With a strong agency head, and a staff absolutely barred from industry ties, the iEPA could avoid a culture of favoritism that has come to define the FCC.

Maybe it’s possible to establish a bureaucratic utopia, although the FCC was created in 1934 by idealistic New Dealers who thought they were establishing a perfectly expert, uncorruptible guardian of truth, justice and the common man.

And they failed.

Maybe the dream that mortals are capable of creating perfect governing institutions consonant with the Platonic vision of philosopher kings is a fool’s errand?

Maybe process and agency structure matter less than the temperament and integrity of the men and women whom the President appoints to lead agencies?

One of the core responsibilities of the iEPA which Lessig envisions would be to “reverse the unrestrained growth of … monopolies.”

But genuine (as opposed to imagined) “excessive private monopoly power” in telecommunications ended sometime between the late 1980s and the early 1990s. What we really have here is a problem of lagging empirical perceptions (see, e.g., what George Gilder and I wrote here) and the absence of a commonly understood definition of the term “monopoly.”

Some time ago, Professor Schumpeter observed that the term “monopoly” has become a catch-all phrase:

Economists, government agents, journalists and politicians in this country obviously love the word [monopoly] because it has come to be a term of opprobrium which is sure to arouse the public’s hostility against any interest so labeled. In the Anglo-American world monopoly has been cursed and associated with functionless exploitation ever since, in the sixteenth and seventeenth centuries, it was English administrative practice to create monopoly positions in large numbers ….

That practice made the English-speaking public so monopoly-conscious that it acquired a habit of attributing to that sinister power practically everything it disliked about business. To the typical liberal bourgeois in particular, monopoly became the father of almost all abuses—in fact, it became his pet bogey … And in this country monopoly is being made practically synonymous with any large-scale business.

In any event, if monopoly abuse is what we are concerned about, that’s what we have the Federal Trade Commission and the Antitrust Division of the Department of Justice for. We hardly need the FCC or an iEPA for that.

With all the great writing—like Tim’s paper—available on the topic, I can’t understand why so many people who write about technology are still confused on the issue of neutrality.  If neutrality is to be understood as some form of the end-to-end principle with a bit of marketing-speak slathered on top, then how can people continue to conflate it with something as basic as differing levels of service from ISPs?

The latest example is Dan Costa writing in the last print edition of PC Magazine.  While Costa’s basic point is correct—he says it’s fair to charge people who use more bandwidth more money for their Internet connection—he seems to think it might be non-neutral.  Sure, it’s non-uniform pricing, but it’s not a violation of net neutrality.

I agree with Costa that it makes sense to charge consumers for what they consume.  To argue this is impermissible would be to argue against the basic principle of fairness.  As Costa says in his column, “Can’t we all agree that my mom and I shouldn’t be paying the same price for broadband?”

The neutrality debate has become a confused mishmash of legitimate concerns over network management practices and the cries of folks who think broadband should be free, or the same low low price for everyone.  I think it’d be great if everyone writing on the matter read Tim’s paper, read the other side of the issue over at places like Free Press, and started speaking sense on the topic.

For geek news gluttons, there’s more to say about Costa’s column, like the TOS of Sprint’s XOHM service, but I’ll leave that to the for those of you who don’t mind long windedness. (Like those of you who actually read Tim’s treatise on neutrality.)  I talk more about Costa’s column at OpenMarket.org.

While creating jobs by upgrading the nation’s physical infrastructure may help in the short term, Mr. Atkinson says, “there’s another category of stimulus you could call innovation or digital stimulus — ‘stimovation,’ as a colleague has referred to it.” Although many economists believe that a stimulus package must be timely, targeted and temporary, Mr. Atkinson’s organization argues that a fourth adjective — transformative — may be the most important. Transformative stimulus investments, he said, lead to economic growth that wouldn’t be there otherwise. 

A new report by the Information Technology and Innovation Foundation [to be released Wednesday] presents the case for investing $30 billion in the nation’s digital infrastructure, including health information technology, broadband Internet access and the so-called smart grid, an effort to infuse detailed digital intelligence into the electricity distribution grid.

And a Silicon Valley petition calls for a tax credit for companies that spend more than 80 percent of what they had been spending annually on information technology like computers and software. 

Usually when politicians hand out targeted tax breaks or grants there are strings attached.

Free Press is already proposing that the Internet services receiving subsidies “must be an open, freely competitive platform for ideas and commerce.” There is a possibility no one would accept the subsidies to build the network Free Press envisions.

Remember last summer when the FCC tried to auction some spectrum in the 700 MHz band with the caveat that “Whoever wins this spectrum has to provide … truly open broadband network — one that will open the door to a lot of innovative services for consumers.” Bidders could have received a subsidy, in effect, because they could choose their bid; they could submit lower bids for the spectrum that would have come with restrictions than they might be willing to consider for similar spectrum unencumbered by such conditions. No one bought it.

And lobbyists for various industry segments are proposing to define the broadband services which would qualify for the tax breaks or grants according to transmission speed. Of course it would be nice if everyone could have the best, i.e., fiber to the home, but that isn’t practical in many parts of the country. Should policymakers disqualify “inferior” technologies because we don’t consider them cutting-edge, even if they are currently best suited to make a real difference in the lives of people who happen to live in places where the “best” would be prohibitively expensive?

Professor Andrew Odlyzko posited in a 2003 paper that fiber to the home “may never become widespread … there is a substantial probability that residential demands might be met by fixed wireless services.”

Then there is the fact someone has to pay for targeted tax relief and grants.

Former Senate Finance Chairman Russell Long (D-LA) once joked, “Don’t tax you, don’t tax me, tax that fellow behind the tree.” He was referring to the fact someone must pay taxes, but Congress can either impose low rates on everyone or high rates on a few people.

Targeted goodies have a way of multiplying as various interest groups come forward with clever arguments for still more targeted benefits. Congress wants to be “fair,” so it enacts more targeted subsidies. But basic tax rates rise and/or new things are taxed as Congress tries to reduce deficit spending. Finally, Congress is forced to eliminate preferences so it can reduce taxes, as it did with the Tax Reform Act of 1986. But at every step of the process there are winners and losers chosen by politicians and bureaucrats.

The alternative is to let private investors decide how to invest society’s resources. Of course if they are successful they may become wealthy. But if they fail they may have to declare bankruptcy. The penalty for failure is severe. Politicians and bureaucrats, on the other hand, are rewarded either way. They merely wait for the next “client” to come along.

Whether or not politicians and bureaucrats are our “best and brightest,” they are captive to political pressure. One should never automatically assume politicians and bureaucrats will aim primarily to help the most needy because they are the most deserving, the middle class because they are the most numerous or the most influential because they are the wealthiest. Politicians and bureaucrats only have to convince a majority feel they are gaining something whether they are or not.

If lower taxes would be good for health information technology, broadband Internet access, the so-called smart grid, computers and software; then — let’s face it — lower taxes would be good for the whole economy.

That said, telecommunications services are not subject to the same taxes other businesses pay. They remit higher taxes owing to the fact they used to be captive ratepayers because they were once monopolies or luxuries. So, for example, even though the sales tax in the District of Columbia is 5.75%, wireless services are taxed 15.71% (this includes a 4.19% federal tax to subsidize phone service in rural areas and computers and Internet access for schools, libraries and rural health care facilities).

Maybe the federal government ought to subsidize those things directly and states and localities ought to apply only their sales tax to telecommunications services — which might lower the price of telecommunications services and stimulate demand for broadband offerings?

Or maybe the objective is not to get broadband to the people but to increase broadband taxes?

Like Ronald Reagan said, “Government’s view of the economy can 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.”

After more than a decade of disappointment, the goal of marrying television and the Internet seems finally to be picking up steam. A key factor in the push are new TV sets that have networking connections built directly into them, requiring no additional set-top boxes for getting online. Meanwhile, many consumers are finding more attractive entertainment and information choices on the Internet — and have already set up data networks for their PCs and laptops that can also help move that content to their TV sets.

The easier it is for consumers to receive traditional television programming (in addition to other kinds of video content) distributed over the Internet on their television, the less “gatekeeper” or “bottleneck” power cable distributors have over programming.  So the Netflix-capable and Yahoo-widget-capable televisions described by the WSJ piece go a long way to increasing the substitutability of what we call Internet Video Programming Distributors (IVPDs) for Multichannel Video Programming Distributors (MVPDs), such as cable, satellite television and fiber services offered by telcos such as Verizon’s FiOS.  

While such televisions are only expected to reach 14% of all TV sales by 2012, one must remember that a growing number of set-top boxes (e.g., the Roku Digitial Video Player, game consoles like the Microsoft XBox 360 and Sony PlayStation 3, and TiVo DVRs) allow users to users to receive IVPD programming on their existing televisions.  

As we argued in our amicus brief, the immense competitive importance of IVPDs lies not in the potential for some users to “cut the cord” to cable and other MVPDs (though that will surely happen), but in the immediate impact IVPDs have as an alternative distribution channel for programmers.  In the pending D.C. Circuit case, we argue that both the FCC’s 30% cap, issued in December 2007, and the underlying portions of the 1992 Cable Act authorizing such a cap should be struck down as unconstitutional because the ready availability of IVPDs as an alternative distribution channel means that cable no longer has the “special characteristic” of gatekeeper/bottleneck power that would justify imposing such a unique burden on the audience size of cable operators.  (Of course, Direct Broadcast Satellite and Telco Fiber are also eating away at cable’s share of the MVPD marketplace.)

The second WSJ piece, an op/ed, illustrates beautifully how cable operators are already losing “market power” (or at least negotiating leverage) in a very tangible way:  they’re having to pay more for programming.  Specifically, the Journal describes how Viacom plaid chicken with Time Warner—and won.  

 The Viacom network had threatened to pull its 19 channels, including Nickelodeon with its “Dora the Explorer” and “SpongeBob SquarePants” cartoons, from the 13 million subscribers to the Time Warner Cable system….

The game of chicken included Viacom advertisements that unless Time Warner Cable agreed to pay more, it would pull the channels, encouraging viewers to call to say they wanted their MTV and other Viacom channels. One ad asked, “Why is Dora crying?” Time Warner countered that consumers would pay more if its costs rose. Bernstein Research analyst Michael Nathanson noted that neither party could afford “mutually assured destruction.” Viacom needs to find more subscription revenue as advertising revenues soften, while Time Warner Cable has to worry about satellite and telecom competitors.

New media was the new factor. Many popular Viacom shows are widely available on the Web, including on its own sites. When it looked as if Comedy Central would be pulled, Wired magazine helpfully posted a guide for accessing the shows on the Web, pointing out that Jon Stewart’s “The Daily Show” can be accessed on Hulu and that “South Park” episodes are on Fancast. The best parts of “The Colbert Report” are often viewed as email attachments or as snippets on mobile phones.

So, in a nutshell, the fact that consumers could get Viacom programming available through IVPDs gave Viacom more leverage against MVPD Time Warner because it increased the credibility of Viacom’s threat to simply shut off programming to Time Warner if the cable giant didn’t cough up more cash.  While this fact seems to have carried the day for Viacom, the availability of Viacom’s content through IVPDs did have some secondary effects that also are worth noting:

During the negotiations, Time Warner Cable threatened to make it easier for its subscribers to connect laptop computers to their televisions so that Viacom shows could stream directly onto subscribers’ televisions.

This is essentially a reversal of the tactic often employed by local broadcasters in their battles with cable operators:  give your customers a set of rabbit ears so they can still get your signal if you actually take your programming off the local cable network.  While this tactic doesn’t seem to have helped Time Warner here, it does point to a long-term trend that could fundamentally change the programming marketplace:

The cable company also argued that it shouldn’t have to pay more to distribute shows that Viacom made available free in other media.

I suspect that, as IVPDs further erode the viewership of cable and other MVPDs, the MVPDs will become more desperate for content—and therefore willing to pay more for it.  But it seems likely that both of the key revenue sources for MVPDs—subscriptions and advertising—will, at some point, begin to decline as Americans spend more time watching IVPD content and become less willing to pay for expensive MVPD plans.  As this happens, cable may have less revenue to share with programmers per subscriber, even as their need for that programming grows.

So how will this all end?  I doubt anyone really knows.  But I feel reasonably comfortable making two predictions.  

First, the overall health of the video programming content market will become increasingly dependent on the profitability of advertising—for MVPDs, IVPDs as well as programmers.  This will require technological innovation to produce smarter advertising.  The better advertising is targeted to a specific consumer’s interests, the more revenue it will produce for all concerned.  But if the government short-circuits this process by hindering the evolution of targeted advertising in the name of protecting consumers’ privacy (or simply to protect them from the supposed inherent unfairness of advertising—an old Marxist shibboleth), the total amount of funding available for content could plummet.  The dynamics described so well by Chris Anderson in “Free! Why $0.00 Is the Future of Business” could drive video programmers to make their content available online for “free” (i.e., at no charge to the user) even if that content ends up producing (via advertising, etc.) significantly less revenue than it currently does on MVPDs (primarily from subscription revenue).  Plenty of smart people have explored this question and have far more intelligent things to say about it than I do.  But since the long-term trend seems to be that consumers are increasingly unwilling to pay even small sums for content, I just don’t see any alternative to increasing advertising revenues—other than public financing, which will necessarily bring with it government control and censorship.

Second, the other part of the solution to this problem will be business model innovation:  If individual consumers won’t pay for online video content, and if future ad revenues for online video content  don’t replace existing revenue streams, programmers are going to look for other sources of funding.  This dynamic seems to be on a collision course with net neutrality mandates.  The WSJ reported:

At one point, it looked as if Viacom might have escalated by trying to block Time Warner Cable broadband subscribers from accessing its Web sites to see its shows.

Whatever actually happened here, one can easily imagine a programmer like Viacom at some point in the future trying to get ISPs to start paying money per broadband subscriber for video content just as MVPDs currently pay per subscriber.  This is really the inverse of the fear generally expressed by net neutrality advocates that ISPs would try to charge programmers for the bandwidth used to transmit their content to an ISP’s subscribers.  If it’s true that programmers (the Viacoms of the world) and not distributors (Time Warner Cable the MVPD or Time Warner Cable the ISP) really have the market power, as this story suggests, then such arrangements might well be the economic salvation of content creators.  As with regulation of advertising, I only hope that government mandates against such innovation in the name of abstract “neutrality” principles don’t end up dooming us to a future where, with free market solutions (better advertising, revenue sharing with ISPs) rendered ineffective by government, government itself seems to be the only option left.

[IE's] share dropped from 69.77% in November to 68.15% in December. [During the same period,] Firefox gained more than half a point and ended up at 21.34%, Safari approaches the [10%] hurdle with 7.93% and Chrome came in at 1.04%, the first time Google was able to cross the 1% mark.

This is particularly interesting: 

Since IE6 is used primarily within corporations, its market share is much higher during the week than it is on weekends. As a result, all other browsers gain on weekends and especially during a holiday. Because of that circumstance, Net Applications noted that the December numbers should be taken with a grain of salt. However, it is worth the note that IE6 achieved … market share numbers of about 28% during the week and about 21% on weekends in early 2008. In December, these numbers were down to about 20% during the week and 15% on weekends.    

So, Microsoft still has an established base among corporate users, where IT administrators  generally prevent employees from installing new applications (including browsers) and the sysadmins often don’t roll out alternative browsers across a corporate network for any one of several possible reasons, including:

• They just don’t want to bother having to install, regularly upgrade and support another piece of software;
• They may overestimate the security vulnerability of such alternative browsers compared to Internet Explorer;
• The crustier sysadmins may not realize that today’s browsers are not only free for individual users, but also for corporate users–unlike the old Netscape Navigator; and
• Corporate intranets may be designed for IE, in which case rolling out an alternative browser might cause confusion among less tech-savvy employees.

Microsoft may still have an advantage that could be considered “unfair,” but so what?  IE’s share of home browser usage may have fallen faster among home users than corporate users, but the overall trend line is clear:  increasing numbers of Americans are taking advantage of the rich browser options available to them, both at home and at work.  As Microsoft’s  share of the browser market falls further with each passing year–at an apparently accelerating rate–the concerns about Microsoft’s “dominance” of the browser market that drove the Justice Department’s antitrust jihad against the company a decade ago seem increasingly obsolete. 

If nothing else, the increasing competitiveness of the browser market should be a persistent reminder to those who advocate top-down regulatory “fixes” to perceived iniquities of online markets that competition and innovation may move faster than government regulators or the courts.  

My prediction for 2009:  IE’s overall share will fall even further than it did in 2008, with particularly strong growth in Google Chrome’s market share.

Now, Ars reports that Kevin Martin has changed his mind about the filtering requirements, caving in to pressure from an array of interest groups to drop the smut-free provisions from the plan. These “family-friendly” rules, which would have mandated that the network filter any content deemed unsuitable for a five-year-old, ended up acting as a lightning rod for critics across the ideological spectrum, and raised serious First Amendment concerns (as Adam and Berin have argued on several occasions).

Even with the smut-free rules having been removed, the proposal remains a very bad idea. Setting aside 25 mhz of the airwaves—a $2 billion chunk of spectrum—to blanket the nation with free wireless broadband (as defined by the FCC) would mean less spectrum available for more robust services. At a time when wireless firms are experimenting with a number of strategies for monetizing the airwaves, allowing a single firm’s business model—especially one that many experts have suggested is simply not viable—to reign over other, more effective models would hurt consumers who yearn for more than basic broadband service.

The case for setting spectrum aside for free wireless broadband is predicated on the myth that there exists an elusive “public interest” that the marketplace is unable to maximize. We’ve heard the same line many times before. It goes something like this: The forces of competition that we rely upon to allocate finite resources in nearly every other sector of the economy are incapable of fulfilling consumer needs when it comes to broadband. Washington DC intellectuals have figured out that the public really wants a free nationwide wireless network—yet this amazing concept has been blocked by evil incumbents that are bent on denying consumers the services they most desire.

This is all baloney, of course. As a group of economists demonstrated in a research paper published a few months ago, there’s strong evidence that the broadband market is actually functioning quite efficiently, and imposing conditions on spectrum operation hurts consumers more than it helps them.

None of these facts have deterred M2Z Networks, a startup wireless firm responsible for much of the advocacy behind the proposal, from conducting a massive, multi-year PR campaign to convince people that free wireless broadband is a worthy goal. But if the proposed network does ultimately prevail, it will owe its success not to actual market performance, but to astute political maneuvering.

Currying favor with Washington regulators by trotting out public interest rhetoric and asserting market failure has worked out quite well for firms recent years. It’s no wonder, then, that M2Z decided to try its hand at persuading the FCC that its plan justified the imposition of special rules. In an open auction without conditions, the price of the spectrum would undoubtedly be higher, and investors would likely be willing to make bigger bets on more viable business models.

The FCC should scrap the free wireless broadband proposal and instead auction off the 2155-2180mhz band with no strings attached. That way, all business models will get a fair shake, and consumer demand—rather than political considerations—will determine who succeeds and who fails.

Will there ever be a place for a nationwide free wireless broadband service in America? More than likely, the answer is yes. As advertisers get better at translating eyeballs into dollars, and engineers continue to improve upon the spectral efficiency of wireless broadband, it’s a safe bet that someday we will see some sort of a nationwide network that offers free Internet access to anyone who’s willing to see a few extra advertisements. But now is not the time for such a network.

Over at OpenMarket.org, the blog of the Competitive Enterprise Institute, I have spelled out my reasons for thinking that neutrality regulation won’t pass and why I think market-enforced neutrality would be a much more robust system for keeping the Net thriving.

Here’s the first couple of paragraphs:

WASHINGTON, DC - Nations ranging from Brazil to Brunei to Russia are failing to properly protect the intellectual property assets of US companies and others, and international organisations are not doing enough to stop it, seven IP attachés to the US Foreign and Commercial Service lamented recently.

Meanwhile, an industry group issued detailed recommendations for the incoming Obama administration’s changes to the US Patent and Trademark Office.

The problems in other nations extend from Brazil’s failure to issue patents for commercially significant inventions by US inventors, to an almost-complete piracy-based economy in Brunei, to an only-modest drop in the rate of Russian piracy from 65 percent to 58 percent.

The attachés, speaking at an event organised by the US Chamber of Commerce and its recently beefed-up Global Intellectual Property Center (GIPC), blasted the record of familiar intellectual property trouble zones like Brunei, Thailand and Russia.

But the problems extend to the attitudes and omissions of major trading partners like Brazil, India and even well-developed European nations, said the attachés.

[more at http://www.ip-watch.org/weblog/index.php?p=1387....]

Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents. That’s often what “real regulators” are like, and it’s important that when policy makers are crafting regulatory scheme, they assume that some of the people administering the law will have these kinds of flaws, rather than imagining that the rules they write will be applied by infallible philosopher-kings.

Ironically, Prof. Lessig — who typically defends many forms of high-tech regulation like Net neutrality and online content labeling — is essentially agreeing with Tim’s critique of bureaucracy. But Lessig seems to ignore the underlying logic of Tim’s critique and instead imagines that we need only reinvent bureaucracy in order to save it. But I’m getting ahead of myself. First, let’s hear what Lessig proposes.

In a Newsweek column this week entitled “Reboot the FCC,” Lessig argues that the FCC is beyond saving because, instead of protecting innovation, the agency has succumb to an “almost irresistible urge to protect the most powerful instead.” Consequently, he continues:

The solution here is not tinkering. You can’t fix DNA. You have to bury it. President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good. In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: “minimal intervention to maximize innovation.” The iEPA’s core purpose would be to protect innovation from its two historical enemies–excessive government favors, and excessive private monopoly power.

As was the case with his earlier call to “blow up the FCC,” I am tickled to hear Lessig call for shutting down an agency that many of us have been fighting against for the last few decades. (Here’s a 1995 blueprint for abolishing the FCC that I contributed to, and here’s PFF’s recent “DACA” project to comprehensively reform and downsize the agency.)

But is Lessig really calling for the same sort of sweeping regulatory reform and downsizing that others have been calling for? And has he identified the real source of the problem that he hopes to correct?  I don’t think so. There are 3 basic problems with the argument Lessig is putting forward in his essay. I will address each in turn.

(1) Real Reform or Just Reshuffling of Deck Chairs?

The first problem is that Lessig isn’t really calling for complete abolition of the FCC; just the transfer of many of its regulatory responsibilities to the supposedly less “corrupt” new Innovation Environment Protection Agency (iEPA). As you read the paragraphs below, note how in the process of re-branding the FCC as the “iEPA,” Lessig seems to be handing that new agency a lot of the FCC’s old powers:

The iEPA’s first task would thus be to reverse the unrestrained growth of these monopolies. For example, much of the wireless spectrum has been auctioned off to telecom monopolies, on the assumption that only by granting a monopoly could companies be encouraged to undertake the expensive task of building a network of cell towers or broadcasting stations. The iEPA would test this assumption, and essentially ask the question: do these monopolies do more harm than good? With a strong agency head, and a staff absolutely barred from industry ties, the iEPA could avoid the culture of favoritism that’s come to define the FCC. And if it became credible in its monopoly-checking role, the agency could eventually apply this expertise to the area of patents and copyrights, guiding Congress’s policymaking in these special-interest hornet nests.

The iEPA’s second task should be to assure that the nation’s basic communications infrastructure spectrum— the wires, cables and cellular towers that serve as the highways of the information economy—remain open to new innovation, no matter who owns them. For example, “network neutrality” rules, when done right, aim simply to keep companies like Comcast and Verizon from skewing the rules in favor of or against certain types of content and services that run over their networks. The investors behind the next Skype or Amazon need to be sure that their hard work won’t be thwarted by an arbitrary decision on the part of one of the gatekeepers of the Net. Such regulation need not, in my view, go as far as some Democrats have demanded. It need not put extreme limits on what the Verizons of the world can do with their network—they did, after all, build it in the first place—but no doubt a minimal set of rules is necessary to make sure that the Net continues to be a crucial platform for economic growth.

Beyond these two tasks, what’s most needed from the iEPA is benign neglect. Certainly, it should keep competition information flowing smoothly and limit destructive regulation at the state level, and it might encourage the government to spend more on public communications infrastructure, for example in the rural areas which private companies often ignore.

“But beyond these limited tasks, ” Lessig claims, “whole phone-books worth of regulation could simply be erased. And with it, we would remove many of the levers that lobbyists use to win favors to protect today’s monopolists.”

Again, from what he’s said here, it sure doesn’t sound like “whole phone books worth of regulation” are being erased. What Lessig has done is essentially restate the current powers and responsibilities of the FCC.  I don’t see much serious downsizing being proposed here at all. Indeed, his call for Net neutrality regulation represents an expansion of bureaucracy.

Instead, what Lessig seems to be saying is that the new iEPA will do the job right because it will be less “corrupt” and enlightened. But that’s not true either.

(2) What Larry Doesn’t Get (about Bureaucracy)

Lessig is essentially calling for the same sort of “scientific” or “professional” bureaucracy that his progressive forefathers advocated a century ago when the modern regulatory leviathan was being envisioned and erected. But what has changed since then? Nothing. Special interests were able to gain influence then just as they do now.

This gets back to Tim Lee’s point about how many pundits and policymakers foolishly believe that everything will magically be better once rules are “applied by infallible philosopher-kings.” Apparently Lessig believes that lots of those folks will be walking the halls at the new iEPA. They’ll somehow be immune from the the “almost irresistible urge to protect the most powerful” that FCC bureaucrats have fallen prey to.

But Lessig provides no rational reason for us to believe that this will really be the case. And really, why should we believe that story? Do we have any good historical evidence to support such a proposition? To the contrary, everything we know from the history of regulation and bureaucracy tells us that exactly the opposite will be the case.

As I so often do when I debate quixotic progressives who say they can construct a more “enlightened” regulatory state, I invite Prof. Lessig to take a hard look at the definitive 2-volume Economics of Regulation by a far more experienced progressive Democrat, Professor Alfred E. Kahn. In Kahn’s masterwork, Prof. Lessig will find the following words of wisdom (and caution) from someone who spent a lifetime studying the issue:

When a commission is responsible for the performance of an industry, it is under never completely escapable pressure to protect the health of the companies it regulates, to assure a desirable performance by relying on those monopolistic chosen instruments and its own controls rather than on the unplanned and unplannable forces of competition.  …

Responsible for the continued provision and improvement of service, [the regulatory commission] comes increasingly and understandably to identify the interest of the public with that of the existing companies on whom it must rely to deliver goods.

(3) No Right to Petition Government ?

At this point, Prof. Lessig and his defenders will no doubt say that everything will be different this time around when they reinvent bureaucracy. The secret, they seem to suggest, is “getting money out of politics” or “ending corruption” by “special interests.” Again, hard to argue against any of that — except to say as we have here many times before that if Big Government exists, special interests will exist to influence it (probably unduly so). Thus, the logical solution is real regulatory reform and downsizing of bureaucracy. That is the only way we are ever really going to solve the problem Prof. Lessig wants to address.

But Prof. Lessig and his supporters are obviously not going to accept that. What they want is government activism without the ugly downsides of lobbying and special interest influence polluting the process. Is there any way to do it? Again, for the reasons I have stated here, I doubt it. But what, exactly, would it mean in practice to let them try?  I fear that what Prof. Lessig and many other “progressives” mean by “ending special interest influence” is really ending the free speech rights of citizens to petition their government if those citizens happen to be corporations.

Let’s remember what the First Amendment says:

“Congress shall make no law … abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Now, I certainly realize how unpopular this will be to some, but if you believe in the plain text of the Constitution then you should respect the right of citizens (including corporate entities) to petition (i.e., “lobby”) the government for consideration of their interests, especially if the government is imposing significant regulatory burdens on them. Calling for limits on the ability of the regulated to petition their regulators is a fundamental betrayal of the plain language of the First Amendment.

I don’t want to put words in Prof. Lessig’s mouth, but I have a feeling that this is where his proposal is heading. He says that the staff of his new iEPA will be “absolutely barred from industry ties” but doesn’t really spell out what that means. If it just means limits on who can be hired for certain positions in the new agency, I’m generally fine with that (even though I do not for one minute believe it will magically “end corruption.”) If, however, Lessig and his fellow progressives want rules restricting the ability of “interests” to communicate with this new agency, then I find such a proposal quite troubling.

One final point: What exactly counts as a “special interest”? No doubt, Lessig and other progressives equate interests with corporations. But what about unions, co-ops, non-profits, schools, charities, think tanks, etc.?  They all petition government endlessly. Would Lessig limit their rights?

I hope Prof. Lessig takes the time to ellaborate on his proposal because he may have good answers to many of the quibbles I have raised here. I really do want to take him at his word and believe that he is ready to radically reform the regulatory beast that has so completely failed in its mission to improve consumer welfare.  But I have my doubts. And, sadly, I have history on my side.