The Technology Policy Institute has released an interesting new study from Robert Crandall and Charles Jackson on “Antitrust in High-Tech Industries,” which takes a close look at the impact of antitrust law in the three most high-profile technology cases of the last half century: IBM, AT&T and Microsoft.  Crandall and Jackson conclude:

In each of our three cases, the ultimate source of major changes in the competitive landscape appears to have been innovation and new technology — technology that was apparently not unleashed by the antitrust litigation. In each case, the government did not and probably could not see how technology would develop over time. Therefore, it was difficult for the government to design remedies that would  accelerate competition when this competition developed from new technologies.

I enjoyed the paper and encourage others to read the entire thing.  It’s very much in line with what we’ve written here in the past on the antitrust and high-tech markets.  See, for example, my review of Gary Reback’s recent book on antitrust and high-tech markets.  As I noted there, the crucial, ‘conflict of visions‘ issue comes down to an appreciation for dynamic competition and technological evolution over the sort of static competition, fixed-pie mindset that so many antitrust defenders espouse.  Those of us who believe in dynamic competition see markets in a constant state of flux and expect that sub-optimal market developments or configurations are exactly the spark that incentivizes new form of market entry, innovation, technological disruption, price competition, and so on.  But the static competition crowd looks at the same situation and imagines that the only hope is to wheel in the wrecking ball of antitrust regulation since they have little faith that things might change for the better. Moreover, they ignore the profound costs associated with such regulation and litigation.  Crandall and Jackson’s paper explains why patience is the better policy.

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

Understanding the Origins of Political Struggles

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

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

The Unconstrained Nature of the Cyber-Collectivist Vision

Sowell’s taxonomy provides a useful frame of reference for today’s debate over communications and media policy. The unconstrained vision crowd here might best be labeled “cyber-collectivists.” This collectivism is not necessarily the hard-edged Marxist brand of collectivism of modern times. It is more the collectivism of Plato’s rule by “philosopher kings” as much as it is modern European “social democrat” collectivism. It generally rejects outright State ownership of the means of production, although there are some exceptions. (Free Press founder Robert McChesney, for example, would go much further than most other collectivists in having the State intervene and directly control or even own media and communications outlets and infrastructure).

Like their many “unconstrained” intellectual predecessors, what unifies the cyber-collectivists is the belief that the State should have a hand in guiding market outcomes toward a “fairer” end. The cyber-collectivists, for example, get indigestion over unequal patterns whether we are talking audience shares or technological diffusion. They are quick to allege “market failure” when some of their preferred media voices only capture miniscule audience shares (even when it’s just the result of consumer demand in action). And when some people or communities gain access to a network or new technology quicker than others, they are often quick to conclude some nefarious plot by greedy capitalists must be to blame.

Of course, in reality, this is just the way things in a free society have always worked. “Liberty upsets patterns” the late Harvard University philosopher Robert Nozick taught us in his 1974 masterpiece “Anarchy, State, and Utopia.” What Nozick meant was that there is a fundamental tension between liberty and egalitarianism such that when people are left to their own devices, some forms of inequality would be inevitable and persistent throughout society. Correspondingly, any attempt to force patterns, or outcomes, upon society requires a surrender of liberty.

All of this is equally true for media and communications policy. Just as there will never be perfect equality of outcomes in the provision of homes, cars, or incomes, there will never be perfect equality of tech gadgets or audience shares for media speakers / outlets.

Speech Redistributionism

The cyber-collectivists are not content with that, however. Just as they call for a redistribution of wealth to rectify the supposed injustice of unequal incomes, so too they call for “something to be done” to “balance” outcomes and ensure “fairer” outcomes. We might call this “media redistributionism” or even “speech redistributionism.”

Consider, for example, a proposal set forth by Cass Sunstein, the prolific University of Chicago law professor (and now Obama Administration official). In his 2001 book Republic.com, in which he suggests that government should consider requiring “electronic sidewalks” in cyberspace to encourage more balance on Internet websites. The state would impose the equivalent of “must carry” mandates on popular or partisan websites, forcing them to carry links to opposing viewpoints. In the name of “media access” or “fairness,” Sunstein and others are apparently willing to let the state impose tyrannical mandates on private website operators, forcing them to open their private property to use by others. Essentially it’s a Fairness Doctrine for the Internet Age.

Elsewhere Sunstein has argued in favor of greater “public interest” regulation to actually change public attitudes and tastes, claiming that there “is a large difference between the public interest and what interests the public.” [See: Television and the Public Interest, 88 California Law Review 499, 501 (2000).] He and many other cyber-collectivist scholars claim that they have a better idea of what interests the public. Essentially, the public doesn’t know what’s best for them, so someone else must tell them—and potentially even force supposedly better choices upon them. For example, Ellen P. Goodman of the Rutgers-Camden School of Law, and currently an adviser to the Federal Communications Commission, believes that, “a proactive media policy must not only correct a poorly functioning market, but also provide diversions around existing media markets and tastes. Proactive media policy can do this by changing consumer wants.”

The thought of having government “change consumer wants” is positively Orwellian and raises the obvious question: according to who’s tastes and values? The viewing and listening public has a broad array of interests and desires that cannot be easily gauged by congressional lawmakers, and certainly not by five unelected bureaucrats at the FCC. As media scholar Benjamin Compaine has correctly noted, “[i]n democracies, there is no universal ‘public interest.’ Rather there are numerous and changing ‘interested publics.’”

And, more practically, how should such goals be accomplished in an age of information abundance? The sheer scale and volume of media activity taking place across an unprecedented variety of communications platforms makes it difficult to imagine how a scarcity-era regulatory regime will be applied going forward. Are we going to have speech patrols standing on every cyber-corner policing the Net for “fairness” violations or determining what is and isn’t “in the public interest”?

Opportunity, Not Outcome, Is What Matters Most

Those of us who subscribe to a more “constrained vision” understand that what is really important is equality of media opportunity, not equality of media outcomes. A focus on the latter is both foolish and destructive. It is foolish because media equality is an impossibility absent extreme measures, which in turn explains why it is destructive. We would need totalitarian government controls on media outputs and consumption in order to achieve anything remotely close to “balance” or “equality” in terms of media results. What counts most is that people have a chance to be heard, not whether millions are listening or whether there is a perfect distribution of digital technology.

Again, that is not enough for the unconstrained visionaries who guide the cyber-collectivist movement. They want action and they want results and they want them now! And, they will always remind us, they have the best of intentions, so we should just trust them. The problem is, intentions + action = control. When they say “something to be done” that is usually code (excuse the pun) for heavy-handed government action to control the messy, un-patterned outcomes of a free marketplace.

And so we arrive at the critical difference between the cyber-freedom and the cyber-collectivist movements: Those of us who adhere to a more constrained view of nature, society and economy (i.e., the cyber-freedom movement) believe that liberty is the default position and that it generally trumps other values. Supposed “market failures” (or “code failures,” as the case may be) are ultimately better addressed by voluntary, spontaneous, bottom-up, marketplace responses than by the coerced, top-down, governmental solutions that the cyber-collectivists call for. Moreover, the decisive advantage of the market-driven approach to correcting code failure comes down to the rapidity and nimbleness of those response(s). Finally, and quite importantly, we in the cyber-freedom movement are not so quick to cry “market failure!” and call in the code cops. We understand that those messy, un-patterned market outcomes are the result of an evolutionary process or trial-and-error and that society and economy benefit from the resulting learning process.

Sure, there may be times when governments may need to intervene at the margins, but we would counsel against abrupt and incessant interventions to correct every supposed “market failure” or “unfair” outcome. After all, those interventions will simply beget more and more interventions to correct the inevitable failures of, or dissatisfaction with, previous interventions. There is simply no sugar-coating the reality that, no matter how well-intentioned, more and more media control is the inevitable prescription.

In my next installment in this series, I will detail the cyber-collectivist blueprint for radical media redistributionism by outlining this movement’s goals and its proposed methods of control.

Mediapost has published an interview I gave to Omar Tawakol, founder of the BlueKai registry entitled “User Empowerment, Not Regulation, Is The Answer to Privacy Concerns About Targeted Ads” in which I summarize the arguments Adam Thierer and I have been making since our “Principles to Guide the Debate” piece last September.

We argue for user empowerment over restrictive defaults (like “opt-in”) for data use and collection because, as the Supreme Court held in 2000: “Technology expands the capacity to choose; and it denies the potential of this revolution if we assume the Government is best positioned to make these choices for us.” We promote tools that let users make their own decisions about privacy, not only because those decisions are fundamentally subjective, but because regulatory mandates could stifle the development of online content and commerce.

I also note the parallels between speech controls and privacy regulation, and call for a consistent, principled approach to both:

Since 1997, the Supreme Court has struck down multiple legislative attempts to censor online and offline content [especially the CDA] because there were “less restrictive alternatives” that would not so heavily burden free speech rights. In a 2000 cable-related decision, the Court held that “targeted blocking [by users] is less restrictive than banning, and the Government cannot ban speech if targeted blocking is a feasible and effective means of furthering its compelling interests.” Courts have struck down other federal and state speech controls because parents had the tools to filter their kids’ access to information online, in video games, etc., as described in my PFF colleague Adam Thierer’s ongoing catalog of these tools… Many who oppose industry self-regulation are not really “consumer advocates” because they don’t recognize that consumers have many, competing values. Those regulatory advocates are more interested in their preferred one-size-fits-all mandates than in empowering users to determine their own privacy preferences. Like advocates of censorship, privacy zealots assert great dangers to which citizens are supposedly oblivious but which urgently require government intervention-dismissing arguments to the contrary as either uninformed or irresponsible.

The comments on the interview are equally worth reading.  Jeff Chester, who has made a career out of attacking advertising, quickly posted a comment dismissing, but ignoring, my arguments about consumer welfare as corporate propaganda—just as he did with his comment on the post Adam and I wrote in June about congressional hearings on the issue featuring Chester (and Scott Cleland, the right-wing “Bizarro Chester“).  I’ve had it with Chester’s ad hominem attacks on the motives of those who disagree with him, as I explained in my reply to Chester:

Despite our profound “Conflict of Visions,” I must rush to Mr. Chester’s defense to point out [contrary to the assertion of another commenter who criticized Chester’s motives] that his salary has only reached “six figures” in one of the three years for which Chester’s group, the Center for Digital Democracy, has filed their Form 990 returns with the IRS: $101,500 in 2005, but a mere $97,925 in 2006 and $96,750 in 2007 (including benefits). Given CDD’s declining donations, Chester’s salary has grown from 35% of CDD’s income in 2005 ($288,807) to 56% ($172,852) in 2007. As a result of deficit-spending to maintain Chester’s salary, CDD’s 2007 assets were just half what they were in 2005 ($203,508 / $411,174). These returns are available on guidestar.org. I might take the same approach Chester takes in attempting to dodge our arguments: question his motives and suggest that the hysteria level of his arguments has grown in close correlation with his increased need to boost CDD’s donations, which have sagged even as his salary has remained constant. But unlike Chester and others who suffer from the “Vision of the Anointed,” I am not in the business of—as Thomas Sowell put it—”disdainfully dismissing” arguments contrary to my own “as either uninformed, irresponsible, or motivated by unworthy purposes.” I truly take Chester at his word: I think he genuinely believes the fantastical claims he makes about the evils of “targeted” advertising and that advertising is manipulative, creating what Neo-Marxists would call “false consciousness” (making people think they want things they don’t). I don’t think he’s merely trying to drum up donations (although that may be a happy coincidence of his Chicken-Little-ism). I ask only that Chester grant us the same respect by recognizing that our arguments are deeply rooted in a principled belief that online advertising creates enormous value for consumers, and that better targeting should be celebrated as a way of sustaining media in the 21st century, not an evil conspiracy by a shadowy cabal of advertisers. I take no pleasure in noting that Chester makes more money than I do (assuming his salary has not finally started to decline since 2007 along with the apparent downward trend in CDD’s donations). Moreover, since my market value as a recently-practicing lawyer is probably considerably higher than this, I gave up quite a lot to fight the battle of ideas when I joined The Progress & Freedom Foundation last year. Chester may not agree with my arguments, but for him to dismiss me as a corporate whore is simply laughable. If I really wanted to sell out, I would go back to a law firm at an annual salary greater than the donations his Center for Digital Democracy received in 2007. I would not have chosen a career as a consumer advocate at considerable personal cost if I were not utterly sincere in my convictions. So, please, Jeff, spare us all your sanctimony and engage our arguments on substance. Your dismissal of Omar Tawakol is also grossly unfair, since BlueKai has been an industry leader in empowering users with its consumer preference registry. On substance, I find it equally amusing that Chester has embraced the rhetoric of “consumer empowerment” in support of an agenda that is about just the opposite: making choices for users. Our argument is that we should to do everything we can to empower users to make their own choices about privacy preferences through tools like the BlueKai Registry, Google’s Ad Preference Manager and other more radical innovations. But Chester’s argument is that government should mandate restrictive default settings (e.g., opt-in). This is not empowerment but arrogant presumption: Chester is an elitist not only because he presumes that consumers are as paranoid about “being tracked” as he is, but also because he would impose a default (no tracking) that would destroy the economic value created by targeted advertising. That default has enormous costs for users as an “Industrial Policy for the Internet,” reducing revenues for publishers whose “free” content and services Chester takes for granted, but which benefit Internet users around the world.