Compliance paradox: The situation in which heightened legal or regulatory efforts fail to reverse unwanted behavior and instead lead to increased legal evasion and additional enforcement problems.
Demosclerosis: Growing government dysfunction brought on by the inability of public institutions to adapt to change, especially technological change.
Evasive entrepreneurs: Innovators who do not always conform to social or legal norms.
Free innovation: Bottom-up, noncommercial forms of innovation that often take on an evasive character. Free innovation is sometimes called “grassroots” or “household” innovation or “social entrepreneurialism.” Even though it is typically noncommercial in character, free innovation often involves regulatory entrepreneurialism and technological civil disobedience.
Innovation arbitrage: The movement of ideas, innovations, or operations to jurisdictions that provide legal and regulatory environments most hospitable to entrepreneurial activity. It can also be thought of as a form of jurisdictional shopping and can be facilitated by competitive federalism.
Innovation culture: The various social and political attitudes and pronouncements toward innovation, technology, and entrepreneurial activities that, taken together, influence the innovative capacity of a culture or nation.
Pacing problem: A term that generally refers to the inability of legal or regulatory regimes to keep up with the intensifying pace of technological change.
Permissionless innovation: The general notion that “it’s easier to ask forgiveness than it is to get permission.” As a policy vision, it refers to the idea that experimentation with new technologies and innovations should generally be permitted by default.
Precautionary principle: The practice of crafting public policies to control or limit innovations until their creators can prove that they will not cause any harm or disruptions.
Regulatory entrepreneurs: Evasive entrepreneurs who set out to intentionally challenge and change the law through their innovative activities. In essence, policy change is part of their business model.
Soft law: Informal, collaborative, and constantly evolving governance mechanisms that differ from hard law in that they lack the same degree of enforceability.
Technological civil disobedience: The technologically enabled refusal of individuals, groups, or businesses to obey certain laws or regulations because they find them offensive, confusing, time-consuming, expensive, or perhaps just annoying and irrelevant.
Technologies of freedom: Devices and platforms that let citizens openly defy (or perhaps just ignore) public policies that limit their liberty or freedom to innovate. Another term with the same meaning is “technologies of resistance.”
In coming days and weeks I will be occasionally blogging about different arguments made in the 368-page book, but here’s a quick summary of some of the key points I make in the book. These ten passages are pulled directly from the text:
“the freedom to innovate is essential to human betterment for each of us individually and for civilization as a whole. That freedom deserves to be taken more seriously today.”
“Entrepreneurialism and technological innovation are the fundamental drivers of economic growth and of the incredible advances in the everyday quality of life we have enjoyed over time. They are the key to expanding economic opportunities, choice, and mobility.”
“Unfortunately, many barriers exist to expanding innovation opportunities and our entrepreneurial efforts to help ourselves, our loved ones, and others. Those barriers include occupational licensing rules, cronyism-based industrial protectionist schemes, inefficient tax schemes, and many other layers of regulatory red tape at the federal, state, and local levels. We should not be surprised, therefore, when citizens take advantage of new technological capabilities to evade some of those barriers in pursuit of their right to earn a living, to tinker with or try doing new things, or just to learn about the world and serve it better.”
“Evasive entrepreneurs rely on a strategy of permissionless innovation in both the business world and the political arena. They push back against ‘the Permission Society,’ or the convoluted labyrinth of permits and red tape that often encumber entrepreneurial activities.”
“We should be willing to tolerate a certain amount of such outside-the-box thinking because entrepreneurialism expands opportunities for human betterment by constantly replenishing the well of important, life-enhancing ideas and applications.”
“we should better appreciate how creative acts and the innovations they give rise to can help us improve government by keeping public policies fresh, sensible, and in line with common sense and the consent of the governed.”
“Evasive entrepreneurialism is not so much about evading law altogether as it is about trying to get interesting things done, demonstrating a social or an economic need for new innovations in the process, and then creating positive leverage for better results when politics inevitably becomes part of the story. By acting as entrepreneurs in the political arena, innovators expand opportunities for themselves and for the public more generally, which would not have been likely if they had done things by the book.”
“Dissenting through innovation can help make public officials more responsive to the people by reining in the excesses of the administrative state, making government more transparent and accountable, and ensuring that our civil rights and economic liberties are respected.”
“In an age when many of the constitutional limitations on government power are being ignored or unenforced, innovation itself can act as a powerful check on the power of the state and can help serve as a protector of important human liberties.”
“Lawmakers and regulators need to consider a balanced response to evasive entrepreneurialism that is rooted in the realization that technology creators and users are less likely to seek to evade laws and regulations when public policies are more in line with common sense.”
CBS and Time Warner Cable have been embroiled in a heated contractual battle over the past week that has resulted in viewers in some major markets losing access to CBS programming. When disputes like these go nuclear and signal blackouts occur, it is inevitable that some folks will call for policy interventions since nobody likes it when the content they love goes dark.
While some policy responses are warranted in this matter, policymakers should proceed with caution. Heated contractual negotiations are a normal part of any capitalist marketplace. We shouldn’t expect lawmakers to intervene to speed up negotiations or set content prices because that would disrupt the normal allocation of programming by placing a regulatory thumb too heavily on one side of the scale. This is why I am somewhat sympathetic to CBS in this fight. In an age when content creators struggle to protect their copyrighted content and get compensation for it, the last thing we need is government intervention that undermines the few distribution schemes that actually work well.
On the other hand, Time Warner Cable deserves sympathy here, too, since CBS currently enjoys some preexisting regulatory benefits. As I noted in this 2012
Forbes oped, “Toward a True Free Market in Television Programming,” many layers of red tape still encumber America’s video marketplace and prevent a truly free market in video programming from developing. The battle here revolves around the “retransmission consent” rules that were put in place as part of the Cable Act of 1992 and govern how video distributors carry signals from TV broadcasters, which includes CBS.
But those “retrans” rules are not the only part of the regulatory mess here. Continue reading →
Filings are due to the Federal Trade Commission (FTC) today as part of its review of the Children’s Online Privacy Protection Act (COPPA) and the COPPA rule that the FTC devised and enforces. I didn’t have time to pen as much as I wanted, but I did submit a short filing to the agency in the matter based on some of my previous work both with Berin Szoka and on my own. Here’s the executive summary for my filing:
It goes without saying that the Children’s Online Privacy Protection Act (COPPA) is complicated law and rule. When considering the rule and proposals to amend it, it is easy to get lost in the weeds and ignore the bigger picture. That would be a mistake. There are broader, more important questions that need to be asked as part of the Federal Trade Commission’s effort to expand this regulatory regime. These questions involve not only the costs of increased regulation for online business interests, but the impact of expanded regulation on market structure, competition, and innovation. More importantly, these questions cut to the core of whether the public (including children) will be served with more and better digital innovations in the future. There is no free lunch. Regulation—even well-intentioned regulation like COPPA—is not a costless exercise. There are profound trade-offs for online content and culture that must always be considered.
Whatever one thinks about the effectiveness or sensibility of the COPPA regulatory model for the Web 1.0 world, it is clear that the regime is being strained by the unforeseen realities of the Web 2.0 world of hyper-ubiquitous connectivity and user-generated content creation and sharing. The digital genie cannot be put back in the bottle. While COPPA may continue to have a marginal role to play in this rapidly evolving world, that role will likely be increasingly limited by the inherent realities of the information age.
Stephanie Clifford of the
New York Times posted a very interesting article this week summarizing a recent “on-the-record chat” the Times staff had with Federal Trade Commission (FTC) chairman Jon Leibowitz and FTC Bureau of Consumer Protection chief David Vladeck. The interview [discussed by Braden here] is profoundly important in that it reveals an alarming disconnect regarding the relationship between “privacy” regulation and the future of media, which were the subjects of their discussion with Times staff. Namely, Leibowitz and Vladeck apparently fail to appreciate how the delicate balance between commercial advertising and journalism is at risk precisely because of the sort of regulations they apparently are ready to adopt. Because the value of online advertising depends on data about its effectiveness and consumers’ likely interests, and because advertising is indispensable to funding media, what’s ultimately at stake here is nothing short of the future of press freedom.
The “Day of Reckoning” Is Upon Us
Leibowitz and Vladeck spend the first half of
The Times interview wringing their hands about “privacy policies,” the declarations made by websites and advertising networks about their data collection and use practices (for which the FTC can and must hold them accountable). But the two feel that privacy policies don’t adequately inform consumers. Chairman Leibowitz claims that online companies “haven’t given consumers effective notice, so they can make effective choices.” And Mr. Vladeck states that advise-and-consent models “depended on the fiction that people were meaningfully giving consent.” But he and the FTC seem ready to abandon the notice and choice model because the “literature is clear” that few people read privacy policies, Vladeck told the Times. He and Leibowitz continue:
“Philosophically, we wonder if we’re moving to a post-disclosure era and what that would look like,” Mr. Vladeck said. “What’s the substitute for it?” He said the commission was still looking into the issue, but it hoped to have an answer by June or July, when it plans to publish a report on the subject. Mr. Leibowitz gave a hint as to what might be included: “I have a sense, and it’s still amorphous, that we might head toward opt-in,” Mr. Leibowitz said.
This clearly foreshadows the regulatory endgame we have long suspected was coming. When the FTC released its “Self-Regulatory Principles for Online Behavioral Advertising” eleven months ago, we asked: “What’s the Harm & Where Are We Heading?” Their answers to both questions have become clearer with each new calculated comment—all apparently intended to slowly “turn up the heat” on the advertising industry so that the proverbial frog will stay in the pot until the water finally boils. Leibowitz’s FTC has simply dodged the “harm” question with a four-part strategy: Continue reading →
As Berin mentioned last week, we have a new paper out on proposals to expand the Children’s Online Privacy Protection Act (COPPA) of 1998. We generically refer to those COPPA-expansion efforts as “COPPA 2.0.” Hence, the title of our paper: “COPPA 2.0: The New Battle over Privacy, Age Verification, Online Safety & Free Speech.” To recap what Berin already noted, in the name of improving online child safety, some legislators and state attorneys general (AGs) are advocating the expansion of COPPA’s “verifiable parental consent” model of age verification before certain sites or services may collect, or enable the sharing of, personal information for children.
Unlike “COPPA 1.0,” however, which only applied to children under the age of 13, “COPPA 2.0” would apply to all minors up to age 17. Moreover, the range of sites covered by the new law would generally be expanded to include just about any site or service with social networking functionality.
Since Berin has already summarized our general concerns with efforts to expand COPPA’s “verifiable parental consent” online age verification system to cover more online users and sites, I thought I would focus here on what I believe will be the most controversial (and important) part of our paper — our discussion about how COPPA 2.0 affects the speech rights of both adults
and adolescents.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology. Learn more about TLF →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.