In my latest R Street Institute blog post, “Mapping the AI Policy Landscape Circa 2023: Seven Major Fault Lines,” I discuss the big issues confronting artificial intelligence and machine learning in the coming year and beyond. I note that the AI regulatory proposals are multiplying fast and coming in two general varieties: broad-based and targeted. Broad-based algorithmic regulation would address the use of these technologies in a holistic fashion across many sectors and concerns. By contrast, targeted algorithmic regulation looks to address specific AI applications or concerns. In the short-term, it is more likely that targeted or “sectoral” regulatory proposals have a chance of being implemented.

I go on to identify seven major issues of concern that will drive these policy proposals. They include:

1) Privacy and Data Collection

2) Bias and Discrimination

3) Free Speech and Disinformation

4) Kids’ Safety

5) Physical Safety and Cybersecurity

6) Industrial Policy and Workforce Issues

7) National Security and Law Enforcement Issues

Of course, each of these issues includes many sub-issues and nuanced concerns. But I also noted that “this list only scratches the surface in terms of the universe of AI policy issues.” Algorithmic policy considerations are now being discussed in many other fields, including education, insurance, financial services, energy markets, intellectual property, retail and trade, and more. I’ll be rolling out a new series of essays examining all these issues throughout the year.

But, as I note in concluding my new essay, the danger of over-reach exists with early regulatory efforts:

AI risks deserve serious attention, but an equally serious risk exists that an avalanche of fear-driven regulatory proposals will suffocate different life-enriching algorithmic innovations. There is a compelling interest in ensuring that AI innovations are developed and made widely available to society. Policymakers should not assume that important algorithmic innovations will just magically come about; our nation must get its innovation culture right if we hope to create a better, more prosperous future.

America needs a flexible governance approach for algorithmic systems that avoids heavy-handed, top-down controls as a first-order solution. “There is no use worrying about the future if we cannot even invent it first,” I conclude.

Additional Reading

• Adam Thierer, “Artificial Intelligence Primer: Definitions, Benefits & Policy Challenges,” Medium, December 2, 2022.
• Neil Chilson & Adam Thierer, “The Coming Onslaught of ‘Algorithmic Fairness’ Regulations,” Regulatory Transparency Project of the Federalist Society, November 2, 2022.
• Adam Thierer, “We Really Need To ‘Have a Conversation’ About AI … or Do We?” Discourse, October 6, 2022.
• Adam Thierer, “How the Embedding of AI Ethics Works in Practice & How It Can Be Improved,” Medium, September 22, 2022.
• Adam Thierer, “No Goldilocks Formula for Content Moderation in Social Media or the Metaverse, But Algorithms Still Help,” Medium, September 13, 2022.
• Adam Thierer, “AI Eats the World: Preparing for the Computational Revolution and the Policy Debates Ahead,” Medium, September 10, 2022.
• Adam Thierer, “‘Running Code and Rough Consensus’ for AI: Polycentric Governance in the Algorithmic Age,” Medium, September 1, 2022.
• Adam Thierer, “AI Governance ‘on the Ground’ vs ‘on the Books,’” Medium, August 19, 2022.
• Adam Thierer, “Why the Future of AI Will Not Be Invented in Europe,” Technology Liberation Front, August 1, 2022.
• Adam Thierer, “Existential Risks & Global Governance Issues around AI & Robotics,” [DRAFT CHAPTER, July 2022].
• Adam Thierer, “How Science Fiction Dystopianism Shapes the Debate over AI & Robotics,” Discourse, July 26, 2022.
• Adam Thierer, “Why is the US Following the EU’s Lead on Artificial Intelligence Regulation?” The Hill, July 21, 2022.
• Adam Thierer, “Algorithmic Auditing and AI Impact Assessments: The Need for Balance,” Medium, July 13, 2022.
• Adam Thierer, “The Proper Governance Default for AI,” Medium, May 26, 2022.
• Adam Thierer, “What I Learned about the Power of AI at the Cleveland Clinic,” Medium, May 6, 2022.
• Adam Thierer, Governing Emerging Technology in an Age of Policy Fragmentation and Disequilibrium, American Enterprise Institute (April 2022).

On December 13th, I will be participating in an Atlas Network panel on, “Big Tech, Free Speech, and Censorship: The Classical Liberal Approach.” In anticipation of that event, I have also just published a new op-ed for The Hill entitled, “Left and right take aim at Big Tech — and the First Amendment.” In this essay, I expand upon that op-ed and discuss the growing calls from both the Left and the Right for a variety of new content regulations. I then outline the classical liberal approach to concerns about free speech platforms more generally, which ultimately comes down to the proposition that innovation and competition are always superior to government regulation when it comes to content policy.

In the current debates, I am particularly concerned with calls by many conservatives for more comprehensive governmental controls on speech policies enforced by various private platforms, so I will zero in on those efforts in this essay. First, here’s what both the Left and the Right share in common in these debates: Many on both sides of the aisle desire more government control over the editorial decisions made by private platforms. They both advocate more political meddling with the way private firms make decisions about what types of content and communications are allowed on their platforms. In today’s hyper-partisan world,” I argue in my Hill column, “tech platforms have become just another plaything to be dominated by politics and regulation. When the ends justify the means, principles that transcend the battles of the day — like property rights, free speech and editorial independence — become disposable. These are things we take for granted until they’ve been chipped away at and lost.”

Despite a shared objective for greater politicization of media markets, the Left and the Right part ways quickly when it comes to the underlying objectives of expanded government control. As I noted in my Hill op-ed:

there is considerable confusion in the complaints both parties make about “Big Tech.” Democrats want tech companies doing more to limit content they claim is hate speech, misinformation, or that incites violence. Republicans want online operators to do less, because many conservatives believe tech platforms already take down too much of their content.

This makes life very lonely for free speech defenders and classical liberals. Usually in the past, we could count on the Left to be with us in some free speech battles (such as putting an end to “indecency” regulations for broadcast radio and television), while the Right would be with us on others (such as opposition to the “Fairness Doctrine,” or similar mandates). Today, however, it is more common for classical liberals to be fighting with both sides about free speech issues.

My focus is primarily on the Right because, with the rise of Donald Trump and “national conservatism,” there seems to be a lot of soul-searching going on among conservatives about their stance toward private media platforms, and the editorial rights of digital platforms in particular.

In my new  Hill essay and others articles (all of which are listed down below), I argue there is a principled classical liberal approach to these issues that was nicely outlined by President Ronald Reagan in his 1987 veto of Fairness Doctrine legislation, when he said:

History has shown that the dan­gers of an overly timid or biased press cannot be averted through bureaucratic regulation, but only through the freedom and compe­tition that the First Amendment sought to guarantee.

Let’s break that line down. Reagan admits that media bias can be a real thing. Of course it is! Journalists, editors, and even the companies they work for all have specific views. They all favor or disfavor certain types of content. But, at least in the United States, the editorial decisions made by these private actors are protected by the First Amendment. Section 230 is really quite secondary to this debate, even though some Trumpian conservatives wrongly suggest that it’s the real problem here. In reality, national conservatives would need to find a way to work around well-established First Amendment protections if they wanted to impose new restrictions on the editorial rights of private parties.

But why would they want to do that? Returning to the Reagan veto statement, we should remember how he noted that, even if the First Amendment did not protect the editorial discretion of private media platforms, bureaucratic regulation was not the right answer to the problem of “bias.”  Competition and choice were the superior answer. This is the heart and soul of the classical liberal perspective: more innovation is always superior to more regulation.

For the past 30 years, conservatives and classical liberals were generally aligned on that point. But the ascendancy of Donald Trump created a rift in that alliance that now threatens to grow into a chasm as more and more Right-of-center people begin advocating for comprehensive control of media platforms.

The problems with that are numerous beginning with the fact that none of the old rationales for media controls work (and most of them never did). Consider the old arguments justifying widespread regulation of private media:

• “Scarcity” was the oldest justification for media regulation, but we live in the exact opposite world today, in which the most common complaint about media is the abundance of it!
• Conversely, the supposed “pervasiveness” of some media (namely broadcasting) was used as a rationale for government censorship in the past. But that, too, no longer works because in today’s crowded media marketplace and Internet-enabled world, all forms of communications and entertainment are equally pervasive to some extent.
• State ownership and licensing of spectrum was another rationale for control that no longer works. No digital media platforms need federal licenses to operate today. So, that hook is also gone. Moreover, the answer to the problem of government ownership of media is to stop letting the government own and control media assets, including spectrum.
• “Fairness” is another old excuse for control, with some regulatory advocates suggesting that five unelected bureaucrats at the Federal Communications Commission (or some other agency) are well-suited to “balance” the airing of viewpoints on media platforms. Of course, America’s disastrous experience with the Fairness Doctrine proved just how wrong that thinking was. [I summarize all the evidence proving that here.]

That leaves a final, more amorphous rationale for media control: ” gatekeeper” concerns and assertions that private media platforms can essentially become “state actors.” In the wake of Donald Trump’s “de-platorming” from Facebook and Twitter, many of his supporters began adopting this language in defense of more aggressive government control of private media platforms, including the possibility of declaring those platforms common carriers and demanding that some sort of amorphous “neutrality” mandates be imposed on them. But as Berin Szóka and Corbin Barthold of Tech Freedom note:

Where courts have upheld imposing common carriage burdens on communications networks under the First Amendment, it has been because consumers reasonably expected them to operate conduits. Not so for social media platforms. [. . . ] When it comes to the regulation of speech on social media, however, the presumption of content neutrality does not apply. Conservatives present their criticism of content moderation as a desire for “neutrality,” but forcing platforms to carry certain content and viewpoints that they would prefer not to carry constitutes a “content preference” that would trigger strict scrutiny. Under strict scrutiny, any “gatekeeper” power exercised by social media would be just as irrelevant as the monopoly power of local newspapers was in [previous Supreme Court holdings].

Put simply, efforts to stretch extremely narrow and limited common carriage precedents to fit social media just don’t work. We’ve already seen lower courts declare that recently when blocking the enforcement of new conservative-led efforts in Florida and Texas to limit the editorial discretion of private social media platforms. If conservatives really hope to get around these legal barriers to regulation, what would be needed would be a more far-reaching strike at the First Amendment itself. That would entail a jurisprudential revolution at the Supreme Court — reversing about a century of free speech precedents — or an some sort of an effort to amend the First Amendment itself. These things are almost certainly not going to occur.

But, again, this hasn’t stopped some conservatives from pitching extreme solutions in their efforts to regulate digital media at both the state and federal level. I discuss these efforts in previous essays on, “How Conservatives Came to Favor the Fairness Doctrine & Net Neutrality,“ “Sen. Hawley’s Radical, Paternalistic Plan to Remake the Internet,“ and “The White House Social Media Summit and the Return of ‘Regulation by Raised Eyebrow’.“ Perhaps some Trump-aligned conservatives understand that these legislative efforts are unlikely to work, but they continue to push them in an attempt to make life hell for tech platforms, or perhaps just to troll the Left and “own the Libs.”

On the other hand, some conservatives seem to really believe in some of the extreme ideas they are tossing around. What is particular troubling about these efforts is the way — following Trump’s lead — some conservatives, including even more mainstream conservative groups like the Heritage Foundation, are increasingly referring to private media platforms as “the enemy of the people.” That’s the kind of extremist language typically used by totalitarian thugs and Marxist lunatics who so hate private enterprise and freedom of speech that they are willing to adopt a sort of burn-the-village-to-save-it rhetorical approach to media policy.

And speaking of Marxists, here’s what is even more incredible about these efforts by some conservatives to use such rationales in support of comprehensive media regulation: It is all based on the “media access” playbook concocted by radical Leftist scholars a generation ago. As I summarized in my essay on, “The Surprising Ideological Origins of Trump’s Communications Collectivism“:

Media access advocates look to transform the First Amendment into a tool for social change to advance specific political ends or ideological objectives. Media access theory dispenses with both the editorial discretion rights and private property rights of private speech platforms. Private platforms become subject to the political whims of policymakers who dictate “fair” terms of access. We can think of this as communications collectivism.

Media access doctrine is rooted in an arrogant, elitist, anti-property, anti-freedom ethic that suggest the State is a better position to dictate what can and cannot be said on private speech platforms. “It’s astonishing, yet nonetheless true,” I continued on in that essay, “that the ideological roots of Trump’s anti-social media campaign lie in the works of those extreme Leftists and even media Marxists. He has just given media access theory his own unique nationalistic spin and sold this snake oil to conservatives.” Yet, Trump and other national conservatives are embracing this contemptible doctrine because now more than ever the ends apparently justify the means in American politics. Nevermind that all this could come back to haunt them when the Left somehow leverages this regulatory apparatus to control Fox News or other sites and content that conservatives favor! Once media platforms are viewed as just another thing to be controlled by politics, the only question is which politics and how are those politics enforced? Certainly both the Left and the Right cannot both have their way given all that current divides them.

Finally, what is utterly perplexing about all this is how much thanks national conservatives really owe to the major digital platforms they now seek to destroy. As I noted in my new Hill op-ed:

There has never been more opportunity for conservative viewpoints than right now. Each day on Facebook, the top-10 most shared links are dominated by pundits such as Ben Shapiro, Dan Bongino, Dinesh D’Souza and Sean Hannity. Right-leaning content is shared widely on Twitter each day. Websites like Dailywire.com and Foxnews.com get far more traffic than the New York Times or CNN.

Thus, conservatives might be shooting themselves in the foot if they were able to convince more legislatures to adopt the media access regulatory playbook because it could have profound unintended consequences once the Left uses those tools to somehow restrict access to “hate speech” or “misinformation” — and then define it so broadly so as to include much of the top material posted by conservatives on Facebook and Twitter ever day.

Not all conservatives have drank the media access kool-aid. In the wake of Trump’s deplatforming from a few major sites, a wave of new Right-leaning digital services are being planned or have already launched. (Axios and Forbes recently summarized some of these efforts.) I don’t know which will of these efforts will succeed, but more competition and platform-building are certainly superior to current calls by some Trump supporters for government regulation of mainstream social media services.

Again, this is the old Reagan vision at its finest! We can achieve a better media landscape, “only through the freedom and compe­tition that the First Amendment sought to guarantee,” not through bureaucratic regulation. It remains the principled path forward.

Additional Reading :

• “Left and right take aim at Big Tech — and the First Amendment“
• “When It Comes to Fighting Social Media Bias, More Regulation Is Not the Answer“
• “FCC’s O’Rielly on First Amendment & Fairness Doctrine Dangers“
• “Conservatives & Common Carriage: Contradictions & Challenges“
• “The Great Deplatforming of 2021“
• “A Good Time to Re-Read Reagan’s Fairness Doctrine Veto“
• “Sen. Hawley’s Radical, Paternalistic Plan to Remake the Internet“
• “How Conservatives Came to Favor the Fairness Doctrine & Net Neutrality“
• “Sen. Hawley’s Moral Panic Over Social Media“
• “The White House Social Media Summit and the Return of ‘Regulation by Raised Eyebrow’“
• “The Not-So-SMART Act“
• “The Surprising Ideological Origins of Trump’s Communications Collectivism“

Older essays & testimony :

• Adam Thierer, “Why Regulate Broadcasting: Toward a Consistent First Amendment Standard for the Information Age,” Catholic University Law School, 15 CommLaw Conspectus (Summer 2007): 431-482.
• Adam Thierer, Testimony at FCC’s Hearing on “Serving the Public Interest in the Digital Era”, March 3, 2010.
• Adam Thierer, “FCC v. Fox and the Future of the First Amendment in the Information Age,” Federalist Society, Engage (Feb. 2009).

This week, the Trump Administration proposed a new policy framework for artificial intelligence (AI) technologies that attempts to balance the need for continued innovation with a set of principles to address concerns about new AI services and applications. This represents an important moment in the history of emerging technology governance as it creates a policy vision for AI that is generally consistent with earlier innovation governance frameworks established by previous administrations.

Generally speaking, the Trump governance vision for AI encourages regulatory humility and patience in the face of an uncertain technological future. However, the framework also endorses a combination of “hard” and “soft” law mechanisms to address policy concerns that have already been raised about developing or predicted AI innovations.

AI promises to revolutionize almost every sector of the economy and can potentially benefit our lives in numerous ways. But AI applications also raise a number of policy concerns, specifically regarding safety or fairness. On the safety front, for example, some are concerned about the AI systems that control drones, driverless cars, robots, and other autonomous systems. When it comes to fairness considerations, critics worry about “bias” in algorithmic systems that could deny people jobs, loans, or health care, among other things.

These concerns deserve serious consideration and some level of policy guidance or else the public may never come to trust AI systems, especially if the worst of those fears materialize as AI technologies spread. But how policy is formulated and imposed matters profoundly. A heavy-handed, top-down regulatory regime could undermine AI’s potential to improve lives and strengthen the economy. Accordingly, a flexible governance framework is needed and the administration’s new guidelines for AI regulation do a reasonably good job striking that balance.

Background

Last February, the White House issued Executive Order 13859, on “Maintaining American Leadership in Artificial Intelligence.” The Order announced the creation of the “American AI Initiative,” an effort to “focus the resources of the Federal government to develop AI.” It prioritized investments in AI-focused research and development (R&D), building a workforce ready for the AI era, international engagement on AI priorities, and the establishment governance standards for AI systems to “help Federal regulatory agencies develop and maintain approaches for the safe and trustworthy creation and adoption of new AI technologies.”

Regarding that last objective, Order 13589 required the Office of Management and Budget (OMB) and the Office of Science and Technology Policy (OSTP) to develop a framework and set of principles for federal agencies to follow when considering the development of regulatory and non‑regulatory approaches for AI. Importantly, the Order also specified that the framework should seek to “advance American innovation” and “reduce barriers to the use of AI technologies in order to promote their innovative application while protecting civil liberties, privacy, American values, and United States economic and national security.”

That resulted in the memorandum sent to heads of federal departments and agencies this week entitled, “Guidance for Regulation of Artificial Intelligence Applications” (hereinafter AI Guidance). The draft version of the AI Guidance specifies that “federal agencies must avoid regulatory or non-regulatory actions that needlessly hamper AI innovation and growth.” More specifically:

“Agencies must avoid a precautionary approach that holds AI systems to such an impossibly high standard that society cannot enjoy their benefits. Where AI entails risk, agencies should consider the potential benefits and costs of employing AI, when compared to the systems AI has been designed to complement or replace.”

But the AI Guidance is certainly not a call for comprehensive deregulation or the abandonment of all AI federal oversight. The memorandum’s very title reflects an understanding that existing laws and agency rules will continue to play a role in guiding the development of AI, machine-learning, and autonomous systems.

Accordingly, and consistent with past executive orders and OMB regulatory guidance documents for federal agencies, the AI Guidance establishes a set of ten principles that agencies must take into consideration when considering AI policy:

1. Public trust in AI: Requiring that “the government’s regulatory and non-regulatory approaches to AI promote reliable, robust, and trustworthy AI applications, which will contribute to public trust in AI.”
2. Public participation: Agencies must provide “ample opportunities for the public to provide information and participate in all stages of the rulemaking process.”
3. Scientific integrity and information quality: Agencies should “leverage scientific and technical information and processes” to build trust and ensure data quality and transparency.
4. Risk assessment and management: Acknowledging that “all activities involve tradeoffs,” the AI Guidance requires that “a risk-based approach should be used to determine which risks are acceptable and which risks present the possibility of unacceptable harm, or harm that has expected costs greater than expected benefits.”
5. Benefits and costs: As part of those risk assessments, agencies must “carefully consider the full societal costs, benefits, and distributional effects before considering regulations related to the development and deployment of AI applications. Such consideration will include the potential benefits and costs of employing AI, when compared to the systems AI has been designed to complement or replace, whether implementing AI will change the type of errors created by the system, as well as comparison to the degree of risk tolerated in other existing ones.”
6. Flexibility: OMB encourages agencies to “pursue performance-based and flexible approaches that can adapt to rapid changes and updates to AI applications.”
7. Fairness and non-discrimination: Acknowledging that “in some instances, introduce real-world bias that produces discriminatory outcomes or decisions that undermine public trust and confidence in AI,” the AI Guidance requires agencies to consider “issues of fairness and non-discrimination with respect to outcomes and decisions produced by the AI application at issue.”
8. Disclosure and transparency: Agencies are encouraged to consider how greater “transparency and disclosure can increase public trust and confidence in AI applications.”
9. Safety and security: Agencies are required to “promote the development of AI systems that are safe, secure, and operate as intended, and encourage the consideration of safety and security issues throughout the AI design, development, deployment, and operation process.”
10. Interagency coordination: The guidance makes it clear that a “coherent and whole-of-government approach to AI oversight requires interagency coordination.”

Soft Law Ascends

Importantly, the AI Guidance also encourages agencies to be open to “non-regulatory approaches to AI” governance and specifies three particular models:

• Sector-specific policy guidance or frameworks: OSTP writes that “agencies should consider using any existing statutory authority to issue non-regulatory policy statements, guidance, or testing and deployment frameworks, as a means of encouraging AI innovation in that sector.” The memorandum also notes that this can include “work done in collaboration with industry, such as development of playbooks and voluntary incentive frameworks.”
• Pilot programs and experiments: The document encourages the use of “pilot programs that provide safe harbors for specific AI applications” which “could produce useful data to inform future rulemaking and non-regulatory approaches.”
• Voluntary consensus standards: Before regulating, the AI Guidance encourages agencies to consider how voluntary consensus standards, assessment programs, and compliance programs might be used to address policy concerns.

These represent “soft law” approaches to technological governance and they are becoming all the rage in technology policy discussions today. Soft law mechanisms are informal, collaborative, and constantly evolving governance efforts. While not formerly binding like “hard law” rules and regulations, soft law efforts nonetheless create a set of expectations about sensible development and use of technologies. Soft law can include multistakeholder initiatives, best practices and standards, agency workshops and guidance documents, educational efforts, and much more.

Soft law has become the dominant governance approach for emerging technologies because it is often better able to address the “pacing problem,” which refers to the growing gap between the rate of technological innovation and policymakers’ ability to keep up with it. As I have previously noted, the pacing problem is “becoming the great equalizer in debates over technological governance because it forces governments to rethink their approach to the regulation of many sectors and technologies.”

Not only do traditional legislative and regulatory hard law systems struggle to keep up with fast-paced technological changes, but oftentimes those older mechanisms are just too rigid and unsuited for new sectors and developments. That is definitely the case for AI, which is multi-dimensional in nature and even defies easy definition. Soft law offers a more flexible, adaptive approach to learning on the fly and cobbling together principles and policies that can address new policy concerns as they develop in specific contexts, without derailing potentially important innovations.

Building on Past Governance Frameworks

In this sense, the Trump administration’s AI Guidance borrows from past policy frameworks by marrying up a desire to promote an exciting new set of emerging technologies alongside the need for reasonable but flexible oversight and governance mechanisms. At a high level, the AI Guidance builds on many of the same principles that motivated the Clinton administration’s Framework for Global Electronic Commerce, a statement of principles and policy objectives for the then-emerging Internet. The document, which was issued in July 1997, said that “governments should encourage industry self-regulation and private sector leadership where possible” and “avoid undue restrictions on electronic commerce.”

The Framework was a clean break from the top-down regulatory paradigm that had previously governed traditional communications and media technologies. Clinton’s Framework insisted that, to the extent government intervention was needed at all, “its aim should be to support and enforce a predictable, minimalist, consistent and simple legal environment for commerce.” The use of soft law and multistakeholder models was a key component of this vision, and those more flexible governance approaches were tapped by the subsequent administrations to address emerging tech policy concerns.

For example, the Obama administration considerably expanded the use of multistakeholder mechanisms and other soft law tools in response to the need of oversight of fast-moving technologies. The Obama administration had many different policy governance efforts underway for specific AI technologies and concerns, including workshops and multistakeholder efforts focused on the safety, security, and privacy-related issues surrounding “big data” systems, online advertising, connected cars, drones, and more.

Whereas the Obama administration was deeper in the weeds of the policy issues associated with specific AI and machine-learning applications, the Trump administration has sought to both build on those focused efforts while also stepping back to consider AI governance at the 30,000-foot level. In essence, the AI Guidance combines some of the aspirational elements found in the Clinton Framework alongside the Obama administration’s more targeted approach to consider specific policy concerns across many different sectors and technologies.

Trump’s AI Guidance adds an element of formality to this process regarding how federal agencies should address AI developments and formulate potential policy responses. It does so by counseling humility and even potential forbearance until all the facts are in. “Fostering innovation and growth through forbearing from new regulations may be appropriate,” the memorandum says. Agencies should consider new regulation only after they have reached the decision, in light of the foregoing section and other considerations, that Federal regulation is necessary.” Again, this is very much consistent with more general regulatory guidance issued by every administration since President Reagan was in office.

Flexible, Adaptive Governance is Key

The AI Guidance foreshadows the future of not only AI governance but the governance of many other emerging technologies. Hard law will continue to provide a backstop and have a role in guiding technological developments. Toward that end, efforts like the new AI Guidance are important because it represents an effort to “regulate the regulators” by placing some ground rules on how they go about applying old law to new developments.

But soft law governance is where the real action is at, both for AI and almost all emerging technologies today. The Trump AI Guidance reflects the extent to which soft law has become the dominant governance paradigm for modern tech sectors. As my colleagues Jennifer Huddleston and Trace Mitchell have noted, soft law is already effectively the law of the land for driverless cars, for example. After years of congressional wrangling over a federal autonomous vehicle regulatory framework—one that has widespread bipartisan support, no less—we still do not have a law on the books. Instead, the Department of Transportation has been cobbling together informal “rules of the road” through informal guidance documents that have been “versioned” as if they were computer software (i.e., Version 1.0, 2.0, 3.0). Version 4.0 of the DoT guidance for automated vehicles was just released this week.

That is the same approach that the National Institute of Standards and Technology (NIST) has taken with the privacy guidelines it developed. NIST’s Privacy Framework: A Tool for Improving Privacy through Enterprise Risk Management is also versioned like software. And many other federal agencies, especially the Federal Trade Commission, have tapped a wide variety of soft law tools—such as agency workshops and workshop reports that recommended privacy best practices for various technologies. Meanwhile, the National Telecommunications and Information Administration (NTIA) has used multistakeholder processes to address privacy concerns surrounding a wide range of technologies, including drones and facial recognition. NIST, FTC, and NTIA have undertaken these informal governance efforts because, despite over a decade of debate, Congress still has not advanced comprehensive federal privacy legislation. For better or worse, soft law has filled that governance gap.

Addressing Likely Objections from Left & Right

Many people of varying ideological dispositions will object to the growing role of soft law as the primary governance tool for emerging technology policy. Some conservatives will cringe at the sound of giving regulators greater leeway to address amorphous policy concerns, fearing that it will result in unconstrained exercises of unaccountable, extra-constitutional power.

Some of those concerns are valid, but they fail to account for the fact that the prospects for agency downsizing or deregulation they prefer are extremely limited. Practically speaking, the administrative state isn’t going anywhere. In some cases, agencies can actually do some real good by encouraging innovators to think about how to “bake-in” sensible best practices to preemptively address concerns about the privacy, safety, security, and fairness of various AI systems. Better those concerns be addressed in more flexible, adaptive fashion than by a heavy-handed, overly-rigid regulatory approach. Soft law offers that possibility, even if legitimate concerns remain about agency accountability and transparency.

Many to the left of center will be critical of this governance approach as well, but on very different grounds. As Associated Press reporter Matt O’Brien notes, “the vagueness of the principles announced by the White House is unlikely to satisfy AI watchdogs who have warned of a lack of accountability as computer systems are deployed to take on human roles in high-risk social settings, such as mortgage lending or job recruitment.”

These concerns actually are addressed in several of the OSTP’s ten principles, including those which stress the need for fairness and non-discrimination, information quality, public participation, disclosure and transparency, and safety and security. Yet many on the left will claim these principles merely pay lip service to these values and that what is really needed is a full-blown regulatory regime and some sort of corresponding new federal AI agency, which would preemptively determine which AI technologies would be allowed into the wild.

Already, an Algorithmic Accountability Act was introduced in Congress last year that would ask the FTC to take a more active role in policing “inaccurate, unfair, biased, or discriminatory decisions impacting consumers” that may have resulted from “automated decision systems.” Meanwhile, some academics have called for the creation of a Federal Robotics Commission or a National Algorithmic Technology Safety Administration to preemptively oversee new AI developments.

The problem with overly-precautionary regulation of that sort could potentially unduly limit AI innovation and the many benefits it entails. There may be some AI applications that pose serious and immediate risks to humanity and which require preemptive restraints on their development and use. Autonomous military and law enforcement applications are the most obvious examples. But most AI applications do not rise to that same level of regulatory concern, and other governance approaches are required to balance the use and misuse of them. This is why a more open and flexible governance approach is needed. Moreover, the old regulatory system just cannot keep up anymore, and it is ill-suited to address most policy concerns in a timely or efficient fashion.

Cristie Ford, and advocate of greater regulatory oversight for fintech, notes in her latest book that the problem with “old-style Welfare State regulation” is that it is “a clumsy, blunt instrument for achieving regulatory objectives” due to its reliance upon “one-size-fits-all mandates, prohibitions, and penalties.” Ford acknowledges what many other regulatory advocates are reluctant to admit:  public policies toward fast-paced technology sectors can no longer be governed effectively using the Analog Era’s top-down, command-and-control regulatory processes. Far too many federal agencies rely on a “build-and-freeze model” of regulation that puts rules in stone to deal with one sets of issues one day, but then either fails to eliminate them later when they become obsolete or to reform those rules to bring them in line with new social, economic, and technical realities.

If we hope to encourage continued innovation in sectors that could produce profoundly important, life-enriching technologies, America’s regulatory approach for AI and emerging technology needs to move away from “build-and-freeze” and toward “build-and-adapt.” Regulation is still needed, but the old regulatory toolkit is badly broken. For better or worse, soft law is going to fill the resulting governance gap, regardless of objections from some on the left or the right. Pragmatic policymaking is going to carry the day for emerging technology governance.

Conclusion

The Trump Administration AI Guidance represents a continuation and extension of this trend toward more flexible, adaptive governance approaches for emerging technologies. It offers a pragmatic vision that builds on the policies and paradigms of the past, while also encouraging fresh thinking about how best to balance the need for continued innovation alongside the various concerns about disruptive technological change.

There are many challenging issues that lie ahead and the new AI Guidance cannot provide bright-line answers to all the hypothetical questions that people want answered today. No one possesses a crystal ball that will allow them to forecast the technological future. Only ongoing trial-and-error experimentation and policy improvisation will allow us to find sensible solutions. A policy approach rooted in humility, flexibility, and forbearance will help ensure that America’s regulatory policies continue to promote both innovation and the public good.

There is growing interest in the market potential of artificial intelligence (AI) technologies and applications as well as in the potential risks that these technologies might pose. As a result, questions are being raised about the legal and regulatory governance of AI, machine learning, “autonomous” systems, and related robotic and data technologies. Fearing concerns about labor market effects, social inequality, and even physical harm, some have called for precautionary regulations that could have the effect of limiting AI development and deployment. In this paper, we recommend a different policy framework for AI technologies. At this nascent stage of AI technology development, we think a better case can be made for prudence, patience, and a continuing embrace of “permissionless innovation” as it pertains to modern digital technologies. Unless a compelling case can be made that a new invention will bring serious harm to society, innovation should be allowed to continue unabated, and problems, if they develop at all, can be addressed later.

Tim Wu: Not Looking Happy about Being So Wrong

Three years ago this month, Columbia University Law School professor Tim Wu released a controversial white paper in conjunction with the New America Foundation entitled, “Wireless Net Neutrality: Cellular Carterfone and Consumer Choice in Mobile Broadband.” It contained a litany of accusations regarding supposed corporate shenanigans in the mobile marketplace, including: intentional crippling of features and functionality; refusal to allow 3rd party attachments or intentional curtailment of a market for 3rd party application developers; and various concerns about “discrimination” of one sort or another.

Here at the TLF, we responded quite forcefully. I think every one of us piled on this study in one way or another. (ex: Hance, Jerry, James, Tim Lee, me x 2, + a podcast).  I called his proposal “a declaration of surrender” since Prof. Wu was essential calling the game early and raising the white flag on mobile competition. Further, I argued he was essentially asking for “the forced commoditization of cellular networks” which “would necessitate at return to the rate-of-return regulatory methods of the past.”  Others were a bit more kind to him, but we were all pretty skeptical of his gloomy claims. However, each of us here also argued that the wireless market (especially the applications side of the market) was still developing and that we’d have to check back in a few years to see how well the hands-off approach worked out.

Well, thankfully, we now know for certain that Tim Wu’s was much too lugubrious in his outlook and far too quick to call for regulatory intervention to solve a non-crisis. On the occasion of the 3rd anniversary of the release of Prof. Wu’s paper, CTIA-The Wireless Association filed a short paper with the FCC taking stock of just how far the mobile marketplace has come in just three short years. The results are really quite remarkable, as CTIA’s letter notes:

Contrary to the professor’s view of how the ecosystem would evolve, in the absence of regulation, every element of the wireless ecosystem has expanded. Today, the fact that there are over six hundred devices in the U.S. offering hundreds of different capabilities for consumers, over 170,000 applications, more open networks with open developer initiatives and software development kits, the sale of phones through numerous online and retail outlets, multiple operating systems, and the launch of the newest and most innovative handsets first in the United States demonstrates that the mobile wireless ecosystem continues to evolve to serve customers, contrary to Professor Wu’s arguments.

The filing goes on to examine each of the complaints Prof. Wu had articulated and then discusses current marketplace realities. Here’s the summary:

• Professor Wu asserted that carriers had a “near lock” on the retailing of mobile devices that, presumably, would only be altered through regulatory intervention. Today, consumers can purchase handsets from carriers, directly from manufacturers, through brick-and-mortar retail chains, via Internet discounters, and through a healthy secondary market. For example, Best Buy, Target, Wal-Mart, TigerDirect.com, Amazon.com, LetsTalk.com, Apple, Nokia, Google, Motorola and many others all sell handsets directly to consumers. The recent Best Buy catalog alone lists over a hundred wireless devices for sale. • Professor Wu argued that the U.S. market had only “a small fraction of the phones available [elsewhere],” implying that carriers restricted the diversity of handsets. Today, the U.S. market has over 630 devices manufactured by 33 different companies, including the BlackBerry® Tour 9630, Samsung Omnia, HTC TouchPro, Motorola Droid, Apple  iPhone 3GS, Motorola Karma QA1, BlackBerry® Bold, Motorola Cliq, myTouch 3G, G1, BlackBerry® Pearl Flip, HTC Touch Pro2, Palm Pre, HTC Hero, Samsung Instinct S30, Cricket TXTM8, Motorola Evoke QA4, Samsung JetSet, Motorola Hint, Samsung Finesse, Samsung Messager, LG Tritan, Samsung TwoStep, and the LG Rhythm. Of note, almost every one of the phones listed above was first launched in the United States. • Professor Wu painted a picture of a “stalled” application market where developers were unable to create applications for mobile devices. Today, a vibrant “apps” market exists where over 170,000 applications are available for popular operating systems, and where developers as young as age 9 can navigate the approval process to become highly successful. At least seven different companies, none of whom are affiliated with wireless carriers, market the overwhelming majority of these applications. • Professor Wu criticized carriers’ control over handset design. Today, all major carriers, and most of the other carriers in the country, have extensive open network development platforms for devices and software. Intra-industry groups have developed the Open Handset Alliance (which has created the Android operating system), and several other operating systems have moved to an open platform. Additionally, as discussed above, numerous handset manufacturers are selling directly to consumers. • Professor Wu stated that the “oligopoly” in handset sales resulted in a market where consumer-friendly capabilities, such as Bluetooth, Wi-Fi, and picture distribution, were “crippled.” Today, all of these capabilities, and hundreds more that reflect a broad array of consumer desires, are available to U.S. consumers. With the wealth of options, consumers can make buying decisions based on a range of factors. This is exactly the market that consumers want, and regulators should encourage.

Now, I’m sure some folks will say, “hey, we can’t trust industry to report on this stuff,” but these are facts, folks. CTIA hasn’t made anything up here. If anything, I think they’ve actually gone too easy on Tim and underplayed just how revolutionary the changes we’ve seen over the last 3 years have been.

That’s especially the case on the operating system front.  This war among Apple, Google, Microsoft, RIM (Blackberry), Palm, Symbian, and others has actually forced me to ask if we have, “Too Much Platform Competition” in this arena. App developers must now craft their offerings for so many platforms that it has become a significant developmental hassle and expense. But hey, from a consumer perspective, this is great! And it shocking how vibrant that OS-level competition continues to be. (For more details, see Berin’s post on “The Fiercely Competitive Mobile OS & Device Markets.”)

And then there’s the applications market. As I have noted in my essays repeatedly hammering Jonathan Zittrain’s equally dismal view of the digital world, today’s market for 3rd party mobile applications would have been virtually unfathomable just a few years ago. Can you even remember 2005 when we had none of those apps at our disposal? Today, by contrast, Apple’s App Store alone has over 100,000 apps in 20 different categories (available in 77 countries) to choose from. Android and Windows Mobile apps are also exploding. Frankly, I get exhausted trying to filter through the thousands and thousands of apps in the Android marketplace I now have to choose from. Again, we had zip, zero, zilch, nadda, N-O-T-H-I-N-G to choose from just a few years ago.  Folks, that is called progress—insane, amazing, beautiful, miraculous progress!

The following GigaOm chart was intended to show average app prices but also includes total app figures for each of the five leading mobile operating systems:

So, will Tim Wu come out and admit that his pessimism was unwarranted? Somehow I doubt it. But allow me to offer him a way to save face: I remember debating Tim about these issues in New York a few years back and he told me that he really didn’t want to see the feds jump in and start aggressively regulating most high-tech markets. Instead, he just wanted to shake things up and put the fear of God in the hearts of private operators so they would change their ways for the better in an effort to avoid the sledgehammer of federal regulation. (Tim, if you are reading this and have forgetting that conversation, it was at that FOSI dinner in New York where we were also debating who was a bigger Dungeons & Dragons nerd back in our childhood. I think you at least had the better of me in that debate!)

So, to save face here, Tim should declare victory and go home.  He should tell the world he single-handled revolutionized the wireless world with his vociferous agitation for a comprehensive federal regulatory regime for mobile and that it has blessed us one of the great capitalist success stories of our time.

Thank you Professor Wu for making the world a better place!

by Berin Szoka & Adam Thierer, Progress Snapshot 5.11 (PDF)

Ten years ago, Nobel Prize-winning economist Milton Friedman lamented the “Business Community’s Suicidal Impulse:” the persistent propensity to persecute one’s competitors through regulation or the threat thereof. Friedman asked: “Is it really in the self-interest of Silicon Valley to set the government on Microsoft?” After yesterday’s FCC vote’s to open a formal “Net Neutrality” rule-making, we must ask whether the high-tech industry—or consumers—will benefit from inviting government regulation of the Internet under the mantra of “neutrality.”

The hatred directed at Microsoft in the 1990s has more recently been focused on the industry that has brought broadband to Americans’ homes (Internet Service Providers) and the company that has done more than any other to make the web useful (Google). Both have been attacked for exercising supposed “gatekeeper” control over the Internet in one fashion or another. They are now turning their guns on each other—the first strikes in what threatens to become an all-out, thermonuclear war in the tech industry over increasingly broad neutrality mandates. Unless we find a way to achieve “Digital Détente,” the consequences of this increasing regulatory brinkmanship will be “mutually assured destruction” (MAD) for industry and consumers.

New Fronts in the Neutrality Wars

The FCC’s proposed rules would apply to all broadband providers, including wireless, but not to Google or many other players operating in other layers of the Net who favor such broadband-specific rules. With this rulemaking looming, AT&T came after Google with letters to the FCC in late September and then another last week accusing the company of violating neutrality principles in their business practices and arguing that any neutrality rules that apply to ISPs should apply equally to Google’s panoply of popular services. In particular, AT&T accused Google of “search engine bias,” suggesting that only government-enforced neutrality mandates could protect consumers from Google’s supposed “monopolist” control.

The promise made yesterday by the FCC—to only apply neutrality principles to the infrastructure layer of the Net—is hollow and will ultimately prove unenforceable. The reality is that regulation always spreads. The march of regulation can sometimes be glacial, but it is, sadly, almost inevitable: Regulatory regimes grow but almost never contract. Indeed, in some ways, the prediction we made just three weeks ago is already coming true: The basic premise of neutrality regulation is already being proposed for other layers of the Internet—and not just by AT&T in retaliation. One need not agree with all of AT&T’s accusations to recognize that, whatever the FCC might say today, any large online intermediary with a popular platform potentially faces the threat of “network neutrality” mandates—because every platform is essentially a “network,” too. We’re not just talking about “search neutrality” (Google as well as Microsoft) but also about “device neutrality” (mobile handsets), “app neutrality” (Apple’s iTunes store, Facebook’s developers and Google’s Android mobile OS) and so on for social networking, email, instant messaging, online advertising, etc.

An open letter sent to FCC Chairman Julius Genachowski this week by 28 founders and CEOs of leading application providers—including Amazon, Google, Facebook, Netflix, Craigslist, Sony and Twitter—speaks generally about the need for the FCC to enforce a “guarantee of neutral, nondiscriminatory access by users.” While many of these signatories may have in mind ISPs as the network “gatekeepers” that need to be reined in by the FCC, the more successful among them are likely to find this letter used against them in the future—perhaps even by co-signatories—to advance a broad conception of what the government must do to ensure “openness” and “access” for platforms at all layers of the Internet.

Dumb Networks, Dumb Devices

The intellectual foundations for this regulatory creep have already been laid by groups like Free Press and Public Knowledge and law professors like Columbia’s Tim Wu, Harvard’s Jonathan Zittrain and Seton Hall’s Frank Pasquale. As originally conceived by Tim Wu in 2003, “network neutrality” is not unique to broadband networks: “the basic economic problem found in the network neutrality debate (a form of ‘platform exclusion’ or ‘vertical foreclosure’) can be found in many other markets.” Indeed, Wu’s popular Net Neutrality FAQ declares:

The promotion of network neutrality is no different than the challenge of promoting fair evolutionary competition in any privately owned environment, whether a telephone network, operating system, or even a retail store. Government regulation in such contexts invariably tries to help ensure that the short-term interests of the owner do not prevent the best products or applications becoming available to end-users.

Zittrain picked up where Wu left off in The Future of the Internet and How to Stop It—attacking, as the enemies of innovation, not ISPs but the supposedly “closed” platforms of Apple, TiVo and Microsoft’s Xbox. Zittrain warns that:

If there is a present worldwide threat to neutrality in the movement of bits, it comes not from restrictions on traditional Internet access that can be evaded using generative PCs, but from enhancements to traditional and emerging appliancized services that are not open to third-party tinkering.

Zittrain’s general solution is “API [Applications Programming Interface] neutrality:” If you create a platform (whether hardware or software) and begin allowing third-party contributions (“generativity”), you will lose all control over devices or applications that can run on that platform.

Those who offer open APIs on the Net in an attempt to harness the generative cycle ought to remain application-neutral after their efforts have succeeded, so all those who built on top of their interface can continue to do so on equal terms…. [N]etwork neutrality ought to be applied to the new platforms of Web services that, in turn, depend on Internet connectivity to function.

Clearly, if Zittrain and his allies have their way, the sort of neutrality mandates envisioned by the FCC or some Congressmen for ISPs will eventually cover companies such as Apple, Google, Facebook, Myspace, Twitter and Amazon—all singled out by Zittrain in a New York Times op-ed in July:

If the market settles into a handful of gated cloud communities whose proprietors control the availability of new code, the time may come to ensure that their platforms do not discriminate. Such a demand could take many forms, from an outright regulatory requirement to a more subtle set of incentives — tax breaks or liability relief — that nudge companies to maintain the kind of openness that earlier allowed them a level playing field on which they could lure users from competing, mighty incumbents.

Frank Pasquale agrees on the need to restrain all “the dominant players at all layers of online life,” but focuses on his demand for a Federal Search Commission to control supposedly “biased” search results. While the FCC wrings its hands over “managed services” offered by ISPs, search engines are increasingly offering their own value-added services by “blending” algorithmically-derived results with special features like maps, videos, books or music depending on what the search term suggests the user is interested in. “Artificially” ensuring that these features appear on the first page of search results is clearly non-neutral, and necessarily involves search engines making ”managed” decisions as to whose features to include. Yet such features also clearly benefit users—dramatically improving the usefulness of search engines and helping to sustain struggling business models like music retailing.

But one need not resort to the works of “ivory tower” academics to see the slippery slope we’re already tumbling down with the infinitely elastic principle of “neutrality.” The prospect of the FCC gradually transforming into a “Federal Information Commission” becomes more apparent when one reads the Wireless Innovation and Investment Notice of Inquiry recently released by the FCC:

As other approaches, such as cloud computing, evolve, will established standards or de facto standards become more important to the applications development process? For example, can a dominant cloud computing position raise the same competitive issues that are now being discussed in the context of network neutrality? Will it be necessary to modify the existing balance between regulatory and market forces to promote further innovation in the development and deployment of new applications and services?

One can imagine how some might use such language to accuse Google of being in “a dominant cloud computing position” such that “the context of network neutrality” will be applied to cloud service (like Google Voice) to “modify the existing balance between regulatory and market forces” through regulation. Indeed, that’s precisely what AT&T has suggested in recent letters (September 25 ^th and October 14 ^th) to the FCC.

AT&T’s partner Apple has already been the subject of such attacks for its decision to block the Google Voice app earlier this summer. The incident marked the beginning of open warfare between Google and AT&T/Apple. The FCC quickly jumped into the mix, first questioning how Apple manages its iTunes apps store for the iPhone, then questioning how Google runs its free Voice application. What legal authority the FCC has over either service is far from clear, but Apple seems to have gotten the message: It recently approved the Spotify music streaming app for the iPhone, which could be a serious competitive threat to the iTunes music store. This small incident highlights how easily regulators can impose their will through informal mechanisms like open-ended investigations even without clear authority to issue rules or bring enforcement actions. Yet none dare call it what it is: regulatory blackmail.

The Inevitability of Regulatory Capture

No doubt, other industry players will cheer on such regulatory harassment of the titans of tech—and maybe even demand more of it. Regulatory creep is driven by more than the self-interests of every bureaucracy to expand its own mission, budget and staff. As the Electronic Frontier Foundation has noted, “Experience shows that the FCC is particularly vulnerable to regulatory capture.” While lobbyists play an important role in defending business from government, all too many businesses naively look at government as a beast that can be tamed, trained, and turned to one’s own advantage, and often try to use the expanding regulatory apparatus to their own advantage or simply throw their competitors under the bus to save themselves. The result is a Hobbesian regulatory “war of all against all” within industry.

As Professor Alfred E. Kahn explained in his 2-volume opus, The Economics of Regulation, all regulation—however high-minded—is inevitably captured by special interests because:

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.

If Internet regulation follows the same course as other industries, the FCC and/or lawmakers will eventually indulge calls by all sides to bring more providers and technologies “into the regulatory fold.” Clearly, this process has already begun. Even before rules are on the books, the companies that have made America the leader in the Digital Revolution are turning on each other in a dangerous game of brinksmanship, escalating demands for regulation and playing right into the hands of those who want to bring the entire high-tech sector under the thumb of government—under an Orwellian conception of “Internet Freedom” that makes corporations the real Big Brother, and government, our savior.

Toward a Less MAD World: Digital Détente

Sincere defenders of real Internet Freedom—that is, freedom from government techno-meddling—recognize that there will always be disputes over how companies deal with each other online across all layers of the Internet. The question is not whether we need a technical coordinating mechanism for handling such disputes. Someone should mediate conflicts over alleged deviations from abstract neutrality principles. But should that arbitrator be an inherently political body like FCC? Or should we instead look to truly independent, apolitical arbitrators like the Internet Engineering Task Force or collaborative efforts like the Network Neutrality Squad? Such alternative dispute resolution mechanisms and fora need not have the power of law to be effective: The weight of their expert opinion, based on careful investigation of the facts, would likely resolve most disputes, because companies have strong reputational incentives to comply with reasoned rulings by truly neutral experts. And the white hot spotlight of public attention has a way of disciplining marketplace behavior as well.

Government would still have a role to play, of course, in enforcing antitrust laws where anticompetitive harm to consumers can be proven, and in enforcing the promises companies make to consumers. Ultimately, however, certain business models and technologies require non-neutral treatment, and the best remedy for concerns about non-neutrality is competition itself: In the high-tech sector more than any other, disruptive innovation makes it difficult for even the most successful companies to stay on top forever. Competitive entry—or even the threat of new entry—provides a powerful check on the power of so-called “gatekeepers,” but even more important is the prospect that today’s leaders will be tomorrow’s laggards: There’s little reason to think Google (search and advertising), Apple (smart phones and music) and Facebook (social networking) won’t someday find themselves playing catch-up, just as IBM (computers), Microsoft (desktop software and search), Friendster and MySpace (social networking), and Yahoo! and AOL (web portals) have had to do.

“Digital Détente” would require that all parties concede something and work constructively toward a more “peaceful” ( i.e., less regulatory) resolution. And yet, no Internet company wants to disarm unilaterally, foreswearing politics as a continuation of competition by other means. Only through multilateral disarmament could they break out of the current cycle of regulatory one-upmanship: If the companies in the Internet ecosystem could form a united front against increased government regulation and in favor of removing existing regulatory obstacles to competition, they could all return to their core competencies of creativity and innovation.

The alternative is a regulatory “nuclear winter”: high-tech titans turning their political fire on each other, catching innocent third parties in the cross-fire and bringing a dark cloud of government regulation over the entire Internet. Such increased regulation would stifle investment and innovation throughout the Internet ecosystem. Thus, it is consumers who will ultimately suffer most from the tech industry’s suicidal impulse, as their choices and digital lives are impoverished. For their sake, we hope all industry players will step back from the brink to avoid such high-tech mutually assured destruction.

Over the past year, I have been monitoring a very interesting trend with important ramifications for the future of Internet policy. State Attorneys General (AGs) — often in league with the National Center for Missing and Exploited Children (NCMEC) — have been striking a variety of “voluntary” agreements with various Internet companies that deal with child safety concerns or other online issues. These agreements require the companies involved to take various steps to alter site architecture and functionality, commit to stop certain practices, or take steps to block certain users (ex: predators; escort services) or types of content (ex: child porn; online “discrimination”) altogether.

To begin, let me be very clear about one thing: Some of these activities or types of content warrant a law enforcement response. That is certainly the case with child pornography or predation, for example. However, as I will note down below, there is a legitimate question about whether state officials and a non-profit private organization should be crafting legal or regulatory policies to address such concerns for a global medium like the Internet. Regardless, these agreements are creating a new layer of Internet regulation (almost extra-legal in character) that is worthy of exploration.

First, let me itemize some of these recent “voluntary” agreements between Internet companies and the AGs and/or NCMEC:

• MySpace, Facebook & 49 state AGs: On January 14th, 2008, social networking website operator MySpace.com announced an agreement with 49 state Attorneys General (AGs) aimed at better protecting children online. As part their “Joint Statement on Key Principles of Social Networking Safety,” MySpace promised the AGs it would expand online safety tools, improve education efforts, and expand its cooperation with law enforcement. Facebook entered into a similar agreement with the AGs in May. These agreements came after AGs had relentlessly pushed these social networking sites for over a year to adopt age verification techniques to screen site users. Although mandatory age verification was not part of the final agreements, an Internet Safety Technical Task Force (ISTTF) was formed to study online safety tools, including a review of online identity authentication technology. It was clear when the announcements were made that the AGs were very interested in seeing online age verification pursued.
• Various ISPs and New York AG + NCMEC: In June 2008, New York Attorney General Andrew Cuomo pushed several major ISPs to enter into a Memorandum of Understanding (MOU) with NCMEC to address the dissemination of child pornography online.  Under the MOU, the ISPs must use a NCMEC-provided list of URLs supposedly containing child pornographic images to blacklist and block all access to those sites for their users. The agreement also closed off access to Usenet discussion boards on those ISP’s networks.
• Craigslist & California AG + NCMEC: In early November, Craigslist struck an agreement with 40 state AGs as well as NCMEC in which the online classifies operator agreed to take steps to root out certain sexually-themed or “erotic services” listings. See this Ars Technica article for additional details.
• eHarmony & New Jersey AG: Just this past week, the online dating service company eHarmony announced it had struck an agreement with the Attorney General of New Jersey to settle a complaint that a New Jersey resident filed with the state in 2005 alleging that eHarmony violated his rights by not offering a same-sex matching service. The agreement creates some interesting questions, as George Mason University law professor David Bernstein told the Wall Street Journal. The discrimination claim “seems like quite a stretch,” he said, and he said that he is worried it might encourage similar claims. “If you start a dating service for African Americans, do you need one for whites and Latinos? If you have one for Jews, do you need one for Christians and Muslims?” According to the Journal, eHarmony faces a similar discrimination claim in a California court, so we might get answers soon enough.

There are a number of interesting legal and practical questions raised by these agreements:

• “Voluntary” Agreements & the Law: Although typically billed as “voluntary” in nature, it seems highly unlikely that any of the companies involved would have made these concessions without  pressure from the state AGs (and sometimes NCMEC) to do so. How binding are these agreements in light of that? Of course, it is unlikely any of the companies involved would (or could) later challenge the validity or scope of these agreements after they had already signed onto them. But what if a free speech or civil liberties group challenged these agreements in court because of their impact on the Internet, online speech, or a certain group of citizens? Would they have a case? Would they even have standing? Where do they have it?
• Precedent & Applicability: Do such agreements constitute precedents that could be applied in other cases or contexts? Could parties not involved in the original agreements — either because they refused or did not yet exist — eventually be covered by them in some fashion? Do these agreements cover services available in the American but hosted entirely overseas?
• Commerce Clause Issues: Do state Attorneys General have the right to impose such quasi-regulatory regimes on an interstate medium like the Internet? Can 50 state AGs impose uniform laws on the Net without any congressional oversight, as was the case in the MySpace and Craigslist agreements? Conversely, what will the impact be of individual state AGs going their own way, as was the case with the eHarmony agreement? If Congress remains silent on the agreements but a group (ex: a civil liberties group) brings a dormant Commerce Clause case, what are their chances of prevailing in court?
• Accountability & Effectiveness: Will anyone in Congress or a federal agency oversee these agreements? How transparent are these agreements when they are brokered behind closed doors or with NCMEC? Does the Freedom of Information Act (FOIA) apply such that records and information can be made public?  What is the benchmark of success when different states adopt different legal regimes for the Net?

I’m not saying I have any good answers here; I’m just trying to get the questions on the table and get a discussion going. I would appreciate any input on the matter, especially of the legal variety. It strikes me that we are in somewhat uncharted waters here, at least for the Internet. On the other hand, I’m sure there have been state AG-related “voluntary” agreements struck in other industries and contexts in the past that might provide some insight into what, if anything, happens next.

What I find most interesting about these developments is that the state AGs appear to be gradually accomplishing what Congress has not been able to do over the past dozen years: To impose a comprehensive regulatory structure on the Internet. But that emerging regulatory structure is highly fractured and piecemeal in nature, and that troubles me. I am particularly concerned about the long-term impact of a 50-state patchwork approach to online regulation — both for speech and commerce. It’s not like we’re talking about the regulation of a corner newsstand here, after all. This is the Internet, and localized regulation of this national — actually global — platform makes me more than a bit nervous.

In closing, I want to again reiterate that I do not necessarily oppose intervention in any of these cases. However, to the extent such regulations do need to be imposed and enforced, it may make more sense for the process to be federalized and NCMEC’s role nationalized and administered by the Federal Bureau of Investigation or some branch of the Department of Justice. There needs to be greater transparency and accountability when matters of child pornography or predation are at issue, and NCMEC’s lack of FOIA-ability in this regard is problematic. I think NCMEC is a fine organization that does very important work to help protect children, but it is work that involves criminal activities and the collection of evidence that could be used in criminal court proceedings. In light of that — and in light of the expanded law enforcement powers being granted to NCMEC — I believe the time has come to have a serious conversation about whether those powers should continue to be housed in a private, non-profit organization, or if they should be transfered to a federal law enforcement agency. Of course, there could be serious downsides associated with the nationalization of those powers, which also should be considered.