When the government tells someone to shut up, we call it censorship and the First Amendment requires the government to defend its regulation. But what if the government just says, “Shhhh… could you please turn that down?” Rep. Anna Eshoo’s Commercial Advertisement Loudness Mitigation Act (“CALM Act” – HR 1084) would do just that: require the FCC to issue rules that broadcast and cable TV ads:

(1) … shall not be excessively noisy or strident; (2) … shall not be presented at modulation levels substantially higher than the program material that such advertisements accompany; and (3) [their] average maximum loudness…  shall not be substantially higher than the average maximum loudness of the program material that such advertisements accompany.

Now,  I understand where Ms. Eshoo is coming from: I have a very low tolerance for noise in general and for television in particular—and it’s not just about commercials. (I find TV news at least as “noisy” and “strident” as commercials. That’s why I opted-out from the whole TV thing in about 2000. Yup, that’s right: I found better things to do with my time and the supposedly all-powerful “gatekeepers” of Hollywood couldn’t do a damn thing about it. You should try it if you don’t like what’s on TV! To paraphrase Voltaire, “I disapprove of what you say watch,  but I will defend to the death your right to say watch it! You can get most of what’s worth watching on DVD or online anyway.) But do we really need bureaucrats in Washington micromanaging volume levels? Maybe Congressmen would have a little more time to read the bills they vote for if they they weren’t so busy fiddling with everyone else’s remote!

Eshoo’s bill has passed the House Energy & Commerce Committee’s Communications Subcommittee just as the TV industry is completing work on voluntary standards of their own. That’s one “less restrictive” alternative to regulation. What about technological empowerment? If Americans really hate loud commercials so much, why don’t they demand TVs with built-in volume normalization features? But this bill isn’t merely unnecessary, it would also set a disturbing precedent in at least six ways.

First, while it might seem that a regulation could draw clear lines with simple rules here about volume, Cliff Stearns (R-Fl) points out that “it is difficult to regulate volumes, since commercials are produced by a number of studios and companies that use different technologies and volume standards.” But this ambiguity merely increased the potential for selective enforcement, which would exist even where it were possible to craft precise rules.  Because the law makes no distinction about “non-commercial” (i.e., not-for-profit) advertisements, this means a politicized FCC could use volume controls as a weapon against opposing political advertising or other non-profit speech it did not like. Anyone who’s ever lived under a Home Owner’s Association should understand how easily an HOA president with a personal grudge could use hyper-technical rules about what shade of blue you have to paint your own mailbox to harass you. And isn’t “strident” the very adjective most commonly used to write off the arguments of those with whom we disagree?

Second, even though it does not exempt non-commercial ads, the bill does embody a recurrent presumption that it’s ok to regulate advertising in ways we wouldn’t accept for the “show” itself (i.e., non-advertising content). Of course, the show could be “commercial” (which, in First Amendment terms, means it would generally get only “intermediate” scrutiny) while the advertisement could be “non-commercial”—such as a political ad. But even if most ads are commercial, so what? If the government is going to protect us from “noisy or strident” commercials, why not all “noisy or strident” programming? Even the most annoying TV ad is probably less annoying than, say, the James Carvilles of the world debating the Glenn Becks of the world. (Of course, users really bothered by noise, but unwilling to give up TV, would probably much rather have a dynamic market for TVs with volume moderating features than rules that dull the din of commercials alone.)

Third, I’m sure that the government would defend Eshoo’s bill, if signed into law, as a restriction on the “time, place and manner” of speech. Although such restrictions are much easier for the government to defend than most restrictions on speech, the government must still show that the regulation is “narrowly drawn” and “serves a significant government interest.” So… what’s the interest here? I’m a little disturbed by the idea that the government has a “significant interest” in what goes on in the space between Americans, their couches, and the electronic display of their choosing. (If we were talking about non-consensual “second-hand television” like TVs blaring in airports, I might be slightly more sympathetic: It’s awfully hard to escape the sound of TV when you’re stuck at the gate waiting for a flight. But commercials are only marginally more annoying to me than most TV, and airport TVs generally show news anyway—the height of annoyingness. I’d much rather see airports, bars, etc. adopt directional sound technologies so that users can move out of the “blast radius” and into peace and quiet simply by moving over a few seats.)

Fourth, I understand that most users probably do wish that commercials probably weren’t so loud. But, this very fact, combined with the ease with which users can now skip all commercials (36% of U.S. homes have a DVR), creates a pretty powerful incentive for the TV industry to self-regulate the volume level of advertising. “Noisy or strident” advertising is just another example of the “tragedy of the commons” at work: Absent any rules, every individual advertiser has an incentive to jack up the volume in order to attract attention, and doing so will probably work up to a certain point of increased annoyance by the user. But collectively, such ads hurt all advertisers because they increase ad blindness, ad deafness, and/or outright commercial skipping. The same dynamic plays out on the Internet, where flashing, blinking, bouncing, strobing dancing ads really drive users nuts and make them turn to tools like AdBlock Plus and Flashblock—which is why ad networks like Google have policies that implement their own “time, place and manner” rules out of pure self-interest. Such rules are useful and valuable. They benefit advertisers, consumers and the ad network alike, because there exists a basic harmony of interests between them: annoying ads don’t really benefit anyone in the long-term.  Do we really want government bureaucrats making these decisions instead?

Fifth, if the FCC has a “significant” interest in “protecting” us from annoying TV ads, why shouldn’t the F TC protect us from annoying ads online? Here, the problems of government making rules become even more obvious as the medium is far more dynamic. But users already have radical user empowerment tools.

Finally, what about the unintended consequences of such regulation? For example, will intermediaries be responsible for compliance?

Rep. Zack Space (D-Ohio), raised the issue of the impact of the bill on small cable operators. He said that while he was not disputing the need for uniform commercial volume, he said the bill, “perhaps unintentionally” was prejudiced [against] small operators. He pointed out that many of those operators did not insert ads themselves or have “the right to alter national feeds unilaterally, like some of the bigger cable companies.” He said that those operators “simply pass through broadcast signals and have no means of adjusting the volume of commercials on the stream.”

If the FCC were to hold ad-distributor intermediaries liable for the volume-compliance of ad-producers, that could certainly disadvantage small distributors and perhaps even promote consolidation—both horizontal and vertical. But isn’t media consolidation the great evil that “media reformistas” are constantly warning us about?

Berin Szoka and I just released a short article on the FCC’s proposed follow-up to the failed 700 mhz D Block auction:  a free, nationwide wireless service that would serve public safety users as well as consumers.  It’s attached down below or the PDF can be found here.

What’s Worse Than Rigged Auctions & Internet Censorship? How About Both in One Package!

a PFF Progress Snapshot Release 4.12 June 2008

by Adam Thierer and Berin Szoka

The big spectrum policy debate in town these days continues to be the fight about how to redo the botched D block auction. As we all know, FCC Chairman Kevin Martin’s previous effort to micro-manage that auction failed miserably. Sadly, the follow-up plan isn’t much better, as the Wall Street Journal notes in an editorial today:

You’d think Chairman Martin would have learned from this experience. It’s not the role of regulators to pick winners and losers to achieve their preferred social outcomes. Private competition and the price mechanism can most fairly and efficiently find the best use for scarce spectrum. The FCC’s clumsy attempt at social engineering resulted in a failed auction that has prevented otherwise desirable spectrum from being put to commercial use. Alas, Mr. Martin has now proposed another wireless auction for a separate piece of spectrum. And this time he wants to require the winner to offer free Internet access that filters out pornography–conditions that obviously would decrease the value of the license and turn off potential bidders. It just so happens that Mr. Martin’s proposed auction seems tailor-made for the business plan put forward by M2Z, another politically connected Silicon Valley start-up looking to enter the wireless broadband telecom market.

The declared goal of the new plan is to provide “free” broadband to the masses while also satisfying public safety spectrum needs (though little is understood about how the propose service will support public safety). Supporting legislation introduced by Rep. Anna Eshoo (D-CA), H.R. 5846, the “Wireless Internet Nationwide for Families Act of 2008,” would require the winning bidder to:

offer, at a minimum, always-on wireless broadband services within 2 years from the date of receipt of the license, and complete the construction of such wireless network with a signal covering at least 95 percent of the population of the United States and its territories within 10 years from the initial operation of the network; [and] a data service that is faster than 200 kilobits per second one way for free to consumers and authorized public safety users without subscription, airtime, usage, or other charges.

Good luck getting anyone to bid much on that plan! It’s not really clear why anyone would think that a 200 kbps public utility service–even at zero cost–will have all that much appeal to the masses. Today, through server-side data compression, any of us can already squeeze 300 kbps out of our old dial-up lines–a service now free from companies like NetZero and generally costing less than $10/month. Even most existing wireless data plans today provide greater bandwidth. How many people are really going to want to use a “free” wireless network that pumps out far less? After all, you’re not going to be able to download many videos or big files or do anything very data-intensive on the proposed network. While a certain segment of basic smart phone users might be satisfied with such sluggish speeds for rudimentary web uses such as email, blog-reading, calendars and basic locational searches, existing equipment would not be able to connect to the proposed network because of the bands used. So, while such PDA users might seize the opportunity to use slow-but-free municipal wi-fi networks, they could not use the proposed network: an entirely new generation of wireless technologies would have to be equipped to support yet another wireless standard.

So why would any company pony up serious money at an auction to win the right to provide such a lackluster service to a minimum of 95% of the nation, including costly-to-serve low density areas, within two years? You don’t need to be a Harvard Business School grad to see why that plan doesn’t make much sense for most investors. (Never mind the fact that the auction of this much valuable spectrum with so many regulatory encumbrances will yield far less at auction to the U.S. Treasury.)

Of course, the winning bidder will likely have the right to “up-sell” customers to a higher-speed paid service. But we have no idea how well that plan will work out and, even if it did, it would call into question the logic of rigging this auction in the first place: Is the purpose truly to provide free universal broadband access, or just to hand someone a chunk of somewhat cheaper spectrum to let them up-sell customers to higher-speed, paid plans? If it’s the latter, the plan seems a little unfair to the private carriers who are already aggressively competing in the market today, having paid top-dollar for their spectrum and invested heavily in wireless data networks.

Or will the lucky auction winner be expected to rely in part on advertising revenues to pay for the up-front costs of winning the auction, building out the network and providing service–much as M2Z originally planned to do? If so, the provider would doubtless prefer to offer more profitable behaviorally targeted advertising customized for each user. The Federal Trade Commission has wisely chosen not to regulate such advertising, given its complexities and ongoing evolution, and to rely instead on enforcement of existing unfair and deceptive trade laws, while issuing voluntary guidelines for industry. But of course, the FCC would have jurisdiction over the proposed service and would likely face enormous political pressure to include its own regulatory regime for online behavioral advertising while drafting service rules. The controversy over such rules could delay the deployment of the proposed service, while any FCC regulations would inject the FCC into the ongoing debate over how to govern a practice that provides the revenue stream necessary to support a variety of content and services.

But this new spectrum-rigging plan is troubling for an entirely different reason: It demands Internet censorship. The original M2Z plan included a promise to sanitize this little patch of spectrum to make sure it was “kid-friendly.” What better way to win a spot in the heart of legislators and regulators than to promise network-wide Net filtering! After all, many lawmakers have long considered this the Holy Grail of Internet policy. Eshoo’s bill would mandate such filtering by requiring that the licensee “offer such free data service with a technology protection measure or measures that protect underage users from accessing obscene or indecent material through such service.”

It’s surprising that so few people are discussing the dangers of this portion of the proposal. After all, what we are talking about here is a blueprint for widespread, government-mandated censorship of the Internet. Many folks, including the Wall Street Journal in today’s editorial, seem to be under the impression that the mandate is strictly directed at “pornography”–and nothing more. But Rep. Eshoo’s bill clearly requires filtering of “obscene or indecent material.” Defining obscenity is difficult enough. But including “indecent” content will open up a Pandora’s Box of regulatory shenanigans. One need do nothing more than read a few pages of broadcast regulatory history to appreciate the practical challenge that awaits both providers and regulators as they attempt to monitor the network to ensure that everything is “decent” for the masses. (Moreover, is that really what the Internet that the masses want?)

Regardless, the important question is not what will be censored, but how it will be censored–a critical detail that neither Chairman Martin nor Rep. Eshoo have spelled out. But, in all likelihood, we’re talking about something more that just downloadable filters for consumers to install themselves if they so chose–leaving the decision to individuals and parents, where it belongs in a free society. Instead, it seems clear that we are talking about server-side, network-wide filtering that will essentially be forced on all users of the network. Such a technological solution will greatly slow down the already primitive network being proposed under this plan. But, more importantly, we have to wonder what sort of precedent is being established here for other broadband networks and the rest of the Net.

Of course, policymakers will respond by saying that the plan is simply another regulatory quid pro quo: We rig the auctions to drive down the cost, and you, the winning carrier, clean up the Net for us. That’s all easier said than done, and it raises a host of constitutional issues in the process. There are many better ways to protect kids, and there are certainly better ways to run a spectrum auction.