Progress Snapshot 6.7, The Progress & Freedom Foundation (PDF)
This week marks a pivotal point in the history of the Internet. Monday was the 25th anniversary of the first .COM registration—and in some ways, the beginning of the commercial Internet. Yesterday, the Federal Communications Commission unveiled its long-awaited National Broadband Plan, which proposes ambitious subsidies to encourage broadband deployment. On the theory that unease about online privacy may discourage broadband adoption, the Plan also calls for increased regulation of how websites collect, and use, data from consumers.
The debate over how to regulate online data use has gone on for over a decade, leading to today’s final “Roundtable” in the “Exploring Privacy” series held by the Federal Trade Commission over the last three months. The stakes in this debate are high: Data is the lifeblood of online content and services, and consumers will ultimately bear the cost of restrictions on data use in the form of reduced advertising funding for, and innovation in, online content and services.
That’s why this week’s most important technology policy event may ultimately prove to be today’s Senate Commerce Committee hearing on Rep. Barney Frank’s “Wall Street Reform and Consumer Protection Act of 2009” (H.R. 4173), which narrowly passed the House in December without a single hearing and no real debate. Although the sprawling (273,579 word) bill is mostly famous for creating a Consumer Financial Protection Agency, it would also, in just 613 words, “put the FTC on steroids,” in the words of Jim Miller, FTC Chairman from 1981 to 1985. With vastly expanded powers, the FTC could impose sweeping new regulation touching virtually every sector of our economy.
The current FTC chairman, Jon Leibowitz, has made clear his determination to step up regulation of online data use, advertising, “blogola,” and child protection, just to name a few of the hot topics in Internet policy. While the FTC will no doubt continue to push for increased statutory authority, such as the online privacy bill reportedly being drafted by House Commerce Internet Subcommittee Chairman Rick Boucher (mandating opt-in for data collection), Chairman Leibowitz may be able to implement most of his radical Internet regulatory agenda using the new powers conferred on his agency in a bill (H.R, 4173) few realize has anything to do with Internet policy. Continue reading →
I’m livetweeting today’s final FTC Privacy Roundtable (check out the #FTCPriv hashtag on Twitter). Check out the day’s agenda or watch the webcast here. Adam Thierer and I expressed our concerns about the rush to regulation at the First Roundtable back in December—see my written comments and Adam’s summary of his remarks. David Vladeck, Director of the Bureau of Consumer Protection offered the following summary of the Roundtable process at the kick-off this morning:
- Benefits & risks of technology. ”March of technology has blurred and threatens to obliterate the distinction between PII [personally identifiable information) and non-PII…. It’s getting harder and harder for users to choose anonymity.”
- Privacy challenges raised by emerging business models. What do consumers know? Consumers are often presented with confusing and unfamiliar situations. Consumers understand little about how their information is handled.
- Innovation in disclosure. Industry is testing privacy icons.
- Privacy policies are too vague, too long, too complicated and too hard to find. We need effective ways to disclose what information is being collected and to give consumers a meaningful way to control its use. There’s no way to put the genie back in the bottle once information has been shared.
On the critical question of next steps, Vladeck claims the agency isn’t certain where it will go and plans to “sit back” and think about the detailed record before making public a set of detailed recommendations on which the public will be invited to provide input. I’d like to believe him and I hope the agency really does think long and hard about the evidence provided in this process as to the trade-offs inherent in increased regulation, the complexity of this space, and the need for a cautious approach when it comes to tinkering with the data flows that are the lifeblood, both technological and financial, of the Internet. But based on their recent public statements, I fear that Vladeck and FTC Chairman Jon Liebowitz have already made up their minds about the need for regulation, and that this process is really just paving the way for a report this summer that will call for sweeping new legislation—just as the FTC did back in its 2000 Report to Congress. Continue reading →
Can we steer people toward hard news — and get them to financially support it — through the use of “news vouchers” or “public interest vouchers”? That’s the subject of this latest installment in my ongoing series on proposals to have the government play a greater role in the media sector in the name of sustaining struggling enterprises or “saving journalism.”
As I mentioned here previously, last week I testified at the FCC’s first “Future of Media” workshop on “Serving the Public Interest in the Digital Era.” (@3:29 mark of video). It was a great pleasure to testify alongside the all-star cast there that day, which included the always-provocative Jeff Jarvis of the CUNY Graduate School of Journalism. He delivered some very entertaining remarks and vociferously pushed back against many of the ideas that others were suggesting about “saving journalism.” Jeff is a very optimistic guy–far more optimistic than me, in fact–about the prospect that new media and citizen journalism will help fill whatever void is left by the death of many traditional media operators and institutions. He had a lively exchange with Srinandan Kasi, Vice President, General Counsel and Secretary of the Associated Press, that is worth watching (somewhere after the 5-hour mark on the video).
Nonetheless, Jarvis is a enough of a realist to know that it has always been difficult to find resources to fund hard news, which he creatively refers to as “broccoli journalism.” This is what is keeping the FCC, the FTC (workshop today), and many media worrywarts up at night; the fear that as traditional financing mechanisms falter (advertising, classifieds, subscription revenues, etc) many traditional news-gathering efforts and institutions will disappear. Of course, while it is certainly true we are in the midst of a gut-wrenching media revolution with a great deal of creative destruction taking place, it is equally true that exciting new media business models and opportunities are developing. We shouldn’t over look that, as I argued here and here.
Anyway, a lot of different proposals are being put forth by scholars and policymakers to find new ways to finance news-gathering or “save journalism.” One of the ideas that has been gaining some steam as of late is the idea of crafting a “public interest voucher” or what Robert W. McChesney & John Nichols, authors of the new book The Death and Life of American Journalism, call a “Citizenship News Voucher.” And McChesney discussed this idea in more detail when he spoke at today’s FTC event on saving journalism. Continue reading →
“We’re from government and we’re here to help save journalism.”
That seems to be the hot new meme in media policy circles these days. Last week, it was the Federal Communications Commission (FCC) kicking off their “Future of Media” effort with a workshop on “Serving the Public Interest in the Digital Era.” This week, it’s the Federal Trade Commission’s (FTC) turn as they host the second in their series of workshops on How Will Journalism Survive the Internet Age? Meanwhile, the Senate has already held hearings about “the future of journalism,” and Senator Benjamin L. Cardin (D-MD) recently introduced the “Newspaper Revitalization Act,” which would allow newspapers to become nonprofit organizations in an effort to help them stay afloat.
I have no doubt that many of the public policymakers behind these efforts have the best of intentions and really are concerned about what many believe to be a crisis in the field of journalism. But here are my three primary concerns with Washington’s sudden interest in “saving journalism”: Continue reading →
Congress gets dinged a lot for slowing down innovation, but sometimes that is just what the doctor ordered. Thirty-five years ago, a Democratically controlled Congress passed the Magnuson-Moss Act in an attempt to check a hyperactive FTC.
Like a kid set loose in a candy store, the FTC at the time had gone on a binge of overreaching and harmful regulation. The core enabler of this action is the exceptionally broad mandate bestowed on the agency to regulate all “unfair” consumer activity. Unlike regulating the structural stability of bridges or safety in food, “fairness” is a subjective concept.
Congress’ prudent action to place special restrictions on FTC rulemaking [15 U.S.C. Sect. 57a(b)(2)(A)] was in direct response to the agency’s overreach and regulation of activities that would have included advertising children’s products – in essence, acting like a kid in a candy store. Magnuson-Moss was the equivalent of putting the candy behind the counter, providing Congress and courts control over how much candy was appropriate.
Now, 35 years later, the FTC has that ‘unfairness feeling’ again. In a NY Times interview last month, FTC Chairman Jon Leibowitz signaled his intent to change standard marketing tactics of disclosure and opt-out, by requiring users to opt-In for collection of information for targeting ads. They are concerned about what’s “fair” in advertising, but we know that low rates of opt-in will reduce ad revenue. If the change were put into effect, free online services might have to charge a “fare” to users.
At the same time, the FTC is seeking to shed what the Chair called “medieval restrictions” on its rulemaking powers. A change that would allow the FTC to move quickly to require opt-in. Taken together, these threats to online services and e-commerce are #1 on the NetChoice 2010 iAWFUL list. Continue reading →
By Adam Thierer & Berin Szoka
Progress & Freedom Foundation Progress Snapshot No. 6.5, Feb 2010 [.pdf]
Advertising is increasingly under attack in Washington. In fact, we’re busy finishing up a paper with the working title: “The New Assault on Advertising: What it Means for the Future of Media & Culture.” Among other things, the paper inventories the many ways in which policymakers in Washington and elsewhere are stepping up regulation of commercial advertising and marketing efforts-and highlights the common themes that unite them. Unfortunately, the report is already over 50 pages long and we keep finding new threats to discuss!
This regulatory tsunami could not come at a worse time, of course, since an attack on advertising is tantamount to an attack on media itself, and media is at a critical point of technological change. As we have pointed out repeatedly, the vast majority of media and content in this country is supported by commercial advertising in one way or another-particularly in the era of “free” content and services.[1]
An Attack on Advertising Will Hurt Consumers
But there’s a more important reason to fear Washington’s new war on advertising: It will hurt consumer welfare. That’s because advertising provides important information and signals to consumers about goods and services that are competing for their attention and business—and that scarcest of all things in the modern world, consumers’ attention. Continue reading →
Third on the headlines today on TechMeme (perhaps the leading tech news aggregator) is this headline: “An Apology To Our Readers,” a heart-felt piece from TechCrunch editor Michael Arrington disclosing that a TechCrunch intern had, on at least two occasions, demanded computers from start-ups as compensation for writing favorable blog posts about them on the highly influential site. The intern was immediately suspended and, when the allegation was confirmed, terminated. Arrington made no excuses for Daniel Brusilovsky on account of his age (he’s under 18). You can read Daniel’s response here.
If this incident demonstrates anything, it’s just how essential it is for a site like TechCrunch to, as Arrington promised his readers in closing, “maintain complete transparency with you on how we operate, even when it isn’t such an easy thing to do.” Arrington went so far as to have “deleted all content created by this person on our blogs”—indeed, “every word written by this person on the TechCrunch network,” which presumably includes comments.
One might take from this the lesson that the press, as it evolves from the newspaper model towards something blog-ier but still hard to pin down precisely, can police itself pretty darn well. Alas, the FTC has taken a much dimmer view of the ability of reputational incentives to discipline the influence that might be exerted by “blogola” payments (cash or in-kind) on editorial discretion and journalistic creation. Continue reading →
At today FTC’s “Exploring Privacy” roundtable event at Berkeley Law School, were heard a lunchtime address from Daniel J. Weitzner, Associate Administrator for Policy, National Telecommunications and Information Administration (NTIA) at the Department of Commerce. Down below is a brief summary of his remarks. (Berin Szoka and have been live-tweeting the event at @AdamThierer and @BerinSzoka). You can view all our tweets here.
- Obama Administration is looking at nexus between privacy & innovation
- Success of Internet has depended upon creative use of information
- Predictability and certainty is imp for both consumers and companies on this front
- Believes we CAN have both innovation and privacy protection; but there will be some tensions
- Challenge of the 3rd decade of Internet policymaking = to get together set of policies to bring security to Net while preserving freedom
- Does domestic & global patchwork of #privacy policies hurt or help innovation?
- Need to take a hard look at the traditional notice & choice framework
- Rules for COLLECTION or USE of data is key question
- Concepts of “accountability” … to what or whom?
- a Notice of Inquiry coming from NTIA about privacy to help shape privacy policy for Obama Admin
I’m attending the FTC’s 2nd “Exploring Privacy” roundtable event, which is taking place at the University of California-Berkeley School of Law. Here’s the agenda. (I’ll be live Tweeting @AdamThierer). FTC Commissioner Pamela Jones Harbour & FTC Bureau of Consumer Protection Director David Vladeck kicked things off. Here’s a quick summary of their remarks:
- Data collection has vast opportunities but drawbacks also
- “non-price dimensions” of privacy important
- Talking about recent Facebook privacy changes
- Privacy is not “over” as McNealy once said; recent public outcry about Facebook changes make that clear
- “delicate balance” between data collection and consumer control
- Concerned about privacy in the mobile environment
- “Apple could do more to require baseline level of privacy disclosures”; other could set such defaults too
- Similar fears about privacy in the cloud; difficult for consumers to define privacy expectation in the cloud; fear of lock-in concerns
- Wants more data portability
- Concerned that anonymization doesn’t work good enough; Perhaps our faith in current technologies is misplaced
- Must address the question of privacy by design sooner rather than later
Continue reading →
Berin Szoka and I will be in Berkeley, CA tomorrow attending the FTC’s 2nd “Exploring Privacy” roundtable event. The event will take place at the University of California-Berkeley School of Law. Here’s the agenda and speaker bios. The event will be webcast for those who cannot make it. But for those of you who going, make sure to come say hi to Berin and me. We were thinking about trying to get a group together afterward to grab a beer somewhere nearby.
Incidentally, Berin and I testified at the FTC’s first Exploring Privacy workshop, which took place on December 7th. You can find webcasts of the panels here, and here are Berin’s comments and my summary of what we had to say that day.
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