Filings are due to the Federal Trade Commission (FTC) today as part of its review of the Children’s Online Privacy Protection Act (COPPA) and the COPPA rule that the FTC devised and enforces. I didn’t have time to pen as much as I wanted, but I did submit a short filing to the agency in the matter based on some of my previous work both with Berin Szoka and on my own. Here’s the executive summary for my filing:
It goes without saying that the Children’s Online Privacy Protection Act (COPPA) is complicated law and rule. When considering the rule and proposals to amend it, it is easy to get lost in the weeds and ignore the bigger picture. That would be a mistake. There are broader, more important questions that need to be asked as part of the Federal Trade Commission’s effort to expand this regulatory regime. These questions involve not only the costs of increased regulation for online business interests, but the impact of expanded regulation on market structure, competition, and innovation. More importantly, these questions cut to the core of whether the public (including children) will be served with more and better digital innovations in the future. There is no free lunch. Regulation—even well-intentioned regulation like COPPA—is not a costless exercise. There are profound trade-offs for online content and culture that must always be considered.
Whatever one thinks about the effectiveness or sensibility of the COPPA regulatory model for the Web 1.0 world, it is clear that the regime is being strained by the unforeseen realities of the Web 2.0 world of hyper-ubiquitous connectivity and user-generated content creation and sharing. The digital genie cannot be put back in the bottle. While COPPA may continue to have a marginal role to play in this rapidly evolving world, that role will likely be increasingly limited by the inherent realities of the information age.
Entire filing can be found on the Mercatus website, on SSRN, or via Scribd [Also embedded below in a Scribd reader.] Continue reading →
The U.S. Treasury and the Federal Reserve have pushed back the deadline for banking industry compliance with regulations pursuant to the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). UIGEA, the controversial tack-on to the Bush administration’s SAFE Port Act aimed at curtailing on-line gambling by making it illegal for U.S banks and financial institutions to participate in funds transactions between U.S. citizens and corporations that operate online casinos, effectively banning Internet gambling.
In a joint statement, the Treasury and the Fed delayed the compliance date, which had been set for today (December 1) to June 1, 2010, the Gambling Today blog reports. The decision also comes just days before Thursday’s scheduled hearing in the House Financial Services Committee on H.R. 2267, a bill introduced by Rep. Barney Frank (D-MA), which would overturn UIGEA and create a full licensing and regulatory framework for the Internet gambling industry in the United States.
As Financial Services Committee chairman, Frank has been a vocal opponent of UIGEA and has been working for its repeal over the past two years. In authorizing the delay, the two agencies said that financial institutions were not prepared with the mechanisms they needed to block unlawful Internet gambling transactions, but they also noted that the rules did not provide a clear definition of unlawful Internet gambling. This last observation could be significant as it acknowledges one of the bill’s principal vulnerabilities—it broadly defines Internet gambling as games of chance. Opposition groups, notably the Poker Players Alliance, have repeatedly argued (correctly IMHO) that certain online casino games, especially poker, are games of skill.
Online gambling blogs generally greeted the delay positively and hope it is another step in the direction of restoring the freedom to gamble online.
As the Gambling Today blog notes:
The postponement was greatly appreciated by the supporters of online gambling. House Financial Services Committee chairman Barney Frank has two of his sponsored bills coming up for hearing on December 3. Frank said, “This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law.”
Progress Snapshot 5.10
from
The Progress & Freedom Foundation
A recent telephone poll conducted by professors at Berkeley and the University of Pennsylvania concluded, “Contrary to what many marketers claim, most adult Americans (66%) do not want marketers to tailor advertisements to their interest.” The study’s authors claim that their poll is the “the first nationally representative telephone (wireline and cell phone) survey to explore Americans’ opinions about behavioral targeting by marketers.” They also assert that the poll indicates that “if Americans could vote on behavioral targeting today, they would shut it down.” Advocates of regulating online data collection have trumpeted this poll as evidence consumers demand legislation to protect their privacy. “This research gives the F.T.C. and Congress a political green light to go ahead and enact effective, but reasonable, rules and policies,” declared Jeff Chester, a leading critic of online advertising.
But what is most surprising about this poll is not that 66% of users said they do not want tailored online ads, but that 34% of users said they did! The key, initial question of “whether or not you want the websites you visit to show you ads that are tailored to your interests,” presents no trade-off. The fact that
anyusers said “yes” indicates that many users paused to do the rough mental math about the unarticulated trade-off between the benefits of receiving tailored ads and the costs of that tailoring.
The methodology of opinion polls necessarily affects respondents’ mental calculations, rendering polls not just easily manipulated, but inherently unreliable as indicators of real preferences. Every poll reflects the bias of its authors to some degree by the way questions are worded, the order in which they are asked, the sample surveyed,
etc. The easiest way to bias the results of a poll is to omit any mention of the trade-offs at issue. This poll simply buried the issue of trade-offs in a heavily loaded follow-up question: After telling respondents that marketers “often use technologies to follow the websites you visit and the content you look at in order to better customize ads,” the interviewer asked whether the respondent would allow advertisers to “follow [them] online in an anonymous way in exchange for free content.” Only 10% of users said they would allow this voluntary exchange.
What does this tell us about whether, and how, government should further regulate online advertising? Precious little: Not only does this poll overstate the costs of targeted advertising, understate its benefits, and ignore the tools available to users to address their privacy concerns but, like any opinion poll, this one tells us more about the psychology of decision-making under the artificial uncertainty of polls than about the choices users would actually make in the real world. Continue reading →
My friend Larry Magid, one of America’s leading Internet safety experts, has an outstanding column over at the Yahoo Kids “Connected Parent” site entitled “Is the Internet as Dangerous as Drunk Driving?” In it, he discusses the surprising results of a recent survey of 1,000 moms of teenagers commissioned by McAfee and conducted by Harris Interactive which found that “about two-thirds of mothers of teens in the United States are just as, or more, concerned about their teenagers’ online safety, such as from threatening emails or solicitation by online sexual predators, as they are about drunk driving (62 per cent) and experimenting with drugs (65 per cent).”
Like Larry, I was a bit shocked that so many mothers would equate online safety with the dangers of drunk driving. After all, as Larry proves, the relative risks aren’t even close:
While moms have good reason to be concerned about how their teens use the Internet, online dangers pale compared to the risks of drunk driving. In 2007, 6,552 people were killed in auto accidents involving young drivers (16-20), according to the National Highway Transportation Safety Administration (NHTSA). In 2006, nearly a fifth (18%) of the 7,643 15- to 20-year-old drivers involved in fatal traffic crashes had a blood had a blood alcohol concentration of .08 or higher.
Perception of Internet danger has been heightened thanks to the TV show “To Catch a Predator” and inaccurate reports such as “one in five children have been sexually solicited by a predator.” That statistic is a misquote from a 2000 study by the Crimes Against Children Research Center. The data (which, based on a 2005 follow-up study was revised to one in seven) is based on a survey that asked teens if they had in the last year received an unwanted sexual solicitation.
But many (possibly most) of those solicitations were from other teens, not from adult predators. What’s more most recipients didn’t view them as serious or threatening, “almost all youth handled the solicitations easily and effectively” and “extremely few youth (two out of 1500 interviewed) were actually sexually victimized by someone they met online,” reported the authors of the study. Other studies have shown that “the stereotype of the Internet child molester who uses trickery and violence to assault children is largely inaccurate” (Wolak, Finkelhor & Mitchell, 2004). In a survey of law enforcement investigators of Internet sex crimes, it was reported that only 5% of offenders pretended to be teens when trying to meet potential victims online.
Those of us who work on Internet policy issues need to do a better job of helping the press and public put online safety risks in proper perspective. Misguided Internet legislation is often premised upon irrational or conjectural fears. Unfortunately, a lot of average moms have been swayed by misperceptions, many of which have been driven by the press or public interest groups that favor more regulation of the Net.
It is a difficult thing for me to say, but I am man enough to do it: I must congratulate our intellectual opponents on their amazing victory in the battle to impose Net neutrality regulations on the Internet. With the Wall Street Journal reporting last night that the FCC is on the verge of acting against Comcast based on the agency’s amorphous Net neutrality principles, it is now clear that the folks at the Free Press, Public Knowledge, and the many other advocates of comprehensive Internet regulation have succeeded in convincing a Republican-led FCC to get on the books what is, in essence, the nation’s first Net Neutrality law. It is quite an accomplishment when you think about it.
Even though, as Jerry Brito has noted, “the FCC has no authority to enforce a non-binding policy statement,” it is clear that is not about to stop the activist-minded FCC Chairman Kevin Martin or his allies on the Left from advancing the cause of arbitrary, bureaucratic governance of the Internet. And that means the “Hands Off the Net” era will gradually start giving way to the “Hands All Over the Net” era. As I told Bob Fernandez of the Philadelphia Inquirer when he called to interview me for a story about these developments:
“This is the foot in the door for big government to regulate the Internet,” […] “This is the beginning of a serious regulatory regime. For the first time, the FCC is making law around net neutrality.”
And now that they have that foot in the door, I fully expect that it will be exploited for everything it’s worth to grow the scope of the FCC’s coercive bureaucratic authority over all things digital. The Left is salivating at the prospect of imposing their top-down vision of forced egalitarianism on the the Net, while the Right is figuring out how quickly they can exploit this to impose speech controls on anything they don’t want the public to see or hear.
It is a historic moment in the history of communications and media regulation, and freedom has lost—miserably. The tentacles of the regulatory Leviathan have grown infinitely longer and a little bit more of the Net’s freedom died today. And, again, what’s most amazing about this is that we have a Republican FCC to thank for that. So much for the GOP being for smaller government.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.