Today, the U.S. Department of Transportation released its eagerly-awaited “Federal Automated Vehicles Policy.” There’s a lot to like about the guidance document, beginning with the agency’s genuine embrace of the potential for highly automated vehicles (HAVs) to revolutionize this sector and save thousands of lives annually in the process.

It is important we get HAV policy right, the DOT notes, because, “35,092 people died on U.S. roadways in 2015 alone” and “94 percent of crashes can be tied to a human choice or error.” (p. 5) HAVs could help us reverse that trend and save thousands of lives and billions in economic costs annually. The agency also documents many other benefits associated with HAVs, such as increasing personal mobility, reducing traffic and pollution, and cutting infrastructure costs.

I will not attempt here to comment on every specific recommendation or guideline suggested in the new DOT guidance document. I could nit-pick about some of the specific recommended guidelines, but I think many of the guidelines are quite reasonable, whether they are related to safety, security, privacy, or state regulatory issues. Other issues need to be addressed and CEI’s Marc Scribner does a nice job documenting some of them is his response to the new guidelines.

Instead of discussing those specific issues today, I want to ask a more fundamental and far-reaching question which I have been writing about in recent papers and essays: Is this guidance or regulation? And what does the use of informal guidance mechanisms like these signal for the future of technological governance more generally?

When Is “Voluntary” Really Mandatory?

The surreal thing about DOT’s new driverless car guidance is how the agency repeatedly stresses it “is not mandatory” and that the guidelines are voluntary in nature but then — often in the same paragraph or sentence — the agency hints how it might convert those recommendations into regulations in the near future. Consider this paragraph on pg. 11 of the DOT’s new guidance document:

The Agency expects to pursue follow-on actions to this Guidance, such as performing additional research in areas such as benefits assessment, human factors, cybersecurity, performance metrics, objective testing, and others as they are identified in the future. As discussed, DOT further intends to hold public workshops and obtain public comment on this Guidance and the other elements of the Policy. This Guidance highlights important areas that manufacturers and other entities designing HAV systems should be considering and addressing as they design, test, and deploy HAVs. This Guidance is not mandatory. NHTSA may consider, in the future, proposing to make some elements of this Guidance mandatory and binding through future regulatory actions. This Guidance is not intended for States to codify as legal requirements for the development, design, manufacture, testing, and operation of automated vehicles. Additional next steps are outlined at the end of this Guidance. [emphasis added.]

The agency continues on to request that “manufacturers and other entities voluntarily provide reports regarding how the Guidance has been followed,” but then notes how “[t]his reporting process may be refined and made mandatory through a future rulemaking.” (p. 15)

And so it goes throughout the DOT’s new “guidance” document. With one breath the DOT suggests that everything is informal and voluntary; with the next it suggests that some form of regulation could be right around the proverbial corner.

Agency Threats Are the Future of Technological Governance

What’s going on here? In essence, DOT’s driverless car guidance is another example of how “soft law” and “agency threats” are becoming the dominant governance models for fast-paced emerging technology.

As noted by Tim Wu, a proponent of such regimes, these agency threats can include “warning letters, official speeches, interpretations, and private meetings with regulated parties.” “Soft law” simply refers to any sort of informal governance mechanism that agencies might seek to use to influence private decision-making or in this case the future course of technological innovation.

The problem with agency threats, as my former Mercatus Center colleague Jerry Brito pointed out in a 2014 law review article, is that they are fundamentally undemocratic and represent a betrayal of the rule of law. The use of “threat regimes,” Brito argued, “places undue power in the hands of regulators unconstrained by predictable procedures.” Such regimes breed uncertainty by leaving decisions up to the whim of regulators who will be unconstrained by administrative procedures, legal precedents, and strict timetables. “[B]ecause it has no limiting principle,” Brito concluded, the agency threats model “leaves the regulatory process without much meaning” and “would obviously be ripe for abuse.”

The danger exists that we are witnessing gradual mission creep as the DOT’s “guidance” process slowly moves from being a truly voluntary self-certification process to something more akin to a pre-market approval process. Every “informal” request that DOT makes — even when those requests are just presented in the form of vague questions — opens the door to greater technocratic meddling in the innovation process by federal bureaucrats.

Coping with the Pacing Problem

Why are agencies like the DOT adopting this new playbook? In a nutshell, it comes down to the realization on their part that the “pacing problem” is now an undeniable fact of life.

I discussed the pacing problem at length in my recent review of Wendell Wallach’s important new book, A Dangerous Master: How to Keep Technology from Slipping beyond Our Control. Wallach nicely defined the pacing problem as “the gap between the introduction of a new technology and the establishment of laws, regulations, and oversight mechanisms for shaping its safe development.” “There has always been a pacing problem,” Wallach noted, but like other philosophers, he believes that modern technological innovation is occurring at an unprecedented pace, making it harder than ever to “govern” it using traditional legal and regulatory mechanisms.

Which is exactly why the DOT and whole lot of other agencies are now defaulting to soft law and agencies threat models as their old regimes struggle to keep up with the pace of modern technological innovation. As the DOT put it in its new guidance document: “The speed with which HAVs are advancing, combined with the complexity and novelty of these innovations, threatens to outpace the Agency’s conventional regulatory processes and capabilities.” (p. 8)  More specifically, the agency notes that:

The remarkable speed with which increasingly complex HAVs are evolving challenges DOT to take new approaches that ensure these technologies are safely introduced (i.e., do not introduce significant new safety risks), provide safety benefits today, and achieve their full safety potential in the future. To meet this challenge, we must rapidly build our expertise and knowledge to keep pace with developments, expand our regulatory capability, and increase our speed of execution. (p. 6)

Rarely has any agency been quite so blunt about how it is racing to get ahead of the pacing problem before it completely loses control of the future course of technological innovation.

But the DOT is hardly alone in its increased reliance on soft law governance mechanisms. In fact, I’m in the early research stages of a new paper about what soft law and agency threat models mean for the future of emerging technology and its governance. In that paper, I hope to document how many different agencies (FAA, FDA, FTC, FCC, NTIA, & DOT among others) are using some variant of soft law model to informally regulate the growing universe of emerging technologies out there today (commercial drones, connected medical devices, the Internet of Things, 3D printing, immersive technology, the sharing economy, driverless cars, and more.)

If nothing else, I would like to devise a taxonomy of soft law/agency threat models and then discuss the upsides and downsides of those models. If anyone has recommendations for additional reading on this topic, please let me know. The best thing I have seen on the issue is a 2013 book of collected essays on Innovative Governance Models for Emerging Technologies, edited by Gary E. Marchant, Kenneth W. Abbott and Braden Allenby. I’m surprised more hasn’t been written about this in law reviews or political science journals.

What Does It Mean for Innovation? And Accountable Government?

So, what does all this mean for the future of driverless cars, autonomous systems, and other emerging technologies? I think it’s both good and bad news.

The good news — at least from the perspective of those of us who want to see innovators freed up to experiment more without prior restraint — is that the technological genie is increasingly out of the bottle. Technology regulators are at an impasse and they know it. Their old regulatory regimes are doomed to always be one step behind the action. Thus, a lot of technological innovation is going to be happening before any blessing has been given to engage in those experiments.

The bad news is that the regulatory regimes of the future will become almost hopelessly arbitrary in terms of their contours and enforcement ceiling. Basically, in our new world of soft law and agency threats, you can tear up the Administrative Procedures Act and throw it out the window.  When regulatory agencies act in the future, they will do so in a sort of extra-legal Twilight Zone, where things are not always as they seem. Agencies will increasingly act like nagging nannies, constantly pressuring innovators to behave themselves. And sometimes that nagging will work, and sometimes it will even improve consumer welfare at the margin! It will work sometimes precisely because government still wields a mighty big hammer and no innovator wants to be nailed to the ground in the courts, or the court of public opinion for that matter. Thus, many — not all, but many — of those innovators will go along with whatever agencies like DOT suggests as “best practices” even if those guidelines are horribly misguided or have no force of law whatsoever. And because agencies know that many (perhaps most) innovators will fall in line with whatever “best practices” or “codes of conduct” that they concoct, it will reinforce the legitimacy of this model and become the new method of imposing their will on current or emerging technology sectors.

Again, agency threats won’t always work because some innovators will continue to engage in rough forms of “technological civil disobedience” and just ignore a lot of these informal guidelines and agency threats. Agencies will push back and seek to make an example of specific innovators (especially the ones with deep pockets) in order to send a message to every other innovator out there that they better fall in line or else!

But what that “or else!” moment or action looks like remains completely unclear. The problem with soft law is that, by its very nature, it is completely open-ended and fundamentally arbitrary. It is really just “ non-law law.” That’s the “legal regime” that will “govern” the emerging technologies of the present and the future.

Isn’t Soft Law Better Than the Alternative?

Now, here’s the funny thing about this messy, arbitrary, unaccountable world of soft law and agency threats: It is probably a hell of lot better than the old world we used to live in!

The old analog era regulatory systems were very top-down and command-and-control in orientation. These traditional regimes were driven by the desire of regulators to enforce policy priorities by imposing prior restraints on innovation and then selectively passing out permission slips to get around those rules.

As I noted in my latest book, the problem with those traditional regulatory systems is that they “tend to be overly rigid, bureaucratic, inflexible, and slow to adapt to new realities. They focus on preemptive remedies that aim to predict the future, and future hypothetical problems that may not ever come about. Worse yet, administrative regulation generally preempts or prohibits the beneficial experiments that yield new and better ways of doing things.” (Permissionless Innovation, p. 120)

For all the reasons I outlined in my book and other papers on these topics, “permissionless innovation” remains the superior policy default compared to precautionary principle-based prior restraints. But I am not so naïve as to expect that permissionless innovation will prevail in the policy world all of the time. Moreover, I am not one of those technological determinists who goes around saying that technology is an unstoppable force that relentlessly drives history, regardless of what policymakers say. I am more of a soft determinist who believes that technology often can be a major driver of history, but not without a significant shaping from other social, cultural, economic, and political forces.

Thus, as much as I worry about the new “soft law/agency threats” regime being arbitrary, unaccountable, and innovation-threatening, I know that the ideal of permissionless innovation will only rarely be our default policy regime. But I also don’t think we are going back the old regulatory regimes of the past and we absolutely wouldn’t want to anyway in light of the deleterious impacts those regimes had on innovation in practice.

The best bet for those of us who care about the freedom to innovate is to make sure that these soft law governance mechanisms have some oversight from Congress (unlikely) and the Courts (more likely) when agencies push too far with informal agency threats. Better yet, we can hope that the pace of technological change continues to accelerate and pressures agencies to only intervene to address the most pressing problems and then largely leaves the rest of the field wide open for continued experimentation with new and better ways of doing things.

But make no doubt about it, as today’s DOT guidance document for driverless cars makes clear, “agency threats” will increasingly shape the future of emerging technologies whether we like it or not.

I’m going to close out my series of essays about Tim Wu’s new book, The Master Switch: The Rise and Fall of Information Empires, by discussing his proposed solutions.  In the first five essays in the series, [1, 2, 3, 4, 5] I’ve critiqued Wu’s look at information history as well as his use of terms like “market failure,” “laissez-faire” and “open” vs. “closed.”  I argued there’s a great deal of over-simplification, even outright distortion, in his use of those terms throughout the book.

Anyway, let’s run through the basics of the book once more before getting to Wu’s proposed solutions.  By my reading of The Master Switch, Wu’s argument essentially goes something like this:

• Information industries go through cycles. After a period of “openness” and competition, they tend to drift toward “closed,” corporate-controlled, anti-consumer models and outcomes.
• The resulting “monopolists” then block much innovation, competition, and free speech.
• Consequently, “the purely economic laissez-faire approach… is no longer feasible.”
• Moreover, information industries are more important than all others (“information industries… can never be properly understood as ‘normal’ industries”) and even traditional forms of regulation, including antitrust, “are clearly inadequate for the regulation of information industries.” (p. 303).
• Thus, special rules should apply to information-related sectors of our economy.

Again, I’ve challenged some of these assertions in my previous essays, specifically, Wu’s incomplete history of cycles and the fact that he greatly underplays the role of governments in “locking-in” sub-optimal market structures or, worse yet, creating those structures through misguided public policies or regulatory capture.  Wu discusses some of those factors in his book, but he tends to regard them as secondary to the inquiry, whereas I believe they are crucial to understanding how most “closed” or anti-competitive scenarios develop or endure. Instead, Wu simplistically suggests that “the purely economic laissez-faire approach… is no longer feasible,” even though no such state of affairs has ever existed within communications or media industries. They have been subjected to varying levels of indirect influence or direct control almost since their inception.

Regardless, what does Tim Wu want done about the problems he has (mis-)diagnosed?

What Wu Wants: A “Constitutional” Approach to Private Regulation

Broadly speaking, Wu wants to counter what he regards as “the danger of private power,” “the Lockean sanctification of private property,” and the fact that “American economic life [has] been built mostly on freewheeling capitalism.” (p. 300)  More specifically, he wants to end the “cycle” he describes of markets moving from supposedly open to closed.

To do so, he proposes what he calls a “constitutional” approach to private marketplace regulation.  In reality, it would be a massive, unprecedented, and highly destructive information sector industrial policy that would substitute the Rule of Man for the Rule of Law.  But let’s hear how Wu describes it:

What I propose is not a regulatory approach but rather a constitutional approach to the information economy. By that I mean a regime whose goal is to constrain and divide all power that derives from the control of information. Specifically, what we need is something I would call a Separations Principle for the information economy. A Separations Principle would mean the creation of a salutary distance between each of the major functions or layers in the information economy. It would mean that those who develop information, those who control the network infrastructure on which it travels, and those who control the tools or venues of access must be kept apart from one another. At the same time, Separations Principle stipulates one other necessity: that the government also keep its distance and not intervene in the market to favor any technology, network monopoly, or integration of the major functions of an information industry.”  (p. 302, emphasis in original)

Wu calls this a “constitutional approach” because he models it on the separations of power found in the U.S. Constitution, such as the separation of church and State, as well as the separation of powers between branches of government.  Wu makes a few additional assertions:

• “[T]he Separations Principle accepts in advance that some of the benefits of concentration and unified action will be sacrificed, even in ways that may seem painful or costly.” (p. 305)
• But Wu believes that pain or cost is worth it because of the “corrupting effect of vertically integrated power.” (p. 305)
• “You cannot serve two masters, and the objectives of creating information are often at odds with those of disseminating it,” he says. (p. 305)
• Specifically, he claims the Separations Principle would better protect free speech and entrepreneurial freedom. On the former: “It is a recognition that the disposition of firms and industries is, if anything, more critical than the actions of the state in controlling who gets heard.” On the latter: “The Separations Principle protects entrepreneurial freedom by preventing stagnation and repression of business innovation, especially with the help of the state.” (p. 306)

There’s a lot to unpack here including Wu’s stunning claim that his Separations Principle doesn’t represent a regulatory regime, as well as his rather incredible belief that government meddling and machinations could be kept in check under this regime.

First, however, Wu deserves credit for coming clean about just how radical his proposal is.

Constitutional Limits on Governments vs. Private Actors

Wu admits that “It would be quite radical today even to contemplate imposing on the economy the kind of safeguards that the Constitution places on the political system.” (p. 301)  A few pages later he notes that “The Separations Principle… requires a certain breadth and ambition in its application.” (p. 308)

I’m glad Wu was willing to at least acknowledge the radicalness of his proposal.  But, as he is prone to do throughout the book, he raises an important potential objection only to quickly walk away from it.  In this case, however, it’s completely understandable why Wu wouldn’t want to continue this inquiry: His proposal really is “quite radical” since it is completely at odds with America’s constitutional heritage of individual liberty and limited government.

Let’s go back to Civics 101.  We require that governments live under certain constraints and the Rule of Law because we recognize that governments possess the unique ability to fine, punish, and imprison citizens.  Moreover, escape from government’s tentacles is difficult, if not impossible. A constitutional system is required, therefore, to limit government’s role over our lives and the economy.

By contrast, we do not impose similar constraints on individuals — or on individuals when they work collaboratively in organizations or corporations — primarily because we believe there should be a presumption of liberty in most human affairs.  Freedom is the default position.  We value freedom because it allows humans to exercise their free will and live a life of their own choosing — and that includes the freedom to pursue happiness by making money in a business venture.  Our nation’s founders saw the wisdom in this even before we had a grand historical clash between communism and capitalist systems.  From that experience, however, we now have undisputed proof that social and economic freedoms are closely linked, and that when humans are free, they prosper.  The other reason we default to freedom for private individuals and organizations is because the possibility of “escape” exists from undesirable social or economic situations.

Wu doesn’t bother slowing down to appreciate these distinctions. He gives occasional lip service to the dangers of excessive government power:

Again and again in the histories I have recounted, the state has shown itself an inferior arbiter of what is good for the information industries. The federal government’s role in radio and television from the 1920s through the 1960s, for instance, was nothing short of a disgrace…. Government’s tendency to protect large market players amounts to an illegitimate complicity … [particularly its] sense of obligation to protect big industries irrespective of their having become uncompetitive. (p. 308)

Quite right. Yet, as I pointed out in this earlier essay, there’s seemingly never any serious lesson to be drawn from that conclusion.  Wu just marches right along in his narrative and ignores that “disgrace” and its relationship to “the cycle.”

The crucial point here is that Wu doesn’t fully appreciate the qualitative difference between State power and corporate power.  Instead — consistent with many “media access” theorists who came before him — he largely equates those forms of power or even makes private power out to be the more significant threat to personal liberties and freedom of speech.  Again, we hear statements like “the disposition of firms and industries is, if anything, more critical than the actions of the state in controlling who gets heard.”

The problem with this is that (a) history shows it’s simply not true and (b) the corrective remedies such a theory counsels would require a massive enhancement of State power to counter the supposed threats of private power, which (c) would create an even bigger threat to human liberty since only the State can fine, imprison, and truly foreclose speech.

So, I’ll stick with traditional “constitutionalism,” thank you very much!  Tim Wu’s “constitutionalism,” by contrast, is the Rule of Man, not the Rule of Law.  Specifically, it would be the rule of a handful of unelected men (and women) down at the Federal Communications Commission, the Federal Trade Commission, or whatever other regulatory bureaucracies Wu would empower under this approach.   And, as we’ll see next, that approach is truly audacious in its scope.

Practical Considerations: An Unprecedented Information Control Regime

OK, let’s forget about all that philosophical and legalistic mumbo-jumbo.  After all, most people these days don’t really give a hoot about constitutional limitations or the first principles associated with our nation’s founding. Let us instead explore the Bold New World of information regulation that Wu wants imposed on the high-tech economy and consider its complexity and costs.  Wu is a bit short on details about how policymakers should go about constructing a “Separations” regime, or how it will work in practice, but he does suggest that Net neutrality regulation and expanded antitrust oversight are at least two of the core elements. But he says that will not be enough.

Despite the fact that Wu admits the FCC “has on occasion let itself become the enemy of the good, effectively a tool of repression,” Wu seems to suggest the agency will continue to have “day-to-day authority over the information industries.” (p. 309) Of course, the FCC’s role is currently limited mostly to older sectors of the information economy, but Wu seems to suggest that role should be expanded considerably.  Yet, FCC oversight isn’t enough either, Wu says.  He argues that “what is needed is not only an FCC institutionally committed to a Separations Principle but also a structural arrangement to guard against such deviations, including congressional oversight as well as attention and corrections from other branches of government.”

Here the “breadth and ambition in its application” associated with Wu’s Separations Principal becomes more apparent. We are talking about layers upon layers of regulation. More importantly, the key attribute of Wu’s Separations Principle is that it is preemptive and prophylactic in character.  He explicitly rejects the idea that marketplace experimentation should be allowed and that ex post administrative proceedings or antitrust enforcement will be good enough. “[T]here is the problem of taking an after-the-fact approach to a commodity so vital to our basic liberties,” he argues. (p. 204) Thus, Wu’s approach represent a return to the sort of anticipatory, “Mother, May I” regulatory regime America was supposed to be turning away from following the passage of the Telecommunications Act of 1996.

What’s most bizarre about Wu’s call for such a preemptive “Separations” approach is his insistence that it is not a regulatory approach.  It’s hard to know whether this is an astonishing bit of hubris or just plain naiveté.  I hate to suggest it, but I think Wu is perfectly aware of just how regulatory his system would be in practice; he just doesn’t want to admit it.  After all, for there to be “separations” of various segments of the information sector, someone would need to determine who and what belongs in which bucket.  Wu suggests we’ll need at least three buckets. To repeat, he says his Separations Principle “would mean that those who develop information, those who control the network infrastructure on which it travels, and those who control the tools or venues of access must be kept apart from one another.”  Let’s put some labels on these buckets:

• Bucket #1: Information Creators
• Bucket #2: Information Distributors
• Bucket #3: Information Hardware Makers

These would essentially become three of the new “titles” (or regulatory sections) of a forthcoming “Information Economy Separations Act.” (I’m assuming Wu understands it would take an act of Congress to implement this sweeping regime, although he never makes that clear.  Or perhaps he would just prefer the FCC “reclassify” the entire information economy by regulatory fiat? Who knows.  Again, he never really sweats the details on this important point.)

Regardless, the problem with these conceptually neat classifications is that don’t conform to our fast-paced, highly dynamic Information Age economy.  There is a fluidity of innovation and market activity that Wu utterly fails to appreciate.  I suppose it’d be easy to throw a couple of players into these buckets and tell them to stay put.  We could tell T-Mobile, for example, that they could be a wireless information distributor and absolutely nothing else; we could tell Discovery Networks, they could be a content creator and absolutely nothing else; and we could tell Intel, you can be a chip maker and absolutely nothing else.

But not every existing information sector actor or technology is so neatly compartmentalized. Moreover, Wu’s framework also begs the question: Would firms that currently have integrated operations and investments in multiple fields be forced to divest control of various operations to come in line with Wu’s Separations Principle?   Here are a few scenarios to consider (and with each example, ask yourself the question: What’s the harm here to would justify the sort of “separations” regime Wu proposes?):

• Cox Enterprises has a wide variety of content and distribution properties including: broadband services, cable TV channels and distribution systems, newspapers, radio stations, advertising and direct mail divisions, and AutoTrader.com.  How many pieces does the firm need to be split into to comply with Wu’s new “Separations” regime?
• Should an ISP be allowed to develop or offer (or directly integrate into their service) free anti-virus software and parental control technologies since that’s not part of the underlying distribution service? Nearly every major ISP does so already today.
• Even though the experiment was ultimately a failure, should Google have been allowed to break out of the search market and give the handheld device business a shot with the Nexus One?  Likewise, should Google be allowed to continue its experiment with local fiber or wi-fi networks even though it is so clearly outside their traditional line of business?  Finally, should the FCC have disallowed Google’s bid in the 700 MHz spectrum auction back in 2008 since it would have meant the firm was formally entering the information distribution business?
• Which bucket is Microsoft in as a traditional OS and software provider?  Regardless, was it a mistake to allow them to jump into the video game console marketplace with the Xbox many years ago?   Should MS have been forbidden from creating the Zune since it too was a digital device outside of Microsoft’s core field?  Should MS be allowed to have a content division that develops games or other content for its operating systems even though they might be considered two separate information markets?
• Sony produces movie and video game content but also develops hardware (video game consoles, televisions, music players, phones, etc.) on which that content can be played. Should that be illegal? Would they have to divest some of these divisions once Wu’s system went into effect?
• Apple is the ultimate example of an information hardware manufacturer that has not only diversified its hardware offerings from PCs to iPods, iPhones and iPads, but also become a (if not the) leading information distributor for digital music, movies, television shows, podcasts, books and audiobooks through iTunes.  The company’s Apps store also makes it a key distributor of software.  What bucket is it in?
• Should Amazon be allowed to be both the biggest online marketplace as well as the manufacturer of a device (the Kindle) that offers access to that store?

I could go on and on, but here’s the crucial point: Creating firewalls between the buckets Wu proposes would be a nightmare and would entail incessant regulatory interventions to make sure the walls weren’t breached.  As suggested above, the very act of regulatory line-drawing would be mind-bogglingly complex.  More importantly, each new information sector innovation would suddenly be subjected to a regulatory classification proceeding.

Wu is essentially saying there are few integrative efficiencies or other economic benefits associated with cross-sector deals or cross-platform technological developments.  Again, he dismisses the notion with one line: “[T]he Separations Principle accepts in advance that some of the benefits of concentration and unified action will be sacrificed, even in ways that may seem painful or costly.” (p. 305)  Well, that’s nice… except that this regulatory system would upend the U.S. information economy as we know it!  His Separations Principle is an unprecedented regulatory wrecking ball that would do untold destruction to the American economy in the name of creating a system of information apartheid. Wu also completely ignores the litigation nightmare that would ensue once the government started forcing the divestiture of various lines of business.  After all, many companies would likely have valid “takings” claims here under the Fifth Amendment.

But even if we could get beyond all that, we’d have to consider how this regime would work going forward.  Let’s consider a hypothetical example.  Virtual reality is an emerging field of our information economy that promises to experience rapid growth in coming years.  A number of companies are currently developing content and devices that will help bring a veritable Star Trek holodeck experience to our living rooms sometime very soon.  The market is still in a great deal of flux and it remains unclear which technologies will prevail or which developers and device makers will prosper.  One thing we know for certain, however: it’s a hugely complex and expensive undertaking.  VR technologies aren’t like creating a YouTube video of your cat playing a piano. There are significant costs associated with developing VR content and devices. Distributing VR bits over networks will, no doubt, be quite complicated as well.  Now, imagine two scenarios (which, for all I know, may already be playing out in the marketplace today):

• Scenario 1: A partnership is announced between some cutting-edge VR companies that have different core competencies in this field.  One of the companies is developing holographic imaging devices to project immersive environments directly into your living room or workspace.  Another of the partners is developing games that would take advantage of those new holographic imaging innovations.  And a third partner in the deal is developing software that will help manage the real-time, high-bandwidth flow of VR bits across broadband lines.  Under Wu’s Separations Principle, would this deal be illegal?
• Scenario 2: All of the activities discussed above are being handled by a single, integrated firm.  Is that illegal under Wu’s Separations Principle?

Now, it would be easy to dismiss this scenario with a casual wave of the hand and a ‘we’ll-figure-it-out-later’ attitude.  But consider the fact that deals and developments like this are happening every single minute of the day our modern information economy.  One wonders how regulators would even be expected to keep track of it all.  And they would have to keep track of it all because, again, Wu’s Separations Principle is preemptive and prophylactic in character.  His regulatory regime is going to have to come to grips with that fact that innovation happens. Markets evolve. People want to experiment and do bold new things. They tinker. They develop. They pitch. They deal. And so on.  As that dynamic process unfolds every day across the high-tech economy, Wu’s Separations Principle will be put to the test and necessitate a regulatory proceeding of some sort to determine what is permitted and what is verboten.  Meanwhile, the very uncertainty associated with Wu’s regime would delay and discourage investment in the field and formation of the partnership/venture necessary to successfully bring VR to market

Astonishingly, however, Wu argues that “a Separations regime would take much of the guesswork and impressionism, and indeed the influence trafficking, out of the oversight of information industries.” (p. 307) That’s a doozy of a claim.  To the extent his Separations Principle eliminates “guesswork” and creates more regulatory certainty, it would only do so by creating rigid artificial barriers to market entry and innovation across the information economy.  That’s “certainty” that we can live without.

Conclusion

Over on Amazon.com, I was interested to see Tim Wu post a glowing review of Kevin Kelly’s important new book, What Technology Wants (which I will be reviewing here next).  Kelly’s book argues that we should think of technology, or what he calls “the Technium,” as a “force” or even a living “organism” that has a “vital spirit” and which “has its own wants” and “a noticeable measure of autonomy.”  I think Kelly goes a bit far, but to the extent one buys into the notion that technology is like an organism, Tim Wu’s Information Industrial Policy would kill that organism.  Or, it would at least severely stunt its continued growth and evolution.

Because his information industry policy is every bit as “radical” as he suggests and would require, as he also admits, “a certain breadth and ambition in its application,” it is essential we reject this innovation-killing regulatory regime.  The health of the high-tech economy, the global competitiveness of the U.S. technology sector, and the long-term welfare of consumers depends upon it.

According to respected Guatemalan lawyer Rodrigo Rosenberg, Guatemala’s government is infested with corruption. His message is carried very powerfully to fellow Guatemalans and the world in a video he taped before his murder last week.

YouTube has a role as a powerful engine of dissent and government transparency. It’s a commercial, profit-making business, and it is laying bricks on the path to human rights and the rule of law worldwide.

The Cato Institute’s Juan Carlos Hidalgo writes briefly about developments since then on the Cato@Liberty blog.

Conversations about how the Internet can be used to increase the openness and accountability of government usually focuses on the Executive and Legislative branches of the Federal government.  But on this week’s episode of Technology Policy Weekly, I hosted a discussion of the equally vital issue of public access to court records, joined by:

• The TLF’s own Tim Lee,  who’s written about the problems with PACER , the arcane and expensive system by which court documents are currently made publicly available—with a separate system for each of the 100+ Federal courts!
• James Grimmelmann of New York Law School, who wrote Copyright, Technology, and Access to the Law: An Opinionated Primer.
• Steve Schultze, of Harvard’s Berkman Center, who’s  been writing about these issues on his own blog, especially about Sen. Lieberman’s recent laudable efforts.  Also check out a talk he gave recently on “Selling the Law: The Business of Public Access to Court Records.”

We discussed a wide range of issues, including:

• Why lay people should care—this is ultimately about reducing the legal profession’s monopoly over access to the courts!
• The philosophical reasons why better access to court records is important – little things like democracy, fairness, consistency, equality, the rule of law, etc.
• The copyrightability of legal records
• The history of the problem & what can be done about it

There are several ways to listen to the TLF Podcast. You can press play on the player below to listen right now, or download the MP3 file. You can also subscribe to the podcast by clicking on the button for your preferred service. And do us a favor, Digg this podcast!

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Adam Thierer noted in mid-December that the FCC was considering allowing the experimental use of cellphone jammers in prison.  The FCC just issued (PDF) a Special Temporary Authorization to allow the DC Department of Corrections to test a cell phone jamming technology.

This technology sounds like an excellent solution to a serious problem:  The illicit use of cell phones inside correctional facilities by prisoners across the country.  In particular, the technology appears to be “directional,” meaning that unlike traditional jammers, which simply block signals within a certain radius around the jammer, this technology appears to be capable of blocking signals inside the confines of a particular room or building.  In fact, I’m sure millions of Americans would love to see such technologies implemented in cinemas, theatres, and other performing arts venues across the country.  I, for one, am tired of having the exquisite acoustic delicacies of Bach interrupted by annoying ring tones, such as  the (painfully) immortal “Who Let the Dogs Out?”

So Much for The Rule of Law

But there’s one important problem: The FCC isn’t waiving a rule here against cell phone jammer. unless I’m missing some subtle statutory quirk, they’re essentially “waiving” a statute—specifically 47 U.S.C. 333:

No person shall willfully or maliciously interfere with or cause interference to any radio communications of any station licensed or authorized by or under this chapter or operated by the United States Government.

You don’t need to be an administrative lawyer to know that agencies can’t just ignore acts of Congress—no matter how good the policy reason for the waiver is. That’s a big part of what the “rule of law” means.  Period.  Do not pass ‘Go’.  Do not collect $3,101.09 (today’s equivalent of $200 in 1935, when Monopoly debuted).

Fortunately, as noted in the WSJ article Adam cited, at least one legislator realizes this and thinks it’s worth fixing:  U.S. Rep. Kevin Brady (R., Texas) told the Journal that his office is “drafting the necessary legislation to remove this outdated FCC roadblock.”  The FCC, of course, sped right past that particular roadblock.  But then, what should we expect from an agency that has, under its outgoing (and none-too-soon!) chairman Kevin Martin, simply disregarded statutory limits on its authority when it found Comcast in violation of the agency’s non-binding net neutrality principles this summer?  (My PFF colleague Barbara Esbin has eloquently condemned this violation of the rule of law in, “The Law is Whatever the Nobles Do: Undue Process at the FCC” (PDF).)

Now, when Congress considers this question, let us hope that they draw the right lesson from this episode:   Whatever the wisdom of outright bans on particular technologies, writing such bans into statutes is a really bad idea.  At least if such decisions were left up to regulatory agencies, they would have the flexibility to decide when to depart from a general ban.  Thus, the best approach would be to repeal the ban altogether.  The FCC probably already has the authority to ban jammers under Section 302a, which provides that:

The Commission may, consistent with the public interest, convenience, and necessity, make reasonable regulations:

(1) governing the interference potential of devices which in their operation are capable of emitting radio frequency energy by radiation, conduction, or other means in sufficient degree to cause harmful interference to radio communications…

A Legislative Solution

Now, if Rep. Brady wanted to establish an orderly procedure for replacing Section 333’s outright ban on cell phone jammers with a more reasonable, and flexible, rule, the bill repealing Section 333 might also simply give the FCC the authority to issue Special Temporary Authorizations like the one the FCC just issued to the DC Department of Corrections—but also require that the agency complete a rule-making proceeding within, say, a year to establish new regulations specifying precisely which jammers would be banned.  At a minimum, the new regulations could achieve legally what the FCC is trying to achieve illegally:   banning cell phone jammers except for use in correctional facilities and only subject to certain technical requirements intended to ensure that the jamming was sufficiently “directional” not to obstruct cell phone reception nearby such facilities.

But if such directional jamming is really possible, why not allow the use of jammers in performance venues?  Of course, some consumers might not actually prefer to suffer through a few stray ring-tones during a movie if it means being able to receive calls on vibrate or text messages or email in case of emergency.  But I’d rather leave that decision to private property owners and consumers.  These are not questions Congress should attempt to answer:  Those answers would necessarily be enshrined in statute, and therefore very difficult to change.  Instead, these decisions should be left up to the FCC and resolved through the normal rule-making process.  If the initial rule-making bans private uses of jammers, at least there would be an established procedure whereby the rule could be more easily changed in the future, as technology develops.

A Future Without a Jammer Ban

With all such technologies banned today, there is probably little incentive to develop better jamming technology that can be more carefully tailored.  But if at least some uses of jamming technology were allowed, there would be a market that could drive the development of better jamming technologies in the future.  So if the FCC’s concern were that today’s jammers caused unacceptable levels of unintentional interference to cell phone networks, that problem might yet be solved through technological innovation.

Lest anyone argue that once any use of jammers was allowed, the “cat” would be “out of the bag”—resulting in the disruption of cell phone networks by pranksters, criminals or even terrorists—let me simply suggest Googling “cell phone jammer.” It may not be legal, but Americans can already buy cell phone jammers.  The reality is that, without a global totalitarian state, or at least completely sealed borders (an impossibility), completely banning any technology is impossible.

Since today’s ban—and harsh penalties—seems to work well enough to protect cell networks from widespread disruption—or even occasional disruption sufficient to attract attention—it’s not unreasonable to think we might get by just fine if we kept those same penalties in place under a new rule that carefully circumscribed which private users would be allowed to use which technologies.  Perhaps then we might all be able to enjoy a movie, concert or other performance in peace—if we chose to.

The Alternative

Many people would probably prefer that solution over the alternative:  incorporating into cell phones the kind of  “digital manners policy” (DMP) technology recently patented by Microsoft that would allow a DMP transmitter to order all devices within range that have a DMP receiver to turn off their ring tones, etc.  There’s something to be said for Microsoft’s solution from a technical perspective:  The DMP could be set to allow me to continue to receive text messages, use the vibrate setting for calls, or use the wireless data network.  So a DMP transmitter would certainly be a less blunt instrument than a cell phone jammer.  But it wouldn’t be entirely effective unless every cell phone had a DMP chip, which means that the only way to “make the ringing stop!” would be to mandate the adoption of such technology by cell phone managers, banning the sale of non-compliant cell phones, and—if we really wanted to be thorough—sending out the cell-phone Gestapo to round up all the old, non-compliant cell phones out there.

I’m not suggesting any nefarious intent on Microsoft’s part.  Like Hamlet (” There is nothing either good or bad, but  thinking makes it so“), I don’t believe a technology can be inherently evil.  Indeed, even partial adoption of DMP technologies in cell phones would certainly help solve our “crisis of digital manners.”  But I’m more than a little uncomfortable with the idea of creating this kind of architecture of control, by which a third party (not me or the carrier) could manipulate the settings of my cell phone.  The potential for abuse of that technology seems even scarier than the potential for abuse of jammers.  Even if Microsoft limited the DMP chip’s interface with the cell phone to controlling, say, ring volume or vibrate settings, I’d have to wonder what a good hacker could do with that kind of technology.  So while I wouldn’t suggest banning DMPs either, I would hate to see DMP technologies become industry standard merely because the FCC refused to reconsider its decades-old outright ban on radio jammers.

Rep. Brady, our nation turns its lonely eyes (and even more annoyed ears) to you.