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Along with colleagues at the Mercatus Center at George Mason University, I am releasing two major new reports today dealing with the regulation of the sharing economy. The first report is a 20-page filing to the Federal Trade Commission that we are submitting to the agency for its upcoming June 9th workshop on “The “Sharing” Economy: Issues Facing Platforms, Participants, and Regulators.” We have been invited to participate in that event and I will be speaking on the fourth panel of the workshop. The filing I am submitting today for that workshop was co-authored with my Mercatus colleagues Christopher Koopman and Matt Mitchell.

The second report we are releasing today is a new 47-page working paper entitled, “How the Internet, the Sharing Economy, and Reputational Feedback Mechanisms Solve the ‘Lemons Problem.'” This study was co-authored with my Mercatus colleagues Christopher Koopman, Anne Hobson, and Chris Kuiper.

I will summarize each report briefly here. Continue reading →

by Larry Downes and Geoffrey A. Manne

Now that the election is over, the Federal Communications Commission is returning to the important but painfully slow business of updating its spectrum management policies for the 21st century. That includes a process the agency started in September to formalize its dangerously unstructured role in reviewing mergers and other large transactions in the communications industry.

This followed growing concern about “mission creep” at the FCC, which, in deals such as those between Comcast and NBCUniversal, AT&T and T-Mobile USA, and Verizon Wireless and SpectrumCo, has repeatedly been caught with its thumb on the scales of what is supposed to be a balance between private markets and what the Communications Act refers to as the “public interest.” Continue reading →

The Internet is massive. That’s the ‘no-duh’ statement of the year, right?  But seriously, the sheer volume of transactions (both economic and non-economic) is simply staggering.  Consider a few factoids to give you a flavor of just how much is going on out there:

  • In 2006, Internet users in the United States viewed an average of 120.5 Web pages each day.
  • There are over 1.4 million new blog posts every day.
  • Social networking giant Facebook reports that each month, its over 300 million users upload more than 2 billion photos, 14 million videos, and create over 3 million events. More than 2 billion pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared each week. There are also roughly 45 million active user groups on the site.
  • YouTube reports that 20 hours of video are uploaded to the site every minute.
  • Amazon reported that on December 15, 2008, 6.3 million items were ordered worldwide, a rate of 72.9 items per second.
  • Every six weeks, there are 10 million edits made to Wikipedia.

Now, let’s think about how some of our lawmakers and media personalities talk about the Internet.  If we were to judge the Internet based upon the daily headlines in various media outlets or from the titles of various Congressional or regulatory agency hearings, then we’d be led to believe that the Internet is a scary, dangerous place. That ‘s especially the case when it comes to concerns about online privacy and child safety. Everywhere you turn there’s a bogeyman story about the supposed dangers of cyberspace.

But let’s go back to the numbers. While I certainly understand the concerns many folks have about their personal privacy or their child’s safety online, the fact is the vast majority of online transactions that take place online each and every second of the day are of an entirely harmless, even socially beneficial nature.  I refer to this disconnect as the “problem of proportionality” in debates about online safety and privacy. People are not just making mountains out of molehills, in many cases they are just making the molehills up or blowing them massively out of proportion. Continue reading →