August 2004

Here in the U.S. we’re bogged down in determining whether the Communication Assistance for Law Enforcement Act (CALEA) applies to VoIP technology (the FCC unanimously ruled that it does, but a federal court will likely have the final word). In Canada, they’re debating who should pay for wiretapping. The Canadian Association of Chiefs of Police says it should be telephone users.

An article in the Halifax Herald reports that Canadian police want a surcharge of 25 cents on monthly telephone and internet bills. This charge would cover the costs of tapping into communications networks of suspected terrorists and criminals.

At first glance, it doesn’t seem like such a big deal. We already have a federal security surcharge of up to $10 per airline flight (aka the September 11 Security Fee) which serves to fund air travel safety, why not a similar charge on users of communications services to help law enforcement get the bad guys? But there are important differences here. While it may indeed be efficient to place the costs of safety on the user of the service, wiretapping laws do not make telephone users themselves safer – instead, it’s the greater society that purportedly benefits. So this proposal is a tax, not a “user fee.” Economists will tell you that it is inefficient and costly to administer and collect lots of little taxes.

To be sure, taxpayers will pay through general taxes if telephone users do not. But check out this fantastic comment by a Canadian police officer:

“From our perspective, it’s a slippery slope to start paying for the execution of search warrants or any kind of court order.”

Let me get this straight. It’s a burden for your agency to use its own funds for its own activities…to do your job? Should there be a special tax levied on light bulb purchasers for red and blue lights on patrol cars or for consumers of two-way radios so that police forces can upgrade their communications networks?

This is just another example of unfairly burdening a technology. If this proposal gets traction in Canada, it may migrate south to our country (with all the phone taxes already on our bills, who would notice?).

A few weeks ago, perhaps upset that the broadcast networks didn’t feel compelled to offer gavel-to-gavel coverage of the Democratic convention, John Kerry stated his opposition to media consolidation, supporting stronger ownership rules. A threat then, to the big media companies? They don’t seem to think so. According to figures from the Center for Responsive Politics (as reported in today’s Internet Daily), Kerry has received far more in cash from media companies than President Bush–beating him $1.9 million to $1.1 million. Overall, some 2/3 of media dollars this cycle has gone to Dems, with Time Warner giving 72% and Viacom 74% to the Democrats. So much for the Left’s claim that big media corporations are part of the vast right-wing conspiracy. If only they were. Instead, they are more influenced by their Hollywood roots than Washington battles. Combine that with the general masochistic tendency of U.S. corporations to support their own detractors, and the CRP figures may not be that surprising.

Associated Press is reporting that the South Dakota Animal Industry Board is developing a new animal identification system to track cattle. The mandatory national ID system is being put in place to protect the nation’s livestock industry from serious disease outbreaks. They plan on clipping RFID tags to the cows ears to track their movements. (Cows always have been a bit shady in my opinion; it’s about time we start tracking them).

And hey, wouldn’t you know it, U.S. Agriculture Secretary Ann Veneman announced last week that more than $11 million in grants will go to South Dakota and 28 other state and tribal projects to facilitate such tracking. Damn, I will clip a RFID tag to my ear and let the government track me for $11 million bucks. Hell, I’ll do it for just $50 bucks a week. In the meantime, who will stand up for these cows’ privacy rights! (Does EPIC have a white paper out on this yet?)

Seriously, though, my colleague Jim Harper has a nice paper out on “RFID Tags and Privacy: How Bar-Codes-on-Steroids Are Really a 98-Lb. Weakling.” Check it out. This is going to be a hot debate in coming years since the privacy fanatics are going to scream bloody murder as more corporations start rolling out RFID-enabled services and technologies. Again, it’s important we understand the difference between private sector vs. public sector uses of such technologies. See this other recent piece by Harper to see what I mean.

Somebody tell me this is just an early April Fool’s joke. Associated Press reports that somebody at Michigan State University has created a video game for food stamp recipients to teach them about nutrition:

“In an effort to educate the nation’s neediest children on nutrition, a new project uses the familiar medium of video games to broadcast its message. The Fantastic Food Challenge, a package of four computer games, is designed to teach people who get nutrition aid such as federal food stamps how to make better use of their food. Because so many young adults played such games as kids, they ought to be able to learn more easily from them, too, said the project’s director.”

… But wait, it gets better…

“The player feels like a contestant in a marathon of futuristic television game shows that also happen to give instruction about how to buy food at the lowest cost, store it properly and prepare healthy meals… One game is called Store It Safe. It involves placing baked beans, tortillas, frozen chicken and other virtual groceries into a cartoon-drawn freezer, cupboard or refrigerator. In another game, a version of Concentration, players turn over blank cards that flash a food and a menu item made with that ingredient, then try to remember which card had the milk that matches the macaroni and cheese. The on-screen opponent is a sore-loser robot that blows steam out of its ears when it guesses wrong, but which gets better as the game becomes more difficult.”

Are you kidding me? I want to believe that this is just a joke, but it looks like it’s legit.

Unreal. What’s next, a video game to teach us how to dress ourselves?

When phishing for solutions to online crime, lawmakers are bound to reel in two favorites: expanding statutory definitions of criminality, and broadening prosecutorial powers. Senator Leahy proposes the former (S. 2636), but amendments in committee would likely incorporate the later, as well as a few Federal Trade Commission rulemakings, and maybe even a GAO study.

Those of us who are unenthused about the prospect of such government encroachment tend to offer promises of technological solutions without reflecting adequately on whether or not a market exists to support their development. Not only do less than 5 percent of targeted consumers fall victim to phishing, but the primary consumers of these would-be innovations (online businesses) can opt instead to acquire collective (state) resources from pliable lawmakers at a fraction of the cost.

This dynamic is even more pronounced in this situation because the costs of phishing are predictably concentrated among a small subset of businesses and their consumers. According to data from the Anti-Phishing Working Group, 77 percent of phishing attacks are targeted against the financial services industry, with over 44 percent of those attacks against customers of Citibank, the largest bank (in market cap) in the world. Although the phishing infrastructure (mass emails and temporary web sites) is low cost, there are economies of scale involved. And to the extent that those targeted are not only the largest, but also the most reputable online businesses, phishing is a greater threat to brand equity than the more mundane trademark infringements these businesses already spend tens of millions each year to suppress.

Public concerns that consumers will shun all internet transactions after falling victim to fraud are unlikely to be as consequential as management’s concern that consumers will avoid future internet transactions with the business whose trademark was expropriated to commit the fraud. Publicly traded corporations with shareholder equity in excess of $90 billion do not need public subsidies in the form of prosecutorial resources to assist them in maintaining brand equity. And given estimates that suggest only 27 percent of phishing web sites are hosted in the U.S., supranationals may already be better positioned to police against phishing anyway.

From time to time on this site, we will be posting nominees for the “Luddite of the Month” award, or as I will be designating it, the “Fritz Award” in honor of the greatest Luddite to ever walk the halls of Congress, Senator Ernest “Fritz” Hollings. If this site would have existed back in the dark ages of communications technology, we would have certainly seen Fritz win “Luddite of the Month” honors many times over. If you’ve never had the privilege of seeing Fritz in action, then you’ve missed the opportunity to witness a true knuckle-dragging Neanderthal at work. Never has there been a policymaker who consistently expressed such open disdain for technological progress and free trade.

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An eclectic group of telecom companies yesterday unveiled a long-awaited plan for revamping intercarrier compensation. Everyone knows the current system for compensating firms for carrying one another’s traffic is a mess. Rates vary wildly based on how each carrier is defined by regulators: long-distance firms, LEC, ISPs all pay different rates, with differences based on long-obsolete technologies and regulatory schemes. Worse, the system masks a sizable subsidy program, largely to the benefit of rural telcos and their customers. And the whole creaky mechanism is being undercut by the emergence of VOIP, which is less firmly in its clutches.

Yesterday’s announcement was the result of a year-long negotiation among a good part of the telecom world–and was backed by SBC, AT&T, MCI, Level3 and others not normally seen on the same press release. And it includes a lot of sensible and overdue reforms: a uniform compensation rate, putting them on a flat (rather than per-minute) basis, and encouraging private negotiation of compensation. For this the plan deserves kudos. But there are problems with this bandwagon as well. Among other things it would shore up universal service subsidies by making cable and VOIP phone consumers pony up contributions for the first time. That seems a lost opportunity: yes, these services present a challenge to the whole subsidy system. But rather than protect the subsidies from that challenge, why not use it to to gain more substantial reform of the whole subsidy system?

This, by the way, may be one reason why many major telecom players stayed away from this proposal–three of the Bell companies sat it out, as did the cable industry. (This in itself is an interesting development. For decades, the battlelines in telecom have been boringly predictable–LD firms on one side, Bells on the other. Now, those lines are mixing.) Stay tuned for a long-running battle at the FCC and the states–and within the telcom industry itself–on this issue.

The Internet Gets Smaller

by on August 17, 2004

Yesterday Braden linked to this Wired News story:

Effective with this sentence, Wired News will no longer capitalize the “I” in internet.

At the same time, Web becomes web and Net becomes net.

Why? The simple answer is because there is no earthly reason to capitalize any of these words. Actually, there never was.

True believers are fond of capitalizing words, whether they be marketers or political junkies or, in this case, techies. If It’s Capitalized, It Must Be Important. In German, where all nouns are capitalized, it makes sense. It makes no sense in English. So until we become Die Wired Nachrichten, we’ll just follow customary English-language usage. (Web will continue to be capitalized when part of the more official entity, World Wide Web.)

This is confused. First off, “Net” is just short for Internet, and probably shouldn’t be used in formal writing at all. When it is used, it should be preceded by an apostrophe.

“The Internet” is the name of a specific computer network, and it should be capitalized because it’s a proper noun– the same way “Sun” and “Moon” are proper nouns. (interestingly, my Chicago style manual says that “Earth” is only capitalized when it’s not preceded by “the”)

The web is arguably not a proper noun– it’s a conceptual grouping of content that’s served using the HTTP protocol. It’s not quite as obviously the name of a single, distinct thing as “the Internet” is. So I’m open minded about whether the web should be capitalized. However, I completely fail to see the logic for capitalizing “World Wide Web” but not “web.” If the one is a proper noun, so is the other.

We don’t capitalize “Internet” to make a statement about how important it is, but because in our language, proper nouns get capitalized. Since Wired doesn’t expand on what exactly “customary English-language usage” requires, it’s hard to know what their argument is. Wired seems to be trying to make some kind of political statement here, but it seems like it falls flat to me.

I recently finished reading Daniel M. Kimmel entertaining new history of the rise of the Fox television network entitled The Fourth Network: How Fox Broke the Rules and Reinvented Television. While many younger Americans can’t remember a time when multiple networks and cable channels were not at their disposal, for most of television’s history, citizens had only three primary commercial options from which to choose. After inept regulatory policies caused the demise of the DuMont Television Network in the 1950s, no one thought a fourth network was feasible in America. Perhaps that explains why it took a non-American to think outside the box and roll the dice on the launch of a new network in the U.S.

Continue reading →

Eugene Volokh has an important post up on his excellent site about Australia’s new effort to crackdown on online porn by requiring nationwide filtering. As with so many other countries that have already been down this road, one has to wonder: Do they really think they can successfully block all offshore sites? If the history of human civilization has proven anything to us it is that human beings have a seemingly insatiable appetite for prurient material; people will find a way to get what they desire. So the real question in debates like this: Just how far are governments willing to go to enforce moral codes? In an age of seemless, borderless communications, it boggles the mind how ANY regulatory regime (even a “UN for the Net“) could ever shut down the free flow of information (including porn) no matter how hard they tried. Anyway, if you’re interested, these issues are explored in greater detail in a book I co-edited last year with Wayne Crews entitled “Who Rules the Net?”