May 2009

The Cato Unbound online debate about the 10th anniversary of Lawrence Lessig’s Code and Other Laws of Cyberspace continues today with my response to Declan McCullagh’s opening essay, “What Larry Didn’t Get,” as well as Jonathan Zittrain’s follow-up.

In my response, “Code, Pessimism, and the Illusion of ‘Perfect Control,'” I begin by arguing that:

The problem with peddling tales of a pending techno-apocalypse is that, at some point, you may have to account for your prophecies — or false prophecies as the case may be. Hence, the problem for Lawrence Lessig ten years after the publication of his seminal book, Code and Other Laws of Cyberspace.

I go on to argue that:

Lessig’s lugubrious predictions proved largely unwarranted. Code has not become the great regulator of markets or enslaver of man; it has been a liberator of both. Indeed, the story of the past digital decade has been the exact opposite of the one Lessig envisioned in Code.

After providing several examples of just how wrong Lessig’s predictions were, I then ask:

[W]hy have Lessig’s predictions proven so off the mark? Lessig failed to appreciate that markets are evolutionary and dynamic, and when those markets are built upon code, the pace and nature of change becomes unrelenting and utterly unpredictable. With the exception of some of the problems identified above, a largely unfettered cyberspace has left digital denizens better off in terms of the information they can access as well as the goods and services from which they can choose. Oh, and did I mention it’s all pretty much free-of-charge? Say what you want about our cyber-existence, but you can’t argue with the price!

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Here’s an informative article from h+ magazine on how the FDA currently argues that culturing adult stem cells amounts to the creation of a new drug.  This of course would mean long time lags for getting stem cell procedures approved, which has prompted the creation of at least two groups: the American Stem Cell Therapy Association (ASCTA) and Safe Stem Cells NOW! (both focused on adult stem cells).

It doesn’t make sense to me that my own cells would be considered a “drug,” but Dr. Christopher J. Centeno who was interviewed for this article by Stephen Coles says that “The FDA is working to protect the interests of Big Pharma.”  Yikes — if that’s the case, it’s a huge setback for personalized medicine.

As I mentioned on Monday,  the folks over at Cato Unbound have put together an online debate about the impact of Lawrence Lessig’s Code and Other Laws of Cyberspace as it turns 10 this year.

The opening essay from Declan McCullagh, “What Larry Didn’t Get,” took Lessig to task for favoring rule by “technocratic philosopher kings” over the spontaneous invisible hand of code.   In Round 2 of the debate, Harvard’s Jonathan Zittrain comes to Lessig’s defense and suggests that the gap between Lessig and libertarians is not as wide as Declan suggests:

The debate between Larry and the libertarians is more subtle. Larry says: I’m with you on the aim — I want to maintain a free Internet, defined roughly as one in which bits can move between people without much scrutiny by the authorities or gatekeeping by private entities. Code’s argument was and is that this state of freedom isn’t self-perpetuating. Sooner or later government will wake up to the possibilities of regulation through code, and where it makes sense to regulate that way, we might give way — especially if it forestalls broader interventions.

Run over to Cato Unbound to read the rest.  My response will be going up next (on Friday) and then Prof. Lessig’s will be up next Monday.

… could be illegal under a proposed Massachusetts (per Boing Boing) law that would make it a crime to “photograph with ‘lascivious intent’ a person over the age of 60 or a person with a disability who has been declared mentally incompetent.”  Like the recent prosections of teens for sending nude pictures of themselves on Myspace under child pornography laws, the Massachusetts proposal would criminalize the sharing of “lascivious” photos regardless of the consent of the person being photographed.

Arthur would be turning in her (recently-dug) grave.  Dorothy Zbornak (her most famous character) might not have been much of a libertarian—it seems safe to assume she, like most progressive Catholics (however fictional) voted for Mondale—but one can easily imagine how her withering sarcasm would lay bare (no pun intended) the noxious paternalism underlying this proposal:  It’s bad enough that the government treats adults like children, assuming we’re all not smart enough to make good decisions for ourselves, but must the State really draw a line in the sand beyond which age (60, in this case) Americans officially lose their status as adults and revert to a second childhood in the eyes of the law?

Dorothy and the other Golden Girls would never stand for it.  One can only imagine the rage of  aging beauty Blanche Devereaux at the crimp this law would have put in her (previously thriving) sex life.

Those who don’t get the title’s reference to the 1994 classic Airheads, or who just plain don’t care for the Golden Girls’ geriatric charms, might nonetheless be crestfallen to realize that the bill could also deny the world naughty pics of  developmentally disabled sex kittens like Susan Boyle, the surprise star of Britain’s “Got Talent” (essentially American Idol with worse teeth).  (Of course, the bill would apply only if Susan were declared mentally incompetent).

Ah, Susan, be still my beating heart!

segarToday California is holding a hearing on a bill that would require social networking websites to implement certain technologies and procedures to remove photo images upon notice from a user.

AB 632 would force a broad range of websites to establish mechanisms to remove photos, videos, and even caricature or satiric images of its users. As we know, many if not most online sites are incorporating some sort of social networking functionality. This bill would therefore encompass a number of community events, news, sports, and travel sites in addition to more commonly regarded social networking sites.

Apparently the bill’s sponsor is upset that people can right click on photos, and save them to their computer or email to friends. In addition to takedown mechanisms, she wants websites to disclose to users that uploaded photos may be copied by persons who view the image.

As I detailed in a NetChoice letter, the takedown component is most troubling. It would force thousands of websites to redesign their sites to encompass a number of considerations:

  1. A specific image must be readily identifiable on a specific page—this is a non-trivial exercise. Photos may be buried deeply in a user’s album containing thousands of other images, and URLs of particular pages often change.
  2. Sites must determine whether an image is actually of the particular user requesting removal.  Otherwise, users could request removal of a number of photos that bear their likeness, but do not actually include them, for a number of political, religious, or abusive reasons. Yet, even trained experts have difficulty identifying persons in photos, as images are affected by lighting, clothing, and changes in hair style or makeup.
  3. Removal must respect copyright law. Websites would face potential lawsuits from copyright owners if removing their copyrighted images negatively impacted them.
  4. How to deal with group photos, where the user is just one of many people in the image?

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internet-tax Watch out for a bill that will be heard in committee today in the North Carolina  General Assembly that could be the first example (that I know) of a tax that on its face discriminates against the Internet. Senate Bill 99 singles-out the Internet ticket resale market for a “privilege tax”, and because it only applies to Internet sales, it violates the federal moratorium on “multiple or discriminatory taxes on electronic commerce.”

The Internet Tax Freedom Act Amendment Acts of 2007 (Public Law No: 110-108) provides a moratorium through November 1, 2014 that bars federal, state and local governments from imposing discriminatory Internet-only taxes such as bit taxes, bandwidth taxes, and email taxes.

It also prohibits the sort of prima facie discrimination exhibited by SB 99—“Reselling or offering to resell admission tickets on the Internet…”). Because this tax applies to revenues received from Internet transactions but not to offline sales, it clearly violates the Internet Tax Freedom Act.

Here’s where it gets even more interesting — this tax could even be an example of a “multiple” tax. SB 99 imposes a privilege tax on Internet ticket sales that amounts to double taxation. Income earned ticket reselling is already taxed. Companies and individuals that earn revenue from reselling tickets already pay income tax. Moreover, the same ticket could be resold numerous times, resulting in multiple taxation of the same increment over face value.

There are other problems with SB 99 that we lay out in our NetChoice letter, but federal law seems to be clearly against the bill.

As many outlets reported last week, Disney’s ABC Enterprises has bought into Hulu, which had been a joint-venture of NBC Universal, News Corp., and investor Providence Equity Partners.  Like other large media platforms before it, Hulu should brace for the possible antitrust implications of its increasing number of content deals—many of them exclusive, at least as it applies to online streaming video—especially considering the Obama’s administration’s stance on antitrust policy.

Many media commentators are already using the kind of language we associate with past media antitrust cases.  Nate Anderson of ArsTechnica predicted Hulu’s forthcoming “lock” on the market saying:

The Disney deal makes it far more plausible that Hulu—mocked when it launched only last year for its name and its business plan—will dominate online streaming of premium content.

Caroline McCarthy of CNET pointed out that the Disney deal has Hulu fraternizing with prior antitrust targets:

Apple CEO Steve Jobs is Disney’s single biggest shareholder, having sold animation studio Pixar to the company in 2006.

McCarthy makes an apt point as Hulu is looking more and more like the iTunes of television, an honor which Mr. Jobs likely hoped would have gone to iTunes itself.

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Once in a while, I indulge in a non-tech rant here, just to be interesting – or in hopes of reaching the world at large with some information they can use.

Well, everyone should know that Bank of America’s “Borrower’s Protection Plan” is a complete scam. It charges a HUGE monthly amount to insure your mortgage payments (for only a year!) in case of adverse events like job loss, disability, etc.

When I refinanced a year ago, I signed up for it casually and inadvertently, in light of a “first-year free” offer. When it occurred to me that they would probably refuse to let go of me at the end of the opening year, I canceled my participation in the plan by telephone. Or so I thought.

It’s a year later and I’m scheduled to begin making payments for this rip-off in my mortgage payment starting on July 1st. Bank of America evidently lied to me about letting me cancel a year ago.

Here’s a Washington Post article on the topic with the usual pro-regulatory angle. This is not a matter for regulators. It’s my job and yours to be better consumers.

I just called my mortgage broker and chewed her out good for getting me involved in this scam. I won’t refinance with Bank of America, and will be moving accounts (in addition to my current mortgage, I have two business accounts at BofA) away from Bank of America to more reputable institutions. I’ll be distributing this post far and wide and I hope you will pass it along too.

Bank of America’s “Borrower’s Protection Plan” is a scam.

CodeLawrence Lessig’s Code and Other Laws of Cyberspace turns 10 this year and the folks over at Cato Unbound have put together an online debate about the book and its impact on cyberlaw, which I am honored to be taking part in.  The discussion begins today with a lead essay from Declan McCullagh of CNet News and then continues throughout the week with responses from Harvard’s Jonathan Zittrain, myself, and then Prof. Lessig himself.

Declan’s lead essay, “What Larry Didn’t Get,” starts things off with a bang:

[Lessig] prefers what probably could be called technocratic philosopher kings, of the breed that Plato’s The Republic said would be “best able to guard the laws and institutions of our State — let them be our guardians.” These technocrats would be entrusted with making wise decisions on our behalf, because, according to Lessig, “politics is that process by which we collectively decide how we should live.”

Declan goes on to cite a litany of high-profile legislative and regulatory failures that have unfolded over the past decade, calling into question the wisdom of Prof. Lessig’s approach.  Declan continues:

One response might be that the right philosopher-kings have not yet been elevated to the right thrones.  But assuming perfection on the part of political systems (especially when sketching plans to expand their influence) is less than compelling.  The field of public choice theory has described many forms of government failure, and there’s no obvious reason to exempt Internet regulation from its insights about rent-seeking and regulatory capture.

Sounds like it could be a heated discussion!  Jonathan Zittrain is up next with an essay due to be posted on Wednesday and then my response will follow on Friday.  Prof. Lessig’s response will go up a week from today.  I look forward to this exchange and the responses it generates.  I encourage readers to head over to the Cato Unbound site and check out the essays as they appear.  I’ll post reminders here as the installments go live on the Cato site.

President Obama intends to nominate Mignon L. Clyburn to the Federal Communications Commission. Clyburn is a good pick. She has been a member of the Public Service Commission of South Carolina since 1998. She chaired the South Carolina commission from 2002 to 2004, is a past chair of the Southeastern Association of Regulatory Utility Commissioners and is a respected leader in the National Association of Regulatory Utility Commissioners (NARUC). She is trained in economics and has a reputation for thoughtfulness.

The remaining question is who ought to be the Republican nominee to fill the seat vacated by former chairman Kevin J. Martin (a soon-to-be-vacant seat held by Republican Robert M. McDowell will also need to be filled). By law, two of the commssion’s five members may not be from the President’s political party.

Let’s pretend you’re president. You have to appoint two opponents to the FCC. You don’t need their votes to pass your agenda, because you get to appoint three members from your political party who agree with your views. Do you fill the other two slots with people who hold few clear convictions, who are inclined to compromise and who crave positive feedback? Or do you look for people who are intellectually-engaged and are inclined to debate? If you believe your agenda is radical and you worry it will lead to negative consequences for which you will be blamed, you would want to appoint opponents who can be induced to vote with you. That way, you can claim your agenda had bipartisan support. This is the “cover you ass” approach. Continue reading →