October 2009

steigman-steve-blown-awayWhen the government tells someone to shut up, we call it censorship and the First Amendment requires the government to defend its regulation. But what if the government just says, “Shhhh… could you please turn that down?” Rep. Anna Eshoo’s Commercial Advertisement Loudness Mitigation Act (“CALM Act” – HR 1084) would do just that: require the FCC to issue rules that broadcast and cable TV ads:

(1) … shall not be excessively noisy or strident;

(2) … shall not be presented at modulation levels substantially higher than the program material that such advertisements accompany; and

(3) [their] average maximum loudness…  shall not be substantially higher than the average maximum loudness of the program material that such advertisements accompany.

Now,  I understand where Ms. Eshoo is coming from: I have a very low tolerance for noise in general and for television in particular—and it’s not just about commercials. (I find TV news at least as “noisy” and “strident” as commercials. That’s why I opted-out from the whole TV thing in about 2000. Yup, that’s right: I found better things to do with my time and the supposedly all-powerful “gatekeepers” of Hollywood couldn’t do a damn thing about it. You should try it if you don’t like what’s on TV! To paraphrase Voltaire, “I disapprove of what you say watch,  but I will defend to the death your right to say watch it! You can get most of what’s worth watching on DVD or online anyway.) But do we really need bureaucrats in Washington micromanaging volume levels? Maybe Congressmen would have a little more time to read the bills they vote for if they they weren’t so busy fiddling with everyone else’s remote!

Eshoo’s bill has passed the House Energy & Commerce Committee’s Communications Subcommittee just as the TV industry is completing work on voluntary standards of their own. That’s one “less restrictive” alternative to regulation. What about technological empowerment? If Americans really hate loud commercials so much, why don’t they demand TVs with built-in volume normalization features? But this bill isn’t merely unnecessary, it would also set a disturbing precedent in at least six ways.

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Over at his new blog, our old TLF colleague Tim Lee has an interesting post up about “The Problem with Top-Down ‘App Stores’” in which he argues that “when app store approval becomes mandatory, it becomes a major impediment to the success of high-tech platforms.”  But I have to wonder if the facts support that assertion. Here’s how I commented on his site:

Tim… What I don’t hear you articulating here is your vision of what a “bottom-up” app store would look like and why it would really produce vastly superior results. Nor do I hear you saying anything about the legitimate concerns that the handset makers might have about the security or stability factors associated with certain applications. I’m not saying those problems are extensive, but at the margins they could be real depending on the nature of the program and how it interacts with the handset and/or network.

Second, there needs to be some sense of proportionality here, at least about the iPhone (I can’t speak for the Palm experience). In just a little over a year, there’s been 2 billion downloads of over 85,000 apps from over 125,000 developers. So, when you talk about Apple’s approval process being “plagued by.. problems” and “rejections for trivial or non-sensical reasons” and “long delays in the review process have become a staple of the tech blogosphere” I think you are giving the impression that this is somehow the norm when it is very much the exception to the rule. Perhaps you would be willing to itemize the examples for us. Once you do, I’d appreciate you doing the math on what that looks like as a percentage of the total 85,000 apps that are already out there on the market today. I am willing to bet the result is something like 0.000001%.

Again, a sense of proportionality is really key here. While I am not an Apple fan and agree they have a bit too much of a control streak for my tastes, it’s hard to argue with results. In this case, a closed, top-down system has produced some fairly spectacular results.

I’m sure Tim will have more to say so head over to his blog for more discussion.

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 →

Some impressive numbers here from the CTIA’s Semi-Annual Wireless Industry Survey.  There are now more than 276 million wireless users in the U.S., which is almost 14 million more subscribers that there were at this point last year. (Seriously, is there anyone in America who doesn’t have their own phone in their pocket or purse these days?) More amazing is the seemingly never-ending explosive growth of text messaging. The CTIA report that:

text messaging continues to be enormously popular, with more than 740 billion text messages carried on carriers’ networks during the first half of 2009—breaking down to 4.1 billion messages per day. That’s nearly double the number from last year, when only 385 billion text messages were reported for the first half of 2008. Wireless subscribers are also sending more pictures and other multi-media messages with their mobile devices—more than 10.3 billion MMS messages were reported for the first half of 2009, up from 4.7 billion in mid-year 2008.

Most of us probably hadn’t even sent one text message ten years ago. And now there 4.1 billion of the suckers flying off our phones every day.  That is astonishing.

And we’re still gabbing plenty, too. “[W]ireless customers have already used more than 1.1 trillion minutes in the first half of 2009—breaking down to 6.4 billion minutes-of-use per day.”  As the Grim Reaper said in Monty Python’s “Meaning of Life“…  “You always talk, you Americans. You talk and you talk..”

Like James Gattuso, I have a lot of questions about the Federal Trade Commission’s new “Guides Concerning the Use of Endorsements and Testimonials in Advertising,” especially as they apply to bloggers. (And over at Silicon Angle, Mark ‘Rizzn’ Hopkins has been doing a great job keeping tabs on the many questions and hypothetical situations that others have been posing about the new rules). But the one thing I just can’t wrap my head around is how the FTC plans to enforce these rules against those speakers or media outlets who have print publications which are fully protected by the First Amendment.  So, I was pleased to see my favorite press critic Jack Shafer of Salon, ask the same question in his latest column on “The FTC’s Mad Power Grab”:

Because of a pesky thing called the First Amendment, the guidelines don’t apply to news organizations, which receive thousands of free books, CDs, and DVDs each day from media companies hoping for reviews. But if the guidelines don’t apply to established media like the New York Review of Books, which also happens to publish reviews on the Web, why should they apply to Joe Blow’s blog? Regulating bloggers via the FTC while exempting establishment reporters looks like a back-door means of licensing journalists and policing speech.

Exactly.  Is the FTC just going to ignore such speakers or media organizations but enforce against everyone else?  Isn’t that just a bit silly and radically unfair?  Moreover, might such a policy end up incentivizing some folks to create token print publications to get around such the regulations?  I doubt it, but you never know.

Regardless, as Shafer notes, the rules are so hopelessly open-ended and arbitrary that they are bound to pose problems for whomever they are enforced against: Continue reading →

Interesting piece here from Slate’s Farhad Manjoo on why AT&T should dump unlimited data plans and end what he calls the “iPhone all-you-can-eat buffet.”  He notes that: “The typical smartphone customer consumes about 40 to 80 megabytes of wireless capacity a month. The typical iPhone customer uses 400 MB a month. AT&T’s network is getting crushed by that demand.” Because “some iPhone owners are hogging the network” and causing “a slowed-down wireless network,” Manjoo recommends a congestion pricing model as a method of balancing supply and demand:

How would my plan work? I propose charging $10 a month for each 100 MB you upload or download on your phone, with a maximum of $40 per month. In other words, people who use 400 MB or more per month will pay $40 for their plan, or $10 more than they pay now. Everybody else will pay their current rate—or less, as little as $10 a month. To summarize: If you don’t use your iPhone very much, your current monthly rates will go down; if you use it a lot, your rates will increase. (Of course, only your usage of AT&T’s cellular network would count toward your plan; what you do on Wi-Fi wouldn’t matter.)

To understand the advantages of tiered pricing, let’s look at AT&T’s current strategy of spending billions to build more network space. Why won’t this work? For the same reason building more roads doesn’t reduce traffic—more capacity increases the attractiveness of driving, which brings a lot more cars to the road, which leads to more gridlock.

Congestion pricing and metering is something I’ve written quite a bit about here in the context of wireline broadband (1, 2, 3), but Manjoo is equally correct that it could be applied for wireless data plans.  It has the added value of taking pressure off lawmakers to impose Net neutrality regulation since pricing of the pipe becomes an effective substitute for most other forms of network management. In other words, price, don’t block bandwidth-hogging customers and applications.  The problem, Manjoo explains: Continue reading →

The deadline for filing amicus briefs in support of the Federal Circuit’s attempt to trim back business method patents in Bilski passed on October 2. Many briefs have been filed, and much fuss has been made in the tech community, for business method patents are linked to the problem of software patents. Many software patents, such as Amazon’s 1-click order patent, are for business methods.

If the courts ultimately trim back business method patents, will this take some of the pressure off both tech and the patent system? Not as much as many in the tech community or the patent community would hope, for reasons I examine below. Patent reform is now being driven by business constituencies, and these constituencies are not good at all at working on big picture institutional problems. There, in short, is a not-seeing-forest-for trees problem.

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Should the federal government regulate what blogger’s blog? Yes, said the Federal Trade Commission yesterday — at least when it comes to product endorsements.

At issue were the FTC’s guidelines concerning the use of endorsements in advertising. These guidelines, among other things, require paid endorsers of products to disclose their relationships with advertisers. The goal is a good one, to prevent deception and fraud. In practice, the lines are hard to draw — what exactly is an endorsement? What constitutes payment? It gets even harder in today’s world of user-generated media, in which much advertising is by consumers themselves on blogs and elsewhere, sharing recommendations and opinions on just about everything. Continue reading →

Just FYI… I’ll be speaking tomorrow in Second Life about “Government’s Place in Virtual Worlds and Online Communities” as part of an ongoing series hosted by Metanomics, “an active community with a passion for exploring the uses and issues related to virtual worlds.” Metanomics takes a serious look at virtual worlds and the evolving use of virtual world technologies.  I’m excited to be the guest on tomorrow’s show where we will be discussing free speech and privacy policy, online child protection concerns, and issues related to cyber-bullying and anonymity as they effect online communities and virtual worlds.

Those of you who already have Second Life avatars can be a member of the “live studio audience” at the Metanomics virtual studio, which you can find in Second Life here.  Or you can watch and participate in the online broadcast at the Metanomics website where you can text comments to other audience members or ask questions.  A video of the virtual broadcast will be made available later and I will post it (or a link to it) here.

In terms of background material, here are a few things I’ve penned that deal with issues that might come up on the show: Continue reading →

While I was away at Oxford University last week, a USA Today story ran entitled “Online Hate Speech: Difficult to Police… and Define.”  The author, Theresa Howard, was kind enough to call me for comment on the issue before I left and I made two general points in response to her questions about how serious online hate speech was and how we should combat it:

(1) “The Internet is a cultural bazaar. It’s the place to find the best and worst of all human elements on display.” What I meant by that, quite obviously, is that you can’t expect to have the most open, accessible communications platform the world has ever known and not also have a handful of knuckleheads who use it spew vile, hateful, ridiculous comments. But we need to put things in perspective: Those jerks represent only a very, very small minority of all online speech and speakers. Hate speech is not the norm online.  The overwhelmingly majority of  online speech is of a socially acceptable — even beneficial — nature.

(2) “When advocacy groups work together and use the new technology at their disposal, they have a way of signaling out bad speech and bad ideas.” What I meant by that was that the best way to combat the handful of neanderthals out there that spew hateful garbage is to: (a) use positive speech to drown out hateful speech, and (b) encourage websites to self-police themselves or use community policing techniques to highlight hateful speech and encourage the community to fight back.  Importantly, this process is reinforcing.  When online communities “flag and tag” objectionable or hateful content, it is easier for better site policing to occur, for social norms to develop, and for better speech to be targeted at that bad speech.  Moreover, these new tools and methods are helping groups like the Anti-Defamation League and the National Hispanic Media Coalition to better identify hate speech and then channel their collective energy and efforts to unite the rest of the online community against those hateful speakers and sites.

I think this approach makes more sense than calling in governments to police online hate speech through censorship efforts. This is especially the case because, at the margins, “hate speech” can often be tricky to define and, at least in the United States, regulatory efforts could conflict with legitimate free speech rights. Again, the best way to deal with and marginalize such knuckleheads is with more and better speech.  Fight stupidity with sensibility, not censorship.