If you have any credit cards, you’ve probably received notices recently that your credit card company is going to do you some wonderful favors, like apply payments to the balances carrying the highest interest rate first. These same notices also contain changes in other contract terms that might make you worse off. One of mine, for example, tells me that henceforth my annual percentage rate on purchases will be the prime rate plue 11.99 percent, with a minimum of 17.99 percent. The company tells me this is higher than my old fixed rate. (I don’t know what it was, since I never use credit cards to borrow.)
These changes are the result of new federal regulations that were supposed to make credit card companies give us a break on certain terms and conditions. But since all of the terms and conditions of the credit card contract are not comprehensively regulated, the companies can adjust other terms to make up for the money they lose as a result of the mandated regulatory changes. Some scholars call this “term substitution.” I call it “regulatory whack-a-mole,” after that carnival game in which you whack a mole that pops up out of a hole only to have another mole pop up out of another hole.
What does this have to do with technology policy? Term substitution is a pervasive feature of reality whenever regulators regulate some, but not all, aspects of a transaction. Since technology markets are not comprehensively regulated like public utilities, we can expect to see term substitution all over the place in technology markets in response to regulatory mandates.
If you want to find term substitution in technology markets, think of transactions that are only partially regulated:
- If wireless companies couldn’t charge early termination fees, we’d pay more for phones.
- The last time the federal government tried to regulate “basic” cable rates (for your local broadcast and public affairs channels), rates for “expanded basic” and premium channels went up.
- Casket sales have also experienced term substitution. Responding to low-priced Internet competition and federal regulations that allow consumers to BYOB (bring your own box), funeral directors simply reduce casket prices and increase the price they charge for their services.
- Net neutrality regulation might have this kind of effect, if it prevents network operators from charging high-bandwidth users different prices from low-bandwidth users. Forcing them to charge everyone the same, unregulated price could mean the low-bandwidth users pay more than they otherwise would.
I’m curious to hear more actual examples from readers of term substitution in technology markets. What’s the most interesting thing you’ve seen?
By Eric Beach and Adam Marcus
In the previous entry in the Privacy Solutions Series, we described how privacy-sensitive users can use proxy servers to anonymize their web browsing experience, noting that one anonymizer stood out above all others: Tor, a sophisticated anonymizer system developed by the Tor Project, a 501(c)(3) U.S. non-profit venture supported by industry, privacy advocates and foundations, whose mission is to “allow you to protect your Internet traffic from analysis.” The Torbutton plug-in for Firefox makes it particularly easy to use Tor and has been downloaded over three million times. The TorBrowser Bundle is a pre-configured “portable” package of Tor and Firefox that can run off a USB flash drive and does not require anything to be installed on the computer on which it is used. Like most tools in the Privacy Solutions series, Tor has its downsides and isn’t for everyone. But it does offer a powerful tool to privacy-sensitive users in achieving a degree of privacy that no regulation could provide.
Continue reading →
By Eric Beach & Adam Marcus
Among Internet users, there are a variety of concerns about privacy, security and the ability to access content. Some of these concerns are quite serious, while others may be more debatable. Regardless, the goal of this ongoing series is to detail the tools available to users to implement their own subjective preferences. Anonymizers (such as Tor) allow privacy-sensitive users to protect themselves from the following potential privacy intrusions:
- Advertisers Profiling Users. Many online advertising networks build profiles of likely interests associated with a unique cookie ID and/or IP address. Whether this assembling of a “digital dossier” causes any harm to the user is debatable, but users concerned about such profiles can use an anonymizer to make it difficult to build such profiles, particularly by changing their IP address regularly.
- Compilation and Disclosure of Search Histories. Some privacy advocates such as EFF and CDT have expressed legitimate concern at the trend of governments subpoenaing records of the Internet activity of citizens. By causing thousands of users’ activity to be pooled together under a single IP address, anonymizers make it difficult for search engines and other websites–and, therefore, governments–to distinguish the web activities of individual users.
- Government Censorship. Some governments prevent their citizens from accessing certain websites by blocking requests to specific IP addresses. But an anonymizer located outside the censoring country can serve as an intermediary, enabling the end-user to circumvent censorship and access the restricted content.
- Reverse IP Hacking. Some Internet users may fear that the disclosure of their IP address to a website could increase their risk of being hacked. They can use an anonymizer as an intermediary between themselves and the website, thus preventing disclosure of their IP address to the website.
- Traffic Filtering. Some ISPs and access points allocate their Internet bandwidth depending on which websites users are accessing. For example, bandwidth for information from educational websites may be prioritized over Voice-over-IP bandwidth. Under certain circumstances, an anonymizer can obscure the final destination of the end-user’s request, thereby preventing network operators or other intermediaries from shaping traffic in this manner. (Note, though, that to prevent deep packet inspection, an anonymizer must also encrypt data).
Continue reading →
One might have thought European Commission antitrust regulators had their hands full with harassing Microsoft about the “Browser Ballot” (our comments) and fining Intel, but apparently they’re already looking for new targets so they can “stay busy”: Sun disclosed on Monday that the EC had objected to the “combination of Sun’s open source MySQL database product with Oracle’s enterprise database products and its potential negative effects on competition in the market for database products.”
It’s difficult to see how Oracle’s takeover of Sun would reduce competition in the intensely competitive database market. Since Sun’s MySQL software is open source and uses the strongly “copyleft” GNU General Public License (GPL) v2, Oracle will have little control over its future evolution. If Oracle decided to stop updating MySQL tomorrow, anyone in the MySQL development community could simply “fork” the project. Oracle knows this. (Do the European regulators?) If anything, Oracle’s proposed acquisition of Sun indicates that they are embracing the business model of commercial open source. In Sun’s case, that has meant striving to lead the best collaborative project possible and making money on providing the best product support.
European antitrust regulators should be celebrating this deal, rather than obstructing it.
The European Commission is now designing software. And that software is Microsoft Windows…
Comments of Adam Marcus & Berin Szoka to the European Commission on the Matter of Microsoft’s Browser Ballot Proposal, COMP/C-3/39.530 — Microsoft (Tying)*
Submitted Nov. 9, 2009 [PDF of filing]
We applaud the Commission for not repeating its earlier approach to concerns about tie-ins to Microsoft Windows by ordering Microsoft to cripple the functionality of its operating system— such as occurred with the Windows Media Player. While a “browser ballot” is certainly a less restrictive approach, we remain unconvinced that mandating such a ballot is necessary in this case, and concerned about the precedent that government intervention may set here for the future of the highly dynamic and innovative software sector. If, however, a ballot is to be required, we encourage the Commission to accept Microsoft’s ballot as proposed.
A Browser Ballot Mandate Is Not Necessary
The European Community’s Discussion Paper on exclusionary abuses recognizes that bundled discounts infringe Article 82 only when the discount is so large that “efficient competitors offering only some but not all of the components, cannot compete against the discounted bundle.”[1] In this case, a number of alternative browser producers have successfully competed against Internet Explorer in the past—despite it being bundled with Microsoft’s Windows operating system. Continue reading →
Along with my colleague Barbara Esbin, the Director of PFF’s Center for Communications and Competition Policy, I have just released a new paper on discussing the possibility of reallocating a portion of broadcast television spectrum for alternative purposes, namely, mobile broadband. As I discussed here before, Blair Levin, the Executive Director of the FCC’s Omnibus Broadband Initiative, has been suggesting that it might be possible to craft a grand bargain whereby broadcasters get cash for some (or all) of their current spectrum allocations if they return spectrum to the FCC for reallocation and re-auction, likely to mobile broadband services.
In our paper, “An Offer They Can’t Refuse: Spectrum Reallocation That Can Benefit Consumers, Broadcasters & the Mobile Broadband Sector,” [PDF] Barbara and I argue that:
the benefits of such a deal could be enormous for wireless broadband providers, developers of digital technologies, and consumers. Expanding the pool of spectrum available for next-generation wireless broadband offerings will ensure that innovative new networks, devices, and services are made available to the public on a timely basis. Ultimately, that will mean more high-speed choices for consumers, especially those in rural areas harder to reach with high-speed wireline networks. Finally, more generally, anything that moves us in the direction of a freer market in spectrum is a good thing.
But fairness to broadcasters lies at the heart of this spectrum reallocation plan. If a deal can’t be structured that broadcasters would find acceptable, they should not be forced to come to the table. When we speak of an offer they can’t refuse, we mean one so attractive that no rational businessperson or investor would pass it up. It is essential broadcasters be willing partners in the deal, and be full participants in the process of shaping its contours.
Read the entire thing here, or below the fold as a Scribd document. Continue reading →
buck buck buck
Flock Fox Dr. Fox buck
Lucky lucky buck buck buck buck Flock!
Lucky you! thought you!
thought this stupid program!
talking a!
mother Fokker!
should ship ship ships shipped!
In case you were wondering, that’s me trying to swear using Nuance Communications’s Dragon NaturallySpeaking, the leading voice recognition software. It’s bad enough that I can use my left wrist to type anymore because of cartilage damage without pain, and won’t be able to at all for the next few months after my wrist surgery next week. But does Nuance really have to try to clean up my potty mouth?
Now, many users would at this point cry “CENSORSHIP!” They might even suggest that the government should do something about this “violation of my First Amendment rights!” But this is a great example of the difference between what governments often do—block or restrict speech, however indirectly, through the coercive power of the state, ultimately backed by force of arms (real censorship!)—and what private companies sometimes do: hinder my ability to send or receive information that want to sanction. Simply put, government has the power to put me in jail for saying George Carlin’s Seven Dirty Words,while companies like Nuance just make it (somewhat) harder for me to “express myself” using the wealth of my oh-so-extensive vocabulary. Continue reading →
Here’s something that may appeal to transparency enthusiasts, as well as to environmental skeptics…
WASHINGTON, November 9, 2009 – BroadbandCensus.com has been investigating broadband stimulus projects and focusing on the preferred projects from the states. We still lack letters to the National Telecommunications and Information Administration – or notices that states are demanding confidentiality for their letters – from 13 states and territories.
The first person to send any letters from the following states will get a complimentary seat at the November 10 Broadband Breakfast Club at Clyde’s of Gallery Place at 707 7th Street NW, Washington, DC. The breakfast runs from 8 a.m. to 10 a.m., and the topic is “Setting the Table for the National Broadband Plan: The Environment.” Information about the event, and registration, is available at http://broadbandbreakfast.eventbrite.com.
Continue reading →
IDG News reports that the European Parliament has negotiated a telecom bill that “now contains a new Internet freedom provision that states that access to the Internet is a human right of every E.U. citizen, and that if authorities take away that right people must have the opportunity to defend themselves.” If indeed the bill merely creates what Americans would recognize as a “due process” right against government action, that may not be such a bad thing. IDG notes that, “The issue is very sensitive, and not just in Europe, where a number of countries including France and U.K. are passing laws threatening to sever users’ Internet connections if they are found to have breached the copyright on music or movies.” Whatever one thinks of such “three strikes” laws as a remedy for copyright infringement, it seems reasonable that users should indeed have the right to “defend themselves” if accused of copyright violations before their Internet access is turned off.
But we should all be uncomfortable anytime government purports to invent a new “fundamental right” if that right is a “positive” one—i.e., a moral entitlement to a particular product or service that must be guaranteed by other taxpayers paying for something someone can’t afford or simply doesn’t value enough to pay for out of their own pocket. That’s precisely what Finland recently did, guaranteeing Finns the “right” to a 1 megabit broadband connection. That sort of entitlement is pure cyber-collectivism. Cyber-libertarianism recognize instead that:
true “Internet freedom” is freedom from state action; not freedom for the State to reorder our affairs to supposedly make certain people or groups better off or to improve some amorphous “public interest”—an all-to convenient facade behind which unaccountable elites can impose their will on the rest of us.
So if the Europeans want to guarantee a due process right, I hope they would find another term for that concept doesn’t have such cyber-collectivist implications.
Remember, remember the Fifth of November,
The Gunpowder Treason and Plot Privacy Dashboard, so hot,
I know of no reason
Why the Gunpowder Treason Privacy Dashboard
Should ever be forgot.
Sorry, I couldn’t resist, this being Guy Fawkes day (a major traditional holiday for Britons and, more recently, geeky American libertarians such as myself, who dress up as V for Vendetta for Halloween). Google’s announcement of its Privacy Dashboard (TechCrunch) is a major step forward in both informing users about what data Google has tied to their account in each of Google’s many products and in empowering users to easily manage their privacy settings for each product. If users decide they’d rather “take their ball and go home,” they can do that, too, by simply deleting their data.
Users can access the dashboard at www.google.com/dashboard (duh). Or, from the Google homepage, you just have to:
- Click on Settings at the top right > Google Account Settings
- Click on “View data stored with this account” next to “Dashboard”
Once you log-in (for extra security), you can:
- See what data is associated with your account in 23 of Google’s products (Google notes that it will incorporate its 18 other products in the near future).
- Directly access the privacy management settings for that account.
- Access more information—”Links to relevant help articles and information pages.”
Some critics have complained in the past that it’s too hard to find privacy settings links on Google and other sites. Indeed, Google could have made it easier—and now they have! Google has taken another major step forward in user education and empowerment—just as it pioneered transparency into its interest-based advertising product with the Ad Preference Manager launched in March (which I applauded here). (The Dashboard is only for data tied to a user’s Google account, while the APM is tied only to a cookie on the user’s computer.)
The Dashboard really couldn’t be much easier to use—yet we can be sure it won’t be good enough for some privacy zealots who arrogantly presume that their fellow homo sapiens are basically vegetables with hair—unable to use any tool online, no matter how simple, and barely able to tie their own shoelaces without government reminding them how. The principled alternative is to “Trust People & Empower Them.” Because privacy is so profoundly subjective and because there is an inherent trade-off between clamping down on data and the many benefits enjoyed by Internet users from sharing their data, Adam Thierer and I have argued for that “household standards” set by individuals should trump “community standards” imposed on everyone from above: Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.