January 2010

[I’ve been working on an outline for a book I hope to write surveying technological skepticism throughout history. I first started thinking about this topic two years when I noticed that a great number of recent books about Internet policy could generally be grouped into one of two camps: Internet optimists vs. Internet pessimists. I subsequently penned an essay on the subject that generated a fair bit of attention. So, I figured I must be on to something, and the more Net policy books I read, the more I realized that the divisions between these two camps were growing wider and increasingly heated. Thus, I thought I would share this very rough draft (much of it still in outline form) of the opening chapter of that book I want to write about this great intellectual war over the impact of technology on society. I invite reader input. Update Jan. 2011: I finally published a full-length essay on this topic. You can find it here. ]


The impact of technological change on culture, learning, and morality has long been the subject of intense debate, and every technological revolution brings out a fresh crop of both pessimists and pollyannas. Indeed, a familiar cycle has repeat itself throughout history whenever new modes of production (from mechanized agriculture to assembly-line production), means of transportation (water, rail, road, or air), energy production processes (steam, electric, nuclear), medical breakthroughs (vaccination, surgery, cloning), or communications techniques (telegraph, telephone, radio, television) have appeared on the scene.

The cycle goes something like this. A new technology appears. Those who fear the sweeping changes brought about by this technology see a sky that is about to fall. These “techno-pessimists” predict the death of the old order (which, ironically, is often a previous generation’s hotly-debated technology that others wanted slowed or stopped).  Embracing this new technology, they fear, will result in the overthrow of traditions, beliefs, values, institutions, business models, and much else they hold sacred.

The pollyannas, by contrast, look out at the unfolding landscape and see mostly rainbows in the air. Theirs is a rose-colored world in which the technological revolution du jour is seen as improving the general lot of mankind and bringing about a better order.  If something has to give, then the old ways be damned! For such “techno-optimists,” progress means some norms and institutions must adapt—perhaps even disappear—for society to continue its march forward.

Our current Information Revolution is no different. It too has its share of techno-pessimists and techno-optimists. Indeed, before most of us had even heard of the Internet, people were already fighting about it—or at least debating what the rise of the Information Age meant for our culture, society, and economy. Continue reading →

For those of you inclined to read protracted legalese filings, NBC Universal, Comcast and GE submitted their Public Interest Statement to the FCC this week. You can read the filing here.

Many conspiracies have been touted, claiming that public control of communication mediums will be wrested away from the public because of this venture and that consumers stand to lose the most. Adam did a good job debunking these concerns earlier this month. The fact is that this merger in no way would result in the dreaded “M” word, aka monopoly.

Whatever the case, this process is still bound to take another year or so before finalization, which gives you, dear reader, time to process the entire 145 page document. Happy reading!

While the FCC considers whether to impose nondiscrimination and transparency regulation to all forms of broadband Internet access, Public Knowledge is proposing to subject broadband services to the same pervasive, overlapping, heavy-handed regulatory framework as century-old telephone service (see this and this) — a framework which a former FCC chairman during the Clinton Administration described as a hopeless “morass.”

PK is worried the U.S. Court of Appeals for the D.C. Circuit might rule in a pending case that the FCC doesn’t have jurisdiction to regulate broadband. The group also is fretting over a recent observation by AT&T that, “with each passing day, more and more communications service migrate to broadband and IP-based services,” leaving the public switched telephone network (“PSTN”) and plain old telephone service (“POTS”) we all grew up with “as relics of a by-gone era.” Continue reading →

Spike TV’s John Papola and GMU economics professor Russell Roberts teamed up to create an exceptional and entertaining “rap video” pitting John Maynard Keynes against F. A. Hayek.  If you ever wondered what would happen if the two famous economists went out drinking together, here’s one answer.  Now this is a great use of social media.

At today FTC’s “Exploring Privacy” roundtable event at Berkeley Law School, were heard a lunchtime address from Daniel J. Weitzner, Associate Administrator for Policy, National Telecommunications and Information Administration (NTIA) at the Department of Commerce. Down below is a brief summary of his remarks. (Berin Szoka and have been live-tweeting the event at @AdamThierer and @BerinSzoka). You can view all our tweets here.

  • Obama Administration is looking at nexus between privacy & innovation
  • Success of Internet has depended upon creative use of information
  • Predictability and certainty is imp for both consumers and companies on this front
  • Believes we CAN have both innovation and privacy protection; but there will be some tensions
  • Challenge of the 3rd decade of Internet policymaking = to get together set of policies to bring security to Net while preserving freedom
  • Does domestic & global patchwork of #privacy policies hurt or help innovation?
  • Need to take a hard look at the traditional notice & choice framework
  • Rules for COLLECTION or USE of data is key question
  • Concepts of “accountability” … to what or whom?
  • a Notice of Inquiry coming from NTIA about privacy to help shape privacy policy for Obama Admin

Catching up on some magazines while waiting for my car to pass its annual emissions test the other day, I came across an article on cable TV bundling. Not too long ago, the issue of cable TV multichannel packaging–and whether cable companies should be required to offer channels “a la carte,” allowing customers to pick and choose the channels they watch–was a hot issue. Former FCC Commissioner Kevin Martin pushed heavily for it, even though the FCC’s own research, and later as some real-world market trials, found that a la carte options would not gain market traction.

The article nicely summed up the reasons.

The simple argument for unbundling is: “If I pay sixty dollars for a hundred channels, I’d pay a fraction of that for sixteen channels.” But that’s not how a la carte pricing would work. Instead, the prices for individual channels would soar, and the providers, who wouldn’t be facing any more competition than before, would tweak prices, perhaps on a customer-by-customer basis, to maintain their revenue. That doesn’t necessarily mean that Bravo would suddenly cost fifteen dollars a month, but there’s little evidence to suggest that a la carte packages would be generally cheaper than the current bundles. One recent paper on the subject, in fact, estimated the best-case gain to consumers at thirty-five cents a month. But even if it wasn’t a boon to consumers an a la carte system would inject huge uncertainty into the cable business, and many cable networks wouldn’t get enough subscribers to survive. That’s a future that the industry would like to avoid.

Continue reading →

I’m attending the FTC’s 2nd “Exploring Privacy” roundtable event, which is taking place at the University of California-Berkeley School of Law.  Here’s the agenda. (I’ll be live Tweeting @AdamThierer). FTC Commissioner Pamela Jones Harbour &  FTC Bureau of Consumer Protection Director David Vladeck kicked things off. Here’s a quick summary of their remarks:

  • Data collection has vast opportunities but drawbacks also
  • “non-price dimensions” of privacy important
  • Talking about recent Facebook privacy changes
  • Privacy is not “over” as McNealy once said; recent public outcry about Facebook changes make that clear
  • “delicate balance” between data collection and consumer control
  • Concerned about privacy in the mobile environment
  • “Apple could do more to require baseline level of privacy disclosures”; other could set such defaults too
  • Similar fears about privacy in the cloud; difficult for consumers to define privacy expectation in the cloud; fear of lock-in concerns
  • Wants more data portability
  • Concerned that anonymization doesn’t work good enough; Perhaps our faith in current technologies is misplaced
  • Must address the question of privacy by design sooner rather than later

Continue reading →

Just finished watching President Barack Obama’s State of the Union speech and Virginia Governor Bob McDonnell’s response.

For some reason, this reminds me of the annual honors ceremony at my daughter’s school.  Why?  Because at my daughter’s school, when they award a plethora of awards to students in each grade, they ask the audience to hold our applause to the end.  Why? Because  applause prolongs the ceremony interminably.

Sound familiar? Members of Congress imitate Jack-in-the-Boxes springing up and down at appropriate applause lines. Democrats sprang up at appropriate applause lines relevant to the president’s agenda. Republicans sprang up too, when the president praised small business or said said he wanted more nuclear power plants.  President Obama expected applause from Republicans when he listed his tax cuts, but he was disappointed and then joked about it. If you watched the speech on TV, some members of Congress seemed to be applauding with a look on their faces that said they didn’t quite know why they were applauding. The Joint Chiefs of Staff finally stood up and applauded when Obama praised veterans. Vice President Joe Biden has perfected the “sage” look, though sometimes he looked grumpy enough to be mistaken for a Republican!  

Republicans have finally cottoned to this phenomenon. Instead of presenting a solo speaker in a sterile environment, they presented Virginia Governor Bob McDonnell with an audience in the Virginia State Capitol. Like the president, the governor was interrupted by applause from legislators and others in the audence. Rhetorically, I thought it added an extra “oopmh” to the governor’s speech — both because it showed he has folks who agree with him and because he highlighted the state perspective. Given the rules of the political game, it was a smart choice. 

But that doesn’t mean a change in the rules wouldn’t make everyone better off. It’s friggin’ 11:50 at night, and I’m wiped out from a day of simultaneously working at home to get something written and running multiple scans on the home computer to get rid of the friggin’ Security 2010 virus, or Trojan, or whatever that thing  is.  I would have appreciated shorter speeches that simply told me what each party wanted to accomplish.

So here’s my suggestion. For the State of the Union Speech and the opposition party’s response, they should make the same request made at my daughter’s school awards ceremony: “Please hold your applause until the end.”

Now … anybody got any interesting technological solutions that would accomplish this goal?

As I’ve detailed in a WashingtonWatch.com blog post, the president called for earmark transparency in his state-of-the-union speech tonight. A fact sheet put out by the White House goes beyond the president’s words to call for “a comprehensive, bipartisan, state-of-the-art disclosure database that allows Americans to examine the details of every proposed earmark before a vote is taken—one that is fully searchable and otherwise user-friendly.”

This is very good news for transparency coming out of the state-of-the-union speech. And I’ll be working to make sure that the good practices that take root in the earmark area branch out to other areas as well.

The Ticketmaster-Live Nation antitrust saga has come to a bittersweet end. Earlier this week the Justice Department finally approved the merger between the two firms, just shy of one year after it was announced.

While a number antitrust experts had speculated that the Justice Department might seek an injunction to block the deal outright, the DoJ ultimately opted to approve the deal while subjecting Ticketmaster-Live Nation to several conditions that are supposed to promote competition in the events marketplace. Under the terms of the consent decree, the combined firm will be required to license its ticketing software to competitor Anschutz Entertainment Group and divest Paciolan, a ticketing subsidiary of Ticketmaster. Ticketmaster-Live Nation also faces ten years of monitoring by antitrust officials to “prevent anticompetitive bundling of services.”

Ticketmaster has long been a controversial firm among concertgoers, frequently drawing consumers’ ire for charging hefty “convenience” fees and offering customer service that’s not exactly stellar. But it’s important to remember that today’s entertainment market is more fragmented than ever, and consumers have a huge array of choices for listening to music and viewing live events. Even YouTube is getting into the business of airing live events. The video site has broadcast several live events already, including U2’s Rose Bowl performance in October 2009, and is eyeing the pay-per-view live streaming market as well.

So it’s not hard to see why consolidation is taking place in the event ticketing and promotion markets. Economists have demonstrated that vertical integration, done properly, often results in sizable efficiencies, translating into overall welfare gains for consumers. Together, Ticketmaster and Live Nation are in a stronger position than before to offer value to event venues and promote concerts and shows. And as much we all hate service fees, in industries characterized by high fixed costs and declining marginal unit costs – like ticketing – big per-unit “markups” are often necessary to induce businesses to compete and innovate. While Ticketmaster may not be the most innovative company in the world, the firm faces an uncertain future as its contracts with venues come up for renewal. If Ticketmaster really is harming concertgoers – and by the way, there’s no clear evidence that it is – it will be disciplined not only by concert lovers, but by venues and artists as well. Derailing a potentially efficient business arrangement simply because it might not work out, whether in the event ticketing market or the cable television market, results in harm to consumers.

Continue reading →