Children’s Programming, Product Placements & Trade-Offs

by on October 15, 2010 · 2 comments

One of the old saws we hear from those who wish to impose more stringent regulations on advertising or product placement is that “it’s for the children.”  That is, critics such at the Campaign for a Commercial-Free Childhood and other organzations fear that, because children’s brains are less developed or they have not yet learned to differentiate commercial appeals from other types of information flows, kids may be more susceptible to persuasive commercial messaging. I think there’s some truth to that, but I also believe that (a) kids aren’t quite the sheep we make them out to be, (b) the potential “harm” here is not as great as the critics make it out to be and (c) parental supervision should be the primary the solution to the problem.

But let’s ask a different question entirely: Are we willing to forgo additional, and potentially more diverse, forms of children’s programming simply because we want to keep commercial messaging or product placement away from kids?   Consider the case study of The Hub, recently featured in The New York Times:

With imports of European cartoons, a smattering of Hasbro ads and a rerun of the movie “Garfield,” Hasbro and Discovery Communications unveiled a new television brand for children on Sunday, called The Hub. Over time, the two companies hope to prove that there is room for a fourth player alongside Nickelodeon, the Disney Channel and the Cartoon Network, the three heavyweights of children’s TV, said David M. Zaslav, the chief executive of Discovery Communications.  […]

Continue reading →

SHARE: 2 comments

Of Set-Top Box Industrial Policies & Self-Serving Interests

by on October 14, 2010 · 5 comments

If you want another prime example of how self-serving Washington interests often seek to wield the stick of Big Government to their advantage, look no further than the effort the FCC is currently undertaking to extend its “CableCARD” set-top box industrial policy.  The regulatory shenanigans here got started 14 years ago with Section 629 of the Telecommunications Act of 1996, which included authority for the Federal Communications Commission (FCC) to meddle in the video equipment marketplace. The FCC used that authority to impose a variety rules on the cable TV industry, such as CableCARD mandates, in the name of expanding device competition and consumer choice.  Those regulations haven’t done much other than impose added costs on consumers for very little corresponding benefit. And whatever growth we’ve seen in the market for video devices and services has been more organic and unplanned, and it has come from unexpected quarters (think of Apple and Google’s TV efforts, and television distribution via video game platforms). Nonetheless, the FCC plowed forward today with additional layers of red tape in the hope of extending the CableCARD regulatory regime.

The Consumer Electronics Association (CEA) has long served as the prime cheerleader for this high-tech industrial policy since it would hobble video providers and benefit some of CEA’s members in the process. Indeed, to read through the CEA’s filings on this matter through the years, one is led to believe that CEA views cable systems as a sort of essential facility to which access must be granted in the name of preserving innovation by consumer electronics companies.  With the CableCARD mandates, therefore, CEA is asking the FCC to impose a light form of common carrier regulation on the cable industry becuase that would help their interests in the end, regardless of what it meant for innovation at the core of networks.

Now, don’t get me wrong.  There are plenty of self-serving people and organizations around Washington.  Let’s face it, screwing over your competitors with regulation is what makes the “parasite economy” inside the Beltway tick!   But what I find so interesting about this case study is how CEA has vociferously opposed (quite rightly, in my opinion) so many other high-tech industrial policies — the V-Chip, the so-called “broadcast flag,” HDTV tuner mandates, proposals to embed FM tuners in cell phones, and so on — and yet they wholeheartedly endorse the CableCARD industrial policy because the consumer electronics industry would benefit from this particular industrial policy.  Sadly, it’s just another example of what Milton Friedman once called the “Business Community’s Suicidal Impulse”: the persistent propensity to persecute one’s competitors using regulation or the threat thereof.

Nobody said capitalists were consistent, folks.  It’s capitalism for me, but not for thee.

SHARE: 5 comments

Bill Shock Shouldn’t Be a Federal Issue

by on October 14, 2010 · 1 comment

The FCC proposed new rules today aimed at combating wireless “bill shock,” a term that describes mobile subscribers getting hit with overage charges they didn’t anticipate. The proposed rules would require wireless providers to create a system for alerting customers when they are about to incur extra usage charges for voice, text, data, or roaming.

I can certainly see why some consumers may be frustrated with wireless pricing practices. But this frustration hardly constitutes evidence that the mobile marketplace is actually failing. Yes, mobile carriers sometimes make mistakes, and they probably need to do more to ensure their customers understand how overage charges work.

Competitive forces, however, are far better equipped than federal regulators to punish providers that engage in genuinely harmful practices. And if the federal government must “do something” about bill shock, educating mobile subscribers about where to locate and track their usage information is a far better approach than prescriptive, burdensome federal regulation.

Hypocritically, even as the FCC tries to reign in bill shock, its own policies are harming consumers far more than any wireless industry practices. The FCC has again and again put off spectrum auctions that would enable mobile providers to offer better services at lower prices. As a result, consumers are suffering to the tune of billions of dollars each year. Economists Thomas Hazlett and Roberto Munoz published a study last year in which they concluded that U.S. wireless prices would decline by 8% if the FCC were to allocate an additional 60mhz of spectrum to mobile telephony.

If the FCC truly cares about wireless subscribers, rather than simply grandstanding against competitive (if imperfect) mobile carriers, the Commission’s top priority should be to aggressively free up the airwaves.

But analysts at the Competitive Enterprise Institute urged the FCC not to interfere with market disputes and to instead turn its focus to the real obstacle to the wireless marketplace – the FCC’s own anti-consumer approach to spectrum allocation.

“Educating mobile subscribers about where to locate their up-to-date usage information – which all major wireless providers make available – is a far better solution to ‘bill shock’ than prescriptive federal regulation,” argued Ryan Radia, CEI Associate Director of Technology Studies.

Radia pointed out that some consumers’ frustration with current wireless pricing practices is hardly evidence that the mobile marketplace is failing. “To be sure, mobile carriers make occasional mistakes, and they need to work harder to ensure their customers stay well-informed,” Radia said. “But competitive forces are far better equipped than federal regulators to punish providers that engage in genuinely harmful practices or fail to satisfy consumers’ evolving preferences.”

In its efforts to address wireless bill disputes, the FCC purports to represent consumers’ interests; yet, Radia argued, the agency is harming consumers by delaying action to free up radio spectrum — the lifeblood of wireless communications.

“Consumers are suffering to the tune of billions of dollars each year on account of the FCC’s failure to free up radio spectrum for mobile communications,” Radia said. “Economists Thomas Hazlett and Roberto Munoz recently published a study finding that U.S. wireless prices would decline by 8% if the FCC were to allocate an additional 60mhz of spectrum to mobile telephony.”

“If the FCC genuinely cares about wireless subscribers, it should focus on aggressively freeing up the airwaves instead of comparatively trivial issues like bill shock.”

SHARE: 1 comment

Advocates of Regulation are to Charlie Brown as Washington, D.C., is to Lucy

by on October 14, 2010 · 2 comments

This morning on WNYC in New York City, I debated Josh Silver of the pro-Internet-regulation group Free Press. It was a healthy exchange of views, except for a few barbs and innuendos thrown by Silver, who is obviously frustrated by his group’s lack of progress in seeking a “government takeover of the Internet.” (He wanted to debate in simple, ideological terms like that, so I indulge here.)

What was most interesting to me was how unsophisticated Silver is with respect to government and regulation. Take a look at his plea:

What we’re asking for—what we need are regulatory agencies that are not captured by industry and that actually act on behalf of the American public. And that’s what they were created to do. The FCC—1934, with the advent of radio—was created to make sure that the public interest was protected. And what we’ve seen is industry capture of regulatory agencies has made those agencies fail again and again and again.

And the only thing that’s gonna work is if the Obama administration and the FCC stand up and say, “No more business as usual. We are going to protect net neutrality. We’re going to protect competition, and make sure there’s choices for consumers. And we’re going to end the status quo in Washington that has really broken our entire political system.”

The Obama administration and the FCC did stand up and say “no more business as usual,” but that’s what politicians do to seduce voters. Then, once in power, they go about business as usual. Lucy always yanks away the football, Charlie Brown.

Silver is not alone in having these sweet, sad “good government” sentiments. Many of my interlocutors, with whom I often share outcome goals, believe strongly in achieving those goals by remaking governmental and political systems so that they finally “work.” They believe so strongly in this approach that they seem to think it’s just around the corner—if only we prohibit some speech here, some petitioning of the government there. Y’know, “take the money out of politics.”

Hopefully this fantasy will never come true, because it requires reversing fundamental rights such as free speech in all its instantiations—a handover of power from people to the government and elites that run it.

In the absence of that perfected, all-powerful government—thank heavens—we must organize the society’s resources using the best machine we’ve got for discovering consumers’ interests and delivering on them: an unhampered marketplace, now energized and enhanced by the Internet.

SHARE: 2 comments

Milton Mueller’s new book, Networks and States, is out

by on October 14, 2010 · 1 comment

Although I won’t be able to get around to penning a formal review of it for a couple more weeks, I was excited to get a copy of Milton Mueller‘s new book, Networks and States: The Global Politics of Internet Governance, in the mail today. I looks like a terrific treatment of some important cyberlaw issues. Here’s the summary:

Mueller identifies four areas of conflict and coordination that are generating a global politics of Internet governance: intellectual property, cyber-security, content regulation, and the control of critical Internet resources (domain names and IP addresses). He investigates how recent theories about networked governance and peer production can be applied to the Internet, offers case studies that illustrate the Internet’s unique governance problems, and charts the historical evolution of global Internet governance institutions, including the formation of a transnational policy network around the WSIS (World Summit on the Information Society).

As a fan of Net-related political taxonomies and philosophical paradigms, I couldn’t help but quickly jump ahead to the very interesting concluding chapter on “Ideologies and Visions,” in which Mueller examines “the political spectrum of Internet governance.”  There, on page 268, I was very excited to see this statement in his section on “Elements of Denationalized Liberalism”: Continue reading →

SHARE: 1 comment

A Comment on Tim Wu’s Critique of Sunstein’s Internet “Fragmentation” Thesis

by on October 14, 2010 · 13 comments

I’m preparing what will become another one of my absurdly long and boring book reviews and this time it’s Tim Wu’s new book — The Master Switch: The Rise and Fall of Information Empires — that will be under the microscope.  As with many of the books I review, I’m going to go pretty hard on it, especially since I disagree with Tim on so many fronts. But I appreciate his willingness to engage a kooky libertarian like me and the fact that he shared an early proof of the book with me so I could prepare a review.

Nonetheless, I figured I would pre-empt the pain to come by posting a short comment here about one portion of the book with which I find myself in violent agreement.  Chapter 16 of Wu’s book is a short history of cable television and it includes a brief discussion of a favorite theory of many Internet pessimists: the notion that the increased personalization or customization that Internet brings us will lead to a variety of potential ills, including: homogenization, close-mindedness, an online echo-chamber, information overload, or corporate brainwashing.  Their greatest fear seems to be that hyper-customization of websites and online technologies will cause extreme social “fragmentation,” “polarization,” “balkanization,” “extremism” and even the supposed decline of deliberative democracy. Continue reading →

SHARE: 13 comments

Privacy Polls & Real-World Trade-Offs Revisited

by on October 13, 2010 · 0 comments

By Adam Thierer & Berin Szoka

Last Friday, Common Sense Media (CSM) held an event  (video) at the National Press Club featuring the chairmen of the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC). The regulatory activist group released a new poll on children and privacy (Exec Summary & Full Survey). Unfortunately, like almost every other privacy-related poll, theirs is more geared towards fueling a privacy panic than on exploring the real-world trade-offs between legislating “greater privacy” (a hopelessly abstract concept in most conversations) and losing the consumer benefits of data sharing: innovation in online services and the quality and quantity of services and content supported by data-driven advertising.

What better way to drum up Congressional support for paternalistic privacy legislation (restrictions on online data use) than by asserting that this is what the electorate already wants? The poll asks whether “Congress should update laws that relate to online privacy and security for children and teens.”  Three-fifths (61% of parents, 62% of adults) said yes. But earlier in the survey, only 16% knew that the Children Online Privacy Protection Act of 1998 already prohibits “online companies… from collecting or using personal information from children under the age of thirteen without a parent’s permission.” (53% weren’t sure.) If parents don’t know what Congress has already done, how meaningful is it for them to say they think Congress needs to do more? (There’s a reason we don’t have direct democracy.)

Indeed, how useful are such polls, anyway? Ultimately, what such polls really tell us is that, if you ask parents—or adults in general—whether they’re concerned about protecting kids, of course most will say yes, because nobody wants to think of themselves as the kind of person who doesn’t care about kids.

This bias becomes even more problematic when the choice at issue involves such stark trade-offs—especially when we’re talking about throwing a wrench (restrictions on data use and collection) in the economic engine that has again and again provided funding for media and services that users just won’t pay for. As we’ve noted here before, privacy polls and surveys reveal only what the public will tell pollsters in response to the particular questions asked. On privacy, those questions are almost invariably designed to solicit responses suggesting an urgent need for more laws and government action. Even the fairest of these surveys is no substitute for real-world experiments in which people make real choices, in real time, often with real money, and face many real trade-offs. Continue reading →

SHARE: 0 comments

In the Lull of Election Year Politics, Internet Ads Self-Regulation Has a Fighting Chance

by on October 13, 2010 · 0 comments

Earlier this month, a coalition of ad and marketing associations made public a new self-regulatory program for behavioral advertising (or as we like to refer to them, “interest-based ads”). Will it be enough to whet the appetite of members of Congress waiting to chomp on the privacy bit when they get back in November?

Hopefully. But it all depends on ad network uptake and user adoption. FTC Chairman Jon Leibowitz’s wait-and-see attitude toward the self-regulatory effort probably sums up the thoughts of many pro-regulatory privacy advocates. According to Politico’s Morning Tech, Leibowitz said:

We commend industry’s effort to get a broad group of industry leaders on board. However, the effectiveness of this effort will depend on how, and the extent to which, the opt-out is actually implemented and enforced – all of which is yet to be seen. We also urge industry to make sure that the opt-out is easy for consumers to find, use, and understand.

Making it easy for consumers is what the advertising option icon (above) is all about. It’s a just-in-time “heads-up” accompanying ads that allows users to obtain more information about why they’re seeing the ad. In the future, it will allow users to opt-out. Ad networks will pay a license fee to have the right to display the icon and must submit to ongoing compliance.

It’s the compliance part that’s interesting. The Better Advertising project is a new company formed specifically for the self-regulatory program. According to Internet Retailer, “the Council of Better Business Bureaus and the Direct Marketing Association, a trade group for direct-to-consumer marketers and retailers, will begin monitoring compliance with the program early next year.”

Let’s hope the coalition moves quickly and successfully, before Congress does….

SHARE: 0 comments

Schneier on Facebook: Factually Incorrect

by on October 13, 2010 · 1 comment

(Second in a series.)

The Register quotes security guru Bruce Schneier saying: “Facebook is the worst [privacy] offender – not because it’s evil but because its market is selling user data to its commercial partners.”

Facebook’s business model is to guide advertisements on its site toward users based on their interests as revealed by data about them. It is not to sell data about users. Selling data about users would undercut its advertising business.

It’s easy to misspeak in extemporaneous comments, and The Register is not your most careful media outlet. But we’ve almost got enough data points to show a consistent practice of misrepresentation on Bruce Schneier’s part. Perhaps that should be actionable as an unfair or deceptive practice under section five of the FTC Act.

SHARE: 1 comment

DIY News and Commentary

by on October 13, 2010 · 1 comment

What a delight it has been to watch the rescue of the Chilean miners on a live feed, without commentary from any plasticized, blathering “news reporter.” Of course, there are editorial judgments being made by the camera crews and on-scene director, but it is refreshing to make my own judgments based on what I see happening and what I see on the faces of the miners, their wives, and standers-by.

As my friend, the curmudgeonly @derekahunter notes, “There’s really nothing worse than listening to a reporter attempting to fill time while waiting for something to happen.”

Meanwhile, I’ve been chasing down some intemperate commentary on Twitter about the recent discovery of explosives in a New York cemetery. One Fred Burton, identified on his Twitter feed as Vice President of Intelligence for STRATFOR and a former counter-terrorism agent, Tweeted at the time that these explosives seemed like “a classic dead drop intended for an operative.”

But now we know the explosives are old, they were dug up and laid aside in May or June of 2009, and someone recently found them and decided to report them. That is not consistent with a dead drop, and Burton was wrong to speculate as he did, starting an Internet rumor that needlessly propagates fear.

As a public service, I’m doing a little bit to cut into Burton’s credibility, which should cause him to think twice next time. The winning Tweet is not mine, though. It’s @badbanana’s: “Military-grade explosives found at NYC cemetery. Hundreds confirmed dead.”

In summary, it’s a do-it-yourself news and commentary night. I’m making my world and re-making yours (just a tiny bit), rather than all of us sitting around being fed what to think.

SHARE: 1 comment

← Previous Entries

Next Entries →