Reputation oils the gears of many markets. People’s expressions of opinion about goods and services help establish the reputations of sellers and service providers. Knowing that they are the subject of reputation systems that they do not control, service providers do a better job on average than they otherwise would. Slacking off even once can sully a reputation and produce well-placed economic sanctions: people won’t do business. Withdrawing reputation information from the public sphere will generally slow the process of winnowing bad actors out of any market and rewarding most highly the good ones. Commercial opinion is a little engine of positive externalities.
Federal privacy regulations under the Health Insurance Portability and Accountability Act shaped the information terms in health care services in ways people are right to disagree with. So it might be tempting to trade away one’s right to criticize a doctor for greater privacy protection. But a new site called DoctoredReviews.com argues against that bargain—indeed, it argues the bargain is illusory—and it criticizes the use of copyright law to enforce the deal.
Apparently, a group called Medical Justice is offering doctors a form contract to give to patients that holds out greater privacy protection for the patient if the patient will refrain from criticizing the doctor. That’s a deal people should be free to make, though—again—it’s probably a bad one. One way that the deal is enforced is by giving the doctor a copyright in the expressions of opinion that patients may issue. This gives the doctor a right to issue “take-down” notices to web sites where content critical of them is found.
This peculiar use of copyright takes the virtuous cycle where a patient talking about an experience with a doctor benefits others, and doesn’t just nip it—bringing it back to zero. It places enforcement costs on third parties. The enforcement of copyrights in commentary pushes negative externalities onto web site operators as it deprives markets of useful information.
The DoctoredOpinions site has a good, concise explanation of the law as it relates to website owners. I think copyright has some explaining to do—its distinction from rights in physical property is in high relief—if its enforcement can draw disinterested and uninvolved third parties into an administrative/litigation vortex.
Every lover of liberty and the Constitution should be offended by the moniker “Privacy Bill of Rights” appended to regulatory legislation Senators John Kerry (D-MA) and John McCain (R-AZ) introduced yesterday. As C|Net’s Declan McCullagh points out, the legislation exempts the federal government and law enforcement:
[T]he measure applies only to companies and some nonprofit groups, not to the federal, state, and local police agencies that have adopted high-tech surveillance technologies including cell phone tracking, GPS bugs, and requests to Internet companies for users’ personal information–in many cases without obtaining a search warrant from a judge.
The real “Privacy Bill of Rights” is in the Bill of Rights. It’s the Fourth Amendment.
It takes a lot of gall to put the moniker “Privacy Bill of Rights” on legislation that reduces liberty in the information economy while the Fourth Amendment remains tattered and threadbare. Nevermind “reasonable expectations”: the people’s right to be secure against unreasonable searches and seizures is worn down to the nub.
Senators Kerry and McCain should look into the privacy consequences of the Internal Revenue Code. How is privacy going to fare under Obamacare? How is the Department of Homeland Security doing with its privacy efforts? What is an “administrative search”?
McCullagh was good enough to quote yours truly on the new effort from Sens. Kerry and McCain: “If they want to lead on the privacy issue, they’ll lead by getting the federal government’s house in order.”
On Forbes this morning, I analyze the legislative and judicial challenges to last year’s FCC Open Internet rules, the so-called net neutrality order.
Despite the urgency of Friday’s budget machinations, the House took time out to pass House Joint Resolution 37, which “disapproves” the FCC’s December rulemaking. If passed by the Senate and not vetoed by President Obama, HJR 37 would effectively nullify the net neutrality rules, and ensure the FCC cannot pass alternate versions of them absent new authority to do so from Congress.
Most commentators believe that the House action was merely symbolic. Passage in the Senate requires only a simple majority, but the neutrality fight has turned violently partisan since the mid-term elections and getting a few Democratic Senators on-board may be hard. More to the point, the White House last week pre-emptively threatened to veto the resolution.
Continue reading →
On this week’s podcast, Rob Carlson, principal at Biodesic, an engineering, consulting, and design firm in Seattle, and author of the book, Biology is Technology: the promise, peril, and new business of engineering life, discusses his book. Carlson explains what he means by “biology is technology” and gives a few examples of how humans have been using biology as technology for thousands of years. He then discusses a few modern biotechnology applications, like antibiotics, biologics, genetically modified organisms, fuels, and plastics. Carlson also talks about why more biotech garage innovators are needed, what the industry might be able to learn from open source software and hardware, and how legal and regulatory barriers to innovation in biotechnology might be minimized.
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This week, my colleague Jerry Brito asked me to guest lecture to his George Mason University law school class on regulatory process. He asked me to talk about one of my favorite topics: the sad, sordid history of regulatory capture. Regular readers will recall the compendium I posted here a few months ago [and that I continue to update] of selected passages from books and papers penned by various economists and political scientists who have studied this issue.
Again, it doesn’t make for pretty reading, but the lesson that history teaches is vital: No matter how noble the “public interest” goals of regulatory advocates or their specific proposals, the only thing that really counts is what regulation means in practice. Regrettably, all too often, regulation is “captured” by various interests and used to their advantage, or at least to the disadvantage of potential competitors, new entrants, and innovation.
While I was gathering some materials for the case study portion of my lecture — which incorporates the history of telecommunications monopolization, broadcast industry regulatory shenanigans, and transportation / airlines fiascos — I figured I had to post a passage from one of my favorite books on regulation of all-time: Thomas K. McCraw’s brilliant Pulitzer Prize-winning 1984 book, Prophets of Regulation. In his chapter on the late great Alfred Kahn, the father of airline deregulation, McCraw recounts the history of the Civil Aeronautics Board (CAB) from its creation in the 1940s up until the time of Kahn’s ascendency to CAB chairman in the Carter Administration (and then the CAB’s eventual deregulation and abolition). Here’s the key passage from that history: Continue reading →
…says Nick Schulz, in partial answer to the question why regulators want to control telecom and wireless even though those sectors currently enjoy “rising customer satisfaction, falling prices, enviable investment levels, and greater innovation—even during the Great Recession.”
In my latest Forbes column, “Keeping The Video Revolution Going Strong,” I argue that we’ve been blessed to live through a veritable information revolution but that “many scarcity-era regulations remain on the books and threaten this ongoing revolution — especially in the video marketplace. So long as Washington continues to enforce regulations dating to the days of I Love Lucy, the old regulatory norms and edicts threaten to roll over onto emerging video technologies, stifling innovation and consumer choice.”
I go on to briefly discuss a few flashpoints in the ongoing video wars, including: the fights over “retransmission consent,” so-called “AllVid” tech mandates, and the broader battle to liberalize spectrum. “While the video revolution will hopefully continue apace, a light-touch from Washington will be essential to keep it going strong,” I conclude. “To the extent policymakers are looking to ‘level the (regulatory) playing field’ between the old and new video worlds, they should do so in the direction of freer markets, not more tech mandates.”
Anyway, read the whole thing over at the Forbes site.
There’s a nice piece of reporting from Ian Shapira in today’s Washington Post entitled, “Once the Hobby of Tech Geeks, iPhone Jailbreaking Now a Lucrative Industry.” In the article, Shapira documents the rise of independent, unauthorized Apple apps (especially tethering apps) and points out that what was once a small black market has now turned into a booming, maturing business sector in its own right. In fact, Sharpia notes, there are already “market leaders” in the field:
At the top of the jailbreaking hierarchy sits Jay Freeman, 29, the founder and operator of Cydia, the biggest unofficial iPhone app store, which offers about 700 paid designs and other modifications out of about 30,000 others that are free. Based out of an office near Santa Barbara, Calif., Freeman said Cydia, launched in 2008, now earns about $250,000 after taxes in profit annually. He just hired his first full-time employee from Delicious, the Yahoo-owned bookmarking site, to improve Cydia’s design. “The whole point is to fight against the corporate overlord,” Freeman said. “This is grass-roots movement, and that’s what makes Cydia so interesting. Apple is this ivory tower, a controlled experience, and the thing that really bought people into jailbreaking is that it makes the experience theirs.”
In another sign this black market is now going mainstream, advertisers are apparently flocking to it:
In what might be the ultimate sign that the jailbreak industry is losing its anti-establishment character, Toyota recently offered a free program on Cydia’s store, promoting the company’s Scion sedan. Once installed, the car is displayed on the background of the iPhone home screen, and the iPhone icons are re-fashioned to look like the emblem on the front grill.
Interestingly, however, some people now complain that Cydia is getting too big for its britches and has come to be “as domineering as Apple is in the non-jailbreak world.” What delicious irony! Yet, I do not for one minute believe that Cydia has any sort of “lock” on the “unlocking” marketplace. This is an insanely dynamic sector that is subject to near-constant fits of disruptive technological change. Continue reading →
San Francisco’s Entertainment Commission will soon be considering a jaw-dropping attack on privacy and free assembly. Here are some of the rules the Commission may adopt for any gathering of people expected to reach 100 or more:
3. All occupants of the premises shall be ID Scanned (including patrons, promoters, and performers, etc.). ID scanning data shall be maintained on a data storage system for no less than 15 days and shall be made available to local law enforcement upon request.
4. High visibility cameras shall be located at each entrance and exit point of the premises. Said cameras shall maintain a recorded data base for no less than fifteen (15 days) and made available to local law enforcement upon request.
Would you recognize a police state if you lived in one? How about a police city? The First Amendment right to peaceably assemble takes a big step back when your identity data and appearance are captured for law enforcement to use at whim simply because you showed up. (ht: PrivacyActivism.org)
This morning, the U.S. Senate Judiciary Committee heard key administration officials testify about the statute that governs law enforcement access to private information held electronically by third parties. Several leading lawmakers are currently working to bring this law—the 1986 Electronic Communications Privacy Act (ECPA)—into the information age so that it reflects Americans’ reasonable privacy expectations in the era of webmail, mobile services, cloud computing and the like.
TechFreedom has led, in conjunction with the Competitive Enterprise Institute and Americans for Tax Reform‘s Digital Liberty Project, a coalition of leading free market public interest in a letter to the committee voicing their strong support for overhauling the quarter-century-old ECPA. The coalition—also including FreedomWorks, the Campaign for Liberty, the Washington Policy Center, Liberty Coalition, the Center for Financial Privacy and Human Rights, and Less Government—is urging Congress to extend traditional Fourth Amendment protections to Internet-based “cloud” and mobile location services while preserving the building blocks of law enforcement investigations.
The coalition letter explains that framers of the Bill of Rights ratified the Fourth Amendment to protect individuals from unreasonable, unwarranted searches and seizures by government officials. But since courts have not consistently applied these Constitutional protections to private information stored with cloud and mobile providers, many Americans’ private information is vulnerable to warrant-less access by law enforcement. To remedy this, the letter proposes four reforms to ECPA that would resolve legal ambiguities and affirm Constitutional protections by establishing electronic privacy standards that are consistent with the Fourth Amendment.
“Major decisions regarding the future architecture of cloud computing are being made right now,” explains the letter, calling for urgent action. “If Congress fails to enact ECPA reform, cloud computing services may be designed to rely on servers outside the U.S. Not only would this harm U.S. competitiveness, it could also, ironically, deny U.S. law enforcement access to cloud data—even with a lawful warrant.”
Read the full coalition letter here or below. 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.