Introducing Digital Liberty

by on February 14, 2011 · 6 comments

You’ll want to visit, follow, friend, and whatever-the-hell-else-people-do the new Digital Liberty project from Americans for Tax Reform.

Digital Liberty’s introductory blog post says:

Digital Liberty is dedicated to preserving a free market by pushing back against heavy regulation and taxation of all things Internet, tech, telecom, and media. DigitalLiberty.net will serve as a resource for those who believe in constitutionally limited government by providing news updates and policy briefs on tech issues, sharing research from likeminded organizations, and serving the grassroots who believe that technology and media innovation thrives best when markets are free and individuals are free to choose.

Sounds good to me.

Digital Liberty isn’t really new, but an expansion of ATR’s work on tech freedom. They tell us that their Web site will provide news and policy briefs, share research from like-minded free-market organizations, and serve the grassroots focusing on free-market tech policy.

That’s DigitalLiberty.net. Right on to my brethren and sistren from the happy home of the leave-us-alone coalition!

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“Cyber-Collectivism,” “Cyber-Progressivism,” or What?

by on February 14, 2011 · 5 comments

The folks at Reason magazine were kind enough to invite me to submit a review of Tim Wu’s new book, The Master Switch: The Rise and Fall of Information Empires based on my 6-part series on the book that I posted here on the TLF late last year. (Parts 1, 2, 3, 4, 5, 6)  My new essay, which is entitled “The Rise of Cybercollectivism,” has now been posted on the Reason website.

I realize that title will give some readers heartburn, even those who are inclined to agree with me much the time.  After all, “collectivism” is a term that packs some rhetorical punch and leads to quick accusations of red-baiting. I addressed that concern in a Cato Unbound debate with Lawrence Lessig a couple of years ago after he strenuously objected to my use of that term to describe his worldview (and that of Tim Wu, Jonathan Zittrain, and their many colleagues and followers). As I noted then, however, the “collectivism” of which I speak is a more generic type, not the hard-edged Marxist brand of collectivism of modern times. For example, I do not believe that Professors Lessig, Zittrain, or Wu are out to socialize all the information means of production and send us all to digital gulags or anything silly like that. Rather, their “collectivism” is rooted in a more general desire to have–as Declan McCullagh eloquently stated in a critique of Lessig’s Code–rule by “technocratic philosopher kings.” Here’s a passage from my Reason review of Wu’s Master Switch in which I expand upon that notion:

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Actually, Texans Save $600 Million a Year

by on February 12, 2011 · 7 comments

A Texas tax official estimates in this story that Texas loses an estimated $600 million in Internet sales taxes every year. Its part of a long-running debate about whether state governments should be able to collect taxes from out-of-state retailers who send goods into their jurisdictions.

What happens with the $600 million depends on what you mean by “Texas.” If you mean the government of the state of Texas in Austin, why, yes, the government appears not to collect that amount, which it wants to. If by “Texas” you mean the people who live, work, and raise their families throughout the state—Texans—they actually save $600 million a year. They get to do what they want with it. After all, it’s their money.

The Texas tax collector is complaining because the last thing state taxing agents want to do is collect money on in the form of use taxes, which means something like going door to door to collect money from voters based on what they bought from out-of-state. Revenuers intensely prefer to hide the process, collecting their residents’ money from out-of-state companies.

Amazon.com is Texas’ target—it’s the great white whale for tax-hungry jurisdictions nationwide. With no retail outlets and few offices or fulfillment centers around the country, it’s not subject to tax jurisdiction in lots of places that would like to tap it for revenue. Having a fulfillment center in Texas may make Amazon liable for $600 million of its customers’ money, so it’s doing the sensible thing: getting out.

And thank heavens it can! Amazon is a cog in the extremely virtuous process of tax competition. Its ability to move operations means that it can escape states with burdensome taxes and tax collections oblibations, like Texas. Tax competition among states puts downward pressure on taxes, which in turn puts upward pressure on the wealth and well-being of state residents.

The pro-tax folks have been working for years to eliminate tax competition. The “Streamlined Sales Tax Project” continues work it began in 2000 to pave the way for nationwide sales taxation. “Streamlining” sounds so good, doesn’t it? But the result would be uniform—and uniformly high—sales taxes that every state might impose on every retailer that sends goods across state lines.

The Web site of the pro-tax coalition sounds good, too: the “Alliance for Main Street Fairness,” at the URL standwithmainstreet.com. Who wouldn’t want to “stand with Main Street”? Lovers of limited government, for one.

“Fairness” here means uniform high sales taxes and interstate tax collection obligations. The site doesn’t say who’s behind it, but the campaign to impose taxes on Amazon and other remote sellers is almost certainly a project of big national chain retailers. Rather than fight to lower taxes nationwide, they think they should just saddle their online competitors with tax collection obligations.

As long as the Streamlined Sales Tax Project continues to fail, tax competition in this area survives, and retailers like Amazon can provide lower costs to all of us—including that $600 million in savings enjoyed by Texans each year.

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Cyber-Intrigue and Miscalculation

by on February 11, 2011 · 3 comments

If you haven’t been following the intrigue around Wikileaks and the security companies hoping to help the government fight it, this stuff is not to be missed. Recommended:

The latter story links to a document purporting to show that a government contractor called Palantir Technologies suggested unnamed ways that Glenn Greenwald might be made to choose “professional preservation” over his sympathetic reporting about Wikileaks. A later page talks of “proactive strategies” including: “Use social media to profile and identify risky behavior of employees.”

Wikileaks has no employees. I take this to mean that the personal lives of Wikileaks supporters and sympathizers would be used to undercut its public credibility. Because Julian Assange hasn’t done enough…

While we’re on credibility: This may well be Wikileaks’ rehabilitation. Wikileaks erred badly by letting itself and Julian Assange become the story. We’re not having the discussion we should have about U.S. government behavior because of Assange’s self-regard.

But now defenders of the U.S. government are making themselves the story, and they may be looking even worse than Wikileaks and Assange. (n.b. Palantir has apologized to Greenwald.) That doesn’t mean that we will immediately focus on what Wikileaks has revealed about U.S. government behavior, but it could clear the deck for those conversations to happen.

The concept of “miscalculation” seems more prominent in international affairs and foreign policy than other fields, and it comes to mind here. Wikileaks and its opponents are joined in a negative duel around miscalculation. The side that miscalculates the least will have the upper hand.

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Rep. Speier’s “Do Not Track” Privacy Legislation

by on February 11, 2011 · 0 comments

Rep. Jackie Speier introduced legislation today that would require the Federal Trade Commission to establish standards for a “Do Not Track” mechanism and require online data collectors to obey consumer opt-outs through such a tool.

As I’ll explain in more detail in my comments on the FTC’s privacy report (due next Friday), I’ve argued for the last two and half years that user empowering users to make their own choices about online privacy is, in combination with education and enforcement of existing laws, the best way to start adddressing online privacy concerns. In principle, some kind of “Do Not Track” mechanism could be a valuable user empowerment tool.

But actually implementing “Do Not Track” without killing advertising won’t be easy. Just as consumers need to be empowered to make effective privacy choices, so too must publishers of ad-supported websites be able to make explicit today’s implicit quid pro quo: Users who opt-out of tracking might have to see more ads, pay for content and so on.

Government cannot design a “marketplace for privacy” from the top down, nor predict the costs of forcing an explicit quid pro quo. It would be sadly ironic—as Adam Thierer and I pointed out over a year ago—if the same FTC that has agonized so much about the future of journalism wound up killing advertising, the golden goose that has sustained free media in this country for centuries.

The market is evolving quickly here, with two very different “Do Not Track” tools debuting in Internet Explorer 9 and Firefox 4 just this week. Ultimately, it is the Internet’s existing standards-setting bodies, not Congress or the FTC, that have the expertise to resolve such differences and make a “Do Not Track” mechanism work for both consumers and publishers, as well as advertisers and ad networks.

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Terrific Visualization of Digital Information Explosion

by on February 11, 2011 · 11 comments

Here’s an amazing graphic that appeared in today’s Washington Post depicting how digital information has grown exploded over the past two decades. It’s better viewed on a large monitor from this link on the Post website. And here’s the accompanying Post article. The underlying data come from a new study by Martin Hilbert and Priscila Lopez of the University of Southern California, which is entitled, “The World’s Technological Capacity to Store, Communicate, and Compute Information.” It appears in the latest issue of Science but is not available without a subscription.

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Goldsmith on Assange, WikiLeaks, the First Amendment & Press Freedoms

by on February 11, 2011 · 4 comments

There’s a sharp piece in today’s Washington Post from Jack Goldsmith, currently with Harvard Law but formerly an assistant attorney general in the Bush administration, about “Why the U.S. Shouldn’t Try Julian Assange.”  Goldsmith points to the sticky First Amendment / press freedom issues at stake should the U.S. try to go after Assange and WikiLeaks:

A conviction would also cause collateral damage to American media freedoms. It is difficult to distinguish Assange or WikiLeaks from The Washington Post. National security reporters for The Post solicit and receive classified information regularly. And The Post regularly publishes it. The Obama administration has suggested it can prosecute Assange without impinging on press freedoms by charging him not with publishing classified information but with conspiring with Bradley Manning, the alleged government leaker, to steal and share the information. News reports suggest that this theory is falling apart because the government cannot find evidence that Assange induced Bradley to leak. Even if it could, such evidence would not distinguish the many American journalists who actively aid leakers of classified information.

One reason journalists have never been prosecuted for soliciting and publishing classified information is that the First Amendment, to an uncertain degree never settled by courts, protects these activities. Convicting Assange would require courts to resolve this uncertainty in a way that narrows First Amendment protections. It would imply that the First Amendment does not prevent prosecution of American journalists who seek and publish classified information. At the very least it would render the First Amendment a less certain shield. This would – in contrast to WikiLeaks copycats outside our borders – chill the American press in its national security reporting.

Quite right, and it’s a point bolstered by another editorial that also appeared in the Post a few weeks ago by Adam Penenberg of New York University, in which he made the case for treating Assange as a journalist. Penenberg asks: “What constitutes “legitimate newsgathering activities”? How do you differentiate between what WikiLeaks does and what the New York Times does?”

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Some Sense on Sexting

by on February 10, 2011 · 10 comments

Bucking a trend seen in other states, Texas lawmakers are taking steps to separate teen “sexting,” the sending and receiving sexually explicit photos via cell phone or email, from child pornography.

A bill proposed by State Sen. Kirk Watson of Austin, and backed by Texas State Attorney General Greg Abbott, would classify sexting as a Class C misdemeanor for first time violators under 18. Under current law, sexting is a Class C felony carrying penalties of two to 10 years in prison, a fine up to $10,000 and lifelong registration as a sex offender.

The Lone Star State deserves credit for taking a sensible approach to addressing what is without doubt stupid behavior that comes with serious consequences, but is far from the predation that child pornography laws are intended to target.

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The Regulated Internet: How We Got Here

by on February 10, 2011 · 1 comment

In the March issue of Reason, Peter Suderman takes us on a tour of the recent telecom and Internet regulatory scene as he looks at the Federal Communications Commission Chairman and Obama hoops buddy Julius Genachowski and his push to regulate the Web.

The article, which recaps the five-year network neutrality battle that reached a watershed moment this December when Genachowski all but rammed through the new rules as the rest of D.C. was heading out for the holidays, punctures many of the myths of the network neutrality rationale–including the notion that it is a small site-vs.-large-site issue and that large ISPs were exploiting their bottlenck position.

Suderman succintly shows how Genachowski, following the lead of groups like Free Press, framed what is essentially a geeky tug-of-war about network engineering concepts as wholesale market failure that demanded regulation, with himself as top Intenet cop.

But the net neutrality debate doesn’t really pit the Goliaths against the Davids. It’s a battle between the edge of the Internet and the center, with application and content providers (the edge) fighting for control against infrastructure owners (the center). Large business interests dominate both sides of the debate. Google, for example, has long favored some form of net neutrality, as have Facebook, Amazon, Twitter, and a smattering of other big content providers, who prefer a Web in which the network acts essentially as a “dumb pipe” to carry their content. Mom-and-pop sites aren’t the issue.

Google makes its support sound as simple and earnest as its corporate motto of “don’t be evil.” Much like Genachowski, it defines net neutrality as “the concept that the Internet should remain free and open to all comers.” But the freedom and openness that Google claims to prize bear a distinct resemblance to regulatory protection. An Internet in which ISPs can freely discriminate between services, prioritizing some data in order to offer enhanced services to more customers, is an Internet in which content providers may have to pay more to reach their customers. Under Google and Genachowski’s net neutrality regime, ISPs may own the network, but the FCC will have a say in how those networks are run, with a bias toward restrictions that favor content providers.

The entire article can be found here,

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Tim Wu to the FTC: What does it mean?

by on February 9, 2011 · 10 comments

As Adam notes, Columbia lawprof and holder of the dubious distinction of having originated the term and concept of Net Neutrality, Tim Wu, is headed to the FTC as a senior advisor.

Curiously, his guest stint runs for only about four and a half months.  As the WSJ reports:

Mr. Wu, 38, will start his new position on Feb. 14 in the FTC’s Office of Policy Planning, and will help the agency to develop policies that affect the Internet and the market for mobile communications and services. The FTC said Mr. Wu will work in the unit until July 31. Mr. Wu, who is taking a leave from Columbia, said that to work after that date he would have to request a further leave from the university.

Mr. Wu’s claim that the source of the date constraint is Columbia doesn’t pass the smell test.  Now, it is possible that what he says is literally true–and therefore intentionally misleading.  Perhaps he asked only for leave through the end of July and would indeed have to request further leave if he wanted it.  But the implication that Columbia would have trouble granting further leave–especially during the summer!–and thus the short tenure seems very fishy to me.

So what else could be going on, while we’re reading inscrutable tea leaves?  Well, for one thing, it could be that Wu has already signed on for some not-yet-public role at Columbia that he prefers not to imperil.  Maybe associate dean or something like that.

But I have another, completely unsupported speculation.  I think the author of The Master Switch (commented on by Josh and me here) and one of the most capable (as far as that goes) proponents of Internet regulation in the land is being brought in to the FTC to help the agency gin up a case against Google.

I think with Google-ITA seemingly approaching its denouement, the FTC knows or believes that Google is either planning to abandon the merger or else enter into an (insufficiently-restrictive for the FTC) settlement with the DOJ.  In either case, not a full-blown investigation and intervention into Google’s business.  So the FTC is preparing its own Section 5 (and Section 2, but who needs that piker when you have the real deal in Section 5?) (for previous TOTM takes on Section 5, see, e.g., here and here) case and has brought in Wu to help.  Given the switching back and forth between the DOJ and FTC in reviewing Google mergers, it could very well be (I haven’t kept close tabs on Google’s proposed acquisitions) that there’s even already another merger review in waiting at the FTC on which the agency is planning to build its case.

But the phase of the case requiring Wu’s full attention–the conceptual early phase–should be completed by the end of July, so no need to detain him further.

More concretely, I would point out that it says a lot about the agency’s mindset that it is bringing in the likes of Wu to help it with its ongoing forays into the regulation of Internet businesses.  By comparison, I would just point out that Chairman Majoras’ FTC brought in our own Josh Wright as the agency’s first Scholar in Residence.  Sends a very different signal, don’t you think?

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