Written with Jerry Ellig.
Chairman Genachowski’s net neutrality announcement today was very short on details. What we learned is that the Chairman plans to buck Congress and the courts in a drive to regulate broadband. He is proceeding against the wishes of hundreds of members of Congress from both parties that have written the FCC demanding that it not adopt net neutrality rules until Congress has an opportunity to review the matter. Also, since he has announced that he will not seek to reclassify broadband as a regulated telecommunications service, he seems to be resisting the D.C. Circuit Court of Appeals, which told the FCC earlier this year that it lacked the authority to regulate broadband.
Genachowski’s remarks gave us only a thumbnail sketch of how the rules he’s advocating the FCC adopt. We don’t know what authority would undergird new rules, and we don’t know what the chairman means when he says that the new rules would prohibit “unreasonable” discrimination of content by service providers. The devil is in those details, and they seemingly won’t be available until the FCC adopts the rules at its December 21st meeting — days before a new Congress is sworn in.
While taking reclassification off the table is a welcome compromise from the chairman, we don’t understand the rush to action. Why the midnight announcement last night? Why the limited announcement today? Why not allow the new Congress to take up the matter?
Having chosen to act, however, it’s “put up or shut up” time. Chairman Genachowski said the broadband providers have incentives to act as gatekeepers to the Internet and have prevented consumers from using the applications of their choice in the past. But it takes more than these assertions to justify a new regulation. Any net neutrality order needs to offer a coherent, logical theory that explains why broadband providers face systematic incentives to act in non-neutral ways that have no offsetting consumer benefits. And it needs to back up that theory with rigorous empirical evidence that proves a widespread problem exists — not just a repetition of the same handful of anecdotes about bad actors.
It’s heartening to see that Chairman Genachoswki believes wireless broadband is at a different stage in its development and should be treated differently from landline broadband. But insisting that wireless is too different invites a sleight of hand trick that would allow the FCC to claim that broadband faces insufficient competition because wireless doesn’t count. The commission has already done this in its National Broadband Plan, which dismisses third generation wireless as a competitor because it allegedly isn’t fast enough. This stacks the deck in favor of regulation by making it easier to claim that wireline broadband doesn’t face enough competition.
Earlier today I spoke at the Brookings Institution event “The Future of E-rulemaking: Promoting Public Participation and Efficiency,” which was co-sponsored with the Administrative Conference of the United States. I made two points: we have not yet achieved regulatory transparency, and wiki-government does not overcome Hayek’s knowledge problem. What follows are my remarks.
When we talk about e-rulemaking, we often think about a first generation and a second generation of e-rulemaking.
The first generation is focused on making available online all of the information related to regulation and the rulemaking process, as well as making it simple for citizens to participate electronically in traditional rulemaking. In this way we improve the transparency and accountability of the regulatory process.
The second generation moves beyond the basics to leverage the new social technologies of the internet to increase citizen participation and enhance agency expertise. This is the exciting stuff of using Twitter and Facebook and wikis and collaborative commenting systems to achieve a truly democratic, efficient, and responsive rulemaking process. And while I’m very excited by the prospect of this transformation, I feel I have to suggest some caution.
For one thing, I’m not sure we have successfully graduated from the first generation. Less than two years ago we launched OpenRegs.com because Regulations.gov did not offer something as simple as RSS feeds and had a less than ideal user interface. Since then it has been much improved, but if we look at the recommendations of the ABA Administrative Law Section’s report on e-rulemaking — in which so many of the folks I see here today participated — or the recommendations of OMB Watch’s Task Force on e-rulemaking, we can see that we’re a long way from where we should be to say that the first generation is complete. Continue reading →
On the podcast this week, Peter Thiel, co-founder of PayPal, early investor in Facebook, and president of Clarium Capital, discusses the stagnation of technological innovation. Thiel gives reasons why innovation has slowed recently — offering examples of stalled sectors such as space exploration, transportation, energy, and biotechnology — while pointing out that growth in internet-based technologies is a notable exception. He aslo comments on political undercurrents of Silicon Valley, government regulation, privacy and Facebook, and his new fellowship program that will pay potential entrepreneurs to “stop out” of school for two years.
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On the podcast this week, Tyler Cowen, professor of economics at George Mason University, general director of the Mercatus Center, and founder of the popular economics blog Marginal Revolution, answers questions from Surprisingly Free listeners and Marginal Revolution readers. Cowen discusses why people will be appalled that we ever questioned intrusive searches by TSA, what should have been done to minimize unemployment and other harm from the financial crisis, how the “famous American formula” for good government is broken, what might force us to sit around opening cans of dog food with our teeth, and which global sites should be connected by Stargate portals to create the most value. He also asks, “Why read books?”, speculates about the value of his blog, addresses price discrimination of chicken McNuggets, talks about a modern day Athens in Asia with good food, suggests that internet comments are a relatively harmless form of stupidity, and opines about the best thing that government does.
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Another day, another cybersecurity bill. The Homeland Security Cyber and Physical Infrastructure Protection Act of 2010 has been introduced by House Homeland Security chairman Bennie Thompson along with Reps. Jane Harman and Yvette Clark. According to the one-pager they’ve put out (I can’t find the bill) the Act would:
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Require DHS to determine which private assets should be designated “covered critical infrastructure” although there would be a reconsideration process for a firm to challenge such a designation.
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Require DHS to develop cyber security standards that would be enforceable on private sector networks determined to be critical infrastructure.
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Authorize DHS to recommend (Safety Act) liability protection for firms that comply with the standards.
Some questions come to mind: Is there any limit to what can be designated “critical infrastructure”? What evidence is there that the private sector is under-providing security for its networks? What exactly are the performance metrics that would be used to measure compliance? And what is the evidence that federal standards will be more effective than those developed by industry individually or collaboratively in industry groups? Again, as far as I can tell the bill is not cyber available yet, but if other bills in the House and Senate are any indication, these questions haven’t really been considered.
One thing that I think is new in this bill is liability protection for firms that comply with DHS security regulations. I’m afraid this can’t be good for firms’ incentives to innovate.
At the risk of pointing out the obvious, I’d like to remark that the popular revolt against intrusive TSA searches would not have been possible without the internet and digital technologies.
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It was John Tyner’s cell phone video recording of his encounter with TSA, which he posted to his blog, that really galvanized folks to take action.
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The Fly With Dignity campaign was conceived and organized by folks collaborating on the Reddit community.
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It is through online social networks that the meme of Nov. 24 as National Opt-Out Day has spread.
Without the internet, we would have been at the mercy of the news media to get the word out about citizen frustration. Complaining would have been relegated to writing your congressman. And organizing a wide-spread protest would likely have been impossible.
Instead, we’ll hopefully see Americans engaging in peaceful civil disobedience comforted by the knowledge that they’re not alone. So with a nod to Evgeny Morozov’s critique, it makes me happy to see that the internet can still serve to empower the citizens of a democracy to tell its government, enough is enough. This moment should also remind us why we should not ever cede to government the ability to control the flow of information.
On the podcast this week, Duncan Hollis, professor of law and associate dean at Temple University Beasely School of Law, discusses cyber security and his recommendation to counter cyber exploits — an electronic SOS. Hollis gives a brief history of online threats, notes the difference between cyber attack and cyber espionage, discusses the difficulty of deterring online exploits due to the anonymity of the internet, and talks about how governments and individuals have responded to cyber threats. He then outlines his proposal — a duty to assist others when they are under duress online — which was inspired by laws of the sea and an episode in which a U.S. Navy warship aided a North Korean vessel that was under attack by Somali pirates.
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Joseph Isenbergh, a professor at the University of Chicago Law School, discusses his new essay about open versus closed operating systems, their respective marketing strategies, and their influence on the smartphone market. Isenbergh talks about early competition between Macintosh, with its closed operating system integrated with its PC hardware, and Microsoft, with its openly-licensed operating system that could be installed on any PC. He discusses the trade-off between open platforms that offer lots of consumer choice and the ostensible enhanced user experience created by bundling software with hardware. Isenbergh speculates about the future of the smartphone market, Apple’s iOS, and Google’s Android. He also comments on VHS versus Sony Betamax recording systems, tie-in strategies in wine-selling, and Blu-ray versus HD-DVD formats.
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Anyone who knows me will attest to my status as an Apple fanboy. (I type this on my new 11″ MacBook Air, which I managed to resist purchasing for a full week after it was announced.) Hopefully they’ll also attest to my ability to put consumer preference aside when considering logical arguments because today I want to suggest to you that Apple’s business strategy is good for the open internet.
Apple has come under fire by some supporters of an open internet and open software platforms such as Jonathan Zittrain and Tim Wu, who argue that Apple’s walled garden approach to devices and software will lead us to a more controlled and less innovative world. In particular, they point to the app store and Apple’s zealous control over what apps consumers are allowed to purchase and run on their devices. Here’s the thing, though: Every Apple device comes with a web browser. A web browser is an escape hatch from Apple’s walled garden. And Apple has taken a backseat to no one in nurturing an open web. Consider this: Continue reading →
Last week’s episode of Econtalk featured Russ Roberts talking to Tom Hazlett about Apple vs. Google and open vs. closed business models. Tim Lee has already addressed some concerns about Russ and Tom’s treatment of the topic, which I won’t rehash here. But I did want to comment on this statement by Russ (at minute 33):
The idea that you shouldn’t buy Apple stuff, which I’ve actually seen people say, because it’s somehow immoral because [Steve Jobs] is so controlling, is a bizarre idea. I’m not quite sure where it comes from. It comes from some of the freedom of the internet and the stuff we’ve become accustomed to.
Russ then likens a personal conviction to avoid closed products to some of his readers’ feelings of entitlement that they have a right to post a comment on his blog, and to a stranger thinking he has the right to take hot dogs from Russ’s backyard grill. I don’t think I have to explain why these analogies don’t hold up. What I would like to point out is that abstaining from certain products on moral grounds (and even hectoring friends to do the same) is not at all bizarre behavior. We see it all the time by animal lovers who won’t buy leather or products tested on animals, or people who avoid buying diamonds from conflict areas. I’m sure there are products Russ wouldn’t buy on moral grounds.
So if you honestly believe (and I don’t) that patronizing Apple will help contribute to the closing of the Internet, and you value that openness, especially for political reasons, you would be acting perfectly rationally by boycotting Apple. And such an act would have nothing to do with anti-capitalism because, as Tom Hazlett points out, open business models are perfectly compatible with capitalism.
Now stay tuned. In another post later today I’ll suggest why in fact Apple may be good for the open internet.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.