Articles by Wayne Crews

Wayne Crews is vice president for policy and director of technology studies at the Competitive Enterprise Institute, and an adjunct scholar at the Cato Institute. He started the Dysfunction Network as a side project. He is a dad of four. Wayne's work explores the impact of government regulation of private activity: Areas of interest include antitrust and competition policy, safety and environmental issues, and information age concerns like privacy, online security, broadband policy, and intellectual property. Wayne is the author of the yearly report, Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, and he co-authored the recent reports This Liberal Congress Went to Market? a Bipartisan Policy Agenda for the 110th Congress and Communications without Commissions: A National Plan for Reforming Telecom Regulation. Prior to the assorted government bailouts now taking place, he wrote the report Still Stimulating Like It’s 1999: Time to Rethink Bipartisan Collusion on Economic Stimulus Packages. Wayne is co-editor of the books Who Rules the Net: Internet Governance and Jurisdiction (2003) and Copy Fights: The Future of Intellectual Property In the Information Age (2002). He is co-author of What’s Yours Is Mine: Open Access and the Rise of Infrastructure Socialism (2003), and a contributing author to others. He has published in the Wall Street Journal, Chicago Tribune, Forbes, Communications Lawyer, the International Herald Tribune and others. He has made various TV appearances on Fox, CNN, ABC, CNBC and the Lehrer NewsHour, and his regulatory reform ideas have been featured prominently in such publications as the Washington Post, Forbes and Investor’s Business Daily. He is frequently invited to speak, and has testified before congressional committees on various issues. Earlier Wayne was a legislative aide in the United States Senate to Sen. Phil Gramm, covering regulatory and welfare reform issues. He was an Economist and Policy Analyst at Citizens for a Sound Economy Foundation, and has worked as an economist at the U.S. Food and Drug Administration and as a Research Assistant at the Center for the Study of Public Choice at George Mason University. He holds an M.B.A. from William and Mary and a B.S. from Lander College in Greenwood, South Carolina. He was a candidate for state senate as a libertarian while at Lander.

This amazing video gives a few incredible statistics:

  • 70% of Facebook users live outside the U.S.
  • 550,000 Android devices get activated daily
  • Twitter registers 300,000 new users daily — Lady Gaga is by far the most popular human being

And my favorite:

  • 35 hours of video are uploaded to YouTube every minute; that’s 2100 days of video added for every day in real time

Today, the U.S. Senate Commerce Committee held a hearing on “The State of Online Consumer Privacy.”

The push for online privacy regulation has real momentum, as proposed privacy legislation from numerous lawmakers, a Department of Commerce report proposing a compulsory Do Not Track mechanism to regulate business marketing practices, and the Obama Administration’s proposed “Privacy Bill of Rights” all indicate.

However, Congress should be very wary of such proposals. A politically defined Do Not Track regime risks undermining targeted advertising, impeding business transactions that occur between strangers, and stifling mobile ecosystems that are barely out of the cradle. Rattling consumers needlessly by encouraging them to opt-out of largely beneficial information collection is an especially unwise idea in our uncertain economic climate – especially when major industry participants are developing such mechanisms on their own.

The opportunity to undermine online marketing – wrongly called “surveillance” – appeals to some, but such privacy purists have no right to call the shots for anyone but themselves and those who agree with them. The right to use information acquired through voluntary transactions is no less important than the right to decide whether to disclose information in the first place.

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The way Ben Kunz puts it in a new Business Week article, “Each device contains its own widening universe of services and applications, many delivered via the Internet. They are designed to keep you wedded to a particular company’s ecosystem and set of products.”

I like Ben’s article a lot because it recognizes that “walling off” and a “widening universe” are not mutually exclusive. If only policymakers and regulators acknowledged that. They must know it, but admitting it means acknowledging their limited relevance to consumer well-being and a need to step aside. So they feign ignorance.

Many claim to worry about the rise of proprietary services (I, as you can probably tell, often doubt their sincerity) but I’ve always regarded a “Splinternet” as a good thing that means more, not less, communications wealth. I first wrote about this in Forbes in 2000 when everyone was fighting over spam, privacy, content regulation, porn and marketing to kids.

Increasing wealth means a copy-and-paste world for content across networks, and it means businesses will benefit from presence across many of tomorrow’s networks, generating more value for future generations of consumers and investors. We won’t likely talk of an “Internet” with a capital-“I” and a reverent tremble the way we do now, because what matters is not the Internet as it happens to look right now, but underlying Internet technology that can just as easily erupt everywhere else, too.

Meanwhile, new application, device and content competition within and across networks disciplines the market process and “regulates” things far better than the FCC can. Yet the FCC’s very function is to administer or artificially direct proprietary business models, which it must continue to attempt to do (and as it pleads for assistance in doing in the net neutrality rulemaking) if it is going to remain relevant. I described the urgency of stopping the agency’s campaign recently in “Splinternets and cyberspaces vs. net neutrality,” and also in the January 2010 comments to the FCC on net neutrality.

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Today’s The Wall Street Journal Europe published an editorial that Alberto Mingardi of Istituto Bruno Leoni and I penned about the competition complaints brought against Google in Europe.

The EU Searches for a Monopolist, Finds Google

If policy makers set the terms in a primitive year like 2010, nobody will have to respond to Google.


Google isn’t a monopoly now, but the more it tries to become one, the better it will be for us all. Competition works in this way: Capitalist enterprises strive to gain in profits and market share. In turn, competitors are forced to respond by trying to improve their offerings. Innovation is the healthy output of this competitive game. The European Commission, while pondering complaints against the Internet search giant, might consider this point.

Google has been challenged by a German, a British, and a French Web site, for its dominant position in the market for Web search and online advertisement. The U.S. search engine is said to be imposing difficult terms and conditions on competitors and partners, who are now calling regulators into action. Google’s search algorithm is accused of being “biased” by business partners and competing publishers alike.

Before resorting to the old commandments of antitrust, we should consider that the Internet world is still largely impervious and unknown to anybody—including regulators. We are in terra incognita, and nobody knows the likely evolution of the market. But one thing is for sure: Online search can’t evolve properly if it’s improperly regulated—no matter the stage of evolution.

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Clearly many groups contend there’s a “crisis” in journalism, even to the extent of advocating government support of news organizations, despite the dangers inherent in the concept of government-funded ideas and their impact on critique and dissent. 

Georgetown is hosting a conference today called “The Crisis In Journalism: What should Government Do,” (at which Adam Thierer is speaking), with the defining question, “How can government entities, particularly the Federal Trade Commission and the Federal Communications Commission, help to form a sustainable 21st century model for journalism in the United States?”

We actually resolved the question of “What Government Should Do,” Continue reading →

Last week I received Public Knowledge’s press release and letter urging support of a “Bold National Broadband Plan.” I admire PK a great deal on several issues, but remain struck by the arbitrariness of demanding “national plans” for this-or-that technology. It occurred to me that if anybody were to actually ask me (so, don’t), I think I favor a National Elevator Plan instead.
Too many Americans live in two-story homes, and/or have basements, yet have no easy access to the upstairs bathroom and Halloween decorations in the attic, or to the aunt living up there. They are forced to rely on outdated “stairs” technology. (And stairs are dangerous! So this is far more urgent than broadband! Show your outrage! Etc.!) So I ever-so-slightly tweaked the letter; this bold new campaign is meant to rectify this injustice and I hope you’ll sign on and spread the word. Continue reading →

At least that’s how my former colleague Tom Miller, now at the American Enterprise Institute, used to put it. Still another government/business funded report, this one called “Nanotechnology: a UK Industry View” reaches yet again the same conclusions about nanotechnology as the ones that pop out occasionally like the U.S. Environmental Protection Agency’s “Nanotechnology White Paper” or the Food and Drug Administration’s “Nanotechnology.

The conclusions always secure an open-ended role for political bodies to govern private endeavors, and since the business parties are so dependent on political funding, they have to go along with it, cut off from envisioning an alternative approach.

The reports say–brace for it–that governments should fund nanotechnology and study nanotechnology’s risks; and that they should then regulate the technology’s undefined and unknown risks besides. This approach, so different from, say, the way software is produced and marketed, assures that there will never be a “Bill Gates of nanotechnology” (or in another sector, a Bill Gates of biotechnology, as CEI’s Fred Smith often puts it). If every single new advance requires FDA medical-device-style approvals, this is an industry that cannot begin to reach its potential. Continue reading →

So the proposed Comcast/NBC merger was met with “skepticism” by Washington politicians. Will Comcast charge for content that was once free? Will it ensure that emergency programming gets through? These services and decisions about them are normal offerings that a concerned public expects; a merged entity ignores them at its peril.

The two firms’ CEOs respectively made assurances to lawmakers like 18-term term Chairman Henry Waxman. (Speaking of the lack of choice, this gentleman’s own constituents get to vote for him, but none of the rest of us have any say whatsoever–decade after decade–even though his laws impact us all).

But those assurances about programming aren’t what politicians care about, not really. This proceeding serves to help re-energize the old political campaign against what politicians laughably call “media consolidation.” (Here’s one of my defenses of so-called “media monopoly” in Communications Lawyer so no need to repeat it here now; I’m not an attorney but I play one at a think tank.)

Any antitrust intervention that relieves Comcast/NBC’s competitors of critical market impulses, of the driving need to respond to any potentially new superior service or slate of services, hurts the interests of consumers. These endless proceedings and delays–and before this one, those of Echostar/DirecTV, Sirius/XM and others–all directly harm consumer interests and the communications marketplace. There is too much tolerance of pointless FCC and Congressional interference in today’s media-saturated world, and too much tolerance of media competitors who properly should have no say whatsoever in whether or not a rival’s merger goes forward.

Basically, antitrust is about dismantling what others have created or hope to create, undermining large scale voluntarism and enterprise, and replacing it with even larger scale compulsion or prohibition. The (not “unintended,” as often claimed) result of this is to send the “free” market careening off into a direction it never would have taken, a direction in defiance of shareholder capitalism and market pressures. I wrote about this very problem in a letter in the Wall Street Journal last week.

The emergence of ever-greater competitive alternatives on the media horizon will be damaged by the destruction of wealth entailed in halting a productive merger. The merger, if it goes through, may or may not prove successful for the companies themselves. Regardless, it is precisely the market’s task to respond to this and future deals competitively, not leverage Washington to avoid having to engineer and sweat over such a response. To those rivals that might feel satisfaction at the barriers and future conditions put on this merger if it’s even “approved” (how is that even a term appropriate to free enterprise?): Political disapproval of Comcast/NBC makes it even easier to put others in the crosshairs next time.

The Washington, D.C., fight over “net neutrality” in some ways only scratches the surface of what’s really at stake in the question of government regulation of Internet service providers’ treatment of online content. The downside of permitting FCC and Congressional authority over cyberspace “neutrality” is hard to overstate.

A former colleague and friend, now at New Media Strategies, sent me a January 2010 article—“The Splinternet means the end of the Web’s golden age”—about the proliferation of non-compatible devices used online, and the shielding of much new content behind logins and passwords, like the way News Corp. “hides” Wall Street Journal content behind a paywall, and other perceived insults. The author doesn’t see the trend as reversible, but the tone implies what an ominous development this somehow is, as if all this abundance and customization is negative, and that caution is in order.

But the realities of pay models and splintering—like the fact that some journalists have families to feed and can’t write for free, that Google doesn’t see much of what’s on Facebook, and that I can’t stream your iTunes—have no metaphysical, free speech, or public policy implications. Emergent splintering online represents the beginnings of a groundbreaking expansion of the Web’s basic capabilities, not a curtailment. (Besides, many with pro-neutrality views have been upset with Google lately anyway.)

This hand-wringing and use of the term “splinternet” reminded me of a related speculation I’d made in Forbes nearly 10 years ago about the tailoring of networks and pipes. Disturbed by then-burgeoning calls for regulation of the Internet emerging from various quarters over issues like privacy, spam, porn and cyber-trespass, I called for a “splinternet” mindset then and put it as follows:

The Internet needs borders beyond which users can escape damaging political resolutions of [policy] battles, which are rooted in the Internet’s non-owned, common-property status. Conflicting legislative visions in a cyberspace populated by exhibitionists at one extreme and would-be inhabitants of gated communities on the other, reveal the basic truth that not everybody wants or needs to be connected to everybody else.

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You can put on makeup while driving, fiddle with your GPS and iPod or reach back to pinch your annoying kid in the back seat, but don’t get caught texting or making cell phone calls. I remember texting-while-driving once, passing a cop, seeing him spin out of his little perch — thinking he was about to pull me over — but he stopped someone else instead (who had a similar car….hmmm! Or maybe he was just irritated that I was driving a hybrid) Anyway, a new study claims that laws prohibiting against handheld cell phones don’t reduce crashes. The appropriateness of bans has been a debate raging for a long time now.

What always seems to be missing from the popular treatements is any analysis of what market pressures could influence people not to text while driving. In the extreme, on fully private roads in a libertarian society, the activity might be banned altogether. More concretely, on our public roads, automobile insurance companies could team with cellphone companies to discipline.

OK, I admit weekend laziness and that I could’ve gone and googled it, but it would be interesting to know if there are policies that might inhibit insurers from taking self-protective (and people protective) approaches to highway risk reduction that don’t involve the perverse option of speeding policemen blasting down the road. It would seem that carriers and insurers would have mutual interests here; The cell company doesn’t benefit from a dead carrier; the insurance company doesn’t want to pay for people who are needlessly careless or reckess.

Automobiles are increasingly electric in every aspect apart from how they’re powered; onboard monitoring systems can record accident data; maybe that could be (or is?) matched up with cell phone diagnostics on whether somebody was monkeying with the keys or touchpad simultaneously. You could be warned ahead of the time, before you purchase your policy, that you aren’t covered if you’re texting while driving.

It’s food for thought, especially if the laws against texting don’t work anyway. More importantly, all technologies bring risks, and we must always explore disciplines apart from lazy legislation. So far, I haven’t texted while riding my motorcycle, but I do have a little carrier for the Blackberry there on the handlebar.