The morning after North Carolina Attorney General Roy Cooper
(and others) “asked” MySpace.com to hand over the names of sex offenders on its
site, what do I do? I testify in Raleigh about a social networking bill. Talk about entering the lion’s den!
This is the latest development in what is becoming an intense battle over social networking safety. And as I saw first hand in North Carolina, state
legislators are happy to be on the record for any bill that purports to protect children, even if it means mandating age verification techniques that ultimately work against the children we’re trying to protect.
Update: a good overview of the hearing is an article in today’s Raleigh News & Observer newspaper.
I testified on SB 132, now under consideration in North Carolina that would, among other things, require social networking sites like MySpace to verify the ages of their members and facilitate parental consent and parental access to their children’s social networking pages.
At first glance these seem like reasonable proposals.
Unfortunately, they aren’t.
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Y’all should watch this Sunday’s 60 Minutes CBS News show (May 13, 7pm EDT) about the National Association of Realtors (NAR) and its campaign to crush internet-based business models that discount commissions. My colleague Steve DelBianco appears in the piece, based on his role at eRealty.com, a startup that was thwarted by new rules at NAR.
You’ll be glad to know that Steve doesn’t call for any regulation — just exhorts the Realtors to avoid regulation and litigation by allowing more innovation and price competition in their own ranks.
The show airs at an eventful time for the real estate industry. Earlier this week, the FTC released a report that assessed how the real estate brokerage industry has lobbied for regulation in the name of consumer protection, but has the effect of competition prevention. The report calls for a repeal of real estate laws, rules and regulations that limit choices for consumers, limit competition for new brokerage models and don’t appear to provide any justifiable benefits for consumers. In this report, Steve is quoted multiple times
Finally, the Realtors are holding their mid-year convention next week here in Washington. Add the DoJ antitrust lawsuit against NAR and you have a perfect storm over barriers to e-commerce in the real estate space.
Rep. Barney Frank is continuing his effort to repeal the U.S. ban on online gambling, which he calls “one of the stupidest things I ever saw.” The law, the “Unlawful Internet Gambling Enforcement Act,” was passed during the last session of Congress. Now that he’s the chair of the House Financial Services Committee he certainly has a better chance taking this silly law off the books, but he still faces an uphill battle.
Back in October 2003, when I was still with the Cato Institute, my colleague Wayne Crews and I brought Rep. Frank to Cato to deliver some keynote remarks on this issue during an event we hosted. He was amazing and his speech that day remains to the most principled (and highly entertaining) thing I’ve ever heard anyone say on the issue to date. And, luckily, the video is still on the Cato website here. Make sure to check it out and listen to the excellent Q&A session in particular. Great stuff.
My friend Steve DelBianco of ACT and NetChoice recently reminded me that the effort by state officials to impose a burdensome crazy-quilt of sales taxes on the Internet continues. Proponents call this effort the “Streamlined Sales Tax Project” (SSTP) by what it really is–as Veronique de Rugy and I argued in this 2003 Cato Institute report–is a giant sales tax cartel. The states basically want Congress or the courts to give them authority to impose parochial tax collection burdens on what it clearly national–sometimes global–commercial activity. And they want to administer it all together as one big cartel. (And you thought the Articles of Confederation were dead!)
Luckily, Congress and the courts haven’t caved to these demands and given state governments the right to ride roughshod over the Constitution and the Commerce Clause. But, in reality, the only thing that’s held back state and local efforts to impose such sales tax collection burdens on Internet vendors so far is an old 1992 Supreme Court decision, Quill Corp. v. North Dakota and a handful of other legal precedents. Those cases made it clear that it would be unfair to impose tax collection burdens on out-of-state vendors. Instead, state and local governments could only require tax collection if the entity they sought to tax had a “nexus,” or tangible physical presence, in their jurisdictions.
Seems fair enough, right? Basically the court was just restating the old “No taxation without representation” motto upon which our country was founded. Well, apparently a lot of state and local officials aren’t comfortable with that notion because they have spent years trying to evade that sensible constitutional admonition. And in recent years they have been trying to get Congress to agree to toss Quill and those other decisions (and the Commerce Clause) out the window so that they can adopt the SSTP and start taxing every Internet transaction is sight.
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Today the Illinois legislature did what the Florida legislature wouldn’t do – crush a bad online dating bill in committee.
I had a premonition that things would go well in Springfield. Hey, it’s the Land of Lincoln and Illinois is the state where I was born!
But superstitions aside, the members of a House
Judiciary Committee really carried the day here with their probing
questions and clued-in skepticism about HB 563, the Internet Dating Disclosure
and Safety Awareness Act.
Take Rep. Jim Sacia for
instance. He’s an ex-FBI agent that really knew the difference between background checks and criminal screenings. He said that criminal
screenings—the kind contemplated by all of the state online dating bills, were incomplete
and too easily defeated to mean anything.
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I traveled to Florida with a large dose of optimism and returned a jaded man – all in one day. Public policy work can do this to you – particularly when a bill you testify against gets passed unanimously by the committee that heard your testimony.
The occasion: testifying in Tallahassee on a bill that would regulate online dating websites. (HB 531 – The Internet Predator Awareness Act). It would require websites to disclose whether they perform criminal background checks on their members. It would also require disclosures about how to practice safe online dating and not to put too much faith in the results of criminal background checks.
That’s a lot of disclosures and disclaimers, stuff that most consumers will not read and could care less about – especially because a clear criminal background check is no excuse to let down your guard on common sense precautions (in my testimony I warned that this bill could give consumers a false sense of security).
But there’s a larger theme going on here – the nanny state of government is creeping into e-commerce.
What are the benefits of this bill that the market isn’t providing? If security-conscious consumers want to use a service that provides background checks, they can do so already, and can even perform criminal checks on their own.
We don’t need government regulation to mandate which services a website must provide. Governments should protect us from decisions we can’t make, not from decisions we can make.
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The recent TLF podcast touched on the way that states and state AGs are actively trying to regulate social networking and e-commerce sites. My colleague Steve DelBianco recently testified on this issue before the New Jersey General Assembly, and his testimony is a good read. He writes about three rules for state legislators to keep in mind when attempting to regulate e-commerce:
As a firm believer in the benefits of the Internet, I often feel like that little boy who was asked why he was digging through a huge pile of horse manure and responded with a smile, “Well there must be a pony in here somewhere.”
Lawmakers need to understand that e-commerce, instant communication, and global information sharing are worth digging for. To help them do that I offer a simple three-part formula: consumer education, industry responsibility, and law enforcement.
Rule number one – regulate behavior, not technology.
Rule number two – don’t smother the Internet under a patchwork quilt of conflicting state laws.
Rule number three — watch out for special interest legislation.
Read more here.
Tech Policy Weekly from the Technology Liberation Front is a weekly podcast about technology policy from TLF’s learned band of contributors. The shows’s panelists this week are Jerry Brito, Tim Lee, Adam Thierer, and Braden Cox. Topics include,
- Top Wikipedia editor “Essjay” is revealed as a fraud
- States are pushing age verification mandates for social networking sitesl
- Do first responders really need more spectrum?
There are several ways to listen to the TLF Podcast. You can press play on the player below to listen right now, or download the MP3 file. You can also subscribe to the podcast by clicking on the button for your preferred service. And do us a favor, Digg this podcast!
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Anyone who wants to know how Washington works should look to an article buried in today’s Communications Daily (sorry, it’s by subscription) on a House Small Business Committee hearing. The committee had brought together representatives from various communications industry segments to talk about the “innovation agenda, ” focusing on the growth of broadband.
The good news: “All witnesses opposed an Internet tax and supported extending the moratorium” on federal taxation. Easy enough. But wait a second: many of the same witnesses also supported extending universal service subsidies to broadband, presumably applying universal service fund fees to broadband access bills (right now they only are imposed on telephone bills). Isn’t that a tax? No, said the Shirley Broomfield, representing rural telephone firms, who would benefit from extended subsidies. It depends on how it’s implemented, said Earl Comstock from the competitive carriers, whose customers already pay the “fee.” Only one witness — Richard Cimerman from the cable industry, whose customers would have to pay the tax/fee — said yes.
So much for the united front against taxation.
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In a few of my previous essays, I’ve been wondering about the future of virtual reality worlds and specifically how property rights might get defined within those worlds. Alan Sipress of the Washington Post penned an excellent story yesterday on this subject which I thought I’d bring to your attention. In his lengthy front-page story, “Where Real Money Meets Virtual Reality, The Jury Is Still Out,” Sipress notes that:
“As virtual worlds proliferate across the Web, software designers and lawyers are straining to define property rights in this emerging digital realm. The debate over these rights extends far beyond the early computer games that pioneered virtual reality into the new frontiers of commerce. … U.S. courts have heard several cases involving virtual-world property rights but have yet to set a clear precedent clarifying whether people own the electronic goods they make, buy or accumulate in Second Life and other online landscapes. …
The debate is assuming greater urgency as commerce gains pace in virtual reality. In Second Life, where nearly 2 million people have signed up to create their own characters and socialize with other digital beings, the virtual economy is booming, with total transactions in November reaching the equivalent of $20 million. Second Life’s creator, Linden Lab, allows members to exchange the electronic currency they accumulate online with real U.S. dollars. Last month, people converted about $3 million at the Lindex currency market.”
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.