Now is a critical time for online commerce as policymakers assess their approaches to privacy. And as NetChoice says in our comments filed today, now is the perfect time for the Department of Commerce to be more involved in privacy issues.
What? We’re calling for more government involvement in a politically charged issue? Yes, and here’s why it’s an appropriate response to the Commerce Dept’s Notice of Inquiry.
Data flows today are much more complex than they were even a decade ago. Simple one-way transfers between one country and another have been replaced by multinational corporations that transfer data across multiple jurisdictions on a daily basis.
Because of this, privacy-related laws and regulation can have a broad impact on the growth of online commerce, not just here in the U.S. but across the globe. And as a voice for commerce, the Department of Commerce should promote pro-commerce policies over there (EU, Asia, elsewhere) and over here (in the U.S.).
Here’s what we say in our comments:
The Commerce Department should act as an international ambassador for innovative American online companies. The Department can play an important role as a government-to-government advocate for flexible international rules to promote continued innovation and economic growth. And as a government agency speaking to other government agencies, the Commerce Department can bring credibility and leverage that cannot be matched by corporate interests alone.
Domestically, the Commerce Department should work with the FTC to step-up state and federal enforcement against unfair or deceptive information practices. Aggressive enforcement will help foster a better climate for innovation than would expanded regulation. Continue reading →
Don Kellogg, Senior Manager, Research and Insights/Telecom Practice at The Nielsen Company, has a interesting essay up over at the Nielsen Wire about smartphone competition. (“iPhone vs. Android“) It includes some updated quarterly data about the state of the mobile marketplace and, once again, I am just blown away at the continuing degree of operating system (OS)-level competition.
As I have noted herebefore, this war among Apple, Google, Microsoft, RIM (Blackberry), Palm, Symbian, and others has actually forced me to ask if we have “Too Much Platform Competition” in this arena. App developers must now craft their offerings for so many platforms that it has become a significant developmental hassle and expense. But hey, from a consumer perspective, this is great! (For more details, see Berin’s post on “The Fiercely Competitive Mobile OS & Device Markets.”)
Regardless, it’s still more proof that all the hand-wringing here in Washington about the state of wireless innovation is completely unfounded. It is shocking that we have this many developer platforms in play in the smartphone sector and I am still of the belief that things will eventually shake out to just 3 major OSs. So I don’t expect this degree of competition to last. But that’s OK, we can still have plenty of competition and innovation with fewer OSs.
The UK’s Daily Mailreports that Phil Bissett, a 62 year old former gravedigger, transformed a steel casket into a street-legal single-seat automobile that does 100 mph, using the engine from his daughter’s 1972 VW. He acquired the casket — you guessed it — on ebay.
Now here’s where it gets interesting. The casket originally cost 1500 British pounds. He got it for just 98 pounds — about $146 at today’s exchange rate. That’s 93 percent off! The article doesn’t say how much he paid for the assorted spare parts from other vehicles needed to turn the casket into an automobile, nor does it explain what his daughter is doing for transportation now that the engine from her car powers his deathmobile. Still, it’s a nice-looking little sports car, and I’ll bet it cost less and is more reliable than that fine piece of British automotive engineering I used to own, an MG Midget.
Bissett told the reporter, “I’ve learned never to go on the internet when you’ve had a drink. My friend said I’d never be able to turn it into a car but I knew I could.”
This must be what the wonks mean when they say the Internet is an “enabling technology.”
(Be sure to check out the Daily Mail link above to see the cool photos!)
I’m recuperating today after wrist surgery #2 but I just had to say something about a hugely important proposal introduced today that would bring us one step closer to information socialism. No, I’m not talking about the discussion draft privacy bill released today by Reps. Boucher & Stearns (which Adam and I already commented on here) but about the amendment introduced today by Sen. Udall that would “require credit-rating agencies to divulge credit scores, free of charge, to consumers when they access their free annual credit report.”
Actually, there is an important analogy between the two bills: both will have populist appeal because they can claim to giving consumers a “right” to “their” information—but both would impose real costs that will ultimately be borne by consumers. On the privacy side, Adam Thierer and I have warned repeatedly that data collection is critical to the online advertising that supports the publishers of the Internet’s cornucopia of content and services. Everyone takes this for granted but few of us really think about the quidpro quo at work: users receive “free” content and services in exchange for seeing advertising and sharing data about their browsing habits, which makes advertising more relevant to them, more effective for advertisers, and therefore more profitable for publishers.
Unfortunately, a similar free lunch mentality is at work with credit scores. If we think about them at all, most of us probably resent and/or fear them. Yet credit scores, and the entire credit reporting system, are truly one of the wonders of information capitalism and a boon for consumers. Before they developed, lending decisions were far riskier because lenders didn’t really know whom to trust with their money. Thus they had to build in a risk premium into their interest rates to account for the fact that some users might default or fall behind on payments. This punished good borrowers and rewarded bad ones. Getting a loan was difficult, often required special connections, and was often arbitrary and thus sometimes downright discriminatory.
This situation was bad for everyone. While nobody likes being in debt, we often forget how radically empowering credit can be in allowing us to expand our opportunities in life. Continue reading →
Ed Roberts, designer of the first commercially successful personal computer, died yesterday in Georgia at the age of 68.
Roberts founded the MITS company in 1970 and in 1975 developed the first personal computer, the Altair 8800. Soon Bill Gates and Paul Allen came calling, and later sold their first commercial software to Roberts. The Altair also served as the catalyst for the Homebrew Computer Club whose members included Apple Computer co-founders Steve Jobs and Steve Wozniak.
Roberts took a risk on an untested market and launched the PC revolution. He was a true entrepreneur and will continue to be a hero to geeks like me.
Harry McCracken at PC World has posted some very kind words about Roberts. Bill Gates and Paul Allen have also posted a statement at thegatesnotes.com.
This is a hot topic in the Valley at the moment, and for good reason. Here’s an excerpt from my column on the issue:
Silicon Valley is known for innovative ideas in technology, and now some of the area’s greatest minds have come up with a new way to solve one of their biggest operational problems: securing foreign talent. It’s called the “startup visa” and it’s getting a lot of attention in both California and D.C., because it would help create new jobs.
The idea is to issue a work visa to foreign entrepreneurs who start a company in the U.S., provided that they raise at least US$250,000 from qualified U.S. investors. Then, within two years, the startup must create five new jobs, raise at least $1 million, or generate at least $1 million in revenue. If one of those goals is achieved, the founder gets a green card. If not, the entrepreneur must leave the country. Anyone who knows what it’s like to be an immigrant understands that such a scenario would provide a serious incentive to work hard at making the new company grow.
For years, the tech industry has struggled with caps on H-1B visas, but this new idea has sparked hope for a better reception. Far from “stealing jobs” from Americans, the visas would require the creation of new jobs that stimulate the economy.
In a Cato@Liberty post, “Cell Phones and Ingratitude,” David Boaz reproaches the New America Foundation for today’s complaint-fest, “Can You Hear Me Now? Why Your Cell Phone is So Terrible”:
This is an old story. Markets, property rights, and the rule of law provide a framework in which technology and prosperity soar, and some people can only complain. I was reading some of Deirdre McCloskey’s forthcoming book Bourgeois Dignity this week. She points out that the average person lived on the equivalent of $3 a day in 1800. Today there are six and a half times as many people, but the average person earns and consumes 10 times as much, far more than that in the most capitalist countries. And yet some people, most leftist intellectuals, continue to ignore what McCloskey calls “the gigantic gains from bourgeois dignity and liberty” and to denounce the markets, economic liberalization, and globalization that have liberated billions of people from eons of back-breaking labor.
This is an event I’m not going to attend. I mean, like, they’re not even serving food!
That’s basically what FTC Chairman Jon Leibowitz told the Association of National Advertisers when he spoke to their “Advertising Law & Public Policy” conference last Thursday. As I noted last week, there’s intense pressure in Congress to pass a financial regulatory overhaul and, unfortunately, the version passed by the House in December—Rep. Barney Frank’s “Wall Street Reform and Consumer Protection Act of 2009” (H.R. 4173)—would also grant the Federal Trade Commission vast new powers for all its regulations, not just those relating to the non-bank financial institutions it currently regulates. In particular, HR 4173 would:
Make it far easier (and not just faster) for the FTC to issue all kinds of new regulations on its own, without a specific Congressional mandate to do so and instead of relying on case-by-case enforcement to punish “unfair” or “deceptive” acts and practices;
Reduce public input into those regulations;
Impose heavy civil penalties on companies before notifying them that a practice might be “unfair” or “deceptive”;
Prosecute those who merely provided “substantial assistance” to someone engaged in “unfair” or “deceptive” acts or practices; and
Sue on its own authority, instead of through DOJ (as now).
I summarized my concerns about this bill in this short interview with PFF’s new communications director, Mike Wendy, last week:
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Leibowitz has lobbied hard to have his agency put on steroids (as former FTC Chairman Jim Miller put it), asking for all these things, as well as more funding, at the first Senate hearing on Hr 4173 back in February. (Conveniently, he was the only witness!) He repeated his calls for these powers on Thursday but tried to allay fears about how they’d be used. Continue reading →
NPR notes that we’re approaching a major milestone in the history of man’s relationship with machines:
Nearly 200 years ago, workers in England took up arms against technology. Weavers protested the advent of mechanized looms with violence. Named for weaver Ned Lud, the Luddites feared machines would make hand weaving extinct. The people of Huddersfield are rising up again, but this time to commemorate the city’s 19th century weavers.
According to this history of the Luddite movement, the 199th anniversary of the movement’s beginnings passed just last week:
The first incident during the years of the most intense Luddite activity, 1811-13, was the 11 March 1811 attack upon wide knitting frames in a shop in the Nottinghamshire village of Arnold, following a peaceful gathering of framework knitters near the Exchange Hall at Nottingham. In the preceding month, framework knitters, also called stockingers, had broken into shops and removed jack wires from wide knitting frames, rendering them useless without inflicting great violence upon the owners or incurring risk to the stockingers themselves; the 11 March attack was the first in which frames were actually smashed and the name “Ludd” was used. The grievances consisted, first, of the use of wide stocking frames to produce large amounts of cheap, shoddy stocking material that was cut and sewn into stockings rather than completely fashioned (knit in one piece without seams) and, second, of the employment of “colts,” workers who had not completed the seven-year apprenticeship required by law.
In other words, a bunch of hooligans—the ancestors of today’s stereotypically rude, drunk and violent English soccer fans, no doubt—started smashing machines because—horror of horrors!—the machines were producing less expensive textiles and could be operated by cheaper, less-skilled workers outside the hooligans’ guild. That, in essence, is the history of technology and its discontents: Innovation produces gains in productivity that raise the overall standard of living by bringing down prices for consumers, but workers in outmoded industries try to obstruct progress because it renders their unproductive jobs obsolete. Tim Lee noted this back in 2006 regarding the supposed need for tech workers to unionize. Continue reading →
In January, we had the “Fear the Boom & Bust” rap video that pitted John Maynard Keynes v. Friedrich Hayek rapping about their respective approaches to monetary and fiscal policy, and theories of the business cycle. Now Pantless Knights (a web comic team) offers a terrific spoof of the Jay-Z/Alicia Keys video “Empire State” of mind rap video—instead of “New York,” the video celebrates the “New Dork” and the “Entrepreneur State of Mind.”
PantlessKnights describes the video as a “tribute to our favorite entrepreneurs (who are all ‘new dorks’).” The lyrics offer a short introduction to start-up capitalism:
Now I’m in the blogosphere, Now I’m in the twitterverse
Fans get so immersed, But I’m a nerd forever
I’m the new Zuckerberg, And since my website
I been cookin’ dough like a chef servin’ killa-bytes
Used to be the basement, Back at my mom’s place
Buildin’ web traffic so that we could sell an ad spaceContinue reading →
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Ed Roberts, designer of the first commercially successful personal computer, died yesterday in Georgia at the age of 68.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.