Inside the Beltway (Politics)

In Maryland, a Bill that Fixes Nothing (Except Competition in Favor of Big Box Retailers)

by on February 4, 2009 · 10 comments

Yesterday I testified before the Maryland General Assembly to oppose HB 114. It’s a bad bill for consumers and online companies, and another iteration of the continuing war that traditional retailers have waged against e-commerce for the past few years. Last year NetChoice testified before Congress to oppose legislation that would would give retailers the power to force online marketplaces to interrogate their own customers about how they obtained items listed for sale.

HB 114 would require Maryland businesses and residents selling cosmetics, medicines, baby food and infant formula via an Internet auctions to notify the Department of Health & Mental Hygiene at least seven days prior to the auction. The bill applies only to sales using Internet auctions, not fixed-price format, and not newspaper classified ads. That right there makes you wonder.

The bill has been introduced under the theory of product safety. Safeway, Target, and the state retailers association all trumped up the dangers of selling baby food and infant formula online without citing any sort of actual harm. Or at least harm that is disproportionate to what exists at the physical store retail level.

There was also a lot of desperate hyperbole. A representative from Mars supermarkets (a Maryland chain) asserted that Internet auctions fund heroin addiction! Yes, testifying before state legislatures can be fun!

When you have bill proponents demonizing the Internet, it’s easy to see that the bill is about competition prevention. Namely, to prevent Internet auction sites from benefiting Maryland consumers and helping businesses compete with traditional retailers in the sale of food and drug items.

Getting back to the window dressing of public health, Continue reading →

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Republican Nominees for FCC

by on February 3, 2009 · 25 comments

Senate Republican Leader Mitch McConnell and Senate Commerce Ranking Member Kay Bailey Hutchison, I hear, have received approximately one dozen recommendations for filling the vacant seat on the FCC which, by law, must be filled by a Republican.  Although the president will make the appointment, the views of the Senate Republican Leader, in particular, are usually accorded significant weight.  

The most prominent candidates include Lee Carosi Dunn (Senator McCain’s assistant for communications policy), Brian Hendricks (Hutchison’s assistant for communications policy), Ajit Pai (Senator Brownback’s assistant for judiciary matters) and two officials from the Bush administration (David Gross, ambassador for international communications and information policy; and Meredith Baker, former acting assistant secretary of commerce for  telecommunications and information policy).  All sound like good choices.  The Senate staffers have the inside track. 

Aside from the current vacant seat, it’s also possible  one of the candidates could replace current FCC Commissioner Robert M. McDowell, whose term expires in June.  By law his seat would also have to be filled by a Republican.

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TPW 40: Obama, e-Government & Transparency

by on January 27, 2009 · 25 comments

On this week’s show, we discuss government transparency—a topic a number of us here at the TLF have written about lately.  Among other things, we discuss:

  • Why transparency is important

  • What data the government should provide and how
  • Good and bad examples of transparency
  • President Obama’s promise to have the most accountable administration in history
  • Obama’s plans to appoint a Chief Technology Officer

My guests for this show are:

You can subscribe to our podcast here or through iTunes here.  Or, you can play or download this podcast using the online player below.

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Obama’s Inaugural Address & Technology Policy

by on January 20, 2009 · 13 comments

Three passages from Obama’s inaugural address stand out as important for the mix of technology policy issues covered here at the TLF.  On technology policy (a non-trivial 5.4% of the address by word count):

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act – not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories…. All this we can do. And all this we will do.

On how to determine whether government intervention is warranted:

The question we ask today is not whether our government is too big or too small, but whether it works…. Where the answer is yes, we intend to move forward. 

On regulatory policy:

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control….

So what does all this mean for tech policy? Continue reading →

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Obama’s CTO: Fixing Government IT or Setting Nationwide Policy?

by on January 16, 2009 · 10 comments

In early December, Jerry Brito asked whether Obama’s proposal to create the post of  Chief Technology Officer (CTO) should be feared or welcomed:

I think the question turns on whether this person will be CTO of the United States or CTO of the U.S. Federal Government. While I personally believe the former should be feared, the latter should be welcomed.

I agree completely—and it now seems that this is in fact where the incoming Administration is heading.  BusinessWeek reports that the Obama Administration has narrowed its choices down to two Indian-American CTOs:

  • Vivek Kundra, D.C.’s CTO
  • Padmasree Warrior, Cisco’s CTO

Judging by BusinessWeek’s short descriptions, both candidates sound terrifically well-qualified to lead implementation of Obama’s oft-repeated promises to bring the United States government into the Web 2.0 era.  More importantly, the fact that the two likely candidates are CTOs—rather than, say, advocates of any particular technology policy agenda—strongly suggests that the Obama administration isn’t contemplating giving the CTO authority to set technology policy outside the Federal government.  

Whomever Obama chooses in the end will have his or her work cut out for them.  While free marketeers may indeed have much to fear from Obama’s technology policy agenda in terms of over-regulation, increased government control and market-distorting subsidies, e-government is one area where we ought to be able to cheer the new President on:   The Federal government could be made much more transparent and democratically accountable if Federal agencies simply adopted some of the tools users take for granted on private websites-such as RSS feeds and standardized data. 

Let’s just hope that Obama makes it very clear in creating the CTO post that its responsibilities are indeed strictly limited directing adoption of information technology inside the Federal government, so that the position doesn’t mushroom into the more powerful “Technology Czar” some rightly fear.

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Genachowski for the FCC

by on January 13, 2009 · 9 comments

President-elect Obama intends to appoint Julius Genachowski, a protege of former FCC chairman Reed Hundt, as the commission’s next chairman.

Having been at the FCC with Hundt, Genachowski should have seen industries largely ignored by the commission — cable and wireless — thrive as a result of deregulation while the telephone industry it attempted to reinvent soon crashed.

As George Gilder and I noted in a paper this past summer, when the 1996 law passed, there were several cable operators who planned to offer competitive phone services in a venture that included Sprint Corp. These plans were shelved, according to Sprint CEO William T. Esrey, due the FCC‘s “pro-competition” policies: “If we provided telephony service over cable, we recognized that they would have to make it available to competitors.” Thus, the local competition rules which were intended to speed effective competition actually delayed it. Cable voice services did not gain significant momentum until 2004, when the FCC scaled back its pro-competition rules. Those changes prompted phone companies to enter the video market dominated by cable operators, who in turn accelerated their entry into the voice market dominated by incumbent phone companies.

Genachowski should know that in its pure form net neutrality regulation would encumber broadband networks with the same open access regulation which failed when applied to local telephone networks.

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The Most Important Number for Technology Policy in 2009

by on January 8, 2009 · 19 comments

Is $1,200,000,000,000.00.  That’s the expected 2009 Federal budget deficit.  Since the current Federal debt is estimated at a “mere” $10.6 trillion, this means that we’re expected to add nearly 9% in a single year to a debt accumulated over 233 years (since 1774).  This number also amounts to more than 8% of the U.S. economy. 

So what does this have to do with technology policy?  To start with, this figure comes from Congressional Budget Office estimates, which “don’t account for the huge economic stimulus bill Obama is expected to propose soon to try to jolt the economy.”  So, while the Obama team has talked about big “public works” and “infrastructure” spending (which used to be called, variously, “make-work,” “pork barrel” and “corporate welfare”), there’s sure to be huge pressure not to waste more taxpayer money on top of this staggering figure.  Whatever blame Bush deserves, Obama probably doesn’t want to go down in history as the man who finally caused the U.S. government to default on its unmanageable debt burden.

One certainly could make an argument that the kind of technology-related “infrastructure” stimulus Obama has talked about (e.g., broadband subsidies) would be less of a waste of money than, say, simply building more bridges (as Japan did in the 1990s, its “lost decade”) or other reflexively Keynesian responses.  But even so, I suspect that the total amount of funding made available for such projects won’t be anywhere near enough to satisfy the technology policy Left.  

This could result in increased pressure on the Administration to increase regulation of the technology sector in order to implement tech-leftist ideas about “protecting” users’ privacy, promoting media diversity or “fairness”, mandating net “neutrality,” “opening up” spectrum, etc.  Such  proposals might seem attractive precisely because they generally wouldn’t require increased Federal expenditures other than the cost of hiring more bureaucrats (which means more government employee union jobs anyway—hardly a bad thing for Democrats)—while the economic consequences of such proposals for companies and consumers will probably surely be trivialized.  For example, if the advocates of government control at the so-called “Free Press” can’t get universal broadband, they’ll probably press that much harder to cripple online advertising and traffic management by ISPs, just to name two popular bogeymen.obamas-new-new-deal

One might think that a sharp economic decline would cause policy-makers to think twice before undermining the business models that have supported IT innovation and real infrastructure investment.  But one has only to look at the policies of FDR’s first two terms to see how even an amiable, soft-spoken president elected on a mantra of change and “uniting” the nation in a time of crisis could consistently choose to place “Reform” (i.e., increased regulation) over “Recovery” (i.e., the health of the economy)—with devastating economic consequences.

Continue reading →

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What Impact Will Cass Sunstein Have on Obama’s Internet Policy?

by on January 8, 2009 · 39 comments

SunsteinPresident-elect Barack Obama will soon be naming Cass Sunstein, an old friend of his from their University of Chicago Law School days together, the new head the White House Office of Information and Regulatory Affairs (OIRA). OIRA oversees regulation throughout the U.S. government. Basically, Sunstein’s position is the equivalent of the federal regulatory czar.

Sunstein certainly possess excellent qualifications for the job. During his time at the University of Chicago and Harvard Law School, Sunstein has established himself as a leading liberal thinker in the field of law and economics. And, as I have joked in writing about him before, he is so insanely prolific that it seems every time I finish reading one of his new books a new title by him lands on my desk. I am quite convinced that both he and Richard Posner are actually cyborgs. I just don’t understand how two humans can compose words so rapidly!

Anyway, Professor Sunstein’s new position as head of OIRA gives him the ability influence federal regulatory decisions in both a procedural and substantive way. In terms of substance, it gives him an important platform to subtly “nudge” the regulatory philosophy and direction of the Obama Administration on many matters, including Internet policy. So, what has Professor Sunstein had to say about Internet policy in his recent work? Sunstein has developed his thinking about these issues primarily in his two recent books: Republic.com (2000) and Infotopia: How Many Minds Produce Knowledge (2006). But he’s also had a few relevant things to say about Internet issues in his recent book with Richard Thaler, Nudge: Improving Decisions About Health, Wealth, and Happiness (2008).

There are 3 Internet policy-related things from his work that I’d like to focus on here because I find them all quite troubling. Continue reading →

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Lessig on Building a Better Bureaucrat

by on December 24, 2008 · 24 comments

Before commenting on Lawrence Lessig’s latest call to abolish the Federal Communications Commission (he issued a similar call for the FCC’s abolition earlier this year, which I commented on here), let’s recall what Tim Lee posted yesterday about “Real Regulators“:

Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents. That’s often what “real regulators” are like, and it’s important that when policy makers are crafting regulatory scheme, they assume that some of the people administering the law will have these kinds of flaws, rather than imagining that the rules they write will be applied by infallible philosopher-kings.

Ironically, Prof. Lessig — who typically defends many forms of high-tech regulation like Net neutrality and online content labeling — is essentially agreeing with Tim’s critique of bureaucracy. But Lessig seems to ignore the underlying logic of Tim’s critique and instead imagines that we need only reinvent bureaucracy in order to save it. But I’m getting ahead of myself. First, let’s hear what Lessig proposes.

In a Newsweek column this week entitled “Reboot the FCC,” Lessig argues that the FCC is beyond saving because, instead of protecting innovation, the agency has succumb to an “almost irresistible urge to protect the most powerful instead.” Consequently, he continues:

The solution here is not tinkering. You can’t fix DNA. You have to bury it. President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good. In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: “minimal intervention to maximize innovation.” The iEPA’s core purpose would be to protect innovation from its two historical enemies–excessive government favors, and excessive private monopoly power.

As was the case with his earlier call to “blow up the FCC,” I am tickled to hear Lessig call for shutting down an agency that many of us have been fighting against for the last few decades. (Here’s a 1995 blueprint for abolishing the FCC that I contributed to, and here’s PFF’s recent “DACA” project to comprehensively reform and downsize the agency.)

But is Lessig really calling for the same sort of sweeping regulatory reform and downsizing that others have been calling for? And has he identified the real source of the problem that he hopes to correct?  I don’t think so. There are 3 basic problems with the argument Lessig is putting forward in his essay. I will address each in turn.

Continue reading →

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Technology for Opening Up Government

by on December 12, 2008 · 22 comments

can_openerToday’s event on “open” and “participatory” government at Google’s DC office was interesting, if inconclusive. We all agreed that making government more transparent and ready for participation by the citizenry was good. But I left not knowing what it all really means. Tech reporter Grant Gross has a good report, and here’s what I got out of it:

  • Disclosure — At a minimum, opening up government requires more disclosure. Any and all data, transcripts, reports, etc. should be put up on the web.
  • Format — Don’t just disclose, but make sure the information is formatted for ease of access and finding information. Funneling information will be really important. The spigot could pour out information, but if there’s no ability for citizens to find and understand issues that affect them, there’s only a partial benefit to being open. Opportunities for private sector here.
  • Participation — what this means, I’m still not entirely sure, but seems to be the notion that “we the people” should be more involved in government and tech can help us. It could mean regular comments from affected parties on agency and committee websites, not just the occasional responses to proposed rulemakings. However, flooding the process with “white noise” could be a problem, as could be self-selection for those who post comments (so there should be caution when gauging public opinion writ-large).

Someone on the panel mentioned mySociety, which is a nonprofit org in the UK that designed a website service called FixMyStreet. The site acts as a middleman between residents that want to report potholes and the proper authorities to fix them. This is an interesting private sector approach for using technology to help us participate at the local government level. Likewise, Jim Harper’s WashingtonWatch helps track legislation in Congress, and provides opportunities for comments.

Ultimately, no matter what technologies exist and how many private sector initiatives there are, we need buy-in from government. Technology will help, but it’ll take behavioral changes by the powers-that-be to really use and implement web 2.0 tools.  Government 2.0 will hopefully result in better decision-making and increased accountability.

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