Miscellaneous

Looking forward to returning to the annual Consumer Electronics Show (CES) this year in Vegas after missing the previous year’s show. If others are heading out, let me know. Perhaps I’ll try to schedule a meet-up one night with some fellow tech policy geeks like I did in past years. First round on me… so long as you’re a cheap drinker!

I’m really looking forward to the sessions that the Tech Policy Summit team is hosting at CES this year since they always put together great events. They have sessions on broadband deployment issues; spectrum policy; copyright and new media business models; and discussions with leading policymakers and FCC officials, including FCC Chairman Julius Genachowski. Should be a great event and admission is open to all CES attendees. I’m going to try to do some live blogging or Tweeting from some of the sessions.

I’m also speaking on a panel about online child safety and parental control technologies at another event out there called the “Mommy Tech Summit & Exhibition.”  As you might have guessed, it’s a mini-summit geared toward moms who want to learn more about these technologies. The panel discussions take place on Friday but the technology exhibits there will be open the whole time. That will give me a chance to get latest updates for my ongoing booklet on parental control technologies.

Anyway, hope to see some of you there.  Those of you who want that free beer know how to find me!

I was reminiscing last night with my Cato Institute colleague Dan Mitchell about a favorite TLF post of mine: the Persuade-o-Meter. Woo! I slay me!

Dan is very excited about the blue curtain that Santa Claus brought him for Christmas. It matches the ties of his two favorite recent presidents. And he made this video to show it off.

“Search Neutrality”

by on December 28, 2009 · 10 comments

Google is  wrong to seek public utility regulation of ISPs, but it is just as wrong for others to seek public utility regulation of Google.

The founder of a would-be Google competitor or spurned search engine optimizer (I can’t tell which and won’t credit his site with a link) takes to the pages of the New York Times to argue for “search neutrality.”

Though good ironic comeuppance for Google, “search neutrality” regulation would ossify an innovative business and deprive consumers of the benefits of competition.

Happily, responses seem to be clustering around derision for the idea and criticism of the Times for publishing it.

With weather-related travel trauma so prominent on my Twitterscope, and with news that the federal government is banning flight delays, I stopped short when I read this techology pitch:

One of the biggest hassles of travel has to be keeping track of those pesky hotel key cards and then trying to remember which way to fit the darned things in the wide variety of door locks. But that may soon change.

New technology’s been introduced and will soon be test marketed in Las Vegas hotels that allows guests to use their cell phones — any cell phone model at all — to unlock their hotel room door.

I’m not persuaded at all. The difficulty of managing hotel keys doesn’t even rate on my list of travel hassles.

The solution offered up is:

a simple system in which a computer generates a unique series of tones (that sounds kind of like those digitized cell phone ringtones used early this decade) that is then sent to the mobile device. When the tone is played outside the designated guestroom, a microphone incorporated in the locking system IDs the tone and unlocks the door.

Ohhhhh-kay.

There might be value to this technology or (more probably) others like it. Getting secure credentials onto people’s phones has a lot of promise.

But this iteration? Should it survive testing, and the easily imaginable failure modes and attacks on it, it might provide a scintilla of convenience in hotels.

We’ve all heard someone use the phrase “making a federal case out of” something. Often it’s used when people overreact–as in stop making a federal case out of this! And that’s the  reaction we should have to the complaint filed by EPIC, Center for Digital Democracy, and others with the FTC. Because they have literally made a federal consumer protection case out of what should be a a customer relations issue between Facebook and its users.

Facebook’s users are quick and vocal about Facebook’s privacy practices. And Facebook has been quick to respond. The Facebook blog on privacy highlights all its recent undertakings to respond to privacy concerns, including the Facebook Site Governance page, the Statement of Rights and Responsibilities, an open letter and other blog posts from Facebook founder Mark Zuckerberg. There’s even Facebook Principles that highlight the site’s mission. How many other companies have been so transparent and responsive?

Indeed, you could say that Facebook has been the gold standard of responding to consumers. In this most recent change to privacy settings, users were prompted to revisit their privacy settings. Facebook made some recommended changes based on where it sees its service going. Users (like me) could change these if they wanted.

And change is what the Internet and new web services are all about. Forcing Facebook or any other online site to perpetually maintain original settings prevents new and innovative business models and services (just ask Microsoft about how backward compatibility makes Windows innovation so difficult). Web 2.0 services like Facebook have to experiment with the ways that users publish and share information. If these sites go too far, their customers will leave–which is the best check on privacy compared to any law or regulation.

So that’s why I’m disappointed why these privacy groups are complaining to the FTC. There’s a high bar of specificity for FTC action, so it would have been far better to petition the Facebook community and let them unleash whatever fury they have. But my hunch is that these complaining groups don’t think that the FTC will actually do anything here. After all, making a federal case of actions by high visibility companies makes for a good publicity opportunity even if there’s no sound legal case.

Unfortunately–now that it’s a federal case–customer relations is now confused with consumer protection.

So the Federal Trade Commission filed a lawsuit against Intel yesterday charging the company with violations of Sect. 5 of the FTC Act (unfair or deceptive trade practices).  What you may have missed yesterday, however, is the rather ironically timed announcement from the Obama administration that it is launching new policies to spur more manufacturing it the United States.  In a statement, Vice President Biden said:

“We need legal, tax and regulatory regimes that promote American manufacturing and do not place an undue burden on those who wish to manufacture products in America.”

Over at the ACT blog, Mark Blafkin writes why this is ironic:

Intel is one of the last great American manufacturers. While Intel does some manufacturing abroad, the vast majority of its chips are built by its 40,000 American workers.  Most of Intel’s fabrication facilities are in the United States, including Arizona, California, Colorado, Massachusetts and Oregon, and the company has announced that it will spend $7 billion to build more facilities here.

The FTC filed its case on behalf of AMD and Nvidia, two companies who have decided to offshore nearly ALL of their manufacturing. AMD’s most advanced manufacturing facility is in Germany, and is “more of a German government fab than an AMD fab” after the German government invested more than $1.5 billion to build it.

When the European Competition Commissioner decided that Intel abused European antitrust law, she crowed that Intel should change its tagline from “Sponsors of Tomorrow” to “Sponsors of the European Taxpayer.” One would hope that the American government would not have similar designs on taking down a company that provides so many high paying American jobs.

Good ideas, supported by evidence, eventually matter.

That’s the conclusion I reached after reviewing the outline the FCC’s broadband task force presented to the commission yesterday. Here are some ideas perceptive scholars have been discussing for a long time that are apparently going to be part of the National Broadband Plan:

  • “Private sector investment is essential; new funding is limited.” So I guess the Interstate Highway System won’t be the funding model for universal broadband. Whew!
  • “Policy changes require the consideration of unintended consequences.”
  • “Competition drives innovation and better choices for consumers.”
  • Wireless broadband needs a big new chunk of spectrum, and policymakers need to consider reallocating broadcast TV spectrum and spectrum reserved for use by the federal government.
  • “Market forces should be applied to all [spectrum] bands, though other policy objectives should play a role in allocation decisions.”
  • Fundamental reform of the Universal Service Fund, which subsidizes phone service very inefficiently, should actually be done, not just talked about.
  • Universal service reform should include reform of “intercarrier compensation,” the charges phone companies pay each other when they hand off traffic.
  • “USF policies should be designed to achieve measurable outcomes with transparency, oversight, and accountability.”

Most of these ideas were considered wacky, ideological, politically unrealistic, or just not relevant a few decades (or even a few years) ago.  Now they are the mainstream.

That doesn’t mean everything is wonderful with the National Broadband Plan. The FCC is supposed to plan how broadband will be used to promote consumer welfare, civic participation, public safety, education, health care, energy independence, community development, worker training, and a host of other legislative goals. In many cases there may be a fundamental tension between consumer welfare — a term of art in economics that means resources are allocated so that consumers get the selection of goods and services they are most willing to pay for, with the quality attributes they most prefer, at the best possible prices — and the other goals, which often involve planners deciding what consumers should want. Similarly, FCC Chairman Genachowski’s comments illustrate some decisionmakers’ disturbing tendency to conflate access (the service is available to those who want it) with adoption (everybody actually chooses to use it). Technophiles sometimes have an annoying habit of assuming that those of us who fail to adopt the latest info tech gadget or service must be ignorant rubes who don’t understand the glories of being hooked up to a fat information pipe 24/7 — rather than careful shoppers who have better things to do with our time than read Yahoo OMG! while driving. For this reason I fully expect to be annoyed by the National Broadband Plan, as well as gratified to see that some good ideas have finally made it from the Ivory Tower to real-world policy application.

But there’s enough good stuff in there to stick with “gratified” for at least one day.

Do This

by on December 16, 2009 · 12 comments

Watch this video. Then type “My choice for the winner” in the comments.

Pass it on.

A new study in the December 2009 Archives of Ophthalmology reports the beginnings of a new public health epidemic: a dramatic increase in nearsightedness (myopia).  The authors compared the prevalence of myopia in Americans aged 12-54  in 1971-72 and 1999-2004. Prevalence of myopia increased from 25 percent of the population in 1971-72 to 41.6 percent in 1999-2004 — a 66.4 percent increase!  Myopia increased for both blacks and whites (the only two racial categories investigated in the study) and for both men and women (the only two gender categories investigated in the study).

According to the article, genetics and environment both play a role in myopia. It cites several previous studies showing that people with more education are at greater risk, presumably because they’re more likely to spend a lot of time doing “up-close” work like reading and using computers. The authors note that although it’s easy to treat myopia with contact lenses or eyeglasses, the costs of having 25 percent of the population with myopia are about $2 billion per year. 

So stop reading this, get outside, and throw that football around! 

More seriously, I am counting the days until some advocate gloms onto this study to justify a tax on e-mails and social networking, the same way advocates have cited the costs of obesity, alcoholism, and smoking to justify higher taxes on “sins” like soda pop, alcohol, and cigarettes. (Yes, a soda pop tax was under discussion to fund this year’s health care bill!) In fairness to the study’s authors, I should note that they suggest no such thing.

Education is a risk factor for myopia, but I doubt anyone would propose a tax on education as a cure. Education, after all, is generally regarded as a good thing that generates significant private and social benefits. E-mails, Facebook, and Twitter, on the other hand, have a “fun” aspect that makes it much easier to classify them as sins in the same category as getting drunk, smoking, and sipping Coca-Cola. They may also be addictive; anybody heard the term “crackberry”?

There are, of course, some counter-arguments:

  • The biggest costs of myopia are borne privately; they are not “externalities” imposed on unwilling recipients. I always wear glasses because I simply hate having blurred vision. My daughter asked for eyeglasses because she couldn’t read the blackboard from the back of the classroom. Bumping into and tripping over things are also costs of myopia that are borne almost completely by the person who has myopia. Those are pretty strong incentives to get it corrected or change behavior to reduce the risk of becoming myopic. Therefore, an e-mail or social networking tax would not likely have a marginal effect on myopia.
  • Social costs of myopia can be corrected with targeted, less restrictive alternatives. My state driver’s license has a restriction saying I have to wear glasses or contacts to drive. This controls the aspect of my myopia that poses the biggest risk of harm to other people.
  • To the extent that treating myopia is costly, we can find ways to reduce the cost. For example, James C. Cooper’s research has found that online vendors and warehouse clubs sell contact lenses for 20 percent less than other brick-and-mortar sellers. State laws or regulations that prevent online sales, or prevent warehouse clubs from selling contacts, increase the cost of treating myopia substantially. 
  • A majority of the population does not have myopia! For them, an e-mail tax would merely siphon money from their electronic wallets or induce them to cut back e-mail use with no effect on the social ills the tax is supposed to cure.  These folks are like the responsible majority who drink rum, cola, or both in moderation and just keep paying the taxes.

That last analogy reminds me —  those counter-arguments might apply to a lot of existing sin taxes too!

Wine lovers in 37 states can now order wine online from out-of-state sellers and have it shipped to their homes. But if you’re thinking of laying in a nice California red to celebrate the holidays, you could have to pay more if your state law only allows you to order online from wineries.

This topic came up yesterday while I was testifying before the Tennessee General Assembly’s Joint Study Committee on Wine in Grocery Stores. Rick Jelvosek, a Tennessee wine consumer who testified on behalf of Tennessee Consumers for Fair Wine Laws, asked lawmakers to allow out-of-state retailers to ship to Tennessee consumers, so consumers could have access to a greater variety of wines than they can get from the 160 wineries currently licensed to ship wine to consumers. (Video of the hearing is available here.)

Letting retailers ship directly to consumers also lets consumers save money. In 2002 and 2004, Alan Wiseman (now at Ohio State University) and I gathered data on the prices and availability of a sample of popular wines from online sellers and in Nothern Virginia retail stores.   For most bottles, the lowest online price was offered not by the winery, but by a retailer. Usually a California retailer offered the lowest price, but for a few bottles the low-price retailer was in Illinois, New York, Washington DC, Missouri, or Texas.  We suspect the reason is that California allows wineries to bypass wine wholesalers and sell directly to retailers if they choose. The tabulations are in this article.