Adam Thierer and I have been trying to drive home a simple message in the ongoing debate about targeted online advertising and privacy: “There is no Free Lunch!” We don’t have a lot of friends in this debate, since nearly everyone else seems to assume that online content and services will just continue to fall like manna from heaven if politicians strangle advertising online. So I was particularly heartened to read the following from Shelly Palmer:
This is the most serious question facing content producers today. Content costs money to produce. Third-party advertising/sponsor support is one model, promoting your own products is another, subscription is a third. At the end of the day, there are only three ways it works: I pay, you pay or someone else pays. Unfortunately, there is no business model called “no one pays.” In the case of MediaBytes, the model is “I pay.” It works for me as stated above. But, apparently, a fairly large number of people in my audience are uninterested in seeing even relevant product offerings. Is advertising over? If so, what’s next?
Amen! Shelly hosts a daily Internet talk show on technology and media called MediaBytes. He recently tried inserting a short ad at the beginning of the show to cover the significant costs of production:
The show is produced every business day and requires a research staff, a writer (me), an editor, an encoding/distribution manager and an affiliate relations staff. The reason for the production overview is that, this particular two-minutes may look like a talking head combined with some graphics and clips, but the work flow for any given show takes approximately 6 hour and all of the people involved in the production are on salary here at Advanced Media Ventures Group. And, for the record, MediaBytes, and the associated production materials, takes up approximately 25% of my day.
Unfortunately, Shelly’s audience seemed to feel entitled to receive the fruit of his hard work for free—without suffering the
agony of watching… horror of horrors: advertising!. Continue reading →
by Berin Szoka & Adam Thierer
This morning, the House Energy & Commerce Committee will hold a hearing on “Behavioral Advertising: Industry Practices And Consumers’ Expectations.” If nothing else, it promises to be quite entertaining: With full-time Google bashers Jeff Chester and Scott Cleland on the agenda, the likelihood that top Google officials will be burned in effigy appears high!
Chester, self-appointed spokesman for what one might call the People for the Ethical Treatment of Data (PETD) movement, is sure to rant and rave about the impending techno-apocalypse that will, like all his other Chicken-Little scenarios, befall us all if online advertisers were permitted to better tailor ads to consumers’ liking. After all, can you imagine the nightmare of less annoying ads that might actually convey more useful information to consumers? Isn’t serving up “untargeted” dumb banner ads for Viagra to young women and Victoria’s Secret ads to Catholic school kids the pinnacle of modern online advertising? Gods forbid we actually make advertising more relevant and interest-based! (Those Catholic school boys may appreciate the lingerie ads, but few will likely buy bras.)
Anyway, according to National Journal’s Tech Daily Dose, the hearing lineup also includes:
- Charles Curran, Executive Director, Network Advertising Initiative
- Christopher Kelly, Chief Privacy Officer, Facebook
- Edward Felten, Director, Center for IT Policy, Princeton University
- Anne Toth, Chief Privacy Officer & Vice President, Policy, Yahoo!
- Nicole Wong, Deputy General Counsel, Google
That’s an interesting group and we’re sure that they will say interesting things about the issue. Nonetheless, because four of them have a corporate affiliation that fact will inevitably be used by some critics to dismiss what they have to say about the sensibility of more targeted or interest-based forms of online advertising. So, we’d like to offer a few thoughts and pose a few questions to make sure that Committee members understand why, regardless of what it means for any particular online operator,
targeting online advertising is very pro-consumer and essential to the future of online content, culture, and competition. As Wall Street Journal technology columnist Walt Mossberg has noted, “Advertising is the mother’s milk of all the mass media.” Much of the “free speech” we all cherish isn’t really free, but ad-supported!
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Adam Thierer & I have just released a detailed examination (PDF) of brewing efforts to expand the Children’s Online Privacy Protection Act of 1998 to cover adolescents and potentially all social networking sites—an approach we call “COPPA 2.0.”
As Adam explained on Larry Magid’s CNET podcast, COPPA mandates certain online privacy protections for children under 13, most importantly that websites obtain the “verifiable consent” of a child’s parent before collecting personal information about that child or giving that child access to interactive functionality that might allow the child to share their personal information with others. The law was intended primarily to “enhance parental involvement in a child’s online activities” as a means of protecting the online privacy and safety of children.
Yet advocates of expanding COPPA—or “COPPA 2.0″—see COPPA’s verifiable parental consent framework as a means for imposing broad regulatory mandates in the name of online child safety and concerns about social networking, cyber-harassment,
etc. Two COPPA 2.0 bills are currently pending in New Jersey and Illinois. The accelerated review of COPPA to be conducted by the FTC next year (five years ahead of schedule) is likely to bring to Washington serious talk of expanding COPPA—even though Congress clearly rejected covering adolescents age 13-16 when COPPA was first proposed back in 1998.
We’ll discuss some of the key points of our paper in a series of blog posts, but here are the top nine reasons for rejecting COPPA 2.0, in that such an approach would:
- Burden the free speech rights of adults by imposing age verification mandates on many sites used by adults, thus restricting anonymous speech and essentially converging—in terms of practical consequences—with the unconstitutional Children’s Online Protection Act (COPA), another 1998 law sometimes confused with COPPA;
- Burden the free speech rights of adolescents to speak freely on—or gather information from—legal and socially beneficial websites;
- Hamper routine and socially beneficial communication between adolescents and adults;
- Reduce, rather than enhance, the privacy of adolescents, parents and other adults because of the massive volume of personal information that would have to be collected about users for authentication purposes (likely including credit card data);
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I’ve been commenting on yesterday’s Supreme Court decision in FCC v. Fox, and criticizing the logic of the majority’s decision the case, which was driven solely by procedural / admin law considerations. [See Part 3.] I also discussed Justice Thomas’s very interesting concurring opinion, which took a serious look at the constitutional issues in play here and signaled his willingness to potentially overturn Red Lion and Pacifica. [See Part 4.] In this fifth installment, I will briefly outline some of the dissenting arguments.
Justice Stephen Breyer penned a lengthy dissent and was joined by Justices Stevens, Souter and Ginsburg. Like the Scalia majority decision, the Breyer dissent also focused on the procedural / APA-related issues at stake in the case. Breyer, however, was not buying the FCC’s assertion that it had adequately justified its significant expansion of indecency enforcement in recent years. Whereas the majority deferred to the agency and found “no basis in the Act or this Court’s opinions for a requirement that all agency change be subjected to more searching review,” the four dissenting justices saw things quite differently. Breyer noted that while the “law grants those in charge of independent administrative agencies broad authority to determine relevant policy,” it “does not permit them to make policy choices for purely political reasons nor to rest them primarily upon unexplained policy preferences.” He goes on to appropriately note that:
Federal Communications Commissioners have fixed terms of office; they are not directly responsible to the voters; and they enjoy an independence expressly designed to insulate them, to a degree, from “‘the exercise of political oversight.’” [citations omitted] That insulation helps to secure important governmental objectives, such as the constitutionally related objective of maintaining broadcast regulation that does not bend too readily before the political winds. But that agency’s comparative freedom from ballot-box control makes it all the more important that courts review its decision making to assure compliance with applicable provisions of the law — including law requiring that major policy decisions be based upon articulable reasons.
Breyer goes on to restate much of what is already clear from the APA and all that surrounds it. “[A]n agency must act consistently. The agency must follow its own rules,” he notes. Moreover: Continue reading →
With today’s historic Supreme Court decision in FCC v. Fox, I have been commenting on the logic and implications of the decision. Part 3 dealt with the majority’s decision in the case, which was driven solely by procedural / admin law considerations. This installment will discuss the very interesting concurring opinion penned by Justice Thomas, which is the only one that takes a serious look at the constitutional foundations of the FCC’s current regulatory regime. While I was sad to see Justice Thomas join the majority’s decision upholding the FCC’s radical expansion of speech regulation in recent years, he joined that majority only on straightforward procedural grounds. On the underlying constitutional issues at stake here, it is clear from his concurring statement that he is ready for the Court to hear a challenge to the previous court precedents and traditional regulatory doctrines that have long supported FCC speech and media controls.
“I write separately,” Justice Thomas says “to note the questionable viability of the two precedents that support the FCC’s assertion of constitutional authority to regulate the programming at issue in this case.” Specifically, he addresses the two key cases upon which almost all FCC speech regulation rests: Red Lion Broadcasting Co. v. FCC, 395 U. S. 367 (1969) and FCC v. Pacifica Foundation, 438 U. S. 726 (1978). Thomas continues: “Red Lion and Pacifica were unconvincing when they were issued, and the passage of time has only increased doubt regarding their continued validity.”
BOOM! With those words, Justice Thomas has dropped the hammer and taken what will hopefully be the first swing at toppling the house of cards that is modern FCC speech regulation. Justice Thomas goes on to itemize the many problems with what I have referred to as “America’s Jurisprudential Twilight Zone” when it comes to how we apply the First Amendment to media platforms in this country. He states:
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As anyone who has spent time searching for comments on the FCC’s website can tell you, the agency doesn’t exactly have the most user-friendly website. In the interest of making it easier for others to read the comments that came in last week in the agency’s “Child Safe Viewing Act” Notice of Inquiry, I have compiled all the major comments (those over 3 or 4 pages) and provided links to them below the fold.
Again, this proceeding was required under the “Child Safe Viewing Act of 2007,” which Congress passed last year and President Bush signed last December. The goal of the bill and the FCC’s proceeding (MB 09-26) is to study “advanced blocking technologies” that “may be appropriate across a wide variety of distribution platforms, including wired, wireless, and Internet platforms.” I filed 150+ pages worth of comments in this matter last week, and here’s my analysis of why this bill and the FCC’s proceeding are worth monitoring closely.
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Today I filed comments with the Federal Communications Commission (FCC) in its proceeding examining the marketplace for “advanced blocking technologies.” This proceeding was required under the “Child Safe Viewing Act of 2007,” which Congress passed last year and President Bush signed last December. The goal of the bill and the FCC’s proceeding (MB 09-26) is to study “advanced blocking technologies” that “may be appropriate across a wide variety of distribution platforms, including wired, wireless, and Internet platforms.” My colleagues will no doubt laugh about the fact that I have dropped an absurd 150 pages worth of comments on the FCC in this matter, but I had a lot to say on this topic! Parental controls, child safety, and free speech issues have been the focus of much of my research agenda over the past 10 years.
In my filing, I argue that the FCC should tread carefully in this matter since the agency has no authority over most of the media platforms and technologies described in the Commission’s recent Notice of Inquiry. Moreover, any related mandates or regulatory actions in in this area could diminish future innovation in this field and would violate the First Amendment rights of media creators and consumers alike. The other major conclusions of my filing are as follows:
- There exists an unprecedented abundance of parental control tools to help parents decide what constitutes acceptable media content in their homes and in the lives of their children.
- There is a trade-off between complexity and convenience for both tools and ratings, and no parental control tool is completely foolproof.
- Most homes have no need for parental control technologies because parents rely on other methods or there are no children in the home.
- The role of household media rules and methods is underappreciated and those rules have an important bearing on this debate.
- Parental control technologies work best in combination with educational efforts and parental involvement.
- The search for technological silver-bullets and “universal” solutions represent a quixotic, Holy Grail-like quest and it will destroy innovation in this marketplace.
- Enforcement of “household standards” made possible through use of parental controls and other methods negates the need for “community standards”-based content regulation.
My entire filing can be found here and down below in a Scribd reader. All comments in the matter are due tomorrow and then reply comments are due on May 18th.
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The Federal Communications Commission (FCC) has just released a Notice of Inquiry (NOI) in the matter of “Implementation of the Child Safe Viewing Act; Examination of Parental Control Technologies for Video or Audio Programming.” (MB Docket No. 09-26) This NOI was required by S. 602, the “Child Safe Viewing Act of 2007,” which Congress passed last October and President Bush signed into law on December 2nd. The measure requires the FCC to examine:
(1) the existence and availability of advanced blocking technologies that are compatible with various communications devices or platforms;
(2) methods of encouraging the development, deployment, and use of such technology by parents that do not affect the packaging or pricing of a content provider’s offering; and
(3) the existence, availability, and use of parental empowerment tools and initiatives already in the market.
The Act defines the term “advanced blocking technologies” as “technologies that can improve or enhance the ability of a parent to protect his or her child from any indecent or objectionable video or audio programming, as determined by such parent.” Importantly, the Act also directs the agency to look into blocking technologies that “may be appropriate across a wide variety of distribution platforms, including
wired, wireless, and Internet platforms” and which “operate independently of ratings pre-assigned by the creator of such video or audio programming.” The Act requires that the FCC issue a report to Congress about these technologies no later than August 29, 2009.
When writing about the Child Safe Viewing Act shortly after its introduction in the summer of 2007, I noted that the measure potentially represented the beginning of “convergence-era content regulation” at the FCC. Those two clauses highlighted above are of particular importance in that regard. Congress has essentially invited the FCC to engage in unprecedented oversight of media platforms and ratings systems that the agency previously had very little ability to influence. Continue reading →
I’ve got a new PFF paper out today entitled, “Who Needs Parental Controls? Assessing the Relevant Market for Parental Control Technologies.” In this piece, I address the argument made by some media and Internet critics who say that government intervention (perhaps even censorship) may be necessary because parental control technologies are not widely utilized by most Americans. But, as I note in the paper, the question that these critics always fail to ask is: How many homes really need parental control technologies? The answer: Far fewer than you think. Indeed, the relevant universe of potential parental control users is actually quite limited.
I find that the percentage of homes that might need parental control technologies is certainly no greater than the 32% of U.S. households with children in them. Moreover, the relevant universe of potential parental control users is likely much less than that because households with very young children or older teens often have little need for parental control technologies. Finally, some households do not utilize parental control technologies because they rely on alternative methods of controlling media content and access in the home, such as household media rules. Consequently, policymakers should not premise regulatory proposals upon the limited overall “take-up” rate for parental control tools since only a small percentage of homes might actually need or want them.
If you don’t care to read the whole nerdy thing, I’ve created this short video summarizing the major findings of the paper.
http://www.youtube.com/v/a7Fnf3Ztt-U&hl=en&fs=1
And the document is embedded below the fold in a Scribd reader.
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Interesting article here (“Not All Information Wants to Be Free“) by Jack Shafer of Slate. He notes that many people focus on why “pay wall” business models don’t work online, but few people discuss those models that do (i.e., the ones that successfully get customers to pay for access to content behind the wall). Shafer walks through some of the ones that have worked and concludes:
Not all successful paid sites are alike, but they all share at least one of these attributes:
1) They are so amazing as to be irreplaceable.
2) They are beautifully designed and executed and extremely easy to use.
3) They are stupendously authoritative.
Succinctly stated, the pay-per-view sites are damn unique, offering content or a service that consumers are unlikely to find elsewhere. Of course, that’s a pretty small universe of sites, and unless you content is extraordinarily unique and time-sensitive, I have a hard time believing that a pay wall model will work for most sites.
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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.