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Broadband and Competition Conference at GMU Law tomorrow

by on April 18, 2013 · 0 comments

The Information Economy Project at the George Mason University School of Law is hosting a conference tomorrow, Friday, April 19. The conference title is From Monopoly to Competition or Competition to Monopoly? U.S. Broadband Markets in 2013. There will be two morning panels featuring discussion of competition in the broadband marketplace and the social value of “ultra-fast” broadband speeds.

We have a great lineup, including keynote addresses from Commissioner Joshua Wright, Federal Trade Commission and from Dr. Robert Crandall, Brookings Institution.

The panelists include:

Eli Noam, Columbia Business School

Marius Schwartz, Georgetown University, former FCC Chief Economist

Babette Boliek, Pepperdine University School of Law

Robert Kenny, Communications Chambers (U.K.)

Scott Wallsten, Technology Policy Institute

The panels will be moderated by Kenneth Heyer, Federal Trade Commission and Gus Hurwitz, University of Pennsylvania, respectively. A continental breakfast will be served at 8:00 am and a buffet lunch is provided. We expect to adjourn at 1:30 pm. You can find an agenda here and can RSVP here. Space is limited and we expect a full house, so those interested are encouraged to register as soon as possible.

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A Better, Simpler Narrative for U.S. Privacy Policy

by on March 19, 2013 · 6 comments

Last week on his personal blog, Peter Fleischer, Global Privacy Counsel for Google, posted an interesting essay entitled “We Need a Better, Simpler Narrative of US Privacy Laws.” Fleischer says that Europe has done a better job marketing its privacy regime to the world than the United States and argues that “The US has to figure out how to explain its privacy laws on the global stage” since “Europe is convincing many countries around the world to implement privacy laws that follow the European model.” He notes that “in the last year alone, a dozen countries in Latin America and Asia have adopted euro-style privacy laws [while] not a single country, anywhere, has followed the US model.” Fleischer argues that this has ramifications for long-term trade policy and global Internet regulation more generally.

I found this essay very interesting because I deal with some of these issues in my latest law review article, “The Pursuit of Privacy in a World Where Information Control is Failing” (Harvard Journal of Law & Public Policy, vol. 36, no. 2, Spring 2013). In the article, I suggest that the U.S. does have a unique privacy regime and it is one that is very similar in character to the regime that governs online child safety issues. Whether we are talking about online safety or digital privacy, the defining characteristics of the U.S. regime are that it is bottom-up, evolutionary, education-based, empowerment-focused, and resiliency-centered. It focuses on responding to safety and privacy harms after exhausting other alternatives, including market responses and the evolution of societal norms.

The EU regime, by contrast, is more top-down in character and takes a more static, inflexible view of privacy rights. It tries to impose a one-size-fits-all model on a diverse citizenry and it attempts to do so through heavy-handed data directives and ongoing “agency threats.” It is a regime that makes more sweeping pronouncements about rights and harms and generally recommends a “precautionary principle” approach to technological change in which digital innovation is more “permissioned.”

Put simply, the U.S. regime is reactive in character while the E.U. regime is more preemptive.  The U.S. system focuses on responding to safety and privacy problems using a more diverse toolbox of solutions, some of which are governmental in character while others are based on evolving social and market norms and responses. To be clear, law does enter the picture here in the U.S., but it does so in a very different way than it does in the E.U.   Continue reading →

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What “Big Bang Disruption” Says About Technology Policy

by on February 18, 2013 · 3 comments

In the upcoming issue of Harvard Business Review, my colleague Paul Nunes at Accenture’s Institute for High Performance and I are publishing the first of many articles from an on-going research project on what we are calling “Big Bang Disruption.”

The project is looking at the emerging ecosystem for innovation based on disruptive technologies.  It expands on work we have done separately and now together over the last fifteen years.

Our chief finding is that the nature of innovation has changed dramatically, calling into question much of the conventional wisdom on business strategy and competition, especially in information-intensive industries–which is to say, these days, every industry.

The drivers of this new ecosystem are ever-cheaper, faster, and smaller computing devices, cloud-based virtualization, crowdsourced financing, collaborative development and marketing, and the proliferation of mobile everything.  There will soon be more smartphones sold than there are people in the world.  And before long, each of over one trillion items in commerce will be added to the network.

The result is that new innovations now enter the market cheaper, better, and more customizable than products and services they challenge.  (For example, smartphone-based navigation apps versus standalone GPS devices.)  In the strategy literature, such innovation would be characterized as thoroughly “undiscplined.”  It shouldn’t succeed.  But it does. Continue reading →

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On Data Privacy Day, A Glass Half Full and Leadership Lacking on Reforms

by on January 29, 2013 · 0 comments

Obama’s talked a big game about online privacy. He promised reform during the 2008 campaign. A year ago, the White House proposed a “Privacy Bill of Rights.” But so far, the Administration’s delivered little more than fine words. Worse, they’ve focused on the wrong problems.

Government has an important role to play in protecting consumer privacy, but its snooping and surveillance are far bigger problems—which have only grown worse. While Washington talks of a new commercial privacy “Bill of Rights,” the real Bill of Rights is in peril.

The American Revolution erupted, in large part, out of seething resentment at British privacy intrusions—without judicial supervision. Virginia adopted its own Bill of Rights shortly before the Declaration of Independence, including what later became Madison’s Fourth Amendment to the Constitution: “the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.” Law enforcement must generally obtain a warrant before conducting a search—which means convincing a judge that probable cause exists to believe a crime has been committed. Continue reading →

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“It’s just more reliable than YouTube, ok? “

by on September 19, 2012 · 0 comments

That was the response of a friend currently in Rwanda who had issued a Facebook plea for someone to upload the weird “Innocence of Muslims” video to Dropbox.

“Oh, where is the stupid internet in Rwanda?????” she exclaimed.

In typical snark, I had asked, “What do you connect to Dropbox with? Tin-can on string?”

She actually has Internet access, but she finds YouTube so much less reliable than other platforms that she asks friends to upload YouTube videos elsewhere.

I anecdotally find YouTube videos to be clunky downloads compared to others. Quite naturally, I watch fewer videos on YouTube and more on other platforms. I don’t know, but guess, that Google has made some decision to economize on video downloads—a high percentage of people probably watch only the first third of any video, so why send them the whole thing right away?—and that its imperfect implementation has me watching the spinning “pause” wheel (or playing “snake”) routinely when I think a YouTube offering would be interesting.

Would the Google of five years have allowed that? It’s well known that Google recognizes speed as an important elements of quality service on the Internet.

And this is why antitrust action against Google is unwarranted. When companies get big, they lose their edge, as I’m guessing Google is losing its edge in video service. This opens the door to competitors as part of natural economic processes.

Just the other week, I signed up with Media.net and I’ll soon be running tests on whether it gets better results for me on WashingtonWatch.com than Google AdSense. So far so good. A human customer service representative navigated me through the (simple) process of opening an account and getting their ad code.

These are anecdotes suggesting Google’s competitive vulnerability. But you can get a more systematic airing of views at TechFreedom’s event September 28th: “Should the FTC Sue Google Over Search?“

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FTC Issues Groundhog Report on Privacy

by on March 26, 2012 · 1 comment

The Federal Trade Commission issued a report today calling on companies “to adopt best privacy practices.” In related news, most people support airline safety… The report also “recommends that Congress consider enacting general privacy legislation, data security and breach notification legislation, and data broker legislation.”

This is regulatory cheerleading of the same kind our government’s all-purpose trade regulator put out a dozen years ago. In May of 2000, the FTC issued a report finding “that legislation is necessary to ensure further implementation of fair information practices online” and recommending a framework for such legislation. Congress did not act on that, and things are humming along today without top-down regulation of information practices on the Internet.

By “humming along,” I don’t mean that all privacy problems have been solved. (And they certainly wouldn’t have been solved if Congress had passed a law saying they should be.) “Humming along” means that ongoing push-and-pull among companies and consumers is defining the information practices that best serve consumers in all their needs, including privacy.

Congress won’t be enacting legislation this year, and there doesn’t seem to be any groundswell for new regulation in the next Congress, though President Obama’s reelection would leave him unencumbered by future elections and so inclined to indulge the pro-regulatory fantasies of his supporters.

The folks who want regulation of the Internet in the name of privacy should explain how they will do better than Congress did with credit reporting. In forty years of regulating credit bureaus, Congress has not come up with a system that satisfies consumer advocates’ demands. I detail that government failure in my recent Cato Policy Analysis, “Reputation under Regulation: The Fair Credit Reporting Act at 40 and Lessons for the Internet Privacy Debate.”

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Did Google Defeat People’s Privacy Preferences?

by on February 19, 2012 · 3 comments

Given the importance of privacy self-help—that is, setting your browser to control what it reveals about you when you surf the Web—I was concerned to hear that Google, among others, had circumvented third-party cookie blocking that is a default setting of Apple’s Safari browser. Jonathan Mayer of Stanford’s Center for Internet and Society published a thorough and highly technical explanation of the problem on Thursday.

The story starts with a flaw in Safari’s cookie blocking. Mayer notes Safari’s treatment of third-party cookies:

Reading Cookies Safari allows third-party domains to read cookies.
Modifying Cookies If an HTTP request to a third-party domain includes a cookie, Safari allows the response to write cookies.
Form Submission If an HTTP request to a third-party domain is caused by the submission of an HTML form, Safari allows the response to write cookies. This component of the policy was removed from WebKit, the open source browser behind Safari, seven months ago by Google engineers. Their rationale is not public; the bug is marked as a security problem. The change has not yet landed in Safari.

Mayer says Google was exploiting this yet-to-be-closed loophole to install third-party cookies, the domain of which Safari would then allow to write cookies. After describing “(relatively) straightforward” cookie synching, Mayer says:

But we noticed a special response at the last step for Safari browsers. … Instead of responding with the “_drt_” cookie, the server sends back a page that includes a form and JavaScript to submit the form (using POST) to its own URL.

Third-party cookie blocking evaded, and users’ preferences frustrated.

Ars Technica has published Google’s response, which doesn’t seem to have gone up on any of its blogs, in full. Google says they created this functionality to deliver better services to their users, but doing so inadvertently allowed Google advertising cookies to be set on the browser.

I don’t know that I’m technically sophisticated enough to register a firm judgement, but it looks to me like Google was faced with an interesting dilemma: They had visitors who were signed in to their service and who had opted to see personalized ads and other content, such as ‘+1’s but those same visitors had set their browsers contrary to those desires. Google chose the route better for Google, defeating the browser-set preferences. That, I think, was a mistake.

I wonder if there isn’t some Occam’s Razor that a Google engineer might have applied at some point in this process, thinking, “Golly, we are really going to great lengths to get around a browser setting. Are we sure we should be doing this?” Maybe it would have been more straightforward to highlight to Safari users that their settings were reducing their enjoyment of Google’s services and ads, and to invite those users to change their settings. This, and urging Apple to fix the browser, would have been more consistent with the company’s credo of non-evil.

Now, to the ideological stuff, of which I can think of two items:

1) There is a battle for control of earth out there—well, a battle over whether third-party cookie blocking is good or bad. Have your way advocates. I think the consuming public—that is, the market—should decide.

2) There is a battle to make a federal case out of every privacy transgression. An advocacy group called Consumer Watchdog (which has been prone to privacy buffoonery in the past) hustled out a complaint to the Federal Trade Commission. I think the injured parties should be compensated in full for their loss and suffering, of which there wasn’t any. De minimis non curat lex, so this is actually just a learning opportunity for Google, for browser authors, and for the public.

Kudos and thanks are due to Jonathan Mayer, as well as ★★★★★ and Ashkan Soltani, for exposing this issue.

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The FTC, Mobile Apps, Kids’ Privacy, Prices & Competition

by on February 16, 2012 · 19 comments

Today the Federal Trade Commission released a new report entitled, “Mobile Apps for Kids: Current Privacy Disclosures Are Disappointing,” which concludes that “confusing and hard-to-find disclosures do not give parents the control that they need in this area. The FTC argues that “parents need consistent, easily accessible, and recognizable disclosures regarding in-app purchase capabilities so that they can make informed decisions about whether to allow their children to use apps with such capabilities.”

It’s hard to be against the FTC’s “the more disclosure, the better” policy recommendation and I’m not about to come out against it here. But the question is: how much disclosure is enough? Reading through the report and seeing how hard the FTC hammers this point home makes me think the agency wants our app store checkout process to be littered with the pages of fine print disclosure policies that now accompany our credit card statements and home mortgage payments! Seriously, would that make us better off?

As a parent of two kids who both download countless apps on my Android phone, my wife’s iPhone, and our family’s Android tablet, I appreciate a certain amount of disclosure about what sort of information apps are collecting and how they are using it. I think Google’s Android marketplace strikes a nice balance here, providing us with the most crucial facts about what the application will access or share. Apple could do more on disclosure but the company also prides itself (to the dismay of some!) on its rigorous pre-screening process to make sure the apps in the App Store are safe and don’t violate certain privacy and security policies. Yet, as the FTC correctly points out, “the details of this screening process are not clear.” Of course, most Apple users simply don’t give a damn. They’re all too happy to let Apple just take care of it for them even if they’re not really sure what’s happening to their data behind the scenes. The more privacy-sensitive crowd wants greater disclosure and control, of course, and I’m sympathetic to that plea.  But again, how much disclosure is enough? Are you going to wade through pages of disclosure policies and privacy opt-ins before downloading that latest iteration of “Angry Birds” or “Cut the Rope”? Yeah, I didn’t think so.

Anyway, I don’t want to dwell on that. The more interested findings in the survey relate to price and market dynamics and I am hoping people don’t ignore them. Continue reading →

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A Quick Assessment of the FCC’s Appalling Staff Report on the AT&T Merger

by on December 2, 2011 · 7 comments

[Cross posted at Truth on the Market]

As everyone knows by now, AT&T’s proposed merger with T-Mobile has hit a bureaucratic snag at the FCC. The remarkable decision to refer the merger to the Commission’s Administrative Law Judge (in an effort to derail the deal) and the public release of the FCC staff’s internal, draft report are problematic and poorly considered. But far worse is the content of the report on which the decision to attempt to kill the deal was based.

With this report the FCC staff joins the exalted company of AT&T’s complaining competitors (surely the least reliable judges of the desirability of the proposed merger if ever there were any) and the antitrust policy scolds and consumer “advocates” who, quite literally, have never met a merger of which they approved.

In this post I’m going to hit a few of the most glaring problems in the staff’s report, and I hope to return again soon with further analysis.

As it happens, AT&T’s own response to the report is actually very good and it effectively highlights many of the key problems with the staff’s report. While it might make sense to take AT&T’s own reply with a grain of salt, in this case the reply is, if anything, too tame. No doubt the company wants to keep in the Commission’s good graces (it is the very definition of a repeat player at the agency, after all). But I am not so constrained. Using the company’s reply as a jumping off point, let me discuss a few of the problems with the staff report. Continue reading →

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The Question of Remedies in a Google Antitrust Case

by on July 1, 2011 · 0 comments

It remains unclear how interested the Federal Trade Commission (FTC) is in bringing a formal antitrust action against Google, but we at least know that inquiries have been made. I suspect these inquires are far more serious than whatever the agency is fishing for with its new Twitter inquires. After all, as I note in my latest Forbes column, “Google isn’t even a teenager yet (having only been founded in September 1998), but the firm’s rise has been meteoric and it has made a long list of enemies in the process. Practically every major player in the Digital Economy… is gunning for Google these days, both in the commercial and political marketplace.” In this sense, it’s not surprising the FTC might take a keen interest in the company with so many competitors complaining.

Still, I just can’t find much merit in an antitrust case against Google since, as I noted in my column, “The firm’s success seems tied to high quality products that users prefer over rival services. Importantly, barriers to entry are low: there’s nothing stopping new entrants from innovating and offering competing online services to match Google.”

Regardless, instead of arguing about the merits of an antitrust action against Google, let’s consider the more interesting, and I think intractable, question of remedies. Here’s what I had to say about that in my Forbes essay: Continue reading →

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