In my latest column for The Hill, I explore how “State and Local Meddling Threatens to Undermine the AI Revolution” in America as mountains of parochial tech mandates accumulate. We need a federal response, but we’re not likely to get the right one, I argue.

I specifically highlight the danger of new measures from big states like NY and California, but it’s the patchwork of all the state and local regs that will result in a sort of ‘death-by-a-thousand-cuts’ for AI innovation as the red tape grows and hinders innovation and capital formation.

What we need is the same sort of principled, pro-innovation federal framework or AI that we adopted for the Internet a generation ago. Specifically, we need some sort of preemption of most of the state and local constraints on what is inherently national (and even global) commerce and speech.

Alas, Congress appears incapable of getting even basic things done on tech policy these days. As far as I can tell, not a single AI bill in front of Congress today would preempt most of this state and local AI regulatory activity.

Worse yet, if Congress did somehow pass anything on AI right now, it’d probably just include even more anti-innovation mandates and agencies without preempting any of the state and local ones. Thus, America would just be piling bad mandates on top of bad mandates until we basically become like Europe, where innovation goes to die under piles of bureaucratic red tape.

It’s a miserable state of affairs with horrible consequences for the U.S. as global competition from China heats up on the AI front. America is sacrificing its competitive advantage on digital technology because fear-based thinking and partisan politics continue to prevent the adoption of a principled, bipartisan vision for artificial intelligence policy.

See my new Hill column for more discussion, and also make sure to check out my earlier Hill essay on “A balanced AI governance vision for America,” as well as these two big R Street Institute reports from last year about how Congress can craft sensible, pro-innovation AI policy for America:

• Adam Thierer, “Getting AI Innovation Culture Right,” R Street Institute Policy Study №281 (March 2023).
• Adam Thierer, “Flexible, Pro-Innovation Governance Strategies for Artificial Intelligence,” R Street Institute Policy Study №283 (April 2023).

And here is some additional reading on the dangerous regulatory situation we are facing today in terms of over-regulating artificial intelligence by treating innovators as guilty until proven innocent. America is about to shoot itself in the foot as the global race begins for the more important technological revolution of our lifetime:

• Adam Thierer, “Blumenthal-Hawley AI Regulatory Framework Escalates the War on Computation,” Medium, September 13, 2023.
• Adam Thierer, Statement for the Record, Hearing on “The Need for Transparency in Artificial Intelligence,” September 12, 2023.
• Adam Thierer, “Will AI Policy Became a War on Open Source Following Meta’s Launch of LLaMA 2?” Medium, July 19, 2023.
• Adam Thierer, “The FTC Looks to Become the Federal AI Commission,” Medium, July 15, 2023.
• Adam Thierer, “Microsoft’s New AI Regulatory Framework & the Coming Battle over Computational Control,” Medium, May 29, 2023.
• Adam Thierer, “Is Telecom Licensing a Good Model for Artificial Intelligence?” Medium, July 8, 2023.
• Adam Thierer, “The Schumer AI Framework and the Future of Emerging Tech Policymaking,” R Street Institute Real Solutions, June 27, 2023.
• Adam Thierer, “Here Come the Code Cops: Senate Hearing Opens Door to FDA for Algorithms & AI Occupational Licensing,” Medium, May16, 2023.
• Adam Thierer, “Is AI Really an Unregulated Wild West?” Technology Liberation Front, June 22, 2023.
• Adam Thierer, “The Most Important Principle for AI Regulation,” R Street Institute Real Solutions, June 21, 2023.
• Neil Chilson & Adam Thierer, “The Problem with AI Licensing & an ‘FDA for Algorithms,’” Federalist Society Blog, June 5, 2023.
• Adam Thierer, “The Many Ways Government Already Regulates Artificial Intelligence,” Medium, June 2, 2023.

There are a growing number of voices raising concerns about privacy rights and data security in the wake of news of data breaches and potential influence. The European Union (EU) recently adopted the heavily restrictive General Data Privacy Rule (GDPR) that favors individual privacy over innovation or the right to speak. While there has been some discussion of potential federal legislation related to data privacy, none of these attempts has truly gained traction beyond existing special protections for vulnerable users (like children) or specific information (like that of healthcare and finances). Some states, notably including California, are attempting to solve this perceived problem of data privacy on their own, but often are creating bigger problems and passing potentially unconstitutional and often poorly drafted solutions.

All states have at least minimal data breach laws and the quality of such laws both in effectiveness and impact on innovation varies. Normally states work as “laboratories of democracy” and are able to test out different regulatory schemes for new technologies with less demosclerosis than the federal process. Similarly, they are better able to account for different preferences in tradeoffs, and in some cases, they are more able to remove barriers to entry by reforming existing areas of law like licensure or products liability to accommodate a new technology. In areas like autonomous vehicles, telemedicine, and drone policy states are often leading the way to embrace these new technologies. However, a new trend in some states to formally regulate the Internet through laws aimed at data privacy or net neutrality to achieve what they perceive as failures of the federal government to act ignores the potential damage to the permissionless federal policy that made the Internet what it is today.

California has passed the California Consumer Privacy Act (CCPA) and other states are likely to follow suit. Unfortunately, these type of statutes are likely to impact innovation in a misguided attempt to correct issues with data privacy. However, these statutes could reach far beyond state borders and illustrate the potential risks of a fifty-state privacy patchwork.

These laws will likely lead to a problem in identifying what entities are covered by the privacy legislation. California’s recent CCPA defines those who are required to comply so ambiguously that a reasonable interpretation would imply the law applies so long as a single user is a resident of California whether they are accessing the website from California or not and no matter if the website purposefully avails itself of California or not.

State laws also unintentionally make it more difficult for small, local companies to compete with Internet giants. Large companies like Google and Facebook can afford the cost of additional compliance but it is more difficult for smaller and mid-size companies to cover such costs. As a result, if they are able to comply they often are more limited in their ability to fund future innovation as they instead invest resources in compliance. In a world of state based privacy laws, it’s inevitable that some would impose contradictory standards and as a result might actually make it worse rather than better as companies pick and choose which states to comply with. What is already playing out in Europe where small and mid-size companies are choosing to exit the market rather spend the cost in complying with new restrictions could play out for states with more restrictive data requirements. And it’s not just fledging startups that have difficulty, the L.A. Times and Chicago Tribune have been unavailable to Europeans since GDPR became effective as they had not completed compliance by the May deadline. In some cases companies have founded it easier to block or exclude effected users than to comply with onerous data restrictions.

In some cases, states making exceptions for companies below a certain number of user also may discourage investment at a certain point. For example the CCPA kicks in at 50,000 users. As a result there is a large marginal costs for gaining 50,001 ^st user as compliance with the standards are immediately required. This might lead to caps on certain newer platforms or encourage innovators to look for loopholes to avoid the high cost of compliance early on.

But even if states were able to create a sort of interstate compact that created an effectively uniform state level set of privacy laws, it would still be an inappropriate use of federalism for the state to govern data privacy due to its de facto impact on interstate commerce and the First Amendment.

The Internet by its very nature transcends states borders and any state laws aimed at impacting privacy are likely to have national and global impact. This is not what is intended by federalism and not just the case for states like California with a significant amount of tech companies. If there are 50 different state laws than new online intermediaries will have  develop 50 different compliance policies or the most restrictive state will become the de facto standard for everyone left in the industry. As Jeff Kosseff points out, a world of 50 variations of the same privacy law based on users would require out-of-state content creators would likely require significant changes to their existing systems and place an undue burden on content creators and users.

Additionally, there are legitimate concerns about the First Amendment rights to share information that may be in conflict with the way privacy rights are enforced under proposed laws. Requiring otherwise lawful content to be removed silences the speaker. For example, if a friend posts a picture from a party that includes you and you ask all your data be removed is that data yours or your friends. To remove the data would silence a speaker and value one individual’s right to privacy over another’s right to speak. In some cases it seems such tradeoffs could be reasonable such as speech that is not just merely offensive but causes clear harm to the person it is about such as revenge porn, but in many cases it is far less clear. Unfortunately when faced with the crippling potential sanctions of such laws, many companies take a remove first question second approach as has been seen with copyright under the Digital Millennium Copyright Act (DMCA).

While there is a growing voice for data privacy, there seems to be little willingness on the part of consumers or regulators to make such tradeoffs. The so called “privacy paradox” where people do not undertake the necessary actions to match with their stated desire for increased data privacy and many willingly admit they prefer the convenience they receive in exchange for their data. If action on data privacy is necessary, it should occur at a federal level to avoid the patchwork problems that would result from inconsistent state laws. Any law must be narrowly tailored to respect the First Amendment rights of both users and platforms. We also must be aware of the tradeoffs that we are making between innovation and privacy when we see calls for a US GDPR. At the same time we should be concerned that as a result of the heavy burden of compliance with GDPR, a more regulated Internet where only those who can afford to comply survive may replace the permissionless start-up American driven version.

While federal preemption may be needed to address a patchwork of state privacy laws, we should be cautious and seek to avoid the mistakes of GDPR type privacy laws that place a value on individual privacy above innovation and knowledge sharing. Simple steps in providing more transparent information and requirements for notification are more likely to allow individuals to make the privacy choices that best fit their needs.

A privacy patchwork of state based “solutions” is likely to create more problems than it solves. The real solutions to our current dilemmas will come from conversations about how we balance the rewards of innovation with individual preferences for privacy.

Autonomous cars have been discussed rather thoroughly recently and at this point it seems a question of when and how rather than if they will become standard. But as this issue starts to settle, new questions about the application of autonomous technology to other types of transportation are becoming ripe for policy debates. While a great deal of attention seems to be focused on the potential revolutionize the trucking and shipping industries, not as much attention has been paid to how automation may help improve both intercity and intracity bus travel or other public and private transit like trains. The recent requests for comment from the Federal Transit Authority show that policymakers are starting to consider these other modes of transit in preparing for their next recommendations for autonomous vehicles. Here are 5 issues that will need to be considered for an autonomous transit system.

1. Establish what agency or sub-agency if any has the authority to regulate or guide development of autonomous buses.

Currently, the National Highway Traffic Safety Administration (NHTSA) has provided the most thorough guidance on autonomous vehicles, but it has focused almost exclusively on privately owned, individual transport rather than buses or trucking. Currently buses are regulated by the Federal Transit Administration (FTA), NHTSA, the Federal Motor Carrier Safety Administration, Transportation Security Administration (TSA), and various agencies depending on what particular regulation is being addressed. With the growth of soft law particularly for autonomous vehicles, this overlapping jurisdiction becomes even more complicated for those hoping to start a new driverless bus system.

For example, an innovator hoping to start a driverless bus system from Washington, DC to New York City could have approval from NHTSA for the vehicles safety standards from an informal sandboxing, but find him or herself fighting the TSA after the system was ready due to the intercity travel or state regs in either location. This overlapping jurisdiction at the federal level results in further delay for innovators who may think they have properly consulted necessary agencies or are not required to seek approval.

While evasive entrepreneurs have been able to work within and around such regulations, other times they have had to engage in innovation arbitrage in order to continue such projects or stop development before its fully realized. Yes, Elon Musk might be willing to flip switch on Hyperloop with a verbal yes, but other innovators and investors are less likely to pursue costly projects that regularly face regulatory rejection.

2. Vertical Take Off and Landing (VTOL) may be more transformational than autonomous buses

It’s possible that at some point multi-passenger Vertical Take Off and Landing (VTOL) may actually be more disruptive and take the place of standard buses. These devices are basically drones that can carry human passengers.

Uber, for example, has already announced its plans to test such technology in the relatively near future. Just like we may skip some levels of automation on particular technologies, we may find that we are better off skipping autonomous buses in favor of other technology altogether.

3. State and local governments also have significant impact on buses and that’s not necessarily bad.

Right now a great deal of regulation of both autonomous vehicles and intracity transit is done at a state or local level through restrictions on operations, noise control, and local sanctioned-monopolies. Some of this is because of the increasing difficulty in creating formalized rules or legislation to address disruptive technology at a pace sufficient to keep up with innovation. As Adam Thierer, Ryan Hagemann, and I discuss in our forthcoming paper, this has led to an increased use of soft law at a federal level. It has also opened a window for state and local governments to try new policy solutions to determine what (if any) form of regulation might be best to encourage a disruptive technology like autonomous vehicles. While some economists might argue that every new government is a barrier to efficiency, allowing such local regulations is not in and of itself bad.

If the federal government were to become the new bus czar, it would not likely end well. Not only would cities and states protest the usurpation of their traditional role, but they would lack the local knowledge to determine which tradeoffs to make. Transit would best serve its citizens when they are making the decisions that most directly impact them. While the future may have less strict routes, schedules, and stops through services like Lyft Shuttle even these will require some knowledge of local needs to determine the hours and areas for the most profitable operation.

At the same time, there are real risks that a few powerful cities or states like California or New York City could prevent life-saving innovations like autonomous transit in smaller markets. This could be in a variety of ways from permitting to lane restrictions to funding. Still when examined as a national or even international market, it is likely that innovators would choose to take their technology elsewhere to a market that did exist. For example, following increased regulations related to autonomous vehicle testing in California, Uber moved its autonomous vehicle testing to a more welcome regulatory environment in Arizona. While engaging in such innovation arbitrage is not as easy for an entire transit system, states and cities that are more welcoming or at least willing to work with technological disruptors are more likely to see innovators flock to those areas as well as tangential benefits of allowing such new technology.

4. Smart cities v. dumb choices

In general, it should be applauded that many states and cities are trying to take proactive actions to prepare for potentially transformative changes of driverless cars. However, many of these actions are dumb choices that neither prepare for the change nor promote innovation. As Emily Hamilton has written, “Self-interested incentives may lead policymakers to implement new technologies without making real changes in the quality of service delivery.”

Some of the investment in technological infrastructure has its benefits such as providing data to make infrastructure decision and increased safety and connectedness by enabling more direct communication with citizens. At the same time, many of these projects have been little more than novelties and suffer from the same cronyism issues as other government funded projects. With autonomous vehicles, cities and states may risk betting on the wrong horse and investing in technology that will later be incompatible with the most common product on the market. As Michael and Emily Hamilton have written with the gap between the proposal of legislation and its actual implementation it is easy for the “smart” technologies to be outdated by the time they actually reach citizens.

Still, there are general policy changes that can prepare cities for a smart future. Adam Thierer has written about three policy proposals (an Innovator’s Presumption, a Sunsetting Imperative, and a Parity Provision) that would enable policymakers to create cities that embraced innovation. These proposals rather than targeting specific technologies would create a regulatory environment that encourages experimentation and innovation in a variety of industries.

5. Concerns about the impact of autonomous buses are well intentioned, but typically more about incumbents maintaining their market share.

As Michael Farren and I wrote about the collective freakout in Oregon about having to pump your own gases, often technopanics overlap with an imbedded cronyism or incumbents trying to keep out new entrants through bootleggers and Baptists phenomena.

Sadly, this phenomena is starting emerge when discussions about autonomous buses appear. Unions in some cities like Columbus, Ohio have public voiced their opposition if the jobs of current operators would be impacted. While job loss is a sad event, new technologies do not merely appear overnight and bring with them new job opportunities. Attempts by unions and other advocates to prevent any potential job losses from autonomous vehicles, could cost hundreds of thousands of lives including those of bus and truck drivers. Delaying a life-saving technology because it may negatively impact a few when it could benefit a large number in most cases is not a desirable tradeoff. Policymakers and advocates must realize that there will always be tradeoffs and recognize that often a small loss is necessary for a larger gain.

Technology does not just destroy jobs, it also creates them. A 2015 Deloitte study found that in the 140 years since the industrial revolution new technology had created more jobs than it had destroyed and not just in areas directly related to the technology. As individuals had more free time because technology made things like agriculture and manufacturing easier, significant growth was experienced not only in jobs related directly to technology, but also service and creative industries. While cars may have unemployed blacksmiths, they provided new opportunities for many others by creating and expanding new industries. It is likely that the current disruptive technologies will do the same.

As both the technology and policy surrounding autonomous vehicles evolves these and many other issues will have to be discussed and decided. It is a welcome event that such conversations are beginning to embrace the broader applications of the technology rather than solely focusing on “driverless cars” and hopefully this expanded focus will allow for even greater innovation and benefits.

Reps. Jackie Speier (D-Calif.) and Steve Womack (R-Ark.) have introduced “The Marketplace Equity Act,” which would open the floodgates to anything-goes State-based taxation of the Internet and interstate commerce. The bill essentially sacrifices constitutional fairness at the alter of “tax fairness.” Building on concerns raised by state and local officials as well as “bricks-and-mortar” retailers, Speier and Womack claim that, as “a matter of states’ rights” and “leveling the playing field,” Congress should bless state efforts to impose sales tax collection obligation on interstate (“remote”) companies.The measure would allow States to do so using one of three rate structures: (1) a single blended state/local rate; (2) a single maximum State rate; or (3) the actual local jurisdiction destination rate + the State rate (so long as the State “make(s) available adequate software to remote sellers that substantially eases the burden of collecting at multiple rates within the State.”)

This builds on a long-standing effort by some States to devise a multistate sales tax compact to collude and impose taxes on interstate transactions. In the Senate, Sen. Dick Durbin (D-IL) has floated legislation (“The Main Street Fairness Act”) that would bless such a state-based de facto national sales tax regime for the Internet.

There is a better way to achieve fairness without sacrificing tax competition or opening the doors to unjust, unconstitutional, and burdensome state-based taxation of interstate sales. In a new Mercatus Center essay,”The Internet, Sales Taxes, and Tax Competition,” Veronique de Rugy and I argue that:

Apart from getting chronic state overspending under control, a better solution to the states’ fiscal problems than a tax cartel that imposes burdensome tax collection obligations on outof-state vendors would be tax competition.  Congress should adopt an “origin-based” sourcing rule for any states seeking to impose sales tax collection obligations on interstate vendors. This rule would be in line with Constitutional protections for interstate commerce, allow for the continued growth of the digital economy, and ensure excessive, inefficient taxes do not burden companies and consumers.

Vero and I have detailed this alternative plan in much greater detail in this 2003 Cato white paper, “The Internet Tax Solution: Tax Competition, Not Tax Collusion.” As we explain in our new paper:

In this system, states would tax all sales inside their borders equally, regardless of the buyer’s residence or the ultimate location of consumption. Under that model, all sales would be “sourced” to the seller’s principal place of business and taxed accordingly. This is, after all, how sales taxes have traditionally worked. A Washington, DC, resident who buys a television in Virginia, for instance, is taxed at the origin of sale in Virginia regardless of whether he brings the television back into the District. Each day in America, there are millions of cross-border transactions that are taxed only at the origin of the sale; no questions are asked about where the buyer will consume the good. Policy makers should extend the same principle to crossborder sales involving mail order and the Internet. Under this approach, Internet shoppers would pay the sales tax of the state where the online retailer is based.

An origin-based sourcing rule has several advantages over the destination-based system States favor.

1. It would eliminate constitutional concerns because only companies within a state or local government’s borders would be taxed.
2. An origin-based system would do away with the need for prohibitively complex multistate collection arrangements because states would tax transactions at the source, not at the final point of consumption.
3. An origin-based system also would protect buyers’ privacy rights, eliminating the need to collect any special or unique information about a buyer and to use third-party tax collectors to gather such information.
4. It would also preserve local jurisdictional tax authority whereas a harmonization proposal would create a de facto national sales tax system that would exclude local governments.
5. Finally, because it is more politically and constitutionally feasible, an origin tax may actually maximize the amount of tax collected for states by making compliance easier and incorporating currently untaxed activities.

In closing, it is important to address the misguided claim at the heart of the Speier-Womack bill that this is a “states’ rights” issue. Let’s be clear what real federalism is all about. Federalism is not about “states’ rights.” States have powers and responsibilities, and under the Constitution — at least the proper interpretation of it — they have wide-ranging flexibility to purse different governance approaches. But that power is not unlimited. America abandoned its first constitution, The Articles of Confedertion, after just 14 years in part because untrammeled state authority was discouraging interstate trade and commerce. In their wisdom, the authors or our present Constitution made sure to include Article 1, Sec. 8, Clause 3 — the so-called “Commerce Clause” — which created and protected what might best be thought of as the world’s first free trade zone – The United States of America. It remains one of the greatest achievements in constitutional and commercial history.

Thus, properly understood, federalism is about a healthy tension among competing units of government. Each has a different role and set of responsibilities, and this tension bolsters the checks and balances at the heart of our constitutional republic. [I outline all this in far more detail my 1999 book, The Delicate Balance: Federalism, Interstate Commerce and Economic Freedom in the Technological Age.]

In the context of Internet tax policy, this means that the tax power of the States can be legitimately constrained by the federal government to ensure that the interstate market is not unduly burdened with unjust levies. States certainly retain the power to impose whatever levies they wish on those actors who have a substantial physical presence in their geographic confines. That is, they can tax their own exports. Taxing imports from another State, however, is an entirely different matter, and one the necessarily requires some degree of federal oversight to ensure America’s free trade zone is preserved and protected.

An origin-based sourcing rule accomplishes that goal while also leaving States the discretion to impose taxes on their own exports if they so choose. The fact that this system would lead to heated tax competition among the States is a feature, not a bug.

On July 27th, The Progress & Freedom Foundation hosted a Capitol Hill panel discussion entitled “Online Child Safety, Privacy, and Free Speech: An Overview of Challenges in Congress & the States.” The event featured remarks from:

• Parry Aftab, Executive Director, WiredSafety.org
• Todd Haiken, Senior Manager of Policy, Common Sense Media
• Jim Halpert, Partner, DLA Piper
• Berin Szoka, Senior Fellow, The Progress & Freedom Foundation

We’ve just released the transcript of the event, which I have also pasted down below the fold in a Scribd document reader. Also, the audio for this event can be heard by clicking below:

Download mp3

Here is the full event description:

Online child safety, privacy, and free speech remain hotly debated issues at both the federal and state level. Bills introduced in Congress to address cyberbullying concerns propose either educational initiatives or a criminalization approach. Access to objectionable content also remains a concern and a new, government-mandated task force is looking into those issues. Meanwhile, state officials, including many state attorneys general, continue to explore age verification mandates for social networking sites and some have considered building on the federal Children’s Online Privacy Protection Act (COPPA) to expand “parental notification” mandates. The Federal Trade Commission (FTC) has recently announced an expedited review of COPPA to see if it is keeping up with new developments. The FTC is also exploring child safety in virtual worlds. New concerns about “sexting,” or the sending of sexual explicit images over mobile devices, has also raised new concerns led some lawmakers to ponder penalties.

How serious are these concerns? Is legislation or regulation needed to address them? What free speech issues are at stake? Should Congress take the lead or leave it to the States to experiment with different models? These and other issues were discussed by a panel of leading experts in the field of online safety and privacy policy.

Transcript PFF Online Child Safety Privacy Hill Event (7-27-2009) http://d.scribd.com/ScribdViewer.swf?document_id=18756666&access_key=key-1blb7az1ag406howibuk&page=1&version=1&viewMode=

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);

• Would likely be the subject of massive fraud or evasion since it is not always possible to definitively verify the parent-child relationship, or because the system could be “gamed” in other ways by determined adolescents;
• Do nothing to prevent offshore sites and services from operating outside these rules;
• Present major practical challenges for law enforcement officials in the face of such evasion by both domestic users and offshore sites;
• Could destroy opportunities for new or smaller website operators to break into the market and offer competing services and innovations, thus contributing to consolidation of online content and services by erecting barriers to entry; and
• Violate the Commerce Clause of the U.S. Constitution, since Internet activity clearly represents interstate commerce that states have no authority to regulate.