On Saturday, C-SPAN aired a segment of The Communicators featuring me and Free Press’ Chance Williams. In the 30-minute segment, Chance and I discussed the future of net neutrality now that the FCC’s Open Internet rules are vacated. You can see the taping here or below.

Declan McCullagh, chief political correspondent for CNET and former Washington bureau chief for Wired News, discusses recent leaks of NSA surveillance programs. What do we know so far, and what more might be unveiled in the coming weeks? McCullagh covers legal challenges to the programs, the Patriot Act, the fourth amendment, email encryption, the media and public response, and broader implications for privacy and reform.

Download

Related Links

• Snowden: NSA snoops on U.S. phone calls without warrants, McCullagh
• Snowden: Feds can’t plug leaks by ‘murdering me’, McCullagh
• Feds: Power grid vulnerable to cyber threats, McCullagh

Are we as globalized and interconnected as we think we are? Ethan Zuckerman, director of the MIT Center for Civic Media and author of the new book, Rewire: Digital Cosmopolitans in the Age of Connection, argues that America was likely more globalized before World War I than it is today. Zuckerman discusses how we’re more focused on what’s going on in our own backyards; how this affects creativity; the role the Internet plays in making us less connected with the rest of the world; and, how we can broaden our information universe to consume a more healthy “media diet.”

Download

Related Links

• Rewire: Digital Cosmopolitans in the Age of Connection, Zuckerman
• What Ethan Zuckerman’s Rewire tells us about the internet changing our lives, Morrison
• Rewire: Rethinking Globalization in an Age of Connection Zuckerman

Gabriella Coleman, the Wolfe Chair in Scientific and Technological Literacy in the Art History and Communication Studies Department at McGill University, discusses her new book, “Coding Freedom: The Ethics and Aesthetics of Hacking,” which has been released under a Creative Commons license.

Coleman, whose background is in anthropology, shares the results of her cultural survey of free and open source software (F/OSS) developers, the majority of whom, she found, shared similar backgrounds and world views. Among these similarities were an early introduction to technology and a passion for civil liberties, specifically free speech.

Coleman explains the ethics behind hackers’ devotion to F/OSS, the social codes that guide its production, and the political struggles through which hackers question the scope and direction of copyright and patent law. She also discusses the tension between the overtly political free software movement and the “politically agnostic” open source movement, as well as what the future of the hacker movement may look like.

Download

Related Links

• Coding Freedom: The Ethics and Aesthetics of Hacking, by Coleman
• Hacker Politics and Publics. Public Culture, by Coleman
• Hackers. The Johns Hopkins Encyclopedia of Digital Textuality. Forthcoming, 2012, by Coleman

Three rings for the broadcast-kings filling the sky,
Seven for the cable-lords in their head-end halls,
Nine for the telco-men doomed to die,
One for the White House to make its calls
On Capitol Hill where the powers lie,
One ring to rule them all, one ring to find them,
One ring to bring them all and without the Court bind them,
On Capitol Hill where the powers lie.

Myths resonate because they illustrate existential truths. In J.R.R. Tolkien’s mythical tale, the Lord of the Rings, the evil Lord Sauron imbued an otherwise very ordinary ring – the “One Ring”– with an extraordinary power: It could influence thought. When Sauron wore the One Ring, he could control the lords of the free peoples of Middle Earth through lesser “rings of power” he helped create. The extraordinary power of the One Ring was also its weakness: It eventually corrupted all who wore it, even those with good intentions. This duality is the central truth in Tolkien’s tale.

It is also central to current debates about freedom of expression and the Internet.

Since the invention of the printing press, those who control the means of mass communication have had the ability to influence thought. The printing press enabled the rapid and widespread circulation of ideas and information for the first time in history, including ideas that challenged the status quo (e.g., sedition and heresy). Governments viewed this new technology as a threat and responded by establishing control over the machinery of the printing press through state monopolies, press licenses, and special taxation.

“The right to think is the beginning of freedom, and speech must be protected from the government because speech is the beginning of thought.”

The Framers knew that freedom of expression is the foundation of freedom. They also recognized that governments could control thought by controlling the printing press, and included a clause in the First Amendment prohibiting government interference with the “freedom of the press.” Though this clause was aimed at the printing press, its protection is not limited to the mass communications media of the Eighteenth Century. The courts have held that the First Amendment encompasses new mass media technologies, including broadcast television and cable.

Several public interest groups, academics, and pundits across the political spectrum nevertheless argue that the latest mass communications technology – the Internet – does not merit protection from government interference on First Amendment grounds. They assert that neither the dissemination of speech by Internet service providers (ISPs) nor the results of Internet search engines (e.g., Google) are entitled to First Amendment protection. They fear that Internet companies will use the First Amendment to justify the exercise of editorial control over the free expression of their consumers.

Others (including the Competitive Enterprise Institute) argue that the First Amendment applies to bothISPs and search engines. They believe a government with unrestrained control over the means of mass communications has the incentive and the ability to use that power to control the thoughts of its people, which inevitably leads to authoritarianism. They point to Internet censorship by China, Syria, and other authoritarian governments as current proof of this principle.

Both sides in the Internet debate raise legitimate concerns. I suspect many consumers do not want ISPs and search engines to exercise unfettered control over the Internet. I suspect that just as many consumers do not want government to exercise unfettered control over the Internet either. How can we resolve these dual concerns?

The free peoples of Middle Earth struggled with a similar duality at the Council of Elrond, where they decided what should be done with the One Ring. “Why not use this ring?” wondered Boromir, a bold hero who had long fought the forces of Sauron and believed the ring could save his people. Aragorn, a cautious but no less valiant hero, abruptly answered that no one on the Council could safely wield it. When Elrond suggested that the ring must be destroyed, mutual distrust drove the Council to chaos. Order was restored only when Frodo, a hobbit with no armies to command and no physical power, volunteered for the dangerous task of destroying the ring.

The judicial branch is our Frodo. It has no armies to command and no physical power. It must rely on the willingness of others to abide by its decisions and their strength to enforce them. Like the peoples of Middle Earth who relied on Frodo, we rely on the courts to protect us from abuse of government power because the judicial branch is the least threatening to our liberty.

This is as true today as it was when the Constitution was signed. Changes in technology do not change the balance of power among our branches of government. As we have in the earlier eras of the printing press, broadcast television, and cable, we must trust the courts to apply the First Amendment to mass communications in the Internet era.

Providing ISPs and search engines with First Amendment rights would prevent dangerous and unnecessary government interference with the Internet while permitting the government to protect Internet consumers within Constitutional bounds. Although some advocates imply otherwise, application of the First Amendment to Internet companies would not preclude the government from regulating the Internet. The courts uphold regulations that limit freedom of expression so long as they are narrowly tailored to advance a compelling or substantial government interest.

We have always trusted the courts to balance the right to freedom of expression with other rights and governmental interests, and there is no reason to believe they cannot appropriately balance competing concerns involving the Internet. If the courts cannot be trusted with this task, no one can.

We live in an entitlement era, when rights are seemingly invented out of whole-cloth. It should come as no surprise, therefore, that a bit of “rights inflation” is creeping into debates about Internet policy. Today, for example, a coalition of groups and individuals (many of which typically advocate greater government activism), have floated a “Declaration of Internet Freedom.”  My concern with their brief manifesto is that is seems to based on a confused interpretation of the word “freedom,” which many of the groups behind the effort take to mean freedom for the government to reorder the affairs of cyberspace to achieve values they hold dear.

The manifesto begins with the assertion that “We stand for a free and open Internet,” and then says “We support transparent and participatory processes for making Internet policy and the establishment of five basic principles:”

1. Expression: Don’t censor the Internet.
2. Access: Promote universal access to fast and affordable networks.
3. Openness: Keep the Internet an open network where everyone is free to connect, communicate, write, read, watch, speak, listen, learn, create and innovate.
4. Innovation: Protect the freedom to innovate and create without permission. Don’t block new technologies, and don’t punish innovators for their users actions.
5. Privacy: Protect privacy and defend everyone’s ability to control how their data and devices are used.

This effort follows close on the heels of a proposal from Rep. Darrell Issa (R-CA) and Sen. Ron Wyden (D-OR) to craft a “Digital Bill of Rights” that, not to be outdone, includes ten principles. They are:

1. Freedom – digital citizens have a right to a free, uncensored internet.
2. Openness – digital citizens have a right to an open, unobstructed internet.
3. Equality – all digital citizens are created equal on the internet.
4. Participation – digital citizens have a right to peaceably participate where and how they choose on the internet.
5. Creativity – digital citizens have a right to create, grow and collaborate on the internet, and be held accountable for what they create.
6. Sharing – digital citizens have a right to freely share their ideas, lawful discoveries and opinions on the internet.
7. Accessibility – digital citizens have a right to access the internet equally, regardless of who they are or where they are.
8. Association – digital citizens have a right to freely associate on the internet.
9. Privacy – digital citizens have a right to privacy on the internet.
10. Property – digital citizens have a right to benefit from what they create, and be secure in their intellectual property on the internet.

In a recent Forbes column (“We Don’t Need a Digital Bill of Rights“), I expressed some concerns about the Issa-Wyden effort and I have similar feelings about that new “Declaration of Internet Freedom” as well. As I noted in the Forbes column on those “rights”:

It would be hard to be against any of these things. Luckily, at least here in the United States, we already enjoy all these freedoms thanks to the protections provided by our actual Bill of Rights. We are at liberty to participate where and how we choose, to share and be as creative as we desire, and to associate with whomever we wish. The First Amendment alone secures those rights. Likewise, properly construed, the First Amendment ensures the “right to a free, uncensored Internet,” it’s just that lawmakers often  try to evade the Amendment’s unambiguous and comprehensive “Congress shall make no law” prohibition.

But it’s not just that these new efforts aren’t needed, it’s that conflating them with the actual Declaration of Independence or Bill of Rights really bastardizes the true intent of those founding documents. As Cato’s Jim Harper rightly notes:

I’m really hoping that nobody living today gets to define the basic principles by which the Internet is ruled. We’ve got that. It’s a neato collection of negative rights, preventing the government from interfering with society’s development, whether that development occurs online or off.

Of course, Jim and I believe that the original Declaration, the U.S. Constitution, and the original Bill of Rights helped establish a government of limited, enumerated powers that properly safeguarded the most important general right of all: The right of individuals to be at liberty to live a life of their own choosing. It was all beautifully summarized in that simple phrase: you have a right to “life, liberty, and the pursuit of happiness.”

By contrast, if you subscribe to an alternative theory of rights that imagines there exists a litany of goodies to which we all possess an inalienable right, then you will likely be more sympathetic to efforts like the this new “Declaration of Internet Freedom” and “Digital Bill of Rights.” But that’s the problem I have with both documents.  The wonderful thing about the original Declaration, Constitution, and Bill of Rights was that they didn’t create any expensive entitlements that required affirmative state action. Instead, they tightly bound government and curtailed its powers and left the people at liberty. By contrast, these new “Declaration of Internet Freedom” and “Digital Bill of Rights” contain all sorts of aspirational principles that could be construed as “positive rights” that require government to provide some sort of basic underlying service, or to affirmatively and aggressively regulate the information economy to protect some of these amorphous values.

I think that’s pretty clear with some of the principles listed in the documents. Consider “Access” (“Promote universal access to fast and affordable networks”); and “Openness” (“Keep the Internet an open network where everyone is free to connect, communicate, write, read, watch, speak, listen, learn, create and innovate”). I suppose you could claim that those values do not represent calls for government action, but I hope you can imagine how easy it would be to convert both into an affirmative mandate to subsidize or regulate.

Similarly, I like the sound of the “Innovation” bullet (“Protect the freedom to innovate and create without permission. Don’t block new technologies, and don’t punish innovators for their users actions”), but is that protecting the freedom to innovation and creation without permission from the government or does this entail something more? After all, as I document in this book chapter (“The Case for Internet Optimism, Part 2: Saving the Net from Its Supporters“), there exists a large number of academics and advocacy groups today who believe that “openness” and “innovation” are values (even rights) that are most at risk from private, not public action. I invite you to read the works of Tim Wu, Dawn Nunziato, or Frank Pasquale (among others) to see what I am talking about. These new “Declaration” and “Bill of Rights” proposals don’t offer a detailed answer to that question, but I can’t help but raise this concern when at least the former effort was led by the far-left radicals at the Free Press, which was founded by America’s leading media Marxist (yes, Marxist — read about it all here).

Until the advocates who came up with these statements are willing to unpack these principles a bit more and explain their theories of rights and government, we really don’t know what these manifestos would mean if they came to influence public policy. But I suspect that they would both just result in more legislative meddling and regulatory adventurism.

Finally, I know that a few of my friends here at the TLF have come up with their own “Declaration” to push back against this other one, and I agree with many of the principles that they have articulated in their counter-manifesto. (Hell, Wayne Crews and I once even came up with a sort of Declaration of our own back in 2001).  But I think we now need to impose a moratorium on all these new “Declarations” and “Bill of Rights” proposals until we get a hell of a lot more serious about honoring the originals.

JUST SAY NO to new “Declarations” and “Bill of Rights” proposals, and JUST SAY YES to the real deals!

P.S. For a light-hearted take on the excesses of our entitlement age, you might enjoy my old essay: “Broadband as a Human Right (and a short list of other things I am entitled to on your dime)“

Two data points in the news over the past 24 hours to consider:

• A new report on “Smartphone Adoption & Usage” by the Pew Internet Project finds that “one third of American adults – 35% – own smartphones” and that of that group “some 87% of smartphone owners access the Internet or email on their handheld” and “25% of smartphone owners say that they mostly go online using their phone, rather than with a computer.”
• According to the Wall Street Journal, the “Average iPhone Owner Will Download 83 Apps This Year.” That’s up from an average of 51 apps downloaded in 2010. (At first I was astonished when I read that, but then realized that I’ve probably downloaded an equal number of apps myself, albeit on an Android-based device.)

As I explain in my latest Forbes column, facts like these help us understand “How iPhones And Androids Ushered In A Smartphone Pricing Revolution.” That is, major wireless carriers are in the process of migrating from flat-rate, “all-you-can-eat” wireless data plans to usage-based plans. The reason is simple economics: data demand is exploding faster than data supply can keep up.

“It’s been four years since the introduction of the iPhone and rival devices that run Google’s Android software,” notes Cecilia Kang of The Washington Post. “In that time, the devices have turned much of America into an always-on, Internet-on-the-go society.” Indeed, but it’s not just the iPhone and Android smartphones. It’s all those tablets that have just come online over the past year, too. We are witnessing a tectonic shift in how humans consume media and information, and we are witnessing this revolution unfold over a very short time frame.

Unsurprisingly, therefore, “unlimited” wireless data plans are probably on the way out since, as I observe in my Forbes piece:

That model created unsustainable network traffic burdens and it’s surprising unlimited plans have lasted this long. With smartphone users increasingly using their mobile devices to access the Internet and consume more cloud-based services and mobile video than ever, the “all you can eat” data buffet eventually had to end.

But critics are far too quick to suggest this is some of nefarious, anti-consumer conspiracy. In reality, I argue:

Tiered and metered pricing schemes are a sensible way to price demand for bandwidth-intensive users and applications and, in the process, alleviate network congestion, encourage new investment, and ensure that average costs for consumers are more reasonable over time.

Using usage data provided by Nielsen, I document the dramatic traffic growth that carriers are struggling to deal with but also show how most average consumers will do better under the new tiered plans. That’s because, even with a significant uptick in wireless data demand, the vast majority of users will not exceed the lowest tier of service (2 GB) that carriers are pricing at $20-$30. That’s less than most of them pay today. Thus:

It’s only the most rapacious mobile data consumers who’ll pay the higher tier prices. Doesn’t it make more sense that the most intensive network users pay more instead of raising average costs for all consumers? Why should minimal data users subsidize the big eaters?

Instead of repeating it all here, I’d just encourage you to bounce over to Forbes to read my entire essay.

The interesting policy question raised by all this is whether critics and policymakers will give network operators the freedom to innovate and employ creative business models so market experimentation can determine which pricing schemes will best calibrate supply and demand while also ensuring optimal network investment. You may recall that usage-based pricing has already become a flashpoint in the Net neutrality wars, and just last Friday I wrote about Netflix’s shameless attempt to get the feds to regulate usage-based pricing on the wireline front.

So, stay tuned. This fight could really heat up. Perhaps it’s time to dust off the old books and papers about how to fight off government price controls!

Related Reading:

• Netflix Falls Prey to Marginal Cost Fallacy & Pleads for a Broadband Free Ride (July 8, 2011)
• Why Congestion Pricing for the iPhone & Broadband Makes Sense (October 7, 2009)
• The (Un)Free Press Calls for Internet Price Controls: “The Broadband Internet Fairness Act” (June 17, 2009)
• Free Press Hypocrisy over Metering & Internet Price Controls (June 18, 2009)
• Once Again, Why Not Meter Broadband Pipes?  (September 7, 2007)
• Why Not Meter? (March 12, 2007)
• The Real Net Neutrality Debate: Pricing Flexibility Versus Pricing Regulation (October 27, 2005)

This morning, the Federal Communications Commission (FCC) released its eagerly-awaited “Future of Media” report. The 475-page final report is entitled, “The Information Needs of Communities: The Changing Media Landscape in a Broadband Age.”  [Here’s a 2-page summary and the official press release.]  The report is a bit overdue; the effort was supposed to be wrapped up late last year. Comments in the proceeding were filed over a year ago. Here are some of the major ones. Also, here is the 80-page monster filing that I submitted with my former PFF colleagues Berin Szoka and Ken Ferree.

Quick refresher… Federal policymakers have been taking a greater interest in the health of media and journalism in recent years. In 2009, the Senate held hearings about “the future of journalism,” and Senator Benjamin L. Cardin (D-MD) introduced the “Newspaper Revitalization Act,” which would allow newspapers to become tax-exempt non-profits in an effort to help them stay afloat. In 2010, the Federal Trade Commission hosted two workshops asking “How Will Journalism Survive the Internet Age?” and also released a staff report on “Potential Policy Recommendations to Support the Reinvention of Journalism.” (As I noted here and here, the FTC was blasted for that report and quickly backed off the issue. The agency has since gone radio silent on the issue.) The FCC also launched its “Examination of the Future of Media and Information in a Digital Age” in 2010, and today’s report wraps up their work on this front.

My first reaction after scanning the FCC’s final report is one of relief. For those of us who care about the First Amendment, media freedom, and free-market experimentation with new media business models, it feels like we’ve dodged a major bullet. The report does not recommend sweeping regulatory actions that might have seen Washington inserting itself into the affairs of the press or bailing out dying business models.

By contrast, when the FCC and FTC started their respective proceedings, things looked very grim from a policy perspective. The discussion was being completely dominated by groups like Free Press and their founders, the neo-Marxist media scholar Robert W. McChesney and Nation editor John Nichols.  Here are some old essays and papers that summarize the radical “media reform” agenda they set forth over the past few years:

• A “Public Option” for Media? The Free Press Plan to Put Journalists on the Public Dole
• Free Press, Robert McChesney & the “Struggle” for Media
• Socializing Media in Order to Save It
• The Wrong Way to Reinvent Media, Part 1: Taxing Devices & Networks to Subsidize Media, by Adam Thierer & Berin Szoka, March 24, 2010
• The Wrong Way to Reinvent Media, Part 2: Broadcast Spectrum Fees for Public Media, by Adam Thierer, March 29, 2010
• The Wrong Way to Reinvent Media, Part 3: Media Vouchers, by Adam Thierer & Berin Szoka, April 14, 2010
• The Wrong Way to Reinvent Media, Part 4: Expanding Postal Subsidies, by Adam Thierer & Berin Szoka, April 20, 2010
• The Wrong Way to Reinvent Media, Part 5: Media Bailouts & Welfare for Journalists, by Adam Thierer & Berin Szoka, April 30, 2010

To the FCC’s great credit, the agency’s final report didn’t fall for most of these gimmicks or those radical calls for state intervention. The report’s recommendations are actually quite limited in scope and relatively innocuous in nature (although some of them are extremely amorphous and could be open to expansionist interpretations later on). Here are the major recommendations:

• Accelerate move from paper to online disclosure. Disclosure information required by the FCC should be moved online from filing cabinets to the Internet so the public can more easily gain access to valuable information.  FCC should eliminate burdensome rules and streamline disclosures about local programming by moving files online.
• Remove barriers to innovation and online entrepreneurship by pushing for universal broadband deployment and adoption.  Achieving this goal would remove cost barriers,strengthen online business models, expand consumer pools and ensure that the news and information landscape serves communities to the maximum possible benefit of citizens.
• Target existing federal spending at local media.  Existing government advertising spending, such military recruiting and public health ads, should be targeted toward local media whenever possible. Each year, the federal government spends roughly $1 billion in advertising without maximizing potential benefits to local media.
• Repeal Fairness Doctrine, terminate localism proceeding and replace “enhanced disclosure” with a new streamlined system of online disclosure. Broadcasters would disclose amount of programming about the community and other important information.
• Discourage “pay-for-play” arrangements – in which TV stations allow advertisers to dictate on-air content without disclosing to viewers – by requiring online disclosure of such arrangements.
• Re-assess whether the satellite TV’s set-aside for educational programming and cable TV leased access systems are working; put satellite disclosure online.
• There should be state-based C-SPAN in every state. Cable and satellite operators, public broadcasters and PEG channels should work toward that goal, and policymakers should consider offering incentives for those media organizations that take such steps, or to those that provide support for local cable news operations.
• Re-establish tax certificate program for small businesses including minorities and women.
• Policymakers should consider clarifications or changes in tax rules that would make it easier for nonprofit news operations to develop sustainable business models.
• Focus on historically underserved when policymakers craft strategies and rules.

While I can’t endorse all of these recommendations — especially those that involve more spending or tax code tinkering — I think most of these policy proposals are relatively unobjectionable. Again, this is pretty far removed from the radical Free Press / McChesney agenda that guided the Federal Trade Commission’s controversial report.  I will likely have more to say about the FCC’s specific policy recommendations after getting through the entire 475-page report this weekend.

Even without having finished the entire report, I feel comfortable saying this: The FCC’s “Information Needs of Communities” report is an impressive achievement and will be used as a reference document for decades to come.  The report offers an excellent overview of the state of the media marketplace and provides a relatively balanced assessment of both the good and bad trends shaping media and journalism today.

I congratulate Steve Waldman and the entire team experts that the FCC brought together to compile this report. But most of all I am relieved to see that the agency generally restrained itself here and avoided going down the dangerous path I once feared it might.

Finally, I am just a happy camper any day I see the Federal Communications Commission send out a Tweet like this:

On Forbes this morning, I analyze the legislative and judicial challenges to last year’s FCC Open Internet rules, the so-called net neutrality order.

Despite the urgency of Friday’s budget machinations, the House took time out to pass House Joint Resolution 37, which “disapproves” the FCC’s December rulemaking.  If passed by the Senate and not vetoed by President Obama, HJR 37 would effectively nullify the net neutrality rules, and ensure the FCC cannot pass alternate versions of them absent new authority to do so from Congress.

Most commentators believe that the House action was merely symbolic.  Passage in the Senate requires only a simple majority, but the neutrality fight has turned violently partisan since the mid-term elections and getting a few Democratic Senators on-board may be hard.  More to the point, the White House last week pre-emptively threatened to veto the resolution.

As I’ve noted before, however, net neutrality could still become a casualty of more important compromises between the White House and Congress.  Last week, Politico reported that undoing the FCC order was one of the policy riders Republicans were still pushing.  Today’s draft budget bill doesn’t mention that provision, but the budget fight isn’t over.

Still, it seems more likely that the real challenges will come in the courts.  On that front, the D.C. Circuit last week rejected lawsuits filed by Verizon and MetroPCS as premature (the new rules are still not published in the Federal Register, and the reasons for the delay are unclear).

The two companies will surely try again, though the dismissal of their first efforts means the case could wind up somewhere other than the D.C. Circuit.  Given the strong decision against the FCC in the Comcast case last year, the general consensus is that the D.C. Circuit is the court most likely to rule against the FCC’s thin arguments for authority to issue the rules in the first place.

I’m not one of those libertarians who incessantly rants about the supposed evils of National Public Radio (NPR) and the Public Broadcast Service (PBS).  In fact, I find quite a bit to like in the programming I consume on both services, NPR in particular. A few years back I realized that I was listening to about 45 minutes to an hour of programming on my local NPR affiliate (WAMU) each morning and afternoon, and so I decided to donate $10 per month. Doesn’t sound like much, but at $120 bucks per year, that’s more than I spend on any other single news media product with the exception of The Wall Street Journal. So, when there’s value in a media product, I’ll pay for it, and I find great value in NPR’s “long-form” broadcast journalism, despite its occasional political slant on some issues.

In many ways, the Corporation for Public Broadcasting, which supports NPR and PBS, has the perfect business model for the age of information abundance. Philanthropic models — which rely on support for foundational benefactors, corporate underwriters, individual donors, and even government subsidy — can help diversify the funding base at a time when traditional media business models — advertising support, subscriptions, and direct sales — are being strained.  This is why many private media operations are struggling today; they’re experiencing the ravages of gut-wrenching marketplace / technological changes and searching for new business models to sustain their operations. By contrast, CPB, NPR, and PBS are better positioned to weather this storm since they do not rely on those same commercial models.

Nonetheless, NPR and PBS and the supporters of increased “pubic media” continue to claim that they are in peril and that increased support — especially public subsidy — is essential to their survival.  For example, consider an editorial in today’s Washington Post making “The Argument for Funding Public Media,” which was penned by Laura R. Walker, the president and chief executive of New York Public Radio, and Jaclyn Sallee, the president and chief executive of Officer Kohanic Broadcast Corp. in Anchorage. They argue:

The CPB’s federal appropriation this fiscal year is $430 million – about $1.39 per American. More than 70 percent of that funding goes to local stations around the country, accounting for, on average, nearly 16 percent of their annual budgets. For some, such as New York Public Radio, CPB funding is a smaller – although important – part of the operating budget because their audience size and urban location enable them to rely on a mix of membership, foundation and underwriting support. For stations in rural or economically hard-hit areas that aren’t able to attract as much other support, CPB funding is their lifeblood.

But regardless of whether the federal subsidy to local stations is trivial or substantial, like most other supporters of “public media,” Walker and Sallee jump right past the moral discussion of whether it is right to force citizens to subsidize media they may not find to their liking. Again, as it pertains to NPR at least, I am not one of these people, but I am entirely sympathetic with those — mostly of a conservative persuasion — who find it offensive to be forced to use their tax dollars to support programs they find objectionable for whatever reason.  And while I do not believe that NPR and PBS are as hopelessly biased as some conservatives suggest, I think it’s fair to say that there’s more than a hint of liberal bias in many of their programs and reporters. (Personally, I do not mind some of that bias, but I do find it silly that some of these reporters, editors, and their defenders continue to pretend no such bias exists. Even with a liberal slant to some of their reports, they are still great reports.)

The reason this is important is because forcing citizens to fund even more media content they might find objectionable will lead to endless political controversy and increased public tensions. My former PFF colleague Randy May, now president of the Free State Foundation, correctly argues that:

when government-supported media—that is, media supported with our tax dollars—decide what content should be filtered or amplified regarding issues of public importance… government’s involvement tends to exacerbate public tensions in a way that makes civil discourse more difficult. This is because government content decisions are seen by many as tilting the public policy playing field in a way inconsistent with their beliefs.

Sure, I understand that we taxpayers are forced to subsidize many things we don’t like or even find offensive.  But that’s hardly a good argument for forcing to subsidize even more, especially when it comes to speech and media. Should liberals be forced to help fund the next Fox News or Rush Limbaugh? Should conservatives have to support the next Keith Olbermann or Bill Moyers?  Should independents or libertarians have to subsidize any of this?  As Thomas Jefferson famously put it in the 1786 Virginia Act for Establishing Religious Freedom, “to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves, is sinful and tyrannical.” That is, we naturally — and rightly — resent subsidizing speech that is antithetical to our own values.

But won’t public media wither and die without taxpayer subsidy, as Walker and Sallee suggest?  I don’t think so. First, to reiterate, public media is already well-diversified and has multiple funding streams to fall back on such that the 16% that comes from taxpayers could be replaced by other sources as it is phased out. Moreover, as the defunding process unfolds, it presents public media with the perfect opportunity to lock in long-term funding from those other sources. Public media supporters like to claim that $430 million (or $1.39 per taxpayer) per year isn’t that big of a burden.  OK, sure, but that argument cuts both ways. If they really feel it isn’t such a huge expense, then certainly we can find other sources to cover that $1.39 per year!  In fact, I can imagine a massive CPB/PBS/NPR fundraising campaign based entirely on “Doing Your Part to Cover the Gap” or other such gimmicks.

What I am getting at here is that the time has come to make a firm break with “public media” notions but to simultaneously embrace “non-commercial media” as a viable and important part of our modern media marketplace. “Public media” will always be a contentious term and be subjected to endless politicization.  “Non-commercial media,” by contrast is more value-neutral and should be easier for citizens of all ideological stripes to accept since it implies media that is not supported by advertising or subscriptions but which is also free of forcible taxpayer subsidy.

Again, CPB is already 84% of the way there! We can find creative ways to bridge the gap and cover that remaining 16%.  I’d happily double my annual contribution to my local NPR affiliate today if they agreed to drop federal subsidies.  And I bet plenty of other people and organizations would step up to the plate and meet this challenge, too.

A group of regulatory advocates that includes Free Press, Media Access Project and the New America Foundation, have fired off a letter to the Federal Communications Commission (FCC) requesting action against the nation’s #5 mobile provider, MetroPCS.  These regulatory groups claim that “new service plans being offered by mobile provider MetroPCS block and discriminate against Internet content, applications and websites.” Wired’s Ryan Singel summarizes what the fight is about:

At issue are new, tiered 4G data plans from the nation’s fifth largest mobile carrier, which specializes in pay-as-you-go mobile-phone service. The new plans offer “unlimited web usage” for all three tiers, which cost $40, $50 and $60 a month. But MetroPCS’s terms exclude video sites other than YouTube from “unlimited web usage,” and block the use of internet-telephony services such as Skype and Tango.  The terms of service also make it very unclear whether users would be allowed to use online-radio services such as Pandora.

The parties petitioning the FCC for regulatory intervention claim that “MetroPCS appears to be in violation of the Commission’s recently adopted open Internet rules” even though they note that “these rules have not yet taken effect.”

There are four things I find interesting about this hullabaloo:

(1) The ink isn’t even dry on the FCC’s Net neutrality order and yet it already has the inside-the-Beltway lobbying machine humming.  We’re just a few weeks into the FCC’s new “light touch” Net neutrality regulatory regime and yet we’re already seeing pleadings like this one.  If this foreshadows what the future holds, it’s a troubling sign of things to come.  If the agency’s new regulatory regime sticks, I think it’s safe to say that such requests for market meddling will only increase as time goes on and the Internet will quickly be wrapped in innovation-stifling red tape.  Meanwhile, countless lawyers and lobbyists around the Beltway are licking their chops in anticipation of the lobbying and litigation bonanza that awaits.

(2) Choice is largely irrelevant to the pro-regulation Net neutrality crowd.  It seemingly doesn’t matter to these regulatory advocates that they and other consumers are free to shop around for alternative mobile plans.  In the field of competition policy, the ability to exercise such choice is typically the end of the story and no further discussion / intervention is considered warranted. These advocates, however, seemingly want control over all terms of service for all market competitors, even for the distant #5 players in the field.  I mean, for God’s sake, we are talking about MetroPCS here!  Does anyone seriously believe that there’s just no escaping their evil clutches?

And apparently we can look forward to more of this sort of across-the-board, damn-the-consequences market meddling thanks to what Randy May of the Free State Foundation refers to as “Infamous No. 78” of the FCC’s Net neutrality order. That provision of the order essentially says that the FCC can dispense with the notion that a showing of actual monopoly power and actual consumer harm should be the litmus tests for regulatory intervention. Instead, May notes:

by disclaiming reliance only on anticompetitive injury and consumer harm (generally present only when an Internet provider possesses market power), the Commission leaves itself largely at sea in enforcing its rules. By “at sea,” I mean, of course, that the Commission, as it acknowledges, is leaving itself with nearly unbridled discretion in deciding which Internet provider practices will be permitted and which will not.

Welcome to our brave new world of ‘anything goes’ Internet regulation.

(3) For Net neutrality proponents, “fairness” always trumps competition / innovation, regardless of the costs.  The people who work at these organizations are, no doubt, well-meaning in their pleadings for regulation. They really think they can make communications and broadband market outcomes more “fair” through the application of Net neutrality regulations and other rules.

But regulation is not costless.  Micromanaging markets can lead to less innovation, less investment, and less consumer choice. It can also dampen price competition. After all, while the regulatory advocates want us to get hot and bothered about the terms of service in this particular case, we should not forget the fact that, with this latest move, MetroPCS is attempting to inject more competition, new innovation, and lower prices into the mobile marketplace.  To reiterate, the company is offering a $40 per month entry level price plan for a new 4G LTE service bundle.  Most people would call this innovation. But Free Press, Media Access Project and New America Foundation want us to believe it is a massive anti-consumer scandal. What an astonishing bit of hubris.

Moreover, let’s imagine that these regulatory advocates get their way and the FCC preemptively denies this innovative move, or that the agency micro-manages the terms of the offering. Those regulatory groups would like us to believe that MetroPCS can absorb the cost of such meddling and that everything will be just fine and dandy.  Back in the real world, however, if you ask just about any serious investment analyst or market expert who monitors mobile markets what they think, most of them would first convey their shock that MetroPCS has even been able to last as long as they have given the cut-throat competition in this arena. Then they’ll tell you that the sort of price and service competition that MetroPCS is pursuing here could kill them. Finally they’d tell you that an increased regulatory burden on the company at this time is could very well result in one less competitor in the long run.

So, while the regulatory advocates will shower us with talk of how they are looking out for our best interests to ensure carriers play “fair,” from a consumer perspective, an additional competitor and more price competition is likely of more importance than a perfectly “neutral” mobile service offering.

(4) Net neutrality regulatory proponents seemingly have very little faith in “openness” prospering organically, even though it has. As I’ve noted before, no one disagrees that the Internet’s openness is what made it great, or that consumers benefit from the free flow of traffic and applications over broadband networks.  But the regulatory advocates assume that only sweeping controls on broadband networks will make that a reality. The fact is, the Internet has never been more “open” than it is today. There’s a simple reason for that: It’s what most people demand. It’s also smart business.  No company ever got rich in this space by blocking traffic.

Having said all that, it may be the case that not everyone cares as much about perfect openness as others do. [See my essay from last year on the many flavors of “openness” and how defining the term is challenging.] As noted above, many consumers would be happier with cheaper price plans and more varied service options. (I bet that is particularly true of many MetroPCS customers since the company seems to target that market niche).  And guess what technophiles… not everyone out there is dying to have Skype or Pandora at their fingertips.  Personally, I couldn’t live with out either of those services and would never own a smartphone or calling plan that disallowed them for any reason.  But I am not so arrogant as to assume that everyone else has the same values as me or that I should make this trade-off for the rest of the world.  If some consumers want to trade functionality off against an affordable entry-level 4G plan, who is to say they should not have that option?  Apparently Free Press, Media Access Project and New America Foundation, that’s who.

In my previous post on the FCC’s Open Internet Report and Order, I looked at the weak justification given for the new rules the Commission approved on Dec. 21, 2010

In this post, an aside on the likely costs of the rules, and in particular the costs of enforcement.

Last week was the 100^th birthday of Nobel prize-winning economist Ronald Coase, a remarkable man I have had the great fortune to know personally. Among his many contributions to the field, Coase has always advocated for more empirical research and other data collection to help lead the field out of its theoretical quagmire. To that end, Coase co-founded the International Society for New Institutional Economics, and served as its first President in 1996.

Unfortunately, the FCC, which owes a great debt to Coase for his early championing of auctions for radio spectrum, does not seem to have learned much else from his work. In a section optimistically captioned, “The Benefits of Protecting the Internet’s Openness Exceed the Costs” (¶¶ 38-42), the Commission makes no effort to calculate either with any hint of rigor. Wishing away serious economic analysis, the Report simply states that “By comparison to the benefits of these prophylactic measures, the costs associated with the open Internet rules adopted here are likely small.”

The sole citation for this remarkable claim is to comments filed by Free Press, one of fifty citations to Free Press in the Report. So far as I know, Free Press does not keep economists on staff, nor did they perform any economic analysis of the benefits or costs of rules that, of course, weren’t in any case finalized until months after comments were filed.

So the belief that the costs are likely small, let alone the value of the benefits not of the open Internet but of the rules adopted to salvage it, is simply that—a belief, or, more likely, a mere hope.

The Report goes on to note that openness and no-blocking are already the “norm” and the “status quo” for broadband Internet providers (so, again, why are new rules so urgently required?), and therefore the only significant compliance cost the FCC envisions is for the new transparency rule, which will require disclosure of network management practices that consumers are imagined to use in deciding which broadband provider to choose. (See ¶¶ 39, 43, and 53-61)

The transparency rule itself, § 8.3, will be discussed in a later post. But assuming that complying with this rule represents the only significant change to existing practices by broadband Internet providers required by the new rules, it probably won’t add enormous new costs. On the other hand, this is also the rule least likely to deliver much in the way of benefits. (Just take a look at the Truth in Lending Disclosure on your last mortgage refinance or read the required FDA disclosure for a recent prescription—which you surely didn’t do before deciding to complete the transaction—to get a sense of just how useful the newly-required network management disclosure will be.)

The Nature of Enforcement

But what of the costs of enforcing the rules, or defending against a claim that a broadband Internet provider has violated them?  The Report here is eerily silent.

There are three types of actions that may be taken to enforce the rules.

First, any individual or organization may file an informal complaint, without paying any fee, through the FCC website. (¶ 153.) Though such complaints will not automatically lead to agency action, “the Enforcement Bureau will examine trends or patterns in complaints to identify potential targets for investigation and enforcement action.”

Second, under ¶ 160, the agency itself may initiate actions, perhaps based on trends or patterns it notes in the informal complaints.

The third avenue for enforcement, the filing of a formal complaint, is the most worrisome. Under § 8.12 of the Order, “Any person may file a formal complaint alleging a violation of the rules….” (emphasis added) (See also ¶¶ 154-159)

In his greatest work, “The Nature of the Firm” (1937), Coase plainly and clearly laid out his belief that business organizations exist only to the extent that their internal costs are less than the costs of using the market to perform every activity associated with the production and marketing of the firm’s products and services. The market in reality is not the magic font of perfect efficiency that theoretical economists assume in their models. Each transaction between a buyer and a seller has certain inefficiencies or costs associated with it, costs Coase referred to as “transaction costs.”

I have written in all of my books about the importance of transaction costs in understanding how the Internet—which reduces transaction costs—is putting unique pressures on the structure of firms, and there’s no need to repeat that discussion here.

But of the six categories of transaction costs Coase introduced in 1937, one that seems not to have penetrated the FCC’s analysis is the one he called “enforcement costs.” In the even the terms of a transaction are not met to the satisfaction of buyer or seller or both, various mechanisms—including arbitration, negotiation, regulators and/or the courts—must be invoked to ensure the bargain made is the bargain received.

In many cases these costs can be exorbitant; indeed, far greater than the value of the underlying transaction. To take a trivial example, a rational consumer won’t sue the maker of a rubber band that breaks the first time she uses it.

At least, that is, not when the consumer has to bear the costs of litigating the claim herself.

The loss of value from the broken rubber band is a fraction of a penny. The cost of initiating—let along prosecuting—a lawsuit would exceed that price by several orders of magnitude. And, in most situations, the most the consumer could hope to win would be the fraction of a cent. The cost of enforcing the implied promise of a working rubber band—and the seller’s cost of defending itself—are lost.  They are inefficiencies of the market, or “transaction costs.”

But what if the consumer can offload nearly all of the enforcement costs on someone else—on the FCC, perhaps, or their broadband ISP provider? If “any person” who believes something is amiss could file an open Internet complaint and pay only a small filing fee to start the machinery of enforcement, why not bring a complaint for any perceived infraction, no matter how small or, indeed, illusory?

And that, unfortunately, is exactly the kind of incentive system created by the Order.

The existence of the new open Internet rules, of course, may operate as a deterrent against the behaviors they prohibit. But it is also likely that the agency will be called upon to enforce the rules against broadband access providers who are accused of violating them. The enforcement costs can be significant—including the costs to the agency itself (that is, to the taxpayers), as well as to the companies accused, rightly or wrongly, of violations.

Bizarrely, the Report makes no mention of the costs of enforcement or their potential impact on the cost-benefit analysis that is dispensed with so quickly. Yet the rules as written are likely to introduce substantial enforcement costs, as evident by looking at the mechanisms for making and resolving complaints. (¶¶ 151-160).

The Danger of a Private Right of Action

In legal terms, the ability of any individual to initiate an enforcement action is known as a private right of action. Federal law grants very few such broadly-written rights. There are, of course, hundreds of millions of American consumers, and giving all of them the right to initiate a formal proceeding that the government and the complained-of party must address can generate enormous costs.

You believe a medication advertised on television has a side-effect on some patient.  You suspect the actions of a far-off manufacturer create environmental hazards in another state.  Your car pulls to the left when you drive on certain roads.  While there are avenues both private and public to bring such concerns to the attention of the potentially-responsible regulators and private parties, there is no private right of action that allows you to file a formal complaint with the federal government–a complaint that must be answered line by line.

But that is precisely what the new rules allow. Regardless of the merits or specifics of a complaint, “the defendant must submit an answer.” In cases where the “facts” are disputed, “a thorough analysis of the challenged conduct might require further factual development and briefing.” (¶ 156) Moreover, “the broadband provider must answer each claim with particularity and furnish facts, supported by documentation or affidavit, demonstrating reasonableness of the challenged practice.” (¶ 157)

In resolving formal complaints, “the Commission will draw on resources from across the agency—including engineering, economic, and legal experts—to resolve open Internet complaints in a timely manner.” (¶ 159)

These are the general comments in the Report. Specific “pleading requirements” laid out in the Order provide the procedures for filing complaints, answers and replies, conducting discovery, developing and supporting legal arguments, verifying facts and documents submitted, and the like. (§§ 8.13-8.17) These sections are in fact far longer and more detailed than the rules themselves, and in essence create a system of adjudication that is similar to the most complex cases brought in federal court.

For example, any broadband provider served with a complaint must respond within 20 days, and must respond to each and every fact referenced in the complaint, supported with documentation including affidavits, legal authority, and other evidence. The Commission “may specify other procedures,” including hearings and oral arguments, and “may require the parties to submit any additional information it deems appropriate for a full, fair, and expeditious resolution of the proceedings, including copies of all contracts and documents reflecting arrangements and understandings alleged to violate” the rules.

Again, a party filing a formal complaint can be any person or organization so long as they have a good faith belief that the broadband provider has violated the rules. (They need not themselves be a customer of the broadband provider.)

Since the kind of blocking and traffic discrimination the rules prohibit can only be distinguished from “reasonable network management” practices (or indeed, behavior that may appear to involve ISP activity but which may simply be a function of overall network conditions at any given time) by reference to detailed discovery, we can expect a lot of complaints to be filed that will turn out not to reveal violations of the rules.

Since consumers aren’t likely to know with any certainty that the behaviors they observe are in fact violations of the rules without extensive and technically complicated discovery, in other words, any slow-down, hiccup, temporary outage or other network artifact that appears to suggest interference will constitute a good faith belief that a violation has occurred, and therefore put the broadband provider (and the FCC) to the cost of demonstrating otherwise.

Is your Internet connection acting up today? Did it take a long time to watch the latest YouTube video? Did you have trouble finding the website you were looking for? Could be that your ISP is blocking or otherwise discriminating against particular content, so perhaps you should submit a formal complaint to the FCC just in case.

All the costs will be borne by others—the provider on the one hand and the FCC on the other.

It’s not Just Money that’s Being Wasted

Such an open-ended grant of standing to “any person,” whether for good or for evil, cannot be squared with the belief that “the costs associated with the open Internet rules adopted here are likely small.” Even if no violation of the rules is ever found—even if no broadband provider ever interferes illegally with the open Internet in the future—providers and the agency will find themselves buried under mountains of complaints, all of which must be investigated and responded to…within 20 days of the filing, no less.

It isn’t just money that will be wasted. The process of enforcement could undermine basic Constitutional protections as well. If a complaint alleges that a broadband provider is interfering with traffic—perhaps on an on-going basis—in ways that violate the rules, the FCC will of necessity analyze large volumes of traffic to determine if a service is being blocked or unreasonably discriminated against. And that means not just looking at traffic patterns but, of course, at the contents of the packets themselves.

The FCC, in other words, in the name of enforcement, will be looking at the Internet behavior not only of the person making the complaint but perhaps of many other customers of the same provider or other providers for comparison.

Economists were clearly absent from discussions about the cost of the rules. But one would have thought at least that civil libertarians would pause at new rules that, in the name of an open and transparent Internet, give the FCC the ability to observe traffic—to perform deep packet inspection—that in any other context would require federal officers to obtain a search warrant based on probable cause of a crime.

But no.  So far, not a peep.

Next: the final rules and what they “preserve.”

I’m always entertained by the talk among the Twitterati — especially those who seem to permanently reside in the #NetNeutrality and #FCC hashtags — about how the Internet’s “openness” is at risk, and that steps must be taken to preserve it.  Regulatory regimes are often birthed by myths, and this one is no different.  Contrary to what the regulation-happy worry-warts suggest, the Internet has never been more “open” than it is today. After all, as Geert Lovink reminded us in his 2008 critique of Jonathan Zittrain’s thinking about the decline of online openness:

[In] [t]he first decades[,] the Internet was a closed world, only accessible to (Western) academics and the U.S. military. In order to access the Internet one had to be an academic computer scientist or a physicist. Until the early nineties it was not possible for ordinary citizens, artists, business[es] or activists, in the USA or elsewhere, to obtain an email address and make use of the rudimentary UNIX-based applications. … It was a network of networks—but still a closed one.

And even though it will probably make the folks at Free Press and Public Knowledge have an aneurysm, it’s abundantly clear what shook-up this sleepy, closed model: commercialization.  That’s right, those evil folks who had the audacity to want to make a dollar online were the ones who brought us the “open” Internet we know and love today! 

Ironically, it was only because the so-called “walled garden” providers of that era — AOL and CompuServe, for example — came along that many average folk were even able to experience and enjoy this strange new world called the Internet. “The fact that millions of Americans for the first time experienced the Internet through services like AOL (and continue to do so) is a reality that Zittrain simply overlooks,” notes Lovink.

It’s true, of course, that services like AOL and CompuServe held our hands to some extent and gave many new Netizens a guided tour of cyberspace. Thus, many would push back against the suggestion that those companies actually helped promote “openness.”  Regardless, that’s all ancient history now because the walls around those particular gardens came crashing down after users became more comfortable navigating the Internet on their own. As a result, CompuServe faded from the scene and AOL lost all 25 million of its $20/month-paying subscribers as they were overtaken by the search and social networking paradigms they never saw coming.

But commercialization promoted openness in a more profound way with the rise of online commerce and the need to expand markets for goods and services, attract audiences, and grow advertising budgets. “Closed” business models just haven’t had much luck online.  Businesses of all flavors aren’t going to make more money online by “blocking” or foreclosing opportunities.

So, getting back to Net neutrality.. should we trust the claims of those who say the FCC will give us a more “open” Internet through a top-down regulatory regime?  I’ll let the brilliant Jack Shafer of Slate answer that question:

So the basic question here is who will set the Internet’s priorities, the government or the providers. That I have an innate distrust for government should surprise no regular readers. Traditionally, the state censors and marginalizes voices while private businesses tend to remain tolerant. Even at the height of the rebellions of the 1960s and early 1970s, political radicals and social radicals could always find printers to publish their most sordid, seditious, and sensational material. But that’s only because there was no FCC control over who could own and operate a printing press, no control over what prices they could charge for their services, and no state commandment that they had to accept any print job. The only times the FCC has spurred debate and commentary have been when it has stepped out of the way.

The FCC’s track record of encouraging innovation or “openness” has just not been a pretty one. Regulatory capture is one culprit here, obviously, but even when the agency’s heart is in the right spot, bureaucratic bungling usually derails the best of intentions with mounds of red tape and years of legal wrangling.

Again, the good news is that almost all signs point in the direction of things growing even more open over time — so long, that is, as the FCC doesn’t screw things up.

[ p.s. I will have much more to say about my views on “openness” and Net optimism in a chapter for Berin Szoka’s terrific upcoming book, The Next Digital Decade.  I built my chapter around this Concurring Opinions debate I had with Jonathan Zittrain earlier this year.]

This morning on WNYC in New York City, I debated Josh Silver of the pro-Internet-regulation group Free Press. It was a healthy exchange of views, except for a few barbs and innuendos thrown by Silver, who is obviously frustrated by his group’s lack of progress in seeking a “government takeover of the Internet.” (He wanted to debate in simple, ideological terms like that, so I indulge here.)

What was most interesting to me was how unsophisticated Silver is with respect to government and regulation. Take a look at his plea:

What we’re asking for—what we need are regulatory agencies that are not captured by industry and that actually act on behalf of the American public. And that’s what they were created to do. The FCC—1934, with the advent of radio—was created to make sure that the public interest was protected. And what we’ve seen is industry capture of regulatory agencies has made those agencies fail again and again and again. And the only thing that’s gonna work is if the Obama administration and the FCC stand up and say, “No more business as usual. We are going to protect net neutrality. We’re going to protect competition, and make sure there’s choices for consumers. And we’re going to end the status quo in Washington that has really broken our entire political system.”

The Obama administration and the FCC did stand up and say “no more business as usual,” but that’s what politicians do to seduce voters. Then, once in power, they go about business as usual. Lucy always yanks away the football, Charlie Brown.

Silver is not alone in having these sweet, sad “good government” sentiments. Many of my interlocutors, with whom I often share outcome goals, believe strongly in achieving those goals by remaking governmental and political systems so that they finally “work.” They believe so strongly in this approach that they seem to think it’s just around the corner—if only we prohibit some speech here, some petitioning of the government there. Y’know, “take the money out of politics.”

Hopefully this fantasy will never come true, because it requires reversing fundamental rights such as free speech in all its instantiations—a handover of power from people to the government and elites that run it.

In the absence of that perfected, all-powerful government—thank heavens—we must organize the society’s resources using the best machine we’ve got for discovering consumers’ interests and delivering on them: an unhampered marketplace, now energized and enhanced by the Internet.

Tech policy polemicist Scott Cleland has hit home with today’s “FreePress’ Faux Urgency on Net Neutrality.”

FreePress’ problem is that people have wised up to their repeated hysterical calls to “Save the Internet” from a problem that has never materialized as they recklessly warned. FreePress has failed miserably in finding or defining any real-world problem that needs radical intervention to fix.

Cleland is meaner to the folks at Free Press than I would be, but he’s right to note that the problems net neutrality regulation might fix haven’t materialized over a long period of, yes, faux urgency.

Two articles of interest in today’s Wall Street Journal with indirect impact on the debate over the future of Internet policy. First, there’s a front-page story (“Facing Budget Gaps, Cities Sell Parking, Airports, Zoo“) documenting how many cities are privatizing various services — including some considered “public utilities” — in order to help balance budgets.  The article worries about “fire-sale” prices and the loss of long-term revenue because of the privatizations.  But the author correctly notes that the more important rationale for privatization is that, “In many cases, the private takeover of government-controlled industry or services can result in more efficient and profitable operations.”  Moreover, any concern about “fire-sale” prices and long-term revenue losses have to be stacked again the massive inefficiencies / costs associated with ongoing government management of resources /networks.

Of course, what’s so ironic about this latest privatization wave is that it comes at a time when some regulatory activists are clamoring for more regulation of the Internet and calling for broadband to be converted into a plain-vanilla public utility. For example, Free Press founder Robert McChesney has argued that “What we want to have in the U.S. and in every society is an Internet that is not private property, but a public utility.”  That certainly doesn’t seem wise in light of the track record of past experiments with government-owned or regulated utilities.  And the fact that we are talking about something as complex and fast-moving as the Internet and digital networks makes the task even more daunting.

Government mismanagement of complex technology projects was on display in a second article in today’s Journal (“U.S. Reviews Tech Spending.”)  Amy Schatz notes that “Obama administration officials are considering overhauling 26 troubled federal technology projects valued at as much as $30 billion as part of a broader effort by White House budget officials to cut spending. Projects on the list are either over budget, haven’t worked as expected or both, say Office of Management and Budget officials.”  I’m pleased to hear that the Administration is taking steps to rectify such waste and mismanagement, but let’s not lose sight of the fact that this is the same government that the Free Press folks want to run the Internet.  Not smart.

CNET has just run the guest column, “Just say no to Ma Bell-era Net neutrality regulation,” Adam Thierer and I wrote in response to “Just say no to fake Net neutrality” by Derek Turner (of Free Press), which decried the win-win-win compromise suggested by Amazon’s Paul Misener, just as Free Press has more recently denounced the compromise proposed by Google and Verizon.

We make a few key points:

1. History demonstrates the dangers of regulatory capture, and the costs to consumers of regulation from lost investment and innovation.
2. These dangers and costs far outweigh the purported benefits of regulation (in addressing a non-existent harm).
3. Broadband markets are competitive enough to prevent the kinds of abuses advocates of net neutrality regulation fret about.
4. Government could foster more broadband competition by deregulating spectrum and local wireline franchising.

I’ve been having a lively debate with the commenters on the piece, so feel free to join in! Unfortunately, we don’t seem to be getting much substantive engagement with our argument—just the usual mix of “These guys are just corporate whores!” and “Can’t you see the sky is falling?”

[I’m always amazed by the misuse of language in debates over media and communications policy. Some regulatory advocates, like Free Press and Public Knowledge, seem to contort the meaning of everyday words in such a grotesque way that they are barely recognizable.  Luckily, via Wikileaks, Mike Wendy and I stumbled upon a secret copy of the “Free Press-Public Knowledge Stylebook for Public Debate” and now have a better idea of what they mean when they utter these terms. We thought we’d share…]

_______________________

“ behemoth” – Use this word to refer to any corporation, regardless of actual size, and make them sound more nefarious than the much larger government that will regulate them.

“ Big Brother” – See “behemoth,” and be careful not to reference Orwell too much lest people actually read “1984” and discover that Big Brother was actually the government, not industry.

“ Censorship” – Refers to efforts by nefarious corporations to control our thoughts and actions since that’s obviously how they make most of their money. Some people say government might be the real threat to freedom of speech, but don’t you believe such silliness!

“ Competition” – A centrally-planned system used to prop up free-riders who usually don’t have facilities of their own. (See “Open access.”)  Of course, the best forms of competition arise from government ownership.

“ the Constitution” – An odd document in that, for some reason, it contains a litany of limitations on the power of government to regulate evil corporations that the people wanted to see crushed. (See “the People.”)  However, the addition of the First Amendment partially rectified that by giving us the foundation for industry regulation. (See “First Amendment.”)

“Corporation” – Detestable entities designed to usurp the fundamental freedoms of the people (See “the People.”)  Oftentimes used to quickly shorthand the concept of “evil” in press releases.

“Fifth Amendment” – A misguided amendment not as easily contorted to our ends at the First. (See “First Amendment.”)  Has something to do with property. (See “Property.”) To be ignored whenever possible. Do not mention in court.

“ First Amendment” – The First Amendment was part of a meddlesome text called “The Constitution,” which apparently limited the powers of government, or something like that.  (See “The Constitution.”)  Anyway, the First Amendment empowers the government to control companies so they can’t censor our every thought. (See “censorship.”)  Some claim the First Amendment should be used to limit government regulation of speech or expression, but it’s unclear why we’d ever need to do that!

“ Free speech” – The right of the people (see “the People”) to use government regulation to demand that private companies give us whatever we want on whatever terms we want.  Used in sentence: “That media company violated my free speech rights by making me pay for the content I wanted!” Or, “Private companies have no right to take away my free speech rights by owning and controlling private networks!”

“ Freedom” – The right of the government to control the economy. When used in a sentence: “The FCC should guarantee Internet freedom through extensive regulation of broadband networks and media platforms.”

“ Investment” – What occurs when government heavily regulates industry and technology.  More regulation guarantees more investment.

“Innovation” – Technological advances that occur only at the “edge” of networks.  It is important that when using this term, the connection to the “network” be minimized in order to belittle its role and minimize underlying speech and property rights, thus allowing the maximum leeway when confiscatory regulations are deemed necessary to benefit the “edge” (which is always).

“ Level playing field” – The placing of a thumb on the regulatory scales to favor whomever seems the least capitalistic at any given time (preferably municipally-owned utilities). To be used arbitrarily by regulators / policymakers to delimit the range of free enterprise options for successful companies via unique regulatory burdens on market leaders — even when no anti-competitive violations have occurred.

“Marketplace” – An unwieldy, red-light district that cannot be trusted by the consumer and which is always in need of a sheriff to police its dubious benefits. The free marketplace remains the mortal enemy of the State, and should never be allowed to prosper free from a deluge of regulations, proscriptions and penalties to ensure its enslavement to the “public interest.”  (See “Public interest.”)

“ Net Neutrality” – The first of the Ten Commandments handed down to Moses on Mt. Sinai by the Lord.  Guarantees openness (See “openness”) and competition (See “competition”) for the people (See “the people.”)

“ Openness” – The belief that everyone and everything should be equal and free — or will be made more equal and free — through extensive regulation.

“ Open Access” – Refers to the right for companies that lack their own facilities — and without any serious chance of making it on their own — to free-ride off of existing infrastructure providers in the name of “competition.” (See “Competition.”)

“ the People” – Refers to what we want, but under the guise of everyone else, whether they actually want the same things we do or not. [Use frequently and in conjunction with “freedom.”]

“ Price discrimination” – Everyone knows discrimination is bad.  (Didn’t we have a civil war over that?)  While some economists pretend price discrimination is a crucial component underlying business models for many important goods and services, we know it is just a ruse to screw consumers. Everybody should pay the same price for everything. Period.

“ Property” – We’ll have to get back to you on this one. We’re not sure what it is.  But in the meantime, avoid any mention of it.  If pressed in court or in the media, instead play up “the public interest.” (See “Public Interest.”)

“ Public interest” – Whatever five unelected bureaucrats at the FCC think is in our best interest.

“ Reform” – Feigning the lessening of regulatory burdens while simultaneously adding new burdens to the regulated class.

“Regulation” – The preferred and politically plastic proxy to the uncontrollable and anti-consumer free-enterprise system. (See “Marketplace.”)

“ Regulatory certainty” – Adding layers of red tape to the mountains that already exist to ensure competition and investment thrive. (See “Competition” and “Investment.”)

“ Rights” – Benefits from the State. The best “rights” are accompanied by an annual appropriation. (When discussing such rights, avoid discussions of costs / taxes / inefficiencies).

“Unintended Consequences” – For law or regulation, there are none, only opportunities to perfect any given means of control.

“ Voluntary Concessions” – The pound of flesh required from any company that has the audacity to suggest is should have the right to merge with another company. Preferably, this death by bloodletting should occur over as long a period as possible. If there is a “shot clock” on the proceeding, it’d be good to stop it as much as possible.

[ Note: Rumor has it that the “FP-PK Stylebook” will soon be made available at college bookstores across America for classroom instruction in cyberlaw and media policy courses. Lawrence Lessig and Tim Wu are penning the preface.  Thanks to a generous grant from The Open Society Institute, the Stylebook will only cost $1 and bulk orders of will be accompanied by a free copy of Rules for Radicals by Saul Alinksky.]

Interesting article in the New York Times today about how the radical media activist group Free Press is now working with an organization called The Harmony Institute toward the goal of “Adding Punch to Influence Public Opinion.”  The way they want to “add punch” is through entertainment propaganda.  The Times article notes that Harmony’s mission is “aimed at getting filmmakers and others to use the insights and techniques of behavioral psychology in delivering social and political messages through their work.” And now they want to use such “behavioral psychology” and “political messaging” (read: propaganda) techniques in pursuit of Net neutrality regulation.

More on that agenda in a second.  First, I just have to note the irony of Harmony’s founder John S. Johnson citing “The Day After Tomorrow” as a model for the sort of thing he wants to accomplish. According to the Times interview with him, he says the movie’s “global warming message [and] rip-roaring story, appeared to alter attitudes among young and undereducated audiences who would never see a preachy documentary.”  I love this because “The Day After Tomorrow” was such a shameless piece of globe warming doomsday propaganda that it must have even made the people at Greenpeace blush in embarrassment.  After all, here is a movie that claims global warming will result in an instantaneous global freeze (how’s that work again?) and leave kids scurrying for the safety of New York City libraries until a quick thaw comes a couple of weeks later. (Seriously, have you seen that movie? That’s the plot!) So apparently we can expect some pretty sensational, fear-mongering info-tainment from Harmony and Free Press.

But here’s what’s better: Do you know who produced “The Day After Tomorrow”?  Oh, that’s right… Rupert Murdoch’s News Corporation financed and distributed that movie!!  The man that Free Press casts as the nefarious media overlord set to take over all media and program our brains gave us the greatest piece of radical environmental propaganda of modern times.  Now, which does that prove: (A) Rupert Murdoch is hell-bent on programming our minds to embrace a sweeping global warming regulatory agenda, or (B) Rupert Murdoch is out to entertain people and make money? If you answered B, congratulations for being a sensible person.  If you answered A, then click here now to start giving money to the Free Press!

OK, so let’s get back to Free Press and what they are up to with the Harmony Institute (which I originally thought was an online dating site).  Free Press apparently hired Harmony to research public attitudes about Net neutrality and how to influence them.  Harmony’s Johnson tells the Times they got interested in the Net neutrality because Free Press and the Pacific Foundation paid them handsomely to do so.  And it appears Free Press got their money’s worth.

The Harmony Institute’s report for Free Press is entitled, ” Net Neutrality for the Win: How Entertainment and the Science of Influence Can Save Your Internet.” It is the kind of document that would make Machiavelli and Saul Alinsky proud.  According to the Times, “the report… promises a sophisticated attempt to change attitudes on a range of issues… by using applied behavioral science.”  That ain’t the half of it.  The report is a shameless effort to completely distort the reality on the ground, which is is that, as the Harmony Institute itself admits, “The public tends to have a favorable view of their current telephone company, cable or satellite provider, mobile provider, and ISP.” (pg. 10) “Currently the public likes the way the Internet works,” the Harmony report goes on to note. “Internet users and businesses generally have a positive relationship with their ISP and believe they can access what they want, when they want it.” (p. 16) More generally, the report finds that the public just isn’t all that interested in Net neutrality regulation but that “Those who responded to the November 2009 poll generally had a favorable view of their ISP, but were split in their view of the government’s role with regard to the Internet.” (p. 11)

Yikes! This sure doesn’t sound like the Free Press doomsday narrative, which says that the public is absolutely clamoring for comprehensive regulation of the Internet via Net neutrality.  And that’s where the Harmony Institute’s propaganda machines kicks into high gear. On its website, Harmony explains how it will accomplish such behavior conditioning by claiming that:

Although the open Internet is vital to enabling ideas like Facebook and Ebay to flourish, without federal regulation, the Internet is vulnerable to discriminatory practices and corporate gate keeping that will dramatically alter its role in public life. As the web continues to permeate society, the issue of’ net’ neutrality has become integral to the preservation of the country’s most basic liberties.

I want to congratulate the folks at Harmony for at least admitting what Free Press never does, namely, that Net neutrality is a form of regulation.  An essential part of the Free Press Net neutrality narrative has always been how Net neutrality is not a form of regulation since they realize that most average Americans will not take kindly to the idea of increasing government control of the Internet.  I guess the Harmony Institute people didn’t get the Free Press memo on that one.  [BTW, let’s see how long the word “regulation” remains on the Harmony site! I bet it disappears shortly.]

Anyway, the rest of the “Net Neutrality for the Win” document is essentially a blueprint for re-engineering public opinion and to get the public panicky about various Chicken Little scenarios of corporate control.  The report talks about getting to the “persuadables” on the issue and changing their minds.  Of the checklist of ways to accomplish this, Harmony stresses how important it is to “Challenge How People View the Internet.”  Well of course you want to challenge how people view the Net when most of them are perfectly happy with it!  We can’t have that, after all. They must be reprogrammed to understand they are really not all that happy with their broadband service, regardless of what they currently think.

The document also goes on to note that “Most people think of the Internet in terms of private ownership,” but “The ultimate goal of a narrative campaign should be to update the image of the Internet from a privilege like property ownership, to a public resource like telephone networks.”  Of course, this fits in all too perfectly with the vision set forth by Free Press co-founder Robert McChesney, the prolific Marxist media theorist.  McChesney has made it clear that “the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.”  “What we want to have in the U.S. and in every society is an Internet that is not private property, but a public utility.”  So, at least the Harmony folks got the Free Press memo about media and infrastructure control.  And killing property rights will be at the heart of this mission. No shock there.

But, according to the Harmony website, the “Net Neutrality for the Win” document is just the beginning of the Harmony-Free Press propaganda campaign:

The second phase of this project will employ the messaging recommendations outlined in the Entertainment and Messaging Guide to Net Neutrality in a six-part animated web show that informs and persuades online audiences of the need to support net neutrality. By consulting with the show’s writing and production team, HI has helped embed issue statements and calls to action within the show’s narrative to further inform the beliefs, attitudes and behaviors of the audience. The end goal is to persuade individuals to take quantifiable steps to positively impact the cause. Each episode is between three-to-ten minutes long, and will be released once a week, over the course of six weeks beginning early 2010.

This is all part of what Harmony calls its “Harmony Institute Method for Entertainment Education”, which seeks “behavior change through narrative entertainment.” (p. 25)   Oh, I can’t wait to see how terrifically entertaining this propaganda will be!  With a mission of “harnessing entertainment to create transformative action in mainstream audiences,” I can only imagine how Harmony will stop at nothing to help Free Press spread lies, rumors and innuendos in their by-any-means-necessary crusade to impose a comprehensive regulatory regime on the Internet.

The only interesting question is whether Hollywood and other entertainment providers will take the bait or if the Harmony-Free Press propaganda machine will consist mostly of homemade videos of Free Press lackeys shouting at web cams in Mom’s basement.  Only time will tell.  But I, for one, am hoping for a big screen blockbuster — “The Net After Tomorrow” — in which nefarious corporate schemers block all online speech until trusty Federal Internet Commission regulators — played by Leo DeCaprio and Megan Fox (since all regulators are that hot) — swoop in to foil the wicked scheme and put the State back in control of our media and communications infrastructure.  You know, because we can trust Big Government to do the right thing once we hand them the keys.

Over at MediaFreedom.org, a new site devoted to fighting the fanaticism of radical anti-media freedom groups like Free Press and other “media reformistas,” I’ve started rolling out a 5-part series of essays about “The Battle for Media Freedom.” In Part 1 of the series, I defined what real media freedom is all about, and in Part 2 I discussed the rising “cyber-collectivist” threat to media freedom.  In my latest installment, I offer an analytical framework that better explains the major differences between the antagonists in the battle over media freedom.

Understanding the Origins of Political Struggles

In his many enlightening books, Thomas Sowell, a great economist and an even better political scientist, often warns of the triumph of good intentions over good economics. It’s a theme that F.A. Hayek and Milton Friedman both developed extensively before him. But Sowell has taken this analysis to an entirely differently level in books like A Conflict of Visions: Ideological Origins of Political Struggles, and The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy . Sowell teaches us that no matter how noble one’s intentions might be, it does not mean that those ideas will translate into sound public policy. Nonetheless, since “the anointed” believe their own intentions are pure and their methods are sound, they see nothing wrong with substituting their will for the will of millions of individuals interacting spontaneously and voluntarily in the marketplace. The result is an expansion of the scope of public decision-making and a contraction of the scope of private, voluntary action. As a result, mandates replace markets, and freedom gives way central planning.

Sowell developed two useful paradigms to help us better understand “the origins of political struggles.” He refers to the “constrained” versus “unconstrained” vision and separates these two camps according to how they view the nature of man, society, economy, and politics:

The Unconstrained Nature of the Cyber-Collectivist Vision

Sowell’s taxonomy provides a useful frame of reference for today’s debate over communications and media policy. The unconstrained vision crowd here might best be labeled “cyber-collectivists.” This collectivism is not necessarily the hard-edged Marxist brand of collectivism of modern times. It is more the collectivism of Plato’s rule by “philosopher kings” as much as it is modern European “social democrat” collectivism. It generally rejects outright State ownership of the means of production, although there are some exceptions. (Free Press founder Robert McChesney, for example, would go much further than most other collectivists in having the State intervene and directly control or even own media and communications outlets and infrastructure).

Like their many “unconstrained” intellectual predecessors, what unifies the cyber-collectivists is the belief that the State should have a hand in guiding market outcomes toward a “fairer” end. The cyber-collectivists, for example, get indigestion over unequal patterns whether we are talking audience shares or technological diffusion. They are quick to allege “market failure” when some of their preferred media voices only capture miniscule audience shares (even when it’s just the result of consumer demand in action). And when some people or communities gain access to a network or new technology quicker than others, they are often quick to conclude some nefarious plot by greedy capitalists must be to blame.

Of course, in reality, this is just the way things in a free society have always worked. “Liberty upsets patterns” the late Harvard University philosopher Robert Nozick taught us in his 1974 masterpiece “Anarchy, State, and Utopia.” What Nozick meant was that there is a fundamental tension between liberty and egalitarianism such that when people are left to their own devices, some forms of inequality would be inevitable and persistent throughout society. Correspondingly, any attempt to force patterns, or outcomes, upon society requires a surrender of liberty.

All of this is equally true for media and communications policy. Just as there will never be perfect equality of outcomes in the provision of homes, cars, or incomes, there will never be perfect equality of tech gadgets or audience shares for media speakers / outlets.

Speech Redistributionism

The cyber-collectivists are not content with that, however. Just as they call for a redistribution of wealth to rectify the supposed injustice of unequal incomes, so too they call for “something to be done” to “balance” outcomes and ensure “fairer” outcomes. We might call this “media redistributionism” or even “speech redistributionism.”

Consider, for example, a proposal set forth by Cass Sunstein, the prolific University of Chicago law professor (and now Obama Administration official). In his 2001 book Republic.com, in which he suggests that government should consider requiring “electronic sidewalks” in cyberspace to encourage more balance on Internet websites. The state would impose the equivalent of “must carry” mandates on popular or partisan websites, forcing them to carry links to opposing viewpoints. In the name of “media access” or “fairness,” Sunstein and others are apparently willing to let the state impose tyrannical mandates on private website operators, forcing them to open their private property to use by others. Essentially it’s a Fairness Doctrine for the Internet Age.

Elsewhere Sunstein has argued in favor of greater “public interest” regulation to actually change public attitudes and tastes, claiming that there “is a large difference between the public interest and what interests the public.” [See: Television and the Public Interest, 88 California Law Review 499, 501 (2000).] He and many other cyber-collectivist scholars claim that they have a better idea of what interests the public. Essentially, the public doesn’t know what’s best for them, so someone else must tell them—and potentially even force supposedly better choices upon them. For example, Ellen P. Goodman of the Rutgers-Camden School of Law, and currently an adviser to the Federal Communications Commission, believes that, “a proactive media policy must not only correct a poorly functioning market, but also provide diversions around existing media markets and tastes. Proactive media policy can do this by changing consumer wants.”

The thought of having government “change consumer wants” is positively Orwellian and raises the obvious question: according to who’s tastes and values? The viewing and listening public has a broad array of interests and desires that cannot be easily gauged by congressional lawmakers, and certainly not by five unelected bureaucrats at the FCC. As media scholar Benjamin Compaine has correctly noted, “[i]n democracies, there is no universal ‘public interest.’ Rather there are numerous and changing ‘interested publics.’”

And, more practically, how should such goals be accomplished in an age of information abundance? The sheer scale and volume of media activity taking place across an unprecedented variety of communications platforms makes it difficult to imagine how a scarcity-era regulatory regime will be applied going forward. Are we going to have speech patrols standing on every cyber-corner policing the Net for “fairness” violations or determining what is and isn’t “in the public interest”?

Opportunity, Not Outcome, Is What Matters Most

Those of us who subscribe to a more “constrained vision” understand that what is really important is equality of media opportunity, not equality of media outcomes. A focus on the latter is both foolish and destructive. It is foolish because media equality is an impossibility absent extreme measures, which in turn explains why it is destructive. We would need totalitarian government controls on media outputs and consumption in order to achieve anything remotely close to “balance” or “equality” in terms of media results. What counts most is that people have a chance to be heard, not whether millions are listening or whether there is a perfect distribution of digital technology.

Again, that is not enough for the unconstrained visionaries who guide the cyber-collectivist movement. They want action and they want results and they want them now! And, they will always remind us, they have the best of intentions, so we should just trust them. The problem is, intentions + action = control. When they say “something to be done” that is usually code (excuse the pun) for heavy-handed government action to control the messy, un-patterned outcomes of a free marketplace.

And so we arrive at the critical difference between the cyber-freedom and the cyber-collectivist movements: Those of us who adhere to a more constrained view of nature, society and economy (i.e., the cyber-freedom movement) believe that liberty is the default position and that it generally trumps other values. Supposed “market failures” (or “code failures,” as the case may be) are ultimately better addressed by voluntary, spontaneous, bottom-up, marketplace responses than by the coerced, top-down, governmental solutions that the cyber-collectivists call for. Moreover, the decisive advantage of the market-driven approach to correcting code failure comes down to the rapidity and nimbleness of those response(s). Finally, and quite importantly, we in the cyber-freedom movement are not so quick to cry “market failure!” and call in the code cops. We understand that those messy, un-patterned market outcomes are the result of an evolutionary process or trial-and-error and that society and economy benefit from the resulting learning process.

Sure, there may be times when governments may need to intervene at the margins, but we would counsel against abrupt and incessant interventions to correct every supposed “market failure” or “unfair” outcome. After all, those interventions will simply beget more and more interventions to correct the inevitable failures of, or dissatisfaction with, previous interventions. There is simply no sugar-coating the reality that, no matter how well-intentioned, more and more media control is the inevitable prescription.

In my next installment in this series, I will detail the cyber-collectivist blueprint for radical media redistributionism by outlining this movement’s goals and its proposed methods of control.

[cross-posted from BigGovernment.com]

In the battle over media and communications freedom, no group poses a more serious threat to a free and independent press than the insultingly misnamed regulatory activist group Free Press. Along with their founders, the prolific neo-Marxist media theorist Robert W. McChesney and Nation correspondent John Nichols, Free Press has engaged in relentless agitation for a truly radical media and communications policy agenda, and their influence is now spreading throughout the Obama Administration.

The Free Press-McChesney blueprint for media “reform” reads more like a script for State servitude. On the regulatory side, they call for media ownership restrictions, “localism” mandates, “Net neutrality” regulations, price controls on broadband, advertising and copyright restrictions, and layers of additional regulatory edicts.  Once all that red tape smothers the life out the independent press and private communications providers, they plan to have the State step in become the primary benefactor of the Fourth Estate and high-tech infrastructure. For starters, McChesney and Nichols advocate a $35 billion annual “public works” program for the press modeled after the Works Progress Administration of the New Deal era. Their media WPA would include a “News AmeriCorps” for out-of-work journalists, a “Citizenship News Voucher” to funnel taxpayer support to struggling media entities, a significant expansion of postal subsidies, a massive new subsidy for journalism schools, corporate welfare for newspapers sufficient to pay 50 percent of the salaries of all “journalistic employees,” municipal government ownership of press and infrastructure, and many more bureaucratic programs.

Using its growing lobbying muscle in Washington, Free Press seeks to enshrine the McChesney-Nichols blueprint into law at the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) under the guise of a “National Journalism Strategy,” a veritable industrial policy for the press that resembles a Soviet-style five-year plan. They also want a “Public Media Trust Fund,” to make sure all the money they confiscate from private providers goes to public-subsidized competitors.  Average citizens would be in for some sticker shock, too, since Free Press and McChesney propose funding much of this new media welfare state with steep taxes on our mobile phones, Internet connections, and digital gadgets. So, get ready for the iPhone tax and new fees on your broadband bills!

Surprisingly, Free Press and McChesney don’t try to sugarcoat their radical intentions. Their self-described “radical” goal is a world of “post-corporate” newsrooms. McChesney and Nichols often speak broadly of “the problem” for the press being the capitalist system itself.  In their 2002 book, Our Media, Not Theirs: The Democratic Struggle Against Corporate Media, they argued that media-reform efforts begin with “the need to promote an understanding of the urgency to assert public control over the media… Our claim is simply that the media system produces vastly less of quality than it would if corporate and commercial pressures were lessened.”  More recently, in an interview with the Canada-based “Socialist Project,” McChesney went so far as to say that “the ultimate goal is to get rid of the media capitalists” and that “Instead of waiting for the revolution to happen, we learned that unless you make significant changes in the media, it will be vastly more difficult to have a revolution. While the media is not the single most important issue in the world, it is one of the core issues that any successful Left project needs to integrate into its strategic program,” he argues. Thus, nothing short of “massive public intervention” into the news business is required. Free Press adopts a similar tone and dials up the heat inside the Beltway with apocalyptic talk about the need to have government “save the news.”  In true Rahm Emanuel-like fashion, Free Press insists, “We have a crisis. We have an historic opportunity. We can’t let either go to waste.”

Hugo-Vision for the U.S.?

If you’re beginning to think that the Free Press-McChesney plan sounds a bit like something right out of Hugo Chavez’s tyrannical press-police state, you’re not mistaken. In fact, McChesney imagines the Venezuelan strongman to be something of a misunderstood genius when it comes to how to run a “free press.”  “Aggressive unqualified political dissent is alive and well in the Venezuelan mainstream media, in a manner few other democratic nations have ever known, including our own,” McChesney has written.  That will certain come to a shock to those journalists and news outlets currently being subjected to Chavez’s reign of media terror.  Luckily — at least till McChesney and Free Press get their hands on them — there are still a few independent media outfits here in the U.S. that can report the truth about Chavez’s “democratic” press, which McChesney glorifies as the ideal for other nations.

In fact, just yesterday, editorials by The Wall Street Journal’s Mary Anastasia O’Grady (“Chávez’s Assault on the Press”) and Jackson Diehl of The Washington Post (“Chavez’s Iron Fist”) painted a frightening picture of the press nightmare that now exists in Chavez’s thugocracy. O’Grady and Diehl both document the plight of Guillermo Zuloaga, who fled the country with his family to avoid being arrested by Chavez.  Zuloaga’s crime?  He has the audacity to speak the truth about the Chavez regime, and as the owner of Globovision, one of only three remaining privately held Venezuelan television stations, that makes him a threat to the thug-in-chief.  “How is it possible that he can accuse me of such things and walk free?” Chavez has asked publicly about Zuloaga.

And Zuloaga and other independent media operators clearly have legitimate cause for concern. Chavez has already yanked the license of opposition broadcaster RCTV, who he said had been working to overthrown him. The U.S. government’s Open Source Center, which provides information on foreign political, military, economic, and technical issues, has documented how “President Chavez’s government is moving forcefully to silence critics by introducing a Media Crimes bill that would give it sweeping authority to jail journalists, media executives, and bloggers who report on anything that the government considers to be harmful to state interests.”  According to Freedom House, which ranks press freedom internationally, Venezuela is the only country besides Cuba listed as “Not Free” in the entire Western Hemisphere. The organization notes that Chavez expelled Human Rights Watch officials from the country after it released a critical report entitled A Decade Under Chavez, which found that “The Venezuelan government under President Chavez has undermined freedom of expression through a variety of measures aimed at reshaping media content and control.” The National Journalists’ Guild has also accused Chavez of violating the rights of the press. The latest Freedom House report on the state of press freedom in the country also notes that:

“Free-to-air broadcast media are largely owned by the government, which operates seven channels with nationwide coverage. However, Venezuela’s leading newspapers are privately owned, and most identify with the opposition. As a result, they are subject to threats and violence by the government and its supporters, sometimes leading to self-censorship. Local and regional media are particularly dependent on government advertising revenue, leaving them vulnerable to economic retaliation for criticism.”

So, what’s Robert McChesney’s response to Chavez’s crackdown on dissent and opposition journalism?  They had it comin’!  “If RCTV were broadcasting in the United States, its license would have been revoked years ago,” McChesney has argued. “In fact its owners would likely have been tried for criminal offenses, including treason.”

Perhaps I’ve missed something but I study the history of journalism for a living and I can’t remember the last time any media outlet had their license yanked or that any journalist was tried for treason in the U.S. for opposing a president’s policies!  But such are the tactics of shameless media Marxist.

Media Reformistas Gaining a Voice in Government

While such sympathy for the devil may seem shocking to most of us, McChesney has no choice but to defend a socialist strongman like Chavez. After all, this is basically the McChesney-Free Press blueprint for media reform!  But one would hope and think that McChesney and his merry band of media reformistas at Free Press wouldn’t be gaining much traction here in the U.S. with their self-described “radical” agenda for media takeover.  Unfortunately, you’d be wrong.

For starters, some Free Press reformistas are now having real, direct influence on the Obama Administration’s media and communications agenda.  Jen Howard, former press director for Free Press, now serves as press secretary for FCC Chairman Julius Genachowski.  And Ben Scott, former Policy Director for Free Press, was recently appointed as a “policy advisor for innovation” to the State Department. Lord help us if it’s the Free Press’s brand of “innovation” that our government will now be promoting worldwide!  Meanwhile, as Seton Motley has noted here before, Free Press has a regular audience in FCC, FTC, and congressional hearing and meeting rooms.  McChesney was even recently invited to deliver a major address at an FTC workshop on “saving journalism.”  Meanwhile, Susan DeSanti, the FTC’s Director of Policy Planning, who spearheads the agency’s “media reinvention” effort, has publicly praised McChesney and Nichols’ “excellent book,” referring to their latest manifesto for media statism, The Death and Life of American Journalism: The Media Revolution that Will Begin the World Again.

The fingerprints of McChesney and Free Press can also be seen on many of the documents and projects the Obama Administration is currently producing on media policy issues.  As part of the FTC’s workshop series asking “How Will Journalism Survive the Internet Age?” the agency released a 47-page discussion draft entitled “Potential Policy Recommendations to Support the Reinvention of Journalism.” The document reads like the Cliff’s Notes for the latest McChesney-Nichols book and Free Press’s “National Journalism Strategy.” The FTC draft cites the authors over a dozen times and reproduces their proposals almost verbatim.  Meanwhile, the Federal Communications Commission is simultaneously conducting a proceeding of its own on the “Future of Media.” So far, its workshops have featured plenty of talk of expanded public media and “public-interest” programs — as well as multiple Free Press witnesses and submissions.

Amazingly, Obama Administration agency officials and congressional lawmakers on the Left often seem to turn a blind eye to some of Free Press’s more infantile attacks and tactics. For example, this week the group is wall-papering Chicago with “wanted” posters featuring Chairman Genachowski’s picture. The Chairman’s crime? He’s not attending a show trial hearing set up to demonize the pending merger of Comcast and NBC-Universal.  And Free Press has repeatedly eaten their own young during Net Neutrality debates by viciously blasting any Democrat who has had the temerity to suggest that maybe, just maybe, an FCC takeover of the Internet isn’t such a grand idea.

The Stakes in the Debate

Let’s be clear about the stakes in this battle. As media historian Ben Compaine has argued, “What the hard core reformistas really want, it seems, is not diversity or an open debate but a media that promotes their own vision of society and the world.”  That’s exactly right and, more specifically, the media reformistas want to impose this control by borrowing the old fantasy that “the public owns the [broadcast] airwaves” and extending that misguided notion to all media platforms and outlets. In other words, McChesney and Free Press want an UnFree Press. To cast things in neo-Marxists terms that they could appreciate, they want to take control of the information means of production.

The fight for real media freedom and a truly “free press” begins with a better understanding and documentation of the radical intentions of the opposition as the struggle over the future course of America’s media marketplace continues. True freedom doesn’t begin by fettering media and communications systems with more chains, as McChesney and Free Press advocate; it begins by removing the chains that already exist and then erecting a firm wall between State and Press.

For more on this subject, see my ongoing series of essays: Should Government Bailout Media, Subsidize the Press & Seek to “Save Journalism”?

As I’ve noted here before, the Federal Trade Commission (FTC) has an ongoing proceeding asking “How Will Journalism Survive the Internet Age?” The agency has hosted two workshops on the issue and a third is scheduled for June 15th at the National Press Club. Recently, the FTC released a 47-page staff discussion draft entitled “Potential Policy Recommendations to Support the Reinvention of Journalism,” which outlines dozens of proposals that have been set forth in recent years to “save journalism,” “reinvent media,” or support various forms of so-called “public interest programming.”  [I’ve embedded the document down below.] Although the FTC makes it very clear on the first page of the discussion draft that it “does not represent final conclusions or recommendations by the Commission or FTC staff [and] it is solely for purposes of discussion,” the document is drawing scrutiny and raising concern since it might foreshadow where the FTC (and Obama Administration) could be heading on this front.

Some of those raising a stink about the FTC draft include: Jeff Jarvis (“FTC Protects Journalism’s Past“); Rob Port (“Federal Government Considering “iPad Tax” To Subsidize Journalism“); Mark Tapscott: “(Will Journalists Wake up in Time to Save Journalism from Obama’s FTC?”); and Andrew Malcolm of the Los Angeles Times (“Obama’s FTC Plan to Reinvent America’s News Media“), who says, “this FTC study is rated R for anyone who thinks the federal government, the object of copious news coverage itself, has no business deciding which sectors of the private media business survive and thrive through its support, subsidies and encouragement with things like tax incentives. Yet that’s what this Obama administration paper is suggesting as another of the ex-community organizer’s galactic reform plans.”   Ouch!

I’ve spent a great deal of time considering many of the “reform” proposals that the FTC outlines in its discussion draft and, along with Berin Szoka, recently released a 5-part series of papers and filed 80 pages of comments with the Federal Communications Commission (FCC) in its “Future of Media” proceeding, which shares much in common with the FTC’s “Will Journalism Survive?” proceeding. Not all of the ideas floated in the FTC’s draft document are toxic, but some are very troubling and fit squarely in the red or yellow zone of that chart above, which plots a range of media policy options that the FTC or FCC might pursue.

As the FTC draft is structured currently, it appears to have been heavily influenced by the radical activist group Free Press and its founder Robert McChesney, the prolific neo-Marxist media scholar from the University of Illinois. I’ve explained in detail here before the dangerous ideas floated by McChesney and Free Press. For background, see:

• Free Press, Robert McChesney & the “Struggle” for Media, Aug. 2009
• A “Public Option” for Media? The Free Press Plan to Put Journalists on the Public Dole, Nov. 2009
• What the Media Reformistas Really Want, Aug. 2008
• Socializing Media in Order to Save It, March 2009

McChesney and his Free Press disciples have called for a “post-corporate” media world in which the state essentially serves as both a benefactor and partner of the press. Their “public option” for the press would essentially upend private media and toss the First Amendment into the dustbin of history. I encourage everyone who thinks I am exaggerating to read Chapter 4 (“Subsidizing Democracy”) of McChesney’s new book with John Nichols, The Death and Life of American Journalism as well as the “National Journalism Strategy” that Free Press released last year.

Those two works read like a Soviet-style 5-Year Plan for the Press. Massive subsidies. Massive taxes. Massive state meddling into virtually every aspect of the media marketplace and journalistic profession. And if, after reading those documents, you still don’t think they are out to destroy the private provision of media in America, you might want to check out this interview McChesney did with the Canadian-based “Socialist Project” in which he confessed that “the ultimate goal is to get rid of the media capitalists,” and noted that, “unless you make significant changes in the media, it will be vastly more difficult to have a revolution.” Similarly, in his book with Nichols, he concludes by noting that “We have responded in a time of crisis not with tinkering reforms but with revolution.”  They sure have!

For some reason, the FTC seems enamored with these dangerous ideas. McChesney and Free Press are cited over a dozen times and their proposals show up almost verbatim throughout the FTC’s discussion draft. Moreover, McChesney was recently invited to one of the FTC’s workshops to deliver a major address on these issues. Finally, what makes me particularly nervous is that Susan DeSanti, the person running the FTC’s effort, has praised McChesney and Nichols’ “excellent book” despite its call for radical steps that would essentially hobble private media and impose crushing taxes on just about everyone in sight to subsidize public, state-blessed media.

I sincerely hope that the FTC’s “discussion draft” is just that, and nothing more.  I’m fine with discussing kooky Marxist ideas all day long. I just hope our government isn’t getting ready to start imposing them upon us.

New FTC Staff Discussion

In the wake of yesterday’s ruling in the D.C. Circuit that the FCC had exceeded its authority in attempting to regulate access to the Internet, I did a number of radio interviews and a radio debate with Derek Turner of Free Press, a leading advocate of Internet regulation.

The debate was a brief, fair exchange of views. I was struck, though, to hear Turner refer to the situation as a “crisis.” Sure enough, in a Free Press release, Turner says three times that the ruling creates a “crisis.”

Recall that in 2007 Comcast degraded the service it provided to a tiny group of customers using a bandwidth-hogging protocol called BitTorrent. Recall also that before the FCC acted, Comcast had stopped doing this, relenting to customer complaints, negative attention in news stories, and such.

In the wake of the D.C. Circuit ruling and the crisis it has created, Internet users can expect the following changes to their Internet service:
None.

Wow. With crises like these, who needs tranquility?

“As a result of this decision, the FCC has virtually no power to stop Comcast from blocking Web sites,” the release intones.

That would be worrisome, though still not much of a crisis—except that Comcast would be undercutting its own business by doing that. Did you know also that no federal regulation bars people from burning their furniture in the backyard? That’s the same kind of problem.

As Tim Lee points out in his paper, “The Durable Internet,” consumer pressures are likely in almost all cases to rein in undesirable ISP practices. Computer scientist Lee presents examples of how ownership of communications platforms does not imply control. If an ISP persists in maintaining a harmful practice contrary to consumer demand—and consumers can’t express their desires by switching to another service—we can talk then.

In the meantime, this “crisis” has me slightly drowsy and eager to go outside and enjoy the spring weather.

John Schwartz of The New York Times called me two weeks ago and asked for comment about a potential controversy involving mobile phone provider Sprint and the charitable organization Catholic Relief Services (CRS). The facts were pretty sketchy at the time, but Schwartz told me that CRS was accusing Sprint of blocking Mobile Commons, the company that connects CRS and 100 other nonprofit organizations with text messaging networks, from getting a short code to create a charitable mobile donation program in the wake of the Haiti earthquake. Here’s the basic background that appeared in Schwartz’s March 24th article, “Catholic Charity and Sprint Tangle Over Texting“:

[CRS] wanted to try a twist on the technology: when people sent a text message to donate, they got a reply offering to connect them via phone to the charity’s call center. The group hoped that the calls could build a stronger bond with donors, and garner larger contributions as well. But just three days into the effort after the Jan. 12 earthquake, the charity got word that Sprint Nextel was demanding that the “text-to-call” effort be shut down. The charity had 40 days to abandon the feature or lose access to millions of Sprint customers.  Sprint’s original motivations are murky; it said that an intermediary company had failed to properly fill out a form to verify that it was dealing with a legitimate charity.

It didn’t take long for the regulatory activists at Free Press and Public Knowledge to pounce and claim the Federal Communications Commission (FCC) had to intervene to save our souls from the nefarious scum at Sprint. After all, you do know that Sprint hates Haitians, right?  The company obviously wanted to see Haitians starve and not receive any support from charitable organizations.

No, seriously, come on!  How asinine is this storyline?! That’s why, when Schwartz called me about the issue, I felt something else had to be going on here. When he asked me for a quote for the story, here’s what I said, (on the assumption that Sprint probably had some sort of system in place to ensure fraud wasn’t taking place): “most people would say, I want my carrier to be doing a certain amount of policing for potentially harmful or fraudulent activities,” and would hold the carrier responsible if things went wrong.

And, now that all the facts are out, we now know that Sprint had no charity-blocking machinations in mind. Indeed, as I suspected, the company (quite sensibly) has a process in place to make sure that any organization asking for the short code is legit and not a blatant scam artist. Here’s how Sprint explained the situation:

We are simply asking Mobile Commons – the aggregator involved – to adhere to the same reasonable practices with which other entities involved in mobile giving adhere.  Specifically, certify that the charities they work with are 501(c)3 organizations; set up a confirmation process for each short code; and, provide basic information concerning the mobile giving campaign they wish to implement. In turn, this allows us to accurately communicate this information to our wireless customers who call us seeking more detail. Taking these steps also protects our customers and assures that their donations are going where they are intended.

Makes perfect sense to me, especially in light of the unique “text-to-call” service being proposed by CRS and Mobile Commons in this case. If you were a mobile phone operator, wouldn’t you want to a have a process in place to vet short code use so that your users weren’t getting scammed by hucksters? (That’s especially the case in our litigious society, where class-action lawsuits fly at the first whiff of potential trouble.) And as a customer, don’t you hope that your provider has such safeguards in place?  Basically, that’s all that Sprint has done here.

But here’s what I found really surprising, and that you certainly wouldn’t learn if you only listened to the howling in Free Press and Public Knowledge press releases: Sprint never blocked the CRS code at all! A clearly (and legitimately) agitated John Taylor, who handles corporate communications for Sprint, notes:

There is not ONE Sprint customer who has been prevented from using the short code set up by the mobile marketing firm hired by Catholic Relief Services. That’s because the short code is operable on Sprint’s network. (It never was suspended and we never threatened to suspend the code.)

And here’s Sprint’s letter to the FCC responding to the allegations and verifying that the CRS code has been operational and will continue to be so.

Now, let’s get back to the call by Free Press and Public Knowledge for regulatory intervention. They made that call to regulatory arms less than 24 hours after Schwartz’s NYT article appeared. Never mind the sketchy facts, they basically said, we are going full bore forward and requesting action now!  Here’s what they demanded:

“The Commission has an opportunity to establish the rule of law with regard to text messaging and short codes. It can require that carriers deal fairly, and that non-profits and commercial enterprises have the necessary stability and legal protection from unjust and unreasonable discrimination to innovate and explore new ways to use this communications technology. But if the Commission once again turns a blind eye to carrier discrimination by letting the Petition continue to languish, this too will send a message to both carriers and users of short codes, and we can expect such arbitrary discrimination to continue to increase.”

But the problem with this is that the carrier in question (Sprint) was dealing with the situation fairly and in a reasonable, non-discriminatory manner.  The company was applying the same sensible policy in this case they they have applied across the board . And, again, they were not blocking anything at all !

In a truly audacious response to these facts, Harold Feld of Public Knowledge tries to avoid admitting that they were clearly wrong on the facts and instead spins this around to make it all Sprint’s fault. In a response to John Taylor, Feld argues:

the “real story” is that Mobile Commons and CRS must put up with such ridiculous processes and arbitrary treatment at all . That you feel ill-used because the process that you developed and implemented prevented you from discovering that a customer was threatened with a shut off for a relief fund — and that you failed to contact the customer directly after the NYT reporter alerted your company about the problem — emphasizes the phenomenal sense of entitlement carriers have with regard to how they provision what should be a basic service no different from use of an 800 number.

Absurd. What “ridiculous processes and arbitrary treatment” are you talking about, Harold? There’s none here to be found!  Would Free Press and Public Knowledge prefer no process at all?  Again, should any huckster calling themselves a “charity” be able to grab a short code and unwitting “donors” givers straight to their offshore account to pump individual givers’ bank accounts at will?  That seems like bad business to me—for both Sprint and its customers. Indeed, if Sprint didn’t have some policies in place to deal with such things, policymakers would likely be up in arms about it and the FTC would potentially come calling once things went wrong. Or would you put the FCC in charge of monitoring all these things on behalf of carriers? Should the FCC have a whole wing of regulators dealing with standard business practices like fraud prevention? Seriously, why shouldn’t that be handled by private carriers?

Even more outrageous is Feld’s line about carriers’ “phenomenal sense of entitlement.”  What in the hell is he talking about? The only “sense of entitlement” I can find here is the one on display at Public Knowledge and Free Press, two organizations that apparently believe that they are entitled to instantaneous FCC regulation of communications markets based on asinine and unsubstantiated conspiracy theories. Most troubling of all is the fact they couldn’t even wait 24 hours to check out all the facts and see what the real story was—perhaps, by checking with Sprint!  Instead, they displayed a reckless disregard for the truth in their rush to fire off a letter asking the FCC to bring down the regulatory hammer.

Shame on them both.

Steve Forbes has an entertaining essay out today about the agenda of Free Press and its founder, the Marxist media scholar Robert McChesney. Forbes notes that McChesney has expressed a great deal of sympathy for the Venezuelan dictator Hugo Chavez and has even defended some of his tactics to control the press. This leads to his fear that McChesney and Free Press will convince the Obama Administration to use similar tactics here in the U.S.:

Once the federal government starts subsidizing our own free press, how long until the feds start revoking broadcast licenses of government opponents and bringing pesky reporters up on charges of say, “corruption” or “subversion”? According to McChesney and the Free Press folks, it apparently can’t happen soon enough.

To be fair, I haven’t heard anyone from Free Press defending Hugo Chavez or his tactics. But I do wonder why the organization continues to associate itself with such a radioactive figure like Mr. McChesney. After all, Forbes isn’t making up anything about McChesney, who is an outspoken, and self-described, Marxist media theorist. McChesney really has expressed sympathy for Chavez and said that, “If [Venezuelan broadcaster] RCTV were broadcasting in the United States, its license would have been revoked years ago. In fact its owners would likely have been tried for criminal offenses, including treason.” Far more troubling are Mr. McChesney’s views regarding how to reform media going forward, which I’ve documented in past essays in more detail. (See, “Free Press, Robert McChesney & the “Struggle” for Media,” “What the Media Reformistas Really Want,” and “Socializing Media in Order to Save It,.”) One need look no further than this lengthy interview with McChesney that appeared in an online newsletter called “The Bullet” produced by the Canada-based “Socialist Project.”

The whole thing is quite troubling to read, but here are a couple of jaw-droppers that make it clear just how radical Mr. McChesney’s worldview and agenda are:

• Media as an instrument of “revolution”: “Instead of waiting for the revolution to happen, we learned that unless you make significant changes in the media, it will be vastly more difficult to have a revolution. While the media is not the single most important issue in the world, it is one of the core issues that any successful Left project needs to integrate into its strategic program.”
• Down with commercial media: “Corporations are not in a position to generate and pay for quality journalism. The news is not a commercial product. It is a public good, necessary for a self-governing society.”
• Down with advertising, which is the engine of private media: “We need to organize against hyper-commercialism. This is an easy-sell for the Left. We understand that advertising is not something done by all people equally, but rather, done by a very small group of people working on behalf of multinational corporations. Advertising is commercial propaganda…  Advertising is the voice of capital. We need to do whatever we can to limit capitalist propaganda, regulate it, minimize it, and perhaps even eliminate it.”
• Down with private communications networks: “What we want to have in the U.S. and in every society is an Internet that is not private property, but a public utility.”
• Kill media capitalism: “the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.”

And there’ more tripe like this to be found in this piece on “Journalism, Democracy,… and Class Struggle” in the socialist journal, Monthly Review:

• “Ultimately, we need to press for the overhaul of the media system, so that it serves democratic values rather than the interests of capital.”
• “Our job is to make media reform part of our broader struggle for democracy, social justice, and, dare we say it, socialism. It is impossible to conceive of a better world with a media system that remains under the thumb of Wall Street and Madison Avenue, under the thumb of the owning class. It is nearly impossible to conceive of the process of getting to a better world without some changes in the media status quo. We have no time to waste.”

But wait, there’s more! This from another Monthly Review essay:

• “The Big Lies protecting the corporate media system [are] that the United States had a free market media system, and that this was the system ordained as the only possible democratic one by the Founders in the Constitution.”
• “any serious effort to reform the media system would have to necessarily be part of a revolutionary program to overthrow the capitalist political economy.”
• “No one thinks any longer that media reform is an issue to solve ‘after the revolution.’ Everyone understands that without media reform, there will be no revolution.”

Now, it would be easy to dismiss McChesney has just another half-crazed, unrepentant radical from the 60’s who is still sore about the Reds losing the Cold War, but the reality is that his thinking is beginning to filter down from the ivory tower and into mainstream politics. He’s now invited to address Federal Trade Commission workshops on “how to save journalism,” and his new book John Nichols, The Death and Life of American Journalism, has even received praise from some in government [at the 10-min mark of this video we hear Susan DeSanti, who is running the FTC’s effort, praising this “excellent book”] despite its call for radical steps to essentially hobble private media and impose crushing taxes on just about everyone in sight to subsidize public, state-blessed media.

Even if Free Press, the group McChesney founded, wisely avoids the radioactive rhetoric McChesney lets slip from his tongue on occasion, the group doesn’t avoid endorsing largely the same policy recommendations that McChesney supports.  I spelled out the current Free Press “media reform” agenda in this piece on, “A ‘Public Option’ for Media? The Free Press Plan to Put Journalists on the Public Dole.” And Berin Szoka and I have just started a new series of essays on “The Wrong Way to Reinvent Media,” in which we will further detail and critique the radical McChesney / Free Press policy agenda. This is leading up to the filing deadline in the FCC’s “Future of Media” proceeding, which is May 7^th.  We plan to file, and I very much look forward to seeing the Free Press filing in that matter to see if they turn up the volume even more or if they scale back the scope of their imperial ambitions.

So stay tuned, the battle for the future of media is really heating up. While I don’t agree with Steve Forbes that we’ll be staring at a Hugo Chavez-like police and propaganda state any time soon — after all, they haven’t repealed the First Amendment yet! — I do believe that what McChesney and Free Press are doing is greasing the skids for a massive infusion of government money and meddling into almost every facet of the American media sector.  Indeed, in many ways, this has been their radical “media reformista” agenda all along. It’s just that they’ve gotten a lot bolder about it, and now they even have some people in government taking them seriously.

[For more information, see my ongoing series: “Should Government Bailout Media, Subsidize the Press & Seek to “Save Journalism”?]

Couple of media clips here regarding my thoughts about the FCC’s National Broadband Plan:

• C-Span Debate with Art Brodsky of Public Knowledge (49 min.)
• NPR / “Diane Rehm Show” Debate with Ben Scott of Free Press (51 min.)
• quick audio clip about the plan (4 min.)
• interview with “5 Qs on Tech” about the plan (3 min.)

Also see my essays:”5 Regulatory Hot Potatoes That Could Derail the FCC National Broadband Plan,” “Will the FCC’s National Broadband Plan Really Be Costless?” and “The Best Quote in the FCC National Broadband Report.”

“We’re from government and we’re here to help save journalism.”

That seems to be the hot new meme in media policy circles these days. Last week, it was the Federal Communications Commission (FCC) kicking off their “Future of Media” effort with a workshop on “Serving the Public Interest in the Digital Era.” This week, it’s the Federal Trade Commission’s (FTC) turn as they host the second in their series of workshops on How Will Journalism Survive the Internet Age? Meanwhile, the Senate has already held hearings about “the future of journalism,” and Senator Benjamin L. Cardin (D-MD) recently introduced the “Newspaper Revitalization Act,” which would allow newspapers to become nonprofit organizations in an effort to help them stay afloat.

I have no doubt that many of the public policymakers behind these efforts have the best of intentions and really are concerned about what many believe to be a crisis in the field of journalism. But here are my three primary concerns with Washington’s sudden interest in “saving journalism”:

1. Policymakers are largely ignoring the role they played in created the current mess, and they won’t likely be willing to undo the damage. I’m speaking mostly of the myriad ownership restrictions and assorted other “public interest” regulations that have strangled many traditional media operators over the years and limited their ability to respond to marketplace changes. I documented these rules and their anti-innovative impacts in my 2005 book, Media Myths: Making Sense of the Debate over Media Ownership. I fear that they now won’t be willing to loosen those chains that continue to bind the media sector. Moreover, it may already be too late for some of those players.
2. Many public officials are largely focused on the problems associated with change and are either ignoring–or, through their interventions could thwart–the opportunities associated with change. No doubt, many media operators are struggling. But it is equally true that exciting new media business models and opportunities are developing. As I pointed out in my recent Newseum debate, while we are in a gut-wrenching evolution with a great deal of creative destruction taking place, we should be careful to not to head off potentially advantageous marketplace developments, if even some are highly disruptive.
3. Increased “assistance” from Washington will likely come with strings attached and raise troubling First Amendment implications. Sen. Cardin’s bill, for example, serves as a good example of what makes me so nervous about Washington’s growing interest in “saving journalism.”  As a condition of any any media entity receiving non-profit tax status, the bill would disallow political endorsements on newspaper editorial pages–which, like campaign finance restrictions, would be a boon for incumbents. That should serve as fair warning to journalists about the sort of strings lawmakers will attach to press-welfare efforts going forward. What else might subsidized media entities have to put up with? Free campaign ads for politicians? Fairness Doctrine or mandatory right of reply for printed editorials? Censorship for “negative” political satire or comics? Moreover, how do we define a “media entity” or “journalist” in terms of how is eligible for support?  Taken together, these considerations raise some rather profound First Amendment questions.

Stay tuned because this debate is just getting started. I suspect that policymakers will significantly step up their interest in the issue as more traditional media entities begin failing. What will be interesting is the extent to which some policymakers begin to embrace the “media reformista” agenda of greater public control that some fringe groups like Free Press favor. I’ve documented their radical agenda here before in my essays:

• A “Public Option” for Media? The Free Press Plan to Put Journalists on the Public Dole
• Free Press, Robert McChesney & the “Struggle” for Media
• What the Media Reformistas Really Want
• Socializing Media in Order to Save It

And I’m currently finishing up the new book by Robert McChesney & John Nichols, The Death and Life of American Journalism, which is a blueprint for how to convert media into wards of the State.  As part of their effort to create a massive “public works” program for the press, they advocate that public subsidies for media be funded by everything from a 5% tax on consumer electronics to a 3% tax on monthly ISP & cell phone bills to taxes on commercial advertising.  Truly frightening stuff. Anyway, I’ll have a complete review done shortly.

Further reading:

• summary of remarks at “Crisis in Journalism” event, by Adam Thierer, Feb. 2010
• Public Option for Press Should Get the Red Pen, by Adam Thierer, The Daily Caller, Jan. 2010
• A “Public Option” for Media? The Free Press Plan to Put Journalists on the Public Dole, by Adam Thierer, Nov. 2009
• Free Press, Robert McChesney & the “Struggle” for Media, by Adam Thierer, Aug. 2009
• What the Media Reformistas Really Want, by Adam Thierer, Aug. 2008
• Socializing Media in Order to Save It, by Adam Thierer, City Journal, March 2009
• Obama Should Just Say No To Newspaper Bailouts, Adam Thierer, Sept. 2009
• The Dangers of Government-Subsidized News, by Adam Thierer, Oct. 2009
• A Bailout For The First Amendment?, by Wayne Crews, Aug. 2009
• testimony at FCC’s Hearing on “Serving the Public Interest in the Digital Era”, by Adam Thierer, March 2010
• A Manifesto for Media Freedom, by Adam Thierer and Brian Anderson, 2008
• Chairman Leibowitz’s Disconnect on Privacy Regulation & the Future of News, by Adam Thierer & Berin Szoka, Progress Snapshot 6.1, January 13, 2010
• Media Ownership Proceedings, by W. Kenneth Ferree, Testimony before the Federal Communications Commission, November 3, 2009
• Media Myths: Making Sense of the Debate over Media Ownership, by Adam Thierer, June 2005

Yesterday I engaged in a lively luncheon debate about Net neutrality regulation with Ben Scott of Free Press at a Catholic University Law School event on “Implementing the National Broadband Plan.” To open the debate, I made a very quick 5-Part Case against Net Neutrality Regulation. I argued that the the objections to a Net neutrality regulatory regime can be grouped into 5 major categories: (1) Legal; (2) Economic; (3) Engineering; (4) Practical; and (5) Philosophical / Principled. Down below you will find my working notes to see how I then elaborated on each objection in a bit more detail. And then Ben and I engaged in some spirited banter for the next 45 minutes.

Unfortunately, it doesn’t appear that the video of our debate is online just yet, but once it is I will post it here. However, the folks from NextGenWeb asked me to shoot a short 2 1/2 min video clip after the debate summarizing my remarks. If you can stand the sight of my big fat head in your browser for that long, here ya go:

The 5-Part Case against Net Neutrality Regulation

The objections to a Net neutrality regulatory regime can be grouped into 5 major categories: (1) Legal; (2) Economic; (3) Engineering; (4) Practical; and (5) Philosophical / Principled. Each objection will be briefly summarized below:

(1)   The Legal Case

• The FCC utterly lacks the authority to regulate in this way: The Commission’s current effort, which is tantamount to throwing stuff at wall to see what sticks, is troubling. They should go to Congress for authority.
• Importantly, Sec. 230 & 706 of the Telecom Act cannot be the hook: They were deregulatory in nature & aimed at keeping govt’s hands off the Net.
• Litigation nightmare : Regardless of how the FCC or Congress plows forward, we’re going to get tied up in the courts for years if we continue down the regulatory path. It will become “full employment” for telecom lawyers.

(2)    The Economic Case

• NN will likely create substantial disincentives to invest and innovate: At a time when we’re trying to build out broadband infrastructure the last thing we should be doing is disincentivizing network investment.
• NN could regress into old fashion rate or return / price control regime. In the history of network regulation, price and rate controls have always accompanied service regulations.
• Sharing is not competing: If this is all just greasing the skids for a new line-sharing or forced access regime, well, we’ve been there before and it didn’t end well. Creating networks built on paper is a worthless endeavor.
• Facilities-based competition, not infrastructure sharing is the path forward if we want truly robust & competitive networks and markets.
• Contestability counts: This is a contestable market. Threats of new entry at margins keep incumbents on their toes.

(3)   The Engineering Case

• We shouldn’t be freezing networks in stone: (Can you imagine if we would have frozen 1999 walled garden model in place?) The Net was “designed for change” (Richard Bennett) and it should be allowed to adapt to changing circumstances.
• Flexibility is crucial for fast-moving technologies & networks: In particular, we need to grant network managers the flexibility to deal with congestion, latency, malware & other unforeseen problems.
• Innovation at the core of networks is every bit as important as innovation at the edge: We don’t want stagnation at the core or networks, and the applications that ride on them, will suffer.

(4)   The Practical Case

• The FCC just isn’t very good at regulating fast-moving industries & technologies: And its track record is poor when it comes to incentivizing new things (remember Video Dialtone? Open Video System rules?)
• No such thing as a “simple rule” when it comes to Net neutrality or network regulation in general: Consider the paperwork burden generated by just three major “competition” rules the FCC issued in an attempt to implement the Telecom Act and define the “cost” of unbundled network elements (“UNEs”):

o   Local Competition Order (1996): 737 pages, 3,283 footnotes o   UNE Remand Order (1999): 262 pages, 1,040 footnotes o   UNE Triennial Review (2003): 576 pages; 2,447 footnotes o   That’s 1,575 pages and 6,770 footnotes worth of regulation in just three orders! o   This was all implemented following the passage of a bill (The Telecom Act) that was supposed to be deregulatory in character! And this doesn’t even begin to cover the tens of thousands of pages of legal filings, economic studies, consultant reports and other filings submitted to the FCC and state agencies by groups and individuals looking to have a say in the matter. That’s an enormous deadweight loss.

• The potential for industry capture grows in proportion to size of the regulatory regime: Alfred Kahn, author of the seminal Economics of Regulation said it best long ago: “Responsible for the continued provision and improvement of service, [the regulatory commission] comes increasingly and understandably to identify the interest of the public with that of the existing companies on whom it must rely to deliver goods.”
• Markets need not be perfect to be preferable to government regulation: That’s especially true in light of the inefficiencies associated with bureaucratic regulation.
• Community policing can help: Any deviations from “neutrality” will be policed by the watchful eyes of the digital world (and the press) and the white hot spotlight of public attention will scrutinize every carrier move (and already is). Plus, experts and technical bodies (ex: Net Neutrality squad) will be watching.

(5)   The Philosophical/Principled Case

• Whatever happened to “Hands Off the Net”? Do we believe in markets or not? And are we willing to let the experiment we started with the Telecom Act continue or not?
• NN is a declaration of surrender and a call to return to the era of public utility-style regulation. We should not give up so easily on the idea of facilities-based competition. Even just two major rivals per region is better than one regulated monopoly.
• The slippery slope of regulation is real: Neutrality mandates will gradually spread to other layers of the Net and cover content and applications. (FCC is already hinting at interest in regulating in the cloud and other Net services and content). Google and Apple’s necks will be on the neutrality chopping block next.
• There are some First Amendment concerns in play here, but not those raised by regulatory advocates (Net Neutrality is not the Internet’s First Amendment as the regulatory advocates claim; the First Amendment is the Internet First’s Amendment).

I know, I know… do we really need to listen to another debate over Net neutrality?!   I too have grown a bit tired of the issue, which has crowded out so many other important issues in the Internet policy world these days. Net neutrality simply sucks all the oxygen out of the room no matter what topic is being discussed. And it is so highly charged that it has become the equivalent of the abortion issue of the high-tech world; intellectual combatants can get so worked up over the topic that seemingly no rational debate can take place at times.

That being said, I do want to encourage everyone to check out this dynamite debate about “Demystifying Net Neutrality,” a Diffusion Group webinar which took place last week. It’s a very level-headed discussion of the issue that features my colleague Barbara Esbin, a PFF Senior Fellow and the Director of PFF’s Center for Communications and Competition Policy, and Chris Riley, a Policy Counsel at Free Press.  You can now download and listen to the debate now from the Diffusion Group website. Barbara also wrote about the discussion over the PFF blog and walks the reader through the discussion. And you won’t be surprised to hear me say I think Barbara gets the better of Chris Riley in the debate!

One thing I found quite interesting in the debate was how Riley struggled to distinguish between “the Internet” versus “Internet access services” for purposes of delineating the proper confines of Net neutrality regulation. Like many other defenders of Net neutrality regulation, (see, most recently, for example, Rob Frieden, “Why the FCC’s Proposed Openness Principles Cannot and Should Not Apply to Internet Application and Content Providers“), Riley and Free Press want us to believe that this distinction is clear-cut and that regulation won’t have unintended consequences.  Of course, such distinctions are always easier in theory than reality, and as Berin Szoka and I argued in our recently paper on “high-tech mutually assured destruction,” regulation always spreads. The march of regulation can sometimes be glacial, but it is, sadly, almost inevitable: Regulatory regimes grow but almost never contract.

Anyway, listen to the entire webinar discussion. It’s worth your time.

The Annenberg School at the University of Southern California recently released a paper by Geoffrey Cowan and David Westphal entitled, “Public Policy and Funding the News.” In it, Cowan and Westphal join the growing chorus of voices advocating a substantial role of government in propping up struggling media entities or investing in news production going forward.

I can’t say that I disagree with everything in the report, especially the contention that many traditional news-gathering institutions face serious challenges to their survival. But as I have noted here before, there are three big problems with recommendations to greatly expand the role of government in the media sector or journalistic profession as a solution:

1. While public media & subsidies may have a role, that role should be tightly limited and focused on filling specific niches or unfilled needs within certain communities. Public subsidies should not be viewed as a replacement for traditional private media sources. Moreover, public subsidies will not begin to make up the shortfall from traditional private funding source, unless we plan on having Congress spend hundreds of billions of dollars (like the radical regulatory advocates at Free Press advocates) to subsidize news.
2. If we do end up taking that path, it will raise profound fairness questions since it will leave taxpayers footing the bill for things they might not want or could find objectionable, even offensive. (Conservatives wouldn’t like funding Bill Moyers, and liberals wouldn’t be too keen on supporting Rush Limbaugh).
3. Any plan to have government step up its role in supporting journalism will raise profound questions about press independence and threaten core First Amendment values. Putting journalists on the public dole is a serious threat to the integrity of the profession.

My PFF colleague Ken Ferree echoes many of these concerns in an essay today about the Annenberg report. (“Another Naïve Proposal for Government Entanglement with the Fourth Estate.”) I think Ken’s concerns about the First Amendment issues at stake here are worth quoting extensively. Ken argues:

I question the underlying assumption that the government has any role — at all — in enhancing or protecting the news media. The authors of the report take that role for granted, but it strikes me as fundamentally inconsistent with the First Amendment freedoms. The framers of our founding document were well aware of the dangers of government entanglement with the press. At the time of the country’s founding, there were about three-dozen newspapers in all of the colonies. Those publications were, for the most part, highly commercial and extremely partisan. The founders did not, however, craft a basic law that would allow for regulation to increase “fairness” or enhance diversity of viewpoints, or to change the way the papers were packaged or sold. Instead they came up with the elegantly simple: “Congress shall make no law . . . abridging the freedom of speech, or of the press. . . .” As Justice Black famously said, “no law means no law.” Congress and our elected officials may sincerely believe that a healthy media is essential to a democratic state, but the Constitution expressly carves the areas speech and press out of the sphere of appropriate government action. A truly free press must be truly free of the government’s tentacles.

Indeed, any attempt to socialize media in order to save it won’t likely work and in the process it will create a grave risk to private media, free speech, and vibrant democratic exchange.

Additional Reading:

• A “Public Option” for Media? The Free Press Plan to Put Journalists on the Public Dole
• The Dangers of Government-Subsidized News
• Public Option for Press Should Get the Red Pen
• Shall We Save Media by Socializing It?