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NRO Op/Ed: Government v. Google: Why Free Marketeers Should Rally Against Search Neutrality

by on July 22, 2010 · 4 comments

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Thus did Ronald Reagan capture the essence of big government. The two biggest challenges facing defenders of free markets in technology policy lie in Reagan’s second point:

  • Telling the “Good News Story” about how “it” (human ingenuity—what the great economist Julian Simon called our “Ultimate Resource”) keeps “moving” (by inventing new hardware, software, services, etc.)
  • Holding the line against efforts to extend the regulatory regimes of the past over new technologies, and chipping away at those regimes as best we can

So one might think that believers in limited government would celebrate a company like Google as a great American success story: A university research program launched by two smart kids (one of whom fled Communist oppression) that grew from a garage start-up into a global tech titan whose wide-ranging innovations are revolutionizing more and more of the economy. Surely free marketeers would rally to the defense of such a company when, say, the New York Times—that if-it-moves-regulate-it bastion—calls for bringing “into the regulatory fold,” right?

Unfortunately, all too many free marketeers seem willing to hang Google out to dry, or at least stay silent because they resent the pro-regulatory policy positions taken by the company or the political leanings of its employees and leadership. The company has hardly been a champion of digital capitalism in Washington, allying itself with a number tax/regulate/subsidize groups, pushing for net neutrality regulation, and using antitrust as a sword against its rivals (some of whom seem willing to return the favor). But the principles at stake are too important for free marketeers to gloat, as Adam Thierer argued in an op/ed for National Review Online earlier this week: Government vs. Google: Why Free Marketeers Should Rally Against “Search Neutrality.” Continue reading →

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After the Deluge, More Deluge

by on July 22, 2010 · 0 comments

If I ever had any hope of “keeping up” with developments in the regulation of information technology—or even the nine specific areas I explored in The Laws of Disruption—that hope was lost long ago.  The last few months I haven’t even been able to keep up just sorting the piles of printouts of stories I’ve “clipped” from just a few key sources, including The New York Times, The Wall Street Journal, CNET News.com and The Washington Post.

 

I’ve just gone through a big pile of clippings that cover April-July.  A few highlights:  In May, YouTube surpassed 2 billion daily hits.  Today, Facebook announced it has more than 500,000,000 members.   Researchers last week demonstrated technology that draws device power from radio waves.

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We Need “New York Times Neutrality”—NOT!

by on July 15, 2010 · 0 comments

I’ve long been a fan of Danny Sullivan, who edits Search Engine Land, and probably knows more about search engines than anyone outside the companies that actually run them. But my respect for his wit, eloquence and perspective  has reached new heights with his latest piece:  The New York Times Algorithm & Why It Needs Government Regulation, a lampoon of the NYT’s foolish call for search neutrality in an editorial yesterday, turning the Times’ arguments right back at them, and pointing out the hypocrisy by which the established press often tries to deny First Amendment protection to newcomers to the speech business. Danny’s post is truly a masterpiece of satire, worthy of Jonathan Swift. But one section deserves special attention:

I’ve been covering the search space closely for nearly 15 years, from before Google itself even existed, so I have seen these types of claims far longer and examined them in far more depth than what went into that New York Times editorial. My guess is that the editorial staff (the staff that writes the newspaper’s editorials, which are opinion pieces, which is confusing when the newspaper also has an editorial staff that writes “editorial” stories elsewhere that are supposed to be unbiased) spent about an hour or so discussing recent Google news, then someone was probably assigned to write the editorial and invested all of about three hours on it. That’s not much time or care for a major and well-respected newspaper (in many quarters) to decide the government should evaluate “fairness” when it comes to making editorial judgments in search results, be they from Google or any other search engine.

I’m afraid Danny’s right. What a shameful day for the “Grey Lady.” Anyway, here are a few of the pieces Adam and I have written about the dangers inherent in the seductive idea of search neutrality: Continue reading →

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Google’s Lobby Shop Creates Need for Itself

by on July 14, 2010 · 1 comment

“Live by the sword, die by the sword.”

“Play with fire and you might get burned.”

Those are lines that sprung to my mind as I read this FT article noting how Google’s support for ‘net neutrality regulation has transmogrified into a push for “search neutrality.” Such regulation would be aimed directly at Google’s heart throat nuts business model.

(I was the first to discuss “search neutrality” here on TLF. Ignore Adam’s comment.)

But sloganeering is cheap. Let’s take a minute to try and understand why things like this happen to companies like Google.

First, I think, most executives—certainly executives in tech companies—don’t understand Washington at all. They have a gauzy impression that good people work for the betterment of public policy here.

Actually, that’s true. Just about everyone is good. And everyone is working for the betterment of public policy as they see it. The thing is, everybody sees the betterment of public policy as turning it to their own interests. Washington, D.C. is a war of all against all—each trying to grab the most stuff—using politics instead of clubs, knives, and guns.

Next, I think it’s important to recognize the incentives of the people who advise tech executives. They are people with families and mortgages. They want to have and keep a job. So what do they do? They encourage involvement in public policy. The public policy advisor who says “steer clear of Washington” may be giving better advice, but his consulting contract is small and its term is short.

The government relations/lobbying shop in a company like Google is part of a larger business, yes, but it is a small bureaucracy within the business. It doesn’t produce anything subject to competitive pricing, so (accounting practices notwithstanding) there is little way to measure its value. The fallback measure is activity—the more things happening, the more ‘valuable’ the lobbying shop. (Surprise me, Google, so famous for measurement, testing, and rigor in product development. Have you got a way to measure the true value produced by your lobbying shop, law department, accounting group, etc.?)

You see how the dynamics quickly get perverse. A public policy advisor or lobbyist makes him- or herself ‘valuable’ by getting the client into trouble.

Google is not in trouble. The FT story is premature, and it’s overstatement to say that Google has been “hoisted by its own petard.”

But imagine a controlled experiment in which another Google in a parallel universe didn’t draw attention to itself in Washington, D.C., didn’t push for conditions in the 700 MHz spectrum auction, didn’t advocate for ‘net neutrality regulation, and so on. That Google might not have created—or might have delayed—the need for a permanent lobbying/government relations cost center.

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The Seven Deadly Sins of Title II Reclassification (NOI Remix)

by on July 13, 2010 · 4 comments

Better late than never, I’ve finally given a close read to the Notice of Inquiry issued by the FCC on June 17th.  (See my earlier comments, “FCC Votes for Reclassification, Dog Bites Man”.)  In some sense there was no surprise to the contents; the Commission’s legal counsel and Chairman Julius Genachowski had both published comments over a month before the NOI that laid out the regulatory scheme the Commission now has in mind for broadband Internet access.

Chairman Genachowski’s “Third Way” comments proposed an option that he hoped would satisfy both extremes.  The FCC would abandon efforts to find new ways to meet its regulatory goals using “ancillary jurisdiction” under Title I (an avenue the D.C. Circuit had wounded, but hadn’t actually exterminated, in the Comcast decision), but at the same time would not go as far as some advocates urged and put broadband Internet completely under the telephone rules of Title II.

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China Renews Google’s License

by on July 9, 2010 · 9 comments

Today, China renewed Google’s license to do business in the country, reports The Washington Post. The announcement means that Google will maintain its presence in the country for the foreseeable future. Google will likely meet criticism, but this is good news nonetheless for Chinese Internet users.

The rapidly unfolding Google-China saga has made headline after headline since January, when Google announced that it had suffered an intrusion originating in China. In March, after months of internal debate and heavy public criticism, Google shut down its China-based search engine Google.cn, redirecting all queries to its Hong Kong-based Google.com.hk site. Late last month, Google reactivated some of its China-based services and has continued to operate in China, albeit on a limited basis.

Operating in China has long been a headache for Google, due to the Chinese government’s notorious disregard for Internet freedom, embodied by its infamous “Great Firewall of China.” China surveils all Internet traffic that traverses its borders and attempts to block its citizens from accessing information sources which the government considers unfavorable. China also gleans data from its network to identify and retaliate against political dissidents.

Human rights advocates have long derided Google and other U.S. tech companies, such as Microsoft and Yahoo, for doing business in China. China requires all search engines operating in the country to censor a broad range of information, like photos of the 1989 Tiananmen Square massacre. Critics contend that complying with the Chinese government’s oppressive demands is unethical and that facilitating censorship and suppression is morally unacceptable on its face.

Such criticisms, however principled, miss the forest for the trees. If Google were to cease its Chinese operations entirely, the result would be one less U.S. Internet firm accessible to Chinese citizens. While Google is the worldwide search leader, in the Chinese search market Google lags behind Baidu, a search company based in China. Baidu’s market share increased after Google shut down its China-based search site. If Google were to pull out of China entirely, chances are Baidu would pick up many more users.

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Consumer Watchdog Gets Creepy With Congress Trying to Make its “WiSpying” Case

by on July 9, 2010 · 6 comments

I haven’t said a lot about Google picking up wifi signals as it gathered imagery for its helpful Street View service, but the group “Consumer Watchdog” is doing cartwheels and handstands to try and generate interest in it. In my opinion, they’ve gone a little too far, and now—as have so many before—they will learn to fear my blog post.

This release from CW’s “corporateering” section is misleading in several ways. Take this, for example:

Google now admits that its Street View cars snooped on private WiFi networks as they prowled streets in thirty countries photographing people’s homes over the last three years. The company acknowledges it recorded communications it picked up from unencrypted WiFi networks.

To say “Google now admits” suggests that Google covered it up. Wrong. Google came forward with the information as soon as it discovered its mistake.

Is it “private WiFi networks” from which Google picked up data? The concepts and terminology are unclear to many, but the “private” characterization is misleading.

Many of these networks were privately owned, no doubt, but the question is whether they were configured to conceal the data being transmitted on them. They were not. Information was sent out in the clear (i.e. unencrypted) on these networks. And it was sent out by radio.

We should go into that: Continue reading →

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Google Street View/Wi-Fi Privacy Technopanic Continues but Real Cybersecurity Begins at Home

by on July 8, 2010 · 12 comments

Congressmen working on national intelligence and homeland security either don’t know how to secure their own home Wi-Fi networks (it’s easy!) or don’t understand why they should bother. If you live outside the Beltway, you might think the response to this problem would be to redouble efforts to educate everyone about the importance of personal responsibility for data security, starting with Congressmen and their staffs. But of course those who live inside the Beltway know that the solution isn’t education or self-help but… you guessed it… to excoriate Google for spying on members of Congress (and bigger government, of course)!

Consumer Watchdog (which doesn’t actually claim any consumers as members) held a press conference this morning about their latest anti-Google stunt, announced last night on their “Inside Google” blog: CWD drove by five Congressmen’s houses in the DC area last week looking for unencrypted Wi-Fi networks. At Jane Harman’s (D-CA) home, they found two unencrypted networks named “Harmanmbr” and “harmantheater” that suggest the networks are Harman’s. So they sent Harman a letter demanding that she hold hearings on Google’s collection of Wi-Fi data, charging Google with “WiSpying.” This is a classic technopanic and the most craven, cynical kind of tech politics—dressed in the “consumer” mantle.

The Wi-Fi/Street View Controversy

Rewind to mid-May, when Google voluntarily disclosed that the cars it used to build a photographic library of what’s visible from public streets for Google Maps Street View had been unintentionally collecting small amounts of information from unencrypted Wi-Fi hotspots like Harman’s. These hotspots can be accessed by anyone who might drive or walk by with a Wi-Fi device—thus potentially exposing data sent over those networks between, say, a laptop in the kitchen, and the wireless router plugged into the cable modem.

Google’s Street View allows you to virtually walk down any public street and check out the neighborhood Continue reading →

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Privacy MythBusters: No, Facebook Doesn’t Give Advertisers Your Data!

by on July 6, 2010 · 6 comments

Working in any field of public policy is a bit like living in a haunted house: You spend most of your day dodging bogeymen, ghosts, phantasms, phantoms and specters of imagined harms, frauds, invasions and various conspiracies supposedly perpetrated by evil companies against helpless consumers, justice, God, Gaia, small woodland creatures and every sort of underserved, disadvantaged and/or underprivileged group of man, animal, vegetable and mineral imaginable.

But Internet policy—particularly online privacy—tends to be haunted by such groundless imaginings far more than most other areas of policy, largely because it manifests itself in ways that are far more real and immediate to ordinary users. For example, as outraged as any of us might feel about the Gulf oil spill, how many of us have the slightest clue what’s really involved (beyond what we’ve learned watching TV anchors stumble through a vocabulary they don’t understand)?

By contrast, huge numbers of Americans have daily interaction with web services like those provided by Google, Microsoft, Yahoo, Twitter and Facebook. That doesn’t mean we necessarily  understand how these technologies work. Indeed, quite the contrary! As Arthur C. Clark said, “Any sufficiently advanced technology is indistinguishable from magic.” But we often think we know how these technological marvels work, and certainly sound much more informed when we spout off (pun intended) about these things than, say, “top kills” on the bottom of the ocean floor. In short, we know just enough web services to be dangerous when we ground strong policy positions in our unsophisticated understanding of how things really work online.

There are few better examples of this than the constantly repeated bugaboo that “Facebook sells your data to advertisers!” Or “Facebook only wants you to share more information with more people for advertising purposes!” These myths bear no relation to how advertising on social networking sites actually works, as Facebook CEO Sheryl Sandberg explains beautifully in a short tutorial video. Here’s the key portion: Continue reading →

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Viacom v. YouTube: The Principle of Least Cost Avoidance

by on June 26, 2010 · 4 comments

I’m late to the party, but I wanted to say a few things about the District Court’s decision in the Viacom v. YouTube case this week and.  This will be a four-part post, covering:

1.  The holding

2.  The economic principle behind it

3.  The next steps in the case

4.  A review of the errors in legal analysis and procedure committed by reporters covering the case

Continue reading →

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