A key point that Berin and I try to get across in our Forbes editorial today about the Yahoo!-Microsoft deal is that the high-tech marketplace evolves too rapidly for creaky Analog Era antitrust laws to keep up. We wanted to say more on that point in our piece, but we had a tight deadline (and a strict word limit!)  Well, turns out that we really don’t need to do so now because Farhad Manjoo of Slate has done a better job than we ever could have making that point in this essay today entitled, “The Case Against the Case Against Google“:

But if the government was right on the facts [in the Microsoft case], it was wrong on the big picture. The theory behind the prosecution was that Microsoft’s mobster tactics would raise the price of software and slow down innovation. But that didn’t happen. In 2002, Microsoft settled the antitrust case with the Bush administration; it faced no substantial penalties for its years of bad behavior. At that point, it still looked unbeatable—it had the same OS monopoly, office-software monopoly, and Web-browser monopoly. And you know what happened? It got beat anyway. Many of Microsoft’s assets turned out not to matter, because upstarts like Google and old foes like Apple found ways to innovate around them.

Indeed, in many ways Microsoft’s size was a liability, not an asset. This is the classic innovator’s dilemma; the company was so intent on protecting its cash cows—it derives most of its revenue from two products, Windows and Office—that it was blind to opportunities in new markets. Microsoft couldn’t make a Web e-mail system like Gmail, because that would have threatened Outlook. And why should Microsoft bother with free online word processing apps when Office was doing so well? When journalist Steven Levy showed Bill Gates the first iPod, Gates’ first reaction was, “It’s only for Macintosh?” Gates saw the iPod through the lens of desktop computers; if the iPod connected only to Macs, it didn’t pose a threat to Microsoft. What he didn’t figure out was that the iPod would herald the iTunes Store, allowing Apple to become not only the most influential entertainment company in the world, but also the dominant software maker for mobile devices. Yes, the first iPod didn’t work on Windows. In time, it would help render Windows irrelevant.

Exactly right. Antitrust advocates have often failed to appreciate that markets are evolutionary and dynamic, and when those markets are built upon code, the pace and nature of change becomes unrelenting and utterly unpredictable.

The latest edition (Version 4.0) of my PFF special report on “Parental Controls and Online Child Protection: A Survey of Tools & Methods” is now up.  For those not familiar with the report, it explores the market for parental control tools, rating schemes, education and media literacy efforts, and various other tools, methods, and initiatives aimed at promoting online child safety.  After evaluating that state of this market, I conclude: “There has never been a time in our nation’s history when parents have had more tools and methods at their disposal to help them decide what constitutes acceptable media content in their homes and in the lives of their children.”  Moreover, I believe that the parental controls and content management tools cataloged in the report represent a better, less restrictive alternative to government regulation.

Version 4.0 of the report is now over 250 pages long (up from 200 pages in Version 3.0) and it contains almost 70 exhibits (up from 50), 725 references (up from roughly 500), and numerous updates in all five sections of the book. Major updates have been made to the Internet, social networking, and mobile media sections, reflecting the growing importance of those sectors and issues. Other new sections or appendices have also been added to the report, including:

• a new section examining how many households really need parental control tools;
• a new appendix on the downsides of mandatory parental controls and restrictive default settings;
• a new section on the dangers of “deputizing the online middleman” solution as an approach to solving child safety concerns;
• a new appendix reviewing the findings of 5 past online safety task forces;
• … and much more.

I issue major updates once a year and 1 or 2 minor tweaks during the course of the year to reflect the evolution of the parental control and online child safety marketplace and debate. The report is available free-of-charge on the PFF website, and the previous editions of the report are housed there too in case you want to see how it has evolved over the past couple of years. For those interested in taking a quick look at the report, I have embedded it down below the fold as a Scribd file. Finally, as is always the case, I encourage readers to send me updates and suggestions for how to improve the report and I will incorporate them into future versions.

Well, here we go again. Harvard’s Jonathan Zittrain has penned another gloomy essay about how “freedom is at risk in the cloud” and the future of the Internet is in peril because nefarious digital schemers like Apple, Facebook, and Google are supposedly out to lock you into their services and take away your digital rights.  And so, as I have done here many times before (see 1, 2, 3, 4, 5 + video!), I will offer a response arguing that Jonathan’s cyber-Chicken Little-ism is largely unwarranted.

Zittrain’s latest piece is entitled “Lost in the Cloud” and it appears in today’s New York Times.  It closely tracks the arguments he has set forth in his book The Future of the Internet–And How to Stop It, which I named the most important technology policy book of 2008, but not because I agreed with its central thesis.  Zittrain’s book and his new NYT essay are the ultimate exposition of Lessigite technological pessimism.  I don’t know what they put in the water up at the Berkman Center to make these guys so remarkably cranky and despondent about the future of of the Internet, but starting with Lawrence Lessig’s Code in 1999 and running through to Zittrain’s Future of the Internet we have been forced to endure endless Tales of the Coming Techno-Apocalypse from these guys.  Back in the late 90s, Prof. Lessig warned us that AOL and some other companies would soon take over the new digital frontier since “Left to itself, cyberspace will become a perfect tool of control.”  Ah yes, how was it that we threw off the chains of our techno-oppressors and freed ourselves from that wicked walled garden hell?  Oh yeah, we clicked our mouses and left! And that was pretty much the end of AOL’s “perfect control” fantasies. [See my recent debate with Prof. Lessig over at Cato Unbound for more about this “illusion of perfect control,” as I have labeled it.]

But Zittrain is the equivalent of the St. Peter upon which the Church of Lessigism has been built and, like any good disciple, he’s still vociferously preaching to the unconverted and using fire and brimstone sermons to warn of our impending digital damnation. In fact, he’s taken it to all new extremes. In Future of the Internet, Jonathan argues that we run the risk of seeing the glorious days of the generative, open Net and digital devices give way to more “sterile, tethered devices” and closed networks. The future that he hopes to “stop” is one in which Apple, TiVo, Facebook, and Google — the central villains in his drama — are supposedly ceded too much authority over our daily lives because of a combination of (a) their wicked ways and (b) our ignorant ones.

First, let’s talk about those corporate wicked ways. Jonathan waxes nostalgic about a mythical time not long ago when technologies were supposedly far more “open and generative” than they are now. In Jonathan’s revisionist history of the digital olden times, we are told that the early PC era was somehow the model for openness and generativity.  That’s damn peculiar to an old-timer like me because all I remember from those days is the tall stacks of proprietary programs sitting on my desk + a keyboard and other peripherals that were all hard-wired to the monitor + a guy named Bill Gates who was typically likened to the Darth Vader of openness.  In Zittrain’s retelling of things, however, those Digital Dark Ages have suddenly become the good ol’ days!  The real threat to openness and digital freedom, however, is now right before us.. or just over our head it seems. It’s up there in the cloud, he tells us. The freedom that “tinkerers and hackers” once enjoyed in those glorious good ‘ol days “is at risk in the cloud, where the vendor of a platform has much more control over whether and how to let others write new software,” Zittrain says.

Excuse me? Why would it be the case that generativity is now somehow more at risk today than it was in the era where we had to wake up every morning and wait for a C:\ prompt before loading an operating system or $50 spreadsheet software via three different 5.25 floppy disks?  [Seriously, does anybody else besides me remember how much those days sucked?]  Well, it turns out that the answer to that question goes back to the ignorant ways of the digital hoi polloi that I mentioned above.  You see, we are all sheep who just don’t know what’s good for us. Or here’s how Jonathan puts it, albeit spinning it in such a way to make his elitist pronouncements somewhat easier to swallow:

The market is churning through these issues. […] But the dynamics here are complicated. When we vest our activities and identities in one place in the cloud, it takes a lot of dissatisfaction for us to move. And many software developers who once would have been writing whatever they wanted for PCs are simply developing less adventurous, less subversive, less game-changing code under the watchful eyes of Facebook and Apple.

Ooooo.. spooky!  Beware ye naive Netizens, for “the watchful eyes of Facebook and Apple” are upon you!

No, seriously, what the hell does all that mean and what the heck is the problem here? By no conceivable stretch of the imagination can one paint a portrait of the Digital Dark Ages for me that makes that era look better than the Digital Renaissance we are now living through. There’s never been a better time to be tinkerers, hackers, or just regular citizen-consumers in cyberspace.

So, what gives?  Why is it that two smart guys like Lessig and Zittrain always seem to fear to worst even in the midst of a cornucopia of cyber-choices?  It comes back to the hyper-pessimism and remarkable short-sightedness of the Lessig-Zittrain worldview. In terms of their myopia, here’s how I put it in that recent debate with Lessig:

Lessig failed to appreciate that markets are evolutionary and dynamic, and when those markets are built upon code, the pace and nature of change becomes unrelenting and utterly unpredictable. …  a largely unfettered cyberspace has left digital denizens better off in terms of the information they can access as well as the goods and services from which they can choose. Oh, and did I mention it’s all pretty much free-of-charge? Say what you want about our cyber-existence, but you can’t argue with the price!

But there’s something else which drives their reasoning, and for lack of a softer term I will just label it what I think it really is: Elitism. At the end of the day, if we are to believe the scary tales that Zittrain and Lessig try to weave in their work we have to accept the notion that neither companies not consumers can really be trusted to make sensible decisions.  Basically, cyber-companies are only out to screw us and we’re just too stupid to realize it. Luckily for us, however, the fine folks up at Berkman know what’s best for us and, guess what, it’s not Facebook, Apple, TiVo, or Google!  These companies are apparently guilty of the heinous crime of giving consumers too much of what they want, and we can’t allow that because “it takes a lot of dissatisfaction for us to move.”  Or as Jonathan noted in an earlier essay:

I think we can get locked into these platforms as we (rightly, unfortunately) fear the wildness of the open Internet and general purpose PC, and as we shift and accumulate more and more of our data and relationships there. After the markets coalesce to these tamer gated communities, governments can later come along and insist that these platforms be tuned towards surveillance and control far more successfully than the wilder Internet that preceded them.

In other words, we’re lazy fools. Or perhaps maybe — just maybe — we’re reasonably happy with the choices we have been given and don’t have a good reason to flee some of our current favorite providers. My God, could it be that markets work!  No, no, no, Zittrain tells us, for these “tamer gated communities” (tamer than what?) have lulled us into a sleep as they concoct a plan to “tame” the Net, quash software innovation, and then invite the government in to take all our info or property.

So, we’re right back at Lessig’s AOL horror story from 1999, except now it’s Facebook, Apple, and Google staring in the role of our corporate captors — again, even though they offer us constantly improving services and constantly falling prices (and are completely free of charge in the case of Facebook and Google).  Regardless, the fear of lock-in and what Lessig and Zittrain refer to as the “regulability” of some of these services and platforms, leads them to argue that something ominous lurks around every cyber-corner.  Consequently, just as Lessig counseled a fair degree of government oversight and intervention back in ’99 to deal with the AOL era (non-)problem of walled gardens, a decade later, Zittrain is ready to call in the code cops to correct for our foolish allegiances to the latest crop of popular software providers or media platforms:

If the market settles into a handful of gated cloud communities whose proprietors control the availability of new code, the time may come to ensure that their platforms do not discriminate. Such a demand could take many forms, from an outright regulatory requirement to a more subtle set of incentives — tax breaks or liability relief — that nudge companies to maintain the kind of openness that earlier allowed them a level playing field on which they could lure users from competing, mighty incumbents. We’ve only just begun to measure this problem, even as we fly directly into the cloud. That’s not a reason to turn around. But we must make sure the cloud does not hinder the creation of revolutionary software that, like the Web itself, can seem esoteric at first but utterly necessary later.

Sorry, but where is the evidence warranting this sort of techno-pessimism?  I just can’t buy into the story that Zittrain spins: That some folks in the cloud are currently “hinder[ing] the creation of revolutionary software” or that one day soon we’ll all wake up and find our digital lives and property completely controlled by cloud-based companies and we will be utterly without recourse.  Honestly, is Google locking you down? Did someone make you sign up for all their free services? Any reason you can’t use a second e-mail service or a different search provider?  Likewise, did Steve Jobs force you to buy an iPod or an iPhone?  I would think we should be celebrating the fact that in just one year’s time there has been 1.5 Billion downloads of over 65,000 free and paid apps by consumers in 77 countries.  I call that progress — and I don’t even own an iPhone!  Again, nothing is stopping consumers from exercising their right to choose from many other products besides Apple, Google, and Facebook, just as I have.

Now, do companies make mistakes? Of course they do. All the time, in fact. Amazon’s bone-headed book deletion this week is the latest exhibit. But people learn from these things. And companies do as well. Things evolve. Companies correct their mistakes or people bolt. AOL lost 20 million paying customers and billions in market share in the span of just a few years. Time Warner is still cursing the day they made that deal and has now spun it off entirely. Last time I checked, the old AOL model wasn’t a favorite among most web vendors. Moreover, does anyone really think there’s a future for Amazon if they make it a habit of deleting digital books on people’s Kindles?  Frankly, if you want more competition in the digital book market, you should be inviting Amazon to play such silly reindeer games. It would be the best incentive ever for people to switch! But the fact remains, that’s the exception to the rule. Locking down customers or playing games with their digital goodies isn’t a viable long-term business model that I see many firms adopting these days. And if they do, they are screwing themselves.

This same principle applies to Facebook and the fear that they will hold onto customers or their data.  When they get too heavy-handed, people respond. Does anyone remember the Beacon incident or the flare-up of Facebook’s changing Terms of Service?  People got pissed, and the company listened. That’s a healthy sign that consumers have real power in the social networking market.  Moreover, how hard is it to escape from Facebook Land? It’s not a maximum security data prison. I went there for all of about a day, found it wasn’t for me, and then deleted everything and set up camp over at LinkedIn instead.  (Yes, that’s right, I do NOT have a Facebook account.  Somehow the sky hasn’t fallen on me.  People still find me just fine.)

So what about those solutions that Zittrain recommends for these new non-problems? In Future of the Net, he was surprisingly short on specific solutions. But in today’s NYT editorial he gets a bit more concrete with that suggestion “the time may come to ensure that their platforms do not discriminate,” possibly through regulation or other Sunstein-ian “nudges.” Here we have the truly frightening prospect of a handful of faceless bureaucrats becoming Facebook’s overlords.  I’m not even sure what it means to have the government “ensure they do not discriminate,” but I really don’t want to find out.  For Google it’s a lot easier to figure out what Zittrain’s medicine will taste like: Can you say “Right of Reply Mandates & a Fairness Doctrine for the Internet?”  Frank Pasquale and Oren Bracha can and they’ve already sketched the blueprint for what a new Federal Search Commission might look like to address “search bias.” [See Berin’s critique here. ]  And for Apple, non-discrimination at the device level would take the form of forced commoditization of the iPhone.  They’d be required to give it to any carrier that wanted it on government-approved terms and the iPhone Store would be regulated like grain elevator and subjected to common carrier rules.  You know, because that model worked soooo well in other contexts.  And then, just for good measure, we would layer on a bunch of restrictions on all these companies in the form of online advertising regulations.  We can’t have the mindless sheep of the Internet being subjected to more targeted ads, after all!   To be clear, Zittrain hasn’t recommended these specific regulatory remedies yet, but this is where his logic is taking us. The old regulatory playbook will become the new regulatory playbook.

OK, now that I have been so snarky and dismissive of most of what Jonathan says in his editorial today and in his book, let me close by noting where I (partially) agree with him and Lessig. Are some digital technologies “regulable” such that our government could coerce them to divulge data or personal information?  Yes, this is true.  But here’s how I addressed that concern in my recent Cato Unbound debate with Lessig:

[cyber-libertarians] are in league with Lessig [and Zittrain] when it comes to the forcible surrender of personal information or technological capabilities to government officials. When the Department of Justice comes knocking on Google’s door asking for records of our search histories to see who’s looking for online porn (or anything else), that’s a problem. The “deputization of the middleman” has long been a legitimate fear because, with the threat of liability hanging over their necks, online intermediaries could be coerced into giving the state information that leads to fines, imprisonment, censorship, or some other type of government harassment. However, this is a problem we should handle by putting more constraints on our government(s), not by imposing more regulations on code or coders. While, as a general principle, I think it wise for companies to minimize the amount of data they collect about consumers or websurfers, we need not force that by law. And we should certainly hold companies to high standards when it comes to data security and breach. But, again, the way to deal with the “regulability” threat that Lessig and Zittrain raise is to tightly limit the powers of government to access private information through intermediaries in the first place. Most obviously, we could start by tightening up the Electronic Communications Privacy Act and other laws that limit government data access. More subtly, we must continue to defend Section 230 of the Communications Decency Act, which shields intermediaries from liability for information posted or published by users of their systems, because (among many things) such liability would make online intermediaries more susceptible to the kind of back-room coercion that concerns Lessig. If we’re going to be legislating about the Internet, we need more laws like that, not those of the “middleman deputization” model.

But that is the extent of my agreement with Lessig and Zittrain. All this techno-pessimism emanating out of Berkman and their books is largely unwarranted.  I suppose one could argue that they are just sounding alarms in the hope of preemptively checking bone-headed corporate moves, but the problem is that they increasingly back up their pessimism with large doses of heavy-handed political prescriptions to keep the Net “healthy.”  Instead, they’ll just poison the wonderfully free waters of cyberspace with the same regulatory nonsense that has strangled traditional media markets for decades. And unless your idea of cyber-nirvana resembles the broadcast marketplace, you have to think that won’t benefit consumers one bit.

Signed,

An Unrepentant Techno-Optimist

As I am getting ready to watch the Super Bowl tonight on my amazing 100-inch screen via a Sanyo high-def projector that only cost me $1,600 bucks on eBay, I started thinking back about how much things have evolved (technologically-speaking) over just the past decade. I thought to myself, what sort of technology did I have at my disposal exactly 10 years ago today, on February 1st, 1999?  Here’s the miserable snapshot I came up with:

• 10 years ago today, I did not own a high-definition television set, as they were too expensive (I bought my first one from Sears on an installment plan a few months later. It was a boxy 42-inch, 4×3 monstrosity that rolled around on the floor on casters and it took up half the room). Moreover, only a few HDTV signals could be picked up locally and none were yet available from my cable or satellite provider.
• 10 years ago today, the biggest television in my house was a 32-inch 4×3 ProScan analog set, which I thought was massive. (Of course, it was in terms of weight. It was over 125 lbs).
• 10 years ago today, I was still using a dial-up, 56k narrowband Internet connection even though I lived in downtown Washington, DC just 6 blocks from our nation’s Capitol.
• 10 years ago today, my computer was a Compaq laptop that weighed more than my dog, had barely any storage or RAM, and had a screen that was only slightly brighter than an Etch-A-Sketch.
• 10 years ago today, I was still occasionally using an old CompuServe e-mail address that had nine digits in it. (But at least I wasn’t one of the 20 million or so people paying $20 bucks per month to graze around inside AOL’s walled garden!)
• 10 years ago today, I was still backing up files on 3 1/2 inch floppy disks. I had boxes full of those things. (And, sadly, I still had 5 1/4 inch floppies in my possession that I was saving “just in case” I ever needed those old files. Pathetic!)

• 10 years ago today, I did not own an i-Pod, or any other sort of portable digital MP3 player. I was still hauling a box of CDs around with me everywhere I went and playing them on a bulky portable CD player that skipped whenever I bumped it.  And I was still years away from downloading my first song or album online.
• 10 years ago today, I was still occasionally listening to cassette tapes in my car.
• 10 years ago today, I was still using a crummy analog cell phone that had ZERO options outside of just calling people (and I had to manually type in every single contact on the numeric keypad. But hey, that old StarTac sure looked cool at the time!)
• 10 years ago today, I was still driving to my local video store to rent movies, and some of them were on VHS tapes.
• 10 years ago today, I had never downloaded or watched a movie or TV show on my computer.
• 10 years ago today, I was still playing video games on my old PlayStation (as in PlayStation ONE) and was lusting for a Sega DreamCast. And the idea of online gaming was still a distant dream.
• 10 years ago today, I was still using a camera that required film, which I had to always drop off at the local pharmacy to be developed. And I was still over a year away from buying my first digital camera (and camcorder) that could transfer files to my computer.
• 10 years ago today, I had not yet made my first eBay transaction.
• 10 years ago today, I had never done any online banking, or any other monetary transactions online for that matter.
• 10 years ago today, I had not yet conducted my first Google search. I was still using AltaVista for almost all my searches.
• 10 years ago today, I did not have a blog, an RSS feed, a Twitter feed, any social networking accounts, Gmail, GMaps, Google News, Flickr, Firefox, Netflix, Wikipedia, satellite radio, or any of the other endless assortment of digital services I rely on today.

My God, think about how much our world has evolved in just 10 years!!  I love capitalism.

Just FYI, the latest update of my booklet on “Parental Controls and Online Child Protection: A Survey of Tools & Methods” is now live. The new version, Version 3.1, provides minor updates to all sections of the book and a new appendix of relevant research in the field. I issue major updates early each year and 1 or 2 tweaks during the course of the year to reflect the evolution of the parental control and online child safety market and debate.

For those not familiar with the report, it explores the market for parental control tools, rating schemes, education efforts, and initiatives aimed at promoting online child safety. I believe that the parental controls and content management tools cataloged in the report represent a better, less restrictive alternative to government regulation. As I conclude after evaluating that state of the market: “There has never been a time in our nation’s history when parents have had more tools and methods at their disposal to help them decide what constitutes acceptable media content in their homes and in the lives of their children.”

The report is available free-of-charge on the PFF website, and the previous editions of the report are housed there too in case you want to see how it has evolved over the past two years. For those interested in taking a quick look at the report, I have embedded it down below the fold as a Scribd file. Finally, as is always the case, I encourage readers to send me updates and suggestions for how to improve the report and I will incorporate them into future versions.

PFF has just releasing an updated edition of my booklet on “Parental Controls and Online Child Protection: A Survey of Tools & Methods.” The new version, Version 3.0, includes two new appendixes and updates to each section to reflect new parental control tools and programs developed in the last nine months.

The updated report is timely as it comes on the heels of the recently-announced Internet Safety Technical Task Force, which is being chaired by the Berkman Center for Internet & Society at Harvard Law School. I am privileged to serve as a member of the Task Force, which is evaluating various online safety technologies and strategies and then reporting back to state attorneys general with our findings.

Those issues and much more are covered in the latest edition of my report. The report explores the market for parental control tools, rating schemes, education efforts, and initiatives aimed at promoting online child safety. I believe that the parental controls and content management tools cataloged in the report represent a better, less restrictive alternative to government regulation. As I conclude after evaluating that state of the market: “There has never been a time in our nation’s history when parents have had more tools and methods at their disposal to help them decide what constitutes acceptable media content in their homes and in the lives of their children.”

Version 3.0 of the special report, now over 200 pages, contains over fifty exhibits and numerous updates in all five sections of the book. Major updates have been made to the Internet, social networking, and mobile media sections, reflecting the growing importance of those sectors and issues. A greatly expanded section on video empowerment technologies has also been included. Finally, two appendices have also been added: a comprehensive legislative index cataloging over thirty bills introduced in Congress on these issues (complied with John Morris of Center for Democracy & Technology), and a glossary of 35 relevant terms and cases.

The report is available free-of-charge on the PFF website, as are the previous editions. And I am happy to provide hard copies to those who are interested.

PFF has just released my latest paper entitled “Parental Control Perfection? The Impact of the DVR and VOD Boom on the Debate over TV Content Regulation.” In the report, I focus on the extent to which new video technologies, such as digital video recorders (DVRs) and video on demand (VOD) services, are changing the way households consume media and are helping parents better tailor viewing experiences to their tastes and values. I provide evidence showing the rapid spread of these technologies and discuss how parents are using these tools in their homes. Finally, I argue that these developments will have profound implications for debates over the regulation of video programming. As parents are given the ability to more effectively manage their family’s viewing habits and experiences, it will lessen—if not completely undercut—the need for government intervention on their behalf.

This 16-page report can be found at: http://www.pff.org/issues-pubs/pops/pop14.20DVRboomcontentreg.pdf