Here’s the first of two essays I’ve recently penned making “The Case for Internet Optimism.” This essay was included in the book, The Next Digital Decade: Essays on the Future of the Internet (2011), which was edited by Berin Szoka and Adam Marcus of TechFreedom.  In these essays, I identify two schools of Internet pessimism: (1) “Net Skeptics,” who are pessimistic about the Internet improving the lot of mankind; and (2) “Net Lovers,” who appreciate the benefits the Net brings society but who fear those benefits are disappearing, or that the Net or openness are dying.  (Regular readers of this blog will be familiar with these themes since I sketched them out in previous essays here such as, “Are You an Internet Optimist or Pessimist?” and “Two Schools of Internet Pessimism.”) The second essay is here.

This essay focuses on the first variant of Internet pessimism, which is rooted in general skepticism about the supposed benefits of cyberspace, digital technologies, and information abundance. The proponents of this pessimistic view often wax nostalgic about some supposed “good ‘ol days” when life was much better (although they can’t seem to agree when those were). At a minimum, they want us to slow down and think twice about life in the Information Age and how it’s personally affecting each of us.  Occasionally, however, this pessimism borders on neo-Ludditism, with some proponents recommending steps to curtail what they feel is the destructive impact of the Net or digital technologies on culture or the economy.  I identify the leading exponents of this view of Internet pessimism and their major works. I trace their technological pessimism back to Plato but argue that their pessimism is largely unwarranted. Humans are more resilient than pessimists care to admit and we learn how to adapt to technological change and assimilate new tools into our lives over time. Moreover, were we really better off in the scarcity era when we were collectively suffering from information poverty?  Generally speaking, despite the challenges it presents society, information abundance is a better dilemma to be facing than information poverty.  Nonetheless, I argue, we should not underestimate or belittle the disruptive impacts associated with the Information Revolution.  But we need to find ways to better cope with turbulent change in a dynamist fashion instead of attempting to roll back the clock on progress or recapture “the good ‘ol days,” which actually weren’t all that good.

Down below, I have embedded the entire chapter in a Scribd reader, but the essay can also be found on the TechFreedom website for the book as well as on SSRN.  I have also includes two updated tables that appeared in my old “optimists vs. pessimists” essay.  The first lists some of the leading Internet optimists and pessimists and their books. The second table outlines some of the major lines of disagreement between these two camps and I divided those disagreements into (1) Cultural / Social beliefs vs. (2) Economic / Business beliefs.

The Case for Internet Optimism Part 1 – Saving the Net From Its Detractors (Adam Thierer) http://d1.scribdassets.com/ScribdViewer.swf

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I recently finished Tyler Cowen’s latest book, Create Your Own Economy: The Path to Prosperity in a Disordered World.  Like everything he writes, this book is worth reading and it will be of interest to those who follow technology policy debates since Cowen makes a passionate case for “Internet optimism” in the face of recent criticisms of the Internet and the Information Age in general.

Cowen is a Professor of Economics at George Mason University and the co-author, along with Alex Tabarrok, of the wonderful  MarginalRevolution.com blog.  And if you haven’t read Cowen’s In Praise of Commercial Culture, stop what you’re doing and go get yourself a copy right now. Brilliant book.  Compared to that book, Create Your Own Economy is a difficult book to summarize.  Seriously, this book is all over the place… but in a good way.  Even though it sometimes feels like “Tyler’s Miscellaneous Ramblings,” those ramblings will keep you engaged and entertained.  Cord Blomquist did a pretty good job of summarizing the general themes of the book in this post two months ago when he noted that, “despite cultural reflexes that would have us do otherwise, we should embrace… new technologies as means to be more selective about what information we absorb and therefore welcome the increased volume of bytes into our lives.  In his new book, [Cowen] explores technology as a vehicle to help you determine what you really value, not a series of a email-powered torture devices.”  That’s a pretty good summation, but the book is about much more than that.

Instead of a full-blown review, I want to focus on some of passages from Cowen’s book about coping with information overload, which I think readers here might find of interest. In doing so, I will contrast Cowen’s views with those of John Freeman, who just penned “A Manifesto for Slow Communication” in The Wall Street Journal. As we will see, Cowen and Freeman’s differences exemplify the heated ongoing debate taking place among “Internet optimists &  pessimists,” which I have discussed here many times before.  

My favorite chapter of Cowen’s book is entitled, “Why Modern Culture is Like Marriage, In All Its Glory.”  In it, Cowen takes on those who claim citizens are now being overwhelmed by a deluge of digital information, or are suffering from “information overload.”  In particular, Cowen addresses criticisms such as those leveled by social critics like Nick Carr, who penned a widely-read Atlantic article last year entitled, “Is Google Making Us Stupid?”  Cowen responds:

[Carr] missed how people can construct wisdom — and long-term dramatic interest in their own self-education–from accumulating, collecting, and ordering small bits of information. What we’re growing impatient with is bits that are fed to us and that we really do not want. Contrary to Carr, we still have a long attention span when it comes to the broader picture, and if anything Google lengthens our attention span by allowing us to follow the same story over many years’ time. (p. 54)

Additionally, Cowen points out, search tools like Google and other information gathering and processing technologies actually “lengthens our attention spans in another way, namely by allowing greater specialization of knowledge”:

We don’t have to spend as much time looking up various facts and we can focus on the particular areas of interest, if only because general knowledge is so readily available.  It’s never been easier to wrap yourself up in a long-term intellectual project, yet without losing touch with the world around you. As for information overload, it is you who chooses how much “stuff” you want to experience and how many small bits you want to put together. […]  The quantity of information coming our way has exploded, but so has the quality of our filters. (p. 55)

This is an important point and one made previously by Chris Anderson in The Long Tail. I was a bit surprised that Cowen failed to reference him on this point.  Anderson defined filters as “the catch-all phrase for recommendations and all the other tools that help you find quality in the Long Tail” and noted that “these technologies and services sift through a vast array of choices to present you with the ones that are most right for you.” (p. 108 of 2006 hardback edition)  “The job of filters is to screen out [the] noise” (p. 115) or all the information clutter (crap?) that is out there.

Cowen argues that the filtering technologies are getting better at this sifting and processing process, but so too are humans, he says.  The key to this, he argues, is that we are getting better are “ordering” information.  And something real exciting (other might say scary!) is happening to us:

Fundamentally the relationship between human minds and human cultures is changing. … There is quite literally a new plane for organizing human thoughts and feelings and we are jumping on these opportunities at an unprecedented pace.  (p. 9)  […] For a typical person, you encounter the web, and you feel overwhelmed, but you figure out how to impose some local coherence in your own way, if only by using Google search or going to your “favorite places” bookmarks.  You resort to some mental ordering, usually with the aid of technology. At first you’re just struggling to keep up, but the more time you spend on the web, the more you are in control. You move from bookmarks to Facebook to Twitter and then to hyper-specialized sites for ordering the details of your life. You move from bewilderment to a sense of increasing mastery. Economists have studies our species as homo economicus, and a few decades ago, when social science colleagues investigated our game-playing nature, homo ludens was born. Today a new kind of person creates his or her very own economy in his or her head.  The age of homo ordo is upon us. (p. 13)

Cowen is firmly aligning himself with what I have referred to as the “Internet Optimist” school of thinking.  As I pointed out in my “Internet Optimists vs. Internet Pessimists” essay last September, recent commentators on the impact of Internet on culture and economics tend to fall into one of these two camps.  There’s very little middle ground.

The optimists argue that the Internet and Information Age are improving the general lot of mankind and bringing about a better order.  Even if some norms and institutions are being forced to adapt or disappear, that’s a small price to pay for the amazing advancements that the Internet has brought us.  The Internet pessimists see things quite differently.  Net skeptics such as the late Neil Postman, Carr, Andrew Keen, Lee Siegel, and Mark Helprin have argued that the Internet is destroying popular culture and professional media, that it is calling “truth” and “authority” into question by over-glamorizing amateurism and user-generated content, and that increased personalization and customization is damaging deliberative democracy by leading to homogenization, close-mindedness, and an online echo-chamber. Here’s the chart I used in a previous essay to highlight the differences between these two camps:

Now joining the ranks of the skeptics is John Freeman, the acting editor of Granta magazine and the author of the forthcoming book, The Tyranny of E-mail: The Four-Thousand-Year Journey to Your Inbox, which is due out in October.  As mentioned above, an excerpt from the book appeared in weekend edition of The Wall Street Journal. In that essay, Freeman makes an eloquent case that we should all take a collective pause and consider what the Internet and all this information and digital gadgetry means for life and how we live it:

In the past two decades, we have witnessed one of the greatest breakdowns of the barrier between our work and per­sonal lives since the notion of leisure time emerged in Victorian Britain as a result of the Industrial Age. It has put us under great physical and mental strain, altering our brain chemistry and daily needs. It has isolated us from the people with whom we live, siphoning us away from real-world places where we gather. It has encouraged flotillas of unnecessary jabbering, making it difficult to tell signal from noise. It has made it more difficult to read slowly and enjoy it, hastening the already declining rates of literacy. It has made it harder to listen and mean it, to be idle and not fidget. This is not a sustainable way to live. This lifestyle of being constantly on causes emotional and physical burnout, work­place meltdowns, and unhappiness. How many of our most joyful memories have been created in front of a screen? If we are to step off this hurtling machine, we must reassert principles that have been lost in the blur. It is time to launch a manifesto for a slow communication movement, a push back against the machines and the forces that encourage us to remain connected to them. Many of the values of the Internet are social improvements—it can be a great platform for solidarity, it rewards curiosity, it enables convenience. This is not the mani­festo of a Luddite, this is a human manifesto. If the technology is to be used for the betterment of human life, we must reassert that the Internet and its virtual information space is not a world unto itself but a supplement to our existing world…

I take Freeman at his word that he is not out to pen a Luddite manifesto and I very much  look forward to reading his book.  I do hope he makes a better case than some other Internet skeptics — especially Keen, Siegel, and Helprin — who have unfortunately crossed that Luddite line with their tedious, anti-all-things-digital screeds.  Simply stated, the pessimists need a better spokesman.  They raise valid concerns that deserve to be taken seriously and yet it is extremely difficult to take them seriously when they persist in their seeming outright hostility to almost all technological change. The skeptics need a more balanced, less fanatical approach to addressing concerns about the Information Age and information overload.  I hope Mr. Freeman can provide it.  I look forward to his book to see if he has.

Nonetheless, I generally side with Cowen and the Internet optimists — at least when it comes to concerns about information overload.  I guess I have have a bit more faith in humans than the pessimists do. We humans adapt. We learn to cope. We’re actually pretty good at it, too. It’s not like this is the first social or technological revolution we’ve lived through, after all.  In fact, one could make a good case that many previous revolutions were far more jarring than our modern Digital Revolution.

Of course, that’s not to say that change can’t be gut-wrenching and destructive — of both economies and cultures. When I engage in debate with conservative-minded friends about the supposed destructive influences of new forms of pop culture (rock-and-roll or video games, for example), I don’t deny that new media and communications technologies alter culture and behavior in many ways, some negative. But, again, we adapt and learn to cope. The world goes on. It doesn’t get better in every way, but it does in most. I love industrial rock music and violent video games.  Am I a bad person? An uniformed one?  Well, guess what… there are millions out there like me who are getting along just fine, raising a family, holding down steady work, and being good little community citizens.  Perhaps I would swear less if I didn’t grow up listening to punk rock. Then again, my dad and his dad hated all forms of rock music but swore like sailors with their pants on fire.

Regardless, even if you align with the skeptics and believe that, on balance, things (speech, culture, communications, or whatever else) are getting worse because of the Internet and digital media, it begs the obvious questions: What, exactly do you want to do about it?  While I can appreciate the concerns raised by social and technological critics such as Mr. Freeman, they rarely seem to be willing to explain how far they would go to reverse whatever problem it is they have identified.  As Ben Casnocha pointed out in this excellent review of Tyler Cowen’s book, which appeared in The American:

The factor most in Cowen’s favor is the wind at the backs of all techno-optimists like his brethren Clay Shirky and Don Tapscott: the forward momentum of technological development. You cannot turn back the clock. It is impossible to envision a future where there is less information and fewer people on social networks. It is very possible to envision increasing abundance along with better filters to manage it. The most constructive contributions to the debate, then, heed Moore’s Law in the broadest sense and offer specific suggestions for how to harness the change for the better.

I generally agree with Mr. Casnocha except I would argue that, at least in theory, it would be possible to turn back the clock with repressive enough means.  About the closest that any of the Internet pessimists ever came to explaining what that might mean in practice was this 2007 article by Andrew Keen in Advertising Age in which he claimed that the only way to save traditional media outlets and their advertising support mechanisms was to “re-create media scarcity”:

That means less user-generated content and more professionally created information and entertainment, less technology and more creativity. The advertising community desperately needs more gatekeepers, more professional creative authorities, more so-called media “elites” who will curate, filter and organize content. That’s the way to re-establish the value of the message. It’s the one commercial antidote to Web 2.0’s radically destructive cultural democracy.

One wonders, how we go about “re-creating scarcity” in this sense. Who exactly brings in the regulatory wrecking ball and starts tearing down digital abundance?  And is that really a sensible solution?  Instead of calling for solutions that would be both intrusive and destructive, can’t we embrace the best of the modern digital age and try to temper its worst elements using other means?

The problem with the Internet optimists, by contrast, is that they only tend to see the upside of the Information Age. They sometimes fall into the trap of being pollyannas who look out at the unfolding landscape and see only rainbows in the air. Optimists need to place technological progress in context and appreciate that, as Neil Postman argued in Technopoly, there are some moral dimensions to technological progress that deserve attention. For example, if Cowen is correct that “the age of homo ordo is upon us” and we humans are now engaging in unprecedented amount of sorting, organizing, categorizing, and so on, is that entirely salubrious? Or, as the pessimists suggest, might there be downsides to that development worth exploring?

But the pessimists need to refocus their concerns and criticisms into more level-headed, practical prescriptions instead of going off the Luddite deep-end with talk of “re-creating scarcity” or “destroying the machine,” as Siegel and Helprin say.  Toward that end, I like a lot of the advice that John Freeman offers in closing of  his essay:

We need context in order to live, and if the environment of electronic communication has stopped providing it, we shouldn’t search online for a solution but turn back to the real world and slow down. To do this, we need to uncouple our idea of progress from speed, separate the idea of speed from effi­ciency, pause and step back enough to realize that efficiency may be good for business and governments but does not always lead to mindfulness and sustainable, rewarding relationships. We are here for a short time on this planet, and reacting to demands on our time by simply speeding up has canceled out many of the benefits of the Internet, which is one of the most fabulous technological inventions ever conceived. We are connected, yes, but we were before, only by gossamer threads that worked more slowly. Slow communication will preserve these threads and our ability to sensibly choose to use faster modes when necessary. It will also preserve our sanity, our families, our relationships and our ability to find happiness in a world where, in spite of the Internet, saying what we mean is as hard as it ever was. It starts with a simple instruction: Don’t send.

At times, I have talked here about my attempts to strike a more sensible balance between my online and offline lives. After my two kids were born, I became acutely aware of the need to take more “digital sabbaticals” or a weekly “technology Sabbath.”  I now try to find specific moments each day to shut the lid on my laptop, toss my mobile phone in the drawer, and turn off all my other digital gizmos and gadgets and just go do something terribly old-fashion or archaic.  Alas, the struggle continues. Even when I swear off digital gadgets or connectivity for a few hours, I still find myself sneaking a peak at e-mail traffic piling up on my phone.

In closing, as an information historian, I find this debate between the Internet optimists and pessimists incredibly interesting. Indeed, we can trace the intellectual roots of this struggle all the way back to the well-known allegorical tale from Plato’s Phaedrus about the dangers of the written word and the great debate between the god Theuth and King Thamus. When Theuth boasted of how his invention of writing would improve the wisdom and memory of the masses relative to the oral tradition of learning, King Thamus shot back, “the discoverer of an art is not the best judge of the good or harm which will accrue to those who practice it.”  King Thamus then passed judgment himself about the impact of writing on society, saying he feared that the people “will receive a quantity of information without proper instruction, and in consequence be thought very knowledgeable when they are for the most part quite ignorant.” (Of course, I’d like to think that Theuth got the better of that one!)

And so the great debate about the impact of technological change on culture, learning, and morality continues.  And don’t expect it to ever end.  Just wait till virtual reality technology goes mainstream!  Oh my, that’s going to bring out a whole new batch of Theuthian technophiles and Thamusian technophobes.  And I greatly look forward to the discussion.

P.S. I have a lengthy article in the works entitled, ” Theuth, Thamus & the Great Debate over Technology & Culture,” and I’m currently looking for a publisher.  If anyone out there is interested, please let me know!  It will build on what I have said in this essay as well as those below:

• Grouping Recent Net Books: Internet Optimists vs. Pessimists
• The Pragmatic (Internet) Optimist’s Creed
• Book Review: Nick Carr’s Big Switch
• Book Review: Lee Siegel’s Against the Machine
• Thoughts on Andrew Keen, Part 1: Why an Age of Abundance Really is Better than an Age of Scarcity
• Thoughts on Andrew Keen, Part 2: The Dangers of the Stasis Mentality
• Book Review: Digital Barbarism by Mark Helprin
• Review of Cass Sunstein’s Republic.com (in Regulation magazine)

Mark Cuban penned a sharp piece over the weekend entitled “Who Cares What People Write?” in which he explains why people shouldn’t get too worked up about what they might read about themselves (or their organizations) online since, chances are, very few people are ever going to see it anyway.  To explain why, Cuban identifies two kinds of “Outties” (which is shorthand for someone who publishes on the web): (1) “professional outties” (or “Those that attempt to publish in a limited number of locations to a maximum number of readers or listeners, with a reasonable expectation of building a following.”) and (2) “amateur outties” (“Those that attempt to publish in as many places as possible hoping they are “discovered.”)  But those “amateur outties… really [have] no impact on 99.99pct of the population,” Cuban argues, “[and the] vast majority of what is written on the web goes unread and even that which is read, is quickly forgotten.”  Moreover, “even when something is heavily commented on, it  is usually just an onslaught by the ‘amateur outties.’”

Thus, Cuban concludes:

Fragmentation applies to 100pct of media. We have gotten to the point where it is so easy to publish to the web, that most of it is ignored. When it is not ignored and it garners attention, the attention is usually from those people, the amateur outties, whose only goal is to create volume on the web in hopes of being noticed. That’s not to say there are no sites that people consume and pay attention to. There obviously are.  That’s where the “professional outties” come in. They are branded. They have an identity that usually extends beyond the net.  They are able to make a living publishing, even if its not much of one.  They are the sites that people consume and may possibly remember. The moral of the story is that on the internet, volume is not engagement.  Traffic is not reach.  When you see things written about a person, place or thing you care about,  whether its positive or negative, take a very deep breath before thinking that the story means anything to anyone but you.

This is an important insight and, in a roundabout way, Cuban is basically reminding us that “power laws” govern all media, especially online media. Power laws, which are also sometimes always referred to as the “80-20” principle or the “Pareto principle,” refers to an uneven distribution of outcomes in which a small percentage of inputs or causes result in a very large percentage of outputs or effects.  This is where Chris Anderson got his famous “Long Tail” theory [more on that in a moment].

But, again, here’s the really important thing to remember: Power laws rule all media, and with a vengeance. There’s never been anything close to “equal outcomes” when it comes to the distribution or relative success of music, movie, book sales, theater tickets, etc.  A small handful of titles have always dominated, usually according to an 80-20 distribution, with roughly 20% of the titles getting 80% of the traffic / revenue.  And this trend is increasing, not decreasing, for newer and more “democratic” media like blogs.

Back in 2003, in one of my all-time favorite web essays, Clay Shirky popped the over-hype bubble that was developing around blogging by pointing out just how horrendously anti-egalitarian blog traffic was, with an infinitesimal number of blogs getting the overwhelming volume of aggregate attention.  The reason, Shirky pointed out, is that:

In systems where many people are free to choose between many options, a small subset of the whole will get a disproportionate amount of traffic (or attention, or income), even if no members of the system actively work towards such an outcome. This has nothing to do with moral weakness, selling out, or any other psychological explanation. The very act of choosing, spread widely enough and freely enough, creates a power law distribution.

And that’s not only true for blogs and traditional websites, but also for Wikipedia and Twitter, too.  New research reveals that “the top 10% of prolific Twitter users accounted for over 90% of tweets” and  “the top 15% of the most prolific [Wkipedia] editors account for 90% of Wikipedia’s edits.”

There are several reasons that power laws always exist in all media contexts. We used to think it was because the economics of media are quite different than most other industries. Namely, media industries typically exhibit “public good” qualities; high fixed (production costs), but lower distribution costs.  But the primary reason why power laws are probably more prevent in media industries than other sectors of the economy is because the creation and consumption of news and popular culture is a truly social phenomenon. Think of it as the economics of popular choice and the sociology of fashion and fads. People (and consumers) react to what others are reading or watching. Word-of-mouth counts. Bandwagon effects exist. First-mover advantages are significant. And so on.  The end result is a hopeless imbalance of outcomes or outputs.  Media egalitarianism is simply an impossibility.

And despite what Chris Anderson said in The Long Tail, the “future of all business” most definitely does not lie mostly in the 80% part of the tail.  While the long tail of the curve certainly is more profitable than in the past, that “fat head” of the tail is still where most profits (or at least eyeballs) are at.  And this also explains why Cuban says you need not worried about what the “amateur outties” have to say.

Importantly, however, as I pointed out here before, all this misses a very important point: More citizens than ever before are now engaged in an ongoing conversation. Much of that conversation is simple editorializing, but much of it represents a new and distinct form of “informational inputs” that were simply not available to us in the past. That’s a good thing. We can have the best of both worlds. In other words, inequality is not that big of a deal. At least everybody now has a chance to be heard, which is more than we could have said even just a decade ago.

However — and getting back to Cuban’s insight and why he may be a little bit off-the-mark (excuse the pun) — the other differentiating factor between media now versus then is that modern digital media is highly persistent and retrievable. I remember the first time my Dad had a letter to the editor published in our local paper back in the 1970s. It was such a big deal to “see his name up in lights” that he clipped the letter and saved like it was something truly valuable.  He’d even show it to neighbors and friends when they came over. I know it sounds pathetic now, but that’s how hungry we were to have our views heard back then.  (Of course, this was Indiana and we were all dumb hillbillies!)

Today, by contrast, we have moved from a world of information scarcity to one characterized by information abundance.  And not only does everyone have a soapbox that they can stand on to preach to the world or fire off daily equivalents of letters to the editor, but all their views are fully searchable and will be for many years to come.

Thus, in a world of cheap data storage and instantaneous information retrieval, one could argue that Cuban’s insight holds less weight. That is, perhaps people should care about what others write because even if it does not affect them today, it could come back to haunt them in the future as it becomes easier to tie many diverse comments and conversations back to haunt a person when they or others search for their name.

That being said, my general sympathies lie with Cuban for other reasons: (A) People just need to grow a thicker skin; and (B) People have plenty of ways now to respond and set the record straight.  As always, the best respond to “bad speech” is more and better speech.

Adam Thierer & I have just released a detailed examination (PDF) of brewing efforts to expand the Children’s Online Privacy Protection Act of 1998 to cover adolescents and potentially all social networking sites—an approach we call “COPPA 2.0.”

As Adam explained on Larry Magid’s CNET podcast, COPPA mandates certain online privacy protections for children under 13, most importantly that websites obtain the “verifiable consent” of a child’s parent before collecting personal information about that child or giving that child access to interactive functionality that might allow the child to share their personal information with others. The law was intended primarily to “enhance parental involvement in a child’s online activities” as a means of protecting the online privacy and safety of children.

Yet advocates of expanding COPPA—or “COPPA 2.0″—see COPPA’s verifiable parental consent framework as a means for imposing broad regulatory mandates in the name of online child safety and concerns about social networking, cyber-harassment, etc. Two COPPA 2.0 bills are currently pending in New Jersey and Illinois. The accelerated review of COPPA to be conducted by the FTC next year (five years ahead of schedule) is likely to bring to Washington serious talk of expanding COPPA—even though Congress clearly rejected covering adolescents age 13-16 when COPPA was first proposed back in 1998.

We’ll discuss some of the key points of our paper in a series of blog posts, but here are the top nine reasons for rejecting COPPA 2.0, in that such an approach would:

• Burden the free speech rights of adults by imposing age verification mandates on many sites used by adults, thus restricting anonymous speech and essentially converging—in terms of practical consequences—with the unconstitutional Children’s Online Protection Act (COPA), another 1998 law sometimes confused with COPPA;
• Burden the free speech rights of adolescents to speak freely on—or gather information from—legal and socially beneficial websites;
• Hamper routine and socially beneficial communication between adolescents and adults;
• Reduce, rather than enhance, the privacy of adolescents, parents and other adults because of the massive volume of personal information that would have to be collected about users for authentication purposes (likely including credit card data);

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

Google has announced that it will soon begin allowing U.S. advertisers to use trademarked keywords in limited circumstances in text ads, much as Yahoo! already does.  Google currently allow advertisers to bid on trademarked terms as keywords that could cause an ad to appear, either next to Google search results or on a third-party publisher’s website.  That policy will not change, and is discussed here by my PFF colleague Sid Rosenzweig.  The new policy is focused on the text seen by users in ads themselves and applies only if the “landing page” (to which the ad links) is used by a reseller, aggregator or parts supplier to sell only products that are relevant to the mark in question, or if the page is used to provide impartial reviews or other information about the trademarked product.  The new policy does not apply to sites/pages that (a) facilitate the sale of counterfeit goods, (b) allow the sale of a competitor’s goods, (c) criticize the trademarked good, or (d) do not provide substantial information or a purchase option.  Despite these limitations and other safeguards, Google has been sharply criticized by some trademark holders and might even be sued (e.g., for contributory infringement).

I’ll defer to the real trademark lawyers to figure out whether Google is correct that its new policy falls within the bounds of trademark law (particularly the “nominative fair use” doctrine).  But since Adam Thierer and I have been involved in an ongoing defense of online advertising against those who would squelch it through regulation in the name of privacy concerns (not at play here), I think it’s important to highlight the potential benefits to users from this seemingly arcane policy change-and to consider what this episode says about online advertising generally.  I see three main benefits to consumers from the policy change that should be considered alongside the vitally important role that trademarks play in our economy in communicating reputational information.

First, Google’s new policy will allow consumers to find products more easily because advertisers will be able to offer more descriptive and therefore informative ads, mentioning what they sell by name. Looking for a Prada handbag?  You’d probably find the ads that appear next to your search results for “Prada Handbag” more useful if the text of the ad specifically mentioned “Prada”-and if, as Google’s new policy requires (to protect trademark holders), the landing page actually sold Prada handbags, and only Prada handbags.  You’ll currently see a few ads that mention Prada, reflecting the current policy, which allows advertisers to use a trademark in an ad text, but only with permission of the trademark holder.  But the new policy will allow any advertiser that meets the criteria stated above to compete for attention with ads that convey more useful information to users and that are therefore more likely to be clicked on.  This might particularly benefit the Long Tail of products and services, because it could help retailers of niche products advertise, particularly if those products are accessories to major brands.

Of course, Marxists have long argued that advertising is a dead-weight loss to society because it doesn’t actually convey useful information:  Ads just “manipulate” users, who are-the elites tell us-too stupid to tell the difference between what they really want and what they’ve been tricked into thinking they want (“false consciousness”).  Whatever one thinks of this argument, it’s pure hypocrisy to criticize advertising as being “information-poor” and also attack tools and policies that convey more information-in this case, the fact that the advertised page concerns a particular trademarked good/service.

Second, this policy change will allow the Long Tail of retailers & review/information sites to compete more effectively by letting users know they’re out there.  As anyone who’s ever started a business knows, perhaps the single greatest barrier to entry is simply the difficulty and expense entailed in building awareness among potential customers.  This is why effective, targeted speech is so vitally important to competition and the overall health of the economy.  Giving consumers more information means more small businesses will be able to break in to compete with entrenched firms by offering lower prices and higher quality (including on non-price factors like privacy).

Third, by raising the value of advertising, this policy change will create more funding for free content & services, both those provided directly by Google and those provided by third parties supported by ads sold through Google.  Obviously, Google wouldn’t be adopting this new policy they didn’t think it would allow them to make more money:  Allowing more descriptive ads means users are more likely to find the ads they see relevant and to click on them, which, in turn raises the value of ads sold by Google.  But contrary to what some Googlephobes might have us believe (based on the usual reaction to every Google announcement), Larry & Serge won’t just spend that new revenue on building a Clone Army to implement some nefarious scheme to take over the Galaxy.  I can’t disprove the Clone Army possibility any more than I can disprove the existence of the Easter Bunny, Sasquatch or Zeus, but if this phantom menace does exist (perhaps on one of Google’s planned floating data centers), our soon-to-be Digital Overlords are sure doing a good job of hiding it amid all the “free” (i.e., ad-supported) stuff they give away to consumers-at considerable expense:

• As I’ve written previously, two-thirds ($14.41B) of Google’s 2008 global revenue ($21.78B) came from advertising on its own sites, primarily the search engine. These sites and the dozens of its free services like Maps and Gmail aren’t cheap, altogether costing Google another $3.34B to support, including the enormous cost of its data centers (“cost of revenues”). Google spent $2.79B on R&D, much of which will lead to innovative new services for users. Of course, until the Clone Army can take over Google’s daily operations, someone’s got to keep the lights on (and the Cylons machines from rebelling)-so throw in another $1.8 billion for personnel, post-it notes, ethically harvested coffee and other “general and administrative” expenses.
• The remaining third of Google’s global 2008 revenue ($6.71B) came from ads sold on the “Google Content Network”: third-party publishers that sell ad space on their pages to advertisers through the AdSense auction system. Of that, Google paid out $5.28B (78.7%) to publishers, who used the money to support the content and services they give away to users-from simply paying hosting costs in the case of the smallest sites to, say, trying to keep cash-strapped newspapers alive.

Again, there is great value to protecting trademarks to minimize the possibility of confusion and fraud among Internet users.  But while this policy change is ultimately an issue of trademark law, it also highlights the benefits of improved online advertising for consumers.  If Google (and other ad networks) can increase the value of information-richness of advertising (and therefore its effectiveness and economic value) in a way that is consistent with the consumer protection purposes of trademark law, that’s something to be celebrated.   Sure, Google will benefit, but in this case, a rising tide will truly lift all boats.

If Google wants to minimize concerns about the automated process Google will use in deciding whether a trademark may be included in an ad for any particular page, the company could proactively address these concerns by providing trademark owners (and the third parties that monitor their online brands) tools that would indicate whether a particular trademark could be used in advertising a particular page.  This would alleviate the uncertainty of trademark holders as to whether their brands are at risk and allow them to call attention to inevitable shortcomings in Google’s algorithm, which will have to evolve constantly.  This would allow Google to keep its algorithms secret, but in order to prevent those who would abuse such tools from reverse-engineering Google’s abuse-detection algorithm, it would probably be necessary to restrict access to these tools to legitimate trademark holders and monitoring services.  How to implement that system might not be easy, but if anyone can figure that out, it’s Google.  I’ve applauded Google’s leadership in the privacy context, where Google has given users tools (the Ad Preference Manager and the Advertising Cookie Opt-Out Cookie plug-in) to manage their preferences about behavioral advertising.  I hope to see Google follow the same approach here:  addressing legitimate concerns through technological means in a way that maximizes consumer welfare.

Finally, it’s interesting to note here that Google is playing catch-up with Yahoo! here-just as Google lagged behind Yahoo! in introducing behavioral targeting, which has caused considerable privacy consternation.  As I’ve said before:

it’s no accident that Google was a late-comer to the [Online Behavioral Advertising] market, lagging behind Yahoo! in particular.  The most likely reason Google has taken its time in rolling out an OBA product is that Google is subject to a unique level of scrutiny by privacy advocates by virtue of its size.  Being the “big kid on the block,” Google has to be especially careful not to appear to be “Big Brother.”  This reputational check on Google should allay some concerns about Google’s size.

I’ve already laid out my own reactions to Google’s roll-out of an “interest based advertising” (IBA) program here.  In a nutshell, I applauded Google setting a new “gold standard” in user empowerment by providing:

• Notice in their IBA-targeted ads of who’s paying for the ad and the fact that Google is serving it; and 
• A link to a powerful “Ad Preference Manager” that allows users to:
  • See and modify the “digital dossier” (to use the fearmonger’s term) of interests associated with the cookie on their computer; and 
  • Opt-out of tracking for IBA purposes.    

But as I predicted, despite these pro-privacy features (and despite the fact that other major companies such as Yahoo! and Microsoft already have IBA programs), a number of privacy advocacy organizations are attacking Google for daring to enter the IBA (or “online behavioral advertising”) business at all.   I’ll have much more to say about the criticism of Google’s new Ad Preference Manager soon, especially coming from Marc Rotenberg of EPIC (a “disaster“) and Jeff Chester of CDD—precisely the sort of the “paroxysms of privacy hysteria” I predicted.  

But first, the criticism from Ari Schwartz of the Center for Democracy & Technology requires a response today.  At its best, CDT plays a vital role in calling corporations to continually raise the bar on privacy.  My own think tank, the Progress & Freedom Foundation, works closely with CDT on many issues, such as advocating user empowerment through technological means as a constitutionally “less restrictive” way of protecting children than government censorship.

 Here’s what Ari had to say:

[T]he opt-out is based on a failed premise. The truth of the matter is that the industry needs to work together to move beyond the discredited cookie opt-out model….  Google claims to have improved upon the old model by creating a plug-in for users to keep their opt-out cookie while deleting the rest of their cookies. While as a technical matter that may be true, without an industry-wide solution these plug-in options just serve to confuse users about what they need to do to protect themselves. If this plug-in approach catches on, will users need to download a plug-in from every network advertiser and every analytics company to stop the tracking? That model just isn’t sustainable.

Ari is setting up a straw man when he suggests that users are going to have to download a separate plug-in for every ad network.  The obvious solution, as Ari points out, is an industry-wide plug-in. But if it’s so obvious, why can’t CDT just write it themselves?  Indeed, why didn’t they write it years ago?

These aren’t rhetorical questions.  I  really  want to know what would be required to create a plug-in that does what Google’s plug-in does for every other ad network’s opt-out cookie in the Opt-out tool developed by the Network Advertising Initiative (NAI):  Maintain “persistent” user choice by checking to see whether a user has deleted whatever their opt-out cookies and, if so, restoring those cookies.  

CDT will probably insist that, if it’s really so easy to create such an industry-wide plug-in, NAI should have done so years ago.  Maybe so.  Perhaps if the industry had moved faster to innovate in privacy protection, they would be in a stronger position right now politically.  Of course, if the industry moves slowly in this regard, maybe that’s because they’ve got their hands full trying to keep advertising, the economic engine that funds the Internet’s “free” content and services, working-a reality Ari ignores.  Or perhaps it wouldn’t matter:  It seems that no matter what industry might do, it’s just not good enough for Ari.  Under the banner of “Keeping the Internet Open, Innovative and Free,” Ari is in fact leading CDT in a full-on attack on the Internet, pushing for regulation that will make the Internet:

• Less “Open” to competition among service providers and the diversity of voices and choices produced by online content creators who depend on advertising;
• Less “Innovative” in terms of new content, new services, new online personalization technologies, and new advertising business models that could broaden the base of economic support for the entire Internet; and
• Less “Free” both in political terms—“free” from government regulation and controls—and in financial terms—“free” to users because advertisers foot the bill.

CDT ignores these very real costs to crippling online advertising, which will ultimately be borne by the very consumers whom CDT claims to be protecting.  This is precisely why Adam Thierer and I have argued so strongly for a layered approach (and here at page 7) to privacy concerns about online advertising that combines self-regulation and tough FTC enforcement of privacy policies with a recognition that only by empowering individual users to make their own choices can we balance inherently subjective concerns about privacy with the need to fund the Internet’s future:

We stand at an important crossroads in the debate over the online marketplace and the future of a “free and open” Internet.  Many of those who celebrate that goal focus on concepts like “net neutrality” at the distribution layer, but what really keeps the Internet so “free and open” is the economic engine of online advertising at the applications and content layers.  If misguided government regulation chokes off the Internet’s growth or evolution, we would be killing the goose that laid the golden eggs. 

Back to the plug-in…  CDT argues that the opt-out cookie system is flawed in respects other than ensuring the persistence of user opt-outs.  We can debate that question.  But I’d just like to get a clear answer once and for all about why CDT hasn’t already developed this plug-in themselves.

Here‘s the NAI opt-out, Ari, and here‘s the code for Google’s plug-in—it’s open source! How much easier could Google have made this for you?  Quit yapping and start coding! 

Since CDT doesn’t seem up to the task, we’ve already modified the Google plug-in to preserve another ad network’s opt-out cookie (download our beta plug-in here) and are currently working to expand the plug-in to work for multiple cookies—which is simply a matter of coding.  We’d welcome help from anyone with experience in writing Firefox plug-ins. 

NAI could (and probably should) do this, themselves.  But if CDT wants to start being philosophically consistent about empowering consumers across in the board —on privacy issues as well as child protection issues—writing this plug-in themselves is a great way to shame the rest of the advertising industry into picking up where Google left off.   I suspect CDT’s failure to do so thus far reflects a crass political calculation that anything they does to empower users to manage their own privacy through technical solutions simply undermines their arguments that only government can protect users—thus weakening their push for regulation.  So much for CDT’s declared mission of “seek[ing] practical solutions to enhance privacy!”

Statue at FTC Headquarters: “Man Controlling Trade” (We’re rooting for the horse!)

Adam Thierer and I have just released a new PFF paper entitled “Targeted Online Advertising: What’s the Harm & Where Are We Heading?” (PDF) about the FTC’s new “Self-Regulatory Principles for Online Behavioral Advertising.”  Adam lampooned some of the attitudes at play in this debate in a great rant yesterday.

But we give the FTC credit for resisting calls to abandon self-regulation, and for its thoughtful consideration of the danger in stifling advertising-the economic engine that has supported a flowering of creative expression and innovation online content and services.  That said, we continue to have our doubts about the FTC’s approach, however-well intentioned:

1. Where is this approach heading?  Will a good faith effort to suggest best practices eventually morph into outright government regulation of the online advertising marketplace?
2. What, concretely, is the harm we’re trying to address?  We have asked this question several times before and have yet to see a compelling answer.
3. What will creeping “co-regulation” mean for the future of “free” Internet services?  Is the mother’s milk of the Internet-advertising-about to be choked off by onerous privacy mandates?

We stand at an important crossroads in the debate over the online marketplace and the future of a “free and open” Internet. Many of those who celebrate that goal focus on concepts like “net neutrality” at the distribution layer, but what really keeps the Internet so “free and open” is the economic engine of online advertising at the applications and content layers. If misguided government regulation chokes off the Internet’s growth or evolution, we would be killing the goose that laid the golden eggs.

The dangers of regulation to the health of the Internet are real, but the ease with which government could disrupt the economic motor of the Internet (advertising) is not widely understood-and therein lies the true danger in this debate.  The advocates of regulation pay lip service to the importance of advertising in funding online content and services but don’t seem to understand that this quid pro quo is a fragile one: Tipping the balance, even slightly, could have major consequences for continued online creativity and innovation.

As we conclude:  Self-regulatory efforts can be refined, especially through technological innovation to better satisfy the concerns of policymakers, privacy advocates, and average consumers.  For example, if websites and ad networks participating in a self-regulatory framework supplemented their current “natural language” privacy policies with equivalent “machine-readable” code, that data could be “read” by browser tools that would implement pre-specified user preferences by blocking the collection of information depending on whether the privacy policies of certain websites or ad networks met the user’s preferences about data-use. Such robust and granular disclosure, if implemented for behavioral advertising, would exceed the wildest dreams of those who argue that users currently do not read privacy policies-without disrupting the browsing experience or cluttering websites.  But this system would only work if users had to make real choices about paying for”‘free” content and services by disclosing their personal information.

Truly privacy sensitive users should be free to opt out of whatever tracking they find objectionable-but not without a cost:  The less data they agree to share, the less content and services they can fairly expect to receive for free.  Concretely, this means that they might not be able to access certain sites, content, or functionality without watching extra (untargeted ads), or paying for that content or service (assuming such a micropayment model can be worked out).  Of course, there will always be ways to “cheat” in such a system, but Commissioner Harbour is exactly right on one point:  Each content creator and service provider must be “free to strike whatever balance it deems appropriate.” This freedom is vital to the Internet’s future because the easier we make it for some users to get “something for nothing,” the smaller will be the economic base for the content and services everyone else takes for granted.  Again, there is no free lunch.

You can download our paper in PDF form on the PFF website or view it below in Scribd.  (Click the rectangle-in-rectangle button at the top right to maximize the iPaper viewer.)

It’s been a big year for tech policy books. Several important titles were released in 2008 that offer interesting perspectives about the future of the Internet and the impact digital technologies are having on our lives, culture, and economy. Back in September, I compared some of the most popular technology policy books of the past five years and tried to group them into two camps: “Internet optimists” vs. “Internet pessimists.” That post generated a great deal of discussion and I plan on expanding it into a longer article soon. In this post, however, I will merely list what I regard as the most important technology policy books of the past year.

What qualifies as an “important” tech policy book? Basically, it’s a title that many people in this field are currently discussing and that we will likely be talking about for many years to come. I want to make it clear, however, that merely because a book appears on this list it does not necessarily mean I agree with everything said in it. In fact, I found much with which to disagree in my picks for the two most important books of 2008, as well as many of the other books on the list. [Moreover, after reading all these books, I am more convinced than ever that libertarians are badly losing the intellectual battle of ideas over Internet issues and digital technology policy. There’s just very few people defending a “Hands-Off-the-Net” approach anymore. But that’s a subject for another day!]

Another caveat: Narrowly focused titles lose a few points on my list. For example, as was the case in past years, a number of important IP-related books have come out this year. If a book deals exclusively with copyright or patent issues, it does not exactly qualify as the same sort of “tech policy book” as other titles found on this list since it is a narrow exploration of just one set of issues that have a bearing on digital technology policy. The same could be said of a book that deals exclusively with privacy policy, like Solove’s Understanding Privacy. It’s an important book with implications for the future of tech policy, but I demoted it a bit because of its narrow focus.

With those caveats in mind, here are my Top 10 Most Important Tech Policy Books of 2008 (and please let me know about your picks for book of the year):

(1) Jonathan Zittrain ­– The Future of the Internet, and How to Stop It

Zittrain’s book is the most important of 2008 because it’s the one we will still be talking the most about a decade from now. However, I think we’ll be talking about how wrong his thesis was that the “generative” Internet and general purpose PCs are dying.  Indeed, I’ve been quite critical of the thesis that Jonathan sets forth in his book, and I have discussed my reservations in a lengthy book review and a series of follow-up essays here and elsewhere. (Part 1, 2, 3, 4, 5).  We’ve also debated his book on the an NPR-Boston [audio is here] and we debated in person at New America Foundation in early November [video is here].

Despite my serious reservations, Jonathan’s book is important, well-written, and absolutely deserves your attention if you care about the future of technology policy.

(2) Nick Carr – The Big Switch: Rewiring the World, From Edison to Google

Part 1 of Nick Carr’s book is an eloquent early history of cloud computing, nicely comparing it to previous technological revolutions. It’s beautifully done. In Part 2 of the book, however, Carr turns sour and argues that the impact of cloud computing will be quite miserable for our economy, culture, and society. The Big Switch probably makes the best case than any Net pessimist has been penned thus far, and for that reason alone it deserves your attention. Ultimately, however, I found his case unconvincing.

You can find my complete review of Carr’s book here.

(3) John Palfrey and Urs Gasser – Born Digital: Understanding the First Generation of Digital Natives

Palfrey and Gasser’s fine early history of this generation of “Digital Natives” serves as a starting point for any conversation about how to mentor and interact with the children of the Web. It’s a comprehensive and very even-handed discussion about a variety of concerns or Internet pathologies, including: online safety, personal privacy, copyright piracy, offensive content, classroom learning, and much more. Despite a few nitpicks, I really enjoyed this book and highly recommend it. Importantly, it is a very accessible book that even the non-tech layman can pick up and appreciate. [Note: Don Tapscott’s Grown Up Digital: How the Net Generation is Changing Your World, shares a lot in common with Born Digital, but Tapscott doesn’t spend much time on policy issues and that’s why his book isn’t on my list.]

My review of Palfrey and Gasser’s Born Digital is here. [Update Feb 2009: I also hosted a podcast about the book featuring Prof. Palfrey.]

(4) Clay Shirky – Here Comes Everybody: The Power of Organizing without Organizations

While Nick Carr [see #2 above] and Lee Siegel [see #5 below] are leading the “techno-pessimist” parade this year, Clay Shirky is this year’s leading cheerleader for “cyber-optimism.” Shirky argues that the falling costs and growing ease of digital distribution are making it increasingly easy for individuals to engage in group-forming and collective action endeavors. The resulting rise of “mass amateurization” poses a significant challenge to old media operations and traditional business models and practices. In this sense, Shirky is building on many of the themes and arguments previously set forth in books like The Wealth of Networks (Benkler), Wikinomics (Tapscott and Williams), and Convergence Culture (Jenkins). If you’ve already read those titles, you’ll find a great deal of familiar thinking here.

I never got around to putting together a full review of Here Comes Everybody, but Tim Lee had a nice write-up over at Ars earlier this year.

(5) Lee Siegel – Against the Machine: Being Human in the Age of the Electronic Mob

Siegal is this year’s Andrew Keen; a cyber-sourpuss who thinks the whole world is going to hell and that the Internet is to blame. Like Keen’s Cult of the Amateur, Siegel’s Against the Machine is an anti-Web 2.0 screed that finds no redeeming qualities about the Internet or user-generated content.  In particular, Wikipedia and amateur production are blasted as being detrimental to professional media.

Both Siegel and Keen are essentially channeling the ghost of the late Neil Postman, whose 1992 book Technopoly remains the classic statement of techno-pessimism. They prove worthy disciples as they preach the Gospel According to Chicken Little and push for a neo-Luddite revival. But Siegel’s techno-pessimism is boundless and his hatred for all things digital is truly breathtaking. For that reason, however, his book deserves attention.

My lengthy critique of Siegel’s book can be found here.

(6) Ronald J. Deibert, John G. Palfrey, Rafal Rohozinski, and Jonathan Zittrain (eds.) – Access Denied: The Practice and Policy of Global Internet Filtering

This is essential reading for anyone studying the methods governments are using to stifle online expression. The contributors provide a regional and country-by-country overview of the global state of online speech controls and discuss the long-term ramifications of increasing government filtering of online networks. Even if you don’t read the whole thing, this is a must-have title for your bookshelf since there is no other resource out there like this. And it should be required reading in every cyberlaw class in America. [Note: It also contains a very helpful chapter on the mechanics of Net filtering.]  Very highly recommended.

(7) Hal Abelson, Ken Ledeen, and Harry Lewis – Blown to Bits: Your Life, Liberty, and Happiness After the Digital Explosion

Think of this book as “Internet Policy for the Educated Layman.” Abelson, Ledeen, and Lewis survey a broad swath of tech policy territory — privacy, search, encryption, free speech, copyright, spectrum policy — and provide the reader with a nice history and technology primer on each topic. Like Palfrey and Gasser’s Born Digital [see #3 above], Blown to Bits is very accessible and each chapter contains a great deal of useful information to bring you up to speed on the hottest tech policy debates under the sun. Recommended.

My review of Blown to Bits can be found here.

(8) Lawrence Lessig – Remix: Making Art and Commerce Thrive in the Hybrid Economy

Remix treads a lot of ground already covered in Lessig’s other books and essays (perhaps it should have been called “Rehash”), but it more fully develops his thinking on the legal treatment of derivative works. Actually, in some ways (especially in the second half of the book), it’s more of a restatement of much of what is found in Benkler’s Wealth of Networks, albeit in a far less verbose fashion. Regardless, Prof. Lessig has attained rock-star status in tech policy circles and the release of each of his new books or papers becomes a bit of an event. Remix has been no different. It has already attracted a great deal of attention and deserves to be on this list for that reason alone. But if you have read his previous work, you’ll already be familiar with much of what you find in Remix.

Generally speaking, I thought Prof. Lessig made a good case regarding the benefits of remix culture and why copyright law should leave breathing room for the various derivative works of amateur creators. But he too often blurs remix culture with “ripoff culture” (i.e., those who aren’t out to create anything new but instead just take something without paying a penny for it). To solve that latter problem, he endorses a “simple” blanket licensing scheme for the Internet. In this essay, I addressed why blanket online licensing would be anything but simple.

(9) James Bessen and Michael J. Meurer – Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk

Bessen and Meurer argue that America’s patent system is in trouble because “it fail[s] to provide clear and efficient notice of the boundaries of the rights granted.” Patent litigation has exploded, they say, and the costs of the system now outweigh the benefits. Generally speaking, with the exception of the chemical and pharmaceutical industries, Bessen and Meurer don’t feel the patent system does a lot of good.”[I]t seems unlikely that patents today are an effective policy instrument to encourage innovation overall,” they conclude. They detail several reforms to help improve notice and to “make patents work as property” again the way they claim they once did.

Although the authors deal with patents broadly, the book has great relevance to digital technology policy because of their discussion of business method patents and software patents. (Incidentally, that chapter from the book is available online). They argue that software technology is especially prone to problems of “abstraction” and obviousness. As a result, software patenting has been a major contributor to the litigation explosion we have seen in recent years.

Although I agree with their case against software patents, I remain unconvinced that the patent system is failing as badly as Bessen and Meurer claim. Nonetheless, they present a powerful case that deserves to be taken seriously. Patent Failure will have an enormous impact on these debates going forward.

For more opinions on the book… Tim Lee posted a favorable review of Patent Failure over at Ars this summer. And, back in March, there was a lively discussion about the book over at Patently-O. Finally, at last year’s PFF “Aspen Summit,” Michael Meurer debated these issues with some of America’s leading patent law experts. Bronwyn H. Hall, Professor of Economics at Cal-Berkeley, challenges his findings. The video of that panel is here.

(10) Daniel Solove – Understanding Privacy

Daniel Solove’s book — and his approach to classifying and dealing with privacy problems — will have a profound impact on all future privacy debates. In that sense, it is a vital text; a must read for all who follow, or engage in, privacy debates.  On the other hand, Solove’s claim that he can construct a new paradigm based strictly on a pragmatic, utilitarian, “?problem-solving” approach, is ultimately a failure. There is just no getting around the fact that, at some point, you are going to have to provide a more robust theory of rights or justice to explain why one right trumps another. I elaborate in this lengthy critique of Solove’s Understanding Privacy.

Honorable Mentions: Here are a couple of titles that I couldn’t fit on my list but that you might want to also consider reading: Neil Netanel – Copyright’s Paradox; Matt Mason – The Pirate’s Dilemma: How Youth Culture Is Reinventing Capitalism; David Friedman – Future Imperfect: Technology and Freedom in an Uncertain World; Cory Doctorow — Content; and Don Tapscott — Grown Up Digital: How the Net Generation is Changing Your World.

Please let me know if there are other titles I have overlooked, and let me know your opinion about the best technology policy book(s) of 2008 by voting in our poll and commenting more down below.

[poll id=”3″]

A few months ago, I penned a mega book review about the growing divide between “Internet optimists and pessimists.” I noted that the Internet optimists — people like Chris Anderson, Clay Shirky, Yochai Benkler, Kevin Kelly, and others — believe that the Internet is generally improving our culture, economy, and society for the better. They believe the Net has empowered and liberated the masses, sparked unparalleled human creativity and communication, provided greater personalization and customization of media content, and created greater diversity of thought and a more deliberative democracy. By contrast, the Internet pessimists — including Nick Carr, Andrew Keen, Lee Siegel, and others — argue that the Internet is destroying popular culture and professional media, calling “truth” and “authority” into question by over-glamorizing amateurism and user-generated content, and that increased personalization is damaging deliberative democracy by leading to homogenization, close-mindedness, and an online echo-chamber. Needless to say, it’s a very heated debate!

I am currently working on a greatly expanded version of my “Net optimists vs. pessimists” essay for a magazine in which I will draw out more of these distinctions and weigh the arguments made by those in both camps. I plan on concluding that article by arguing that the optimists generally have the better of the argument, but that the pessimists make some fair points about the downsides of the Net’s radically disintermediating role on culture and economy.

So, this got me thinking that I needed to come up with some sort of a label for my middle-of-the-road position as well as a statement of my personal beliefs. As far as labels go, I guess I would call myself a “pragmatic optimist” since I generally side with the optimists in most of these debates, but not without some occasional reservations. Specifically, I don’t always subscribe to the Pollyanna-ish, rose-colored view of the world that some optimists seem to adopt. But the outright Chicken Little-like Ludditism of some Internet pessimists is even more over-the-top at times. Anyway, what follows is my “Pragmatic (Internet) Optimist’s Creed” which better explains my views. (Again, read my old essay first for some context about the relevant battle lines in this intellectual war).

The Pragmatic (Internet) Optimist’s Creed

I believe that the Internet is reshaping our culture, economy, and society – in most ways for the better, but not without some heartburn along the way.

I believe that the world of information abundance that has dawned is vastly superior to the world of information poverty that we just left. But I also understand that not all information is equal and that that the rise of abundance raises concerns about information overload, objectionable content, and the role of “authority” and “truth.”

I believe the era of traditional Mass Media is coming to an end, but “professional” media institutions and creators continue to play a vital role in the creation, aggregation, and dissemination of news, information, culture, and entertainment. The Internet, however, will force gut-wrenching changes on traditional media institutions and some of the more vital ones (ex: daily local newspapers) will struggle to re-invent themselves, or may wither away entirely.

I believe that “professional” journalism faces very serious challenges from the rise of the Internet and user-generated content, but I also believe that hybrid forms of news-gathering and reporting are offering society exciting new ways to learn about the world around them.

I believe Wikipedia is an amazing example of collection action / intelligence at work, but I also understand it is not without flaws and limitations. I believe Wikipedia is a wonderful complement, but not a complete substitute, for other media and information sources and inputs.

I believe that free and open source software (FOSS) has offered society enormous benefits, but I do not believe that FOSS (or “wiki” models) will replace all proprietary business models or methods. Each model or mode of production has its place and purpose and they will continue to co-exist going forward, albeit in serious tension at times.

I believe the Long Tail is a powerful phenomenon, but not “the future of all business.” It is now a more important part of the future of business, but not the entirety of it.

I believe there is a difference between “remix culture” and “ripoff culture.” Remixing (including mash-ups of all sorts) generally enhances and extends culture and creativity. Blatant content piracy, on the other hand, can discourage the creative efforts of the masses. Likewise, hacking, circumvention, and reverse-engineering all play an important and legitimate role in our new digital economy, but one need not accept the legitimacy of those activities when conducted for nefarious purposes (think identity theft or chip modding to facilitate video game piracy.)

I believe that the Internet has empowered the masses and created a world of “pro-sumers” that gives every man, woman, and child a soapbox on which to speak to the world. But that does not mean that all of them will have something interesting to say, and I won’t praise user-generated content as a good in and of itself. It’s quality, not volume, that counts.

I believe that the Internet’s empowering nature has changed much about society and culture, but I do not believe in the romanticism espoused by some about how the Net “remaking man” or changing human nature in a fundamental way. The Internet does not liberate us from all earthly constraints and it cannot magically solve all of humanity’s problems.

I believe that the Internet is reinvigorating deliberative democracy and giving us increased exposure to a breathtaking diversity of views that were previously inaccessible, at least for most of us. On the other hand, I understand that some Netizens will often seek out only those views that reinforce their pre-existing biases.

I believe in the power of freedom of speech and expression, and appreciate that the Internet and the rise of user-generated content has given us a world of unprecedented information and cultural riches. I also understand, however, that unrestricted freedom of speech and expression permits an increase in the prevalence of objectionable, even harmful, speech and content. On net, however, (excuse the pun) the Internet is the most important medium of human communication and expression that the world has ever known.

In sum, I believe there are more reasons to be optimistic than pessimistic about the Internet and its role in shaping our lives, culture, economy, and society. But that doesn’t mean it will be all roses going forward.

Somewhere between Nick Carr’s “Typology of Network Strategies” and Chris Anderson’s “Four Kinds of Free” is the secret to understanding our new economy:

Carr’s “Typology of Network Strategies”:

1. Network effect
2. Data mining
3. Digital sharecropping, or “user-generated content”
4. Complements
5. Two-sided markets
6. Economies of scale, economies of scope, and experience

Anderson’s “Four Kinds of Free”:

1. Direct cross-subsidy (get one thing free, pay for another)
2. Ad-supported (third-party subsidizes second party)
3. “Freemium” (a few people subsidize everyone else)
4. “Gift economy” (people give away things for non-monetary rewards)

Of course, both Carr and Anderson are building on theories and business models previously articulated by many others. A few that come to mind:

• Carl Shapiro & Hal Varian, Information Rules: A Strategic Guide to the Network Economy (1999)
• Stan Liebowitz, Re-thinking the Network Economy (2002)
• Jeffrey H. Rohlfs, Bandwagon Effects in High-Technology Industries (2001)
• Oz Shy, The Economics of Network Industries (2001)
• Don Tapscott & Anthony Williams, Wikinomics: How Mass Collaboration Changes Everything (2006)