There’s an inherent paradox in the Federal Communications Commission’s (FCC) media ownership regulations and the new Notice of Inquiry that the agency has just launched looking into those rules. Like everything else the FCC has been doing lately, this NOI poses hundreds of questions about the topic at hand. In this case, the agency is interested in knowing what the impact of its byzantine regulatory regime for media ownership has been. Complicating matters even more is that fact that the FCC wants people to provide detailed answers about the impact of these rules on amorphous values like “diversity” and “localism.” So, the agency asks, what has been the impact of the local TV ownership rule, the local radio ownership rule, the newspaper/broadcast cross-ownership rule, the radio/TV cross-ownership rule, the dual network rule, and so on, on the marketplace, competition, diversity, localism, etc.

But therein lies the fundamental paradox of the FCC’s inquiry and the media ownership regulations in general: So long as the rules are preemptive and prophylactic in character, we will never get clear answers to the questions the agency poses. By definition, the agency’s media ownership rules make experimentation with new business models illegal. It is per se criminal to enter into combinations that the agency has presumptively divined to be counter to “the public interest,” whatever that means.   Thus, we can never get definitive answers to the questions the agency poses when “the marketplace” isn’t a truly free marketplace at all.  It is a regulatory construct artificially constrained in countless ways.

So, what’s the answer here? In a word: Antitrust. While I’m no fan of over-zealous antitrust regulation, it has one huge advantage over the media ownership regime that the FCC enforces: It doesn’t preemptively seek to determine supposedly sensible market structures or ownership patterns. The threat of antitrust intervention can be a very dangerous thing, and wrecking-ball style antitrust interventions are rarely sensible, but at least the DOJ and FTC aren’t turning the regulatory dials on a massive media marketplace industrial policy the way the Federal Communications Commission does with its media ownership regulations.

The final, and perhaps most insulting paradox within the FCC’s new NOI is the way the agency meticulously documents the troubles that many traditional media operators find themselves in today, especially newspapers and broadcast radio operators.  The agency cites a litany of statistics and bad news anecdotes about how these players are losing revenues, advertisers, staff, and readers / listeners at an alarming clip.  But never once does the Commission stop to ponder whether it itself is responsible for any of this mess!  It would be wrong to suggest that we’d live in some sort of media nirvana if all the media ownership rules went bye-bye. But those rules certainly haven’t helped matters any and, moreover, they come on top of the countless other regulations that the Commission imposes dealing with business practices, technical standards, advertising restrictions, programming mandates, speech controls, etc. etc.

Meanwhile, in a separate proceeding still ongoing, the Commission has been pondering the “Future of Media” and has brought through a parade of “public media” advocates to its workshops on the matter. The majority of the participants have suggested that private media is failing and, you guessed it, lots more public media is the solution.  So, with one hand government suffocates private media markets and with the other it begins reaching into our pockets for public media subsidies!  What a racket.

Over this past week, a lot of people were making hay over this recent ReadWriteWeb story, “Facebook’s Zuckerberg Says The Age of Privacy is Over.” Seems that some people were taking issue with Facebook founder Mark Zuckerberg’s suggestion that Facebook’s recent site policy changes, which generally encouraged more sharing or information, were in line with public expectations.  Most people put words in Zuckerberg’s mouth and accused him of saying that “privacy is over” or that he claimed he “is a prophet,” neither of which he actually said.  But let’s ignore the fact that some people made stuff up and get back to the point: What set people off about Facebook’s recent site changes and Zuckerberg’s rationalization of them?

I think it goes back to the fact that a lot of people want to have their cake and eat it too. “It is the paradox of the cyber era,” notes Washington Post columnist Michael Gerson: We are “a nation of exhibitionists demanding privacy.”  Indeed, that’s true, but there’s a good reason why this so-called “privacy paradox” exists. As Larry Downes, author of the brilliant new book, The Laws of Disruption, argues:

People value their privacy, but then go out of their way to give it up. There’s nothing paradoxical about it. We do value privacy. It’s just that we’re willing to trade it for services we value even more. Consumers intuitively look at the information being requested and decide whether the value they receive for disclosing it is worth the cost of their privacy. (p. 80)

That’s exactly right. When confronted with real world choices about privacy and information sharing, we often are willing to accept some trade-offs in exchange for something of value. But when we are asked about this process we are loathe to admit that we would willingly engage in such privacy-for-services trade-offs even if we do it every day of our lives.  As Michael Arrington of TechCrunch rightly points out:

the rest of us seem to be ok with Gmail. And our phone. That’s because the benefits of those products far outweigh the privacy costs. And people are going to be just fine with Facebook, too.

And he notes there are other examples of where people seemingly make these trade-offs every day, even if it seems illogical to others why they would do so.

The most articulate counter-argument to all this comes from Michael Zimmer, an assistant professor in the School of Information Studies at the University of Wisconsin-Milwaukee, who says:

Users want to be able to control what information they provide and to whom it is visible. That’s the essence of privacy, and it’s still very much in demand. That doesn’t make one a Luddite. It makes one a responsible user of information technology.

Well, I can generally agree with all that, but the question is what it means in practice.  After all, we’re all in favor of giving consumers more choices and empowering them to make decisions for themselves. Berin Szoka and I have again and again and again argued that:

In an ideal world, adults would be fully empowered to tailor privacy decisions, like speech decisions, to their own values and preferences (“household standards”).  Consumers would have (1) the information necessary to make informed decisions and (2) the tools and methods necessary to act upon that information. Importantly, those tools and methods would give them the ability to block the things they don’t like—annoying ads or the collection of data about them, as well as objectionable content—while also helping them find the information and content they desire.

But let’s be clear about something. Even as we move closer to this ideal state, there are still many citizens who will choose to never take advantage or privacy-enhancing tools and will never read a single privacy policy. But if you ask most of those people in a random survey, “Do you care about your privacy?” what do you think they are going to say? Well, it should be as obvious as what the answer would be to a poll question like: “Do you love your mother?”  Yes, of course we do!  But, again, how does that translate to real-world behavior? More importantly, what are the ramifications for public policy?

Last month, I sat on a panel about polls and privacy expectations at the Federal Trade Commission’s December 7th workshop on “Exploring Privacy.” I argued that, while privacy polls and surveys may offer us some interesting insights into how some in the public think about advertising and privacy in the abstract, ultimately, polls and surveys are no substitute for real-world experiments in which people make real choices, in real time, often with real money, and face many real trade-offs. [See Berin’s paper on this issue.]

I also argued that privacy is a highly subjective condition and that consumers are empowered with many real privacy controls such that they can make the privacy choices that are right for them. [See this ongoing series and this paper.] Moreover, it remains unclear what the harms are that privacy regulatory advocates are really trying to protect us against.  For these reasons, I argued that rational ignorance may often be at work since many consumers likely won’t feel the need to read privacy policies or take steps to “protect their privacy” online. Or, people just implicitly accept the fact that they are getting something of value even if it means they might also be sharing some information about themselves with others.

Which brings us back to Zuckerberg’s comments.  People expressed outrage — even if he didn’t say the things they accused him of saying — and many rushed to claim that privacy is still alive and well and worthy of protection, even if it means an onerous federal data regulation regime.  But I wonder… how many of those people left Facebook or changed their behavior in any other way after they expressed that outrage?  I suspect most people went right along with their lives and probably jumped right back on Facebook and starting sharing even more about themselves with the world.