Adam Thierer's Blog, page 112

New Study on the Unintended Consequences of COPPA

I highly recommend this important new study on "Why Parents Help Their Children Lie to Facebook about Age: Unintended Consequences of the Children's Online Privacy Protection Act" by danah boyd of New York University, Eszter Hargittai from Northwestern University, Jason Schultz from University of California, Berkeley, and John Palfrey from Harvard University. COPPA is a complicated and somewhat open-ended law and regulatory regime. COPPA requires that commercial operators of websites and services obtain "verifiable parental consent" before collecting, disclosing, or using "personal information" (name, contact inform­ation) of children under the age of 13 if either their website or service (or "portion thereof") is "directed at children" or they have actual knowledge that they are collecting personal information from a child.

The new study, which surveyed over 1,000 parents of children between the ages of 10 and 14, reveals that, despite the best of intentions, COPPA is having many unintended costs and consequences:

Although many sites restrict access to children, our data show that many parents knowingly allow their children to lie about their age — in fact, often help them to do so — in order to gain access to age–restricted sites in violation of those sites' ToS. This is especially true for general–audience social media sites and communication services such as Facebook, Gmail, and Skype, which allow children to connect with peers, classmates, and family members for educational, social, or familial reasons.

The authors conclude that "COPPA inadvertently undermines parents' ability to make choices and protect their children's data" and that their results "have significant implications for policy–makers, particularly in light of ongoing discussions surrounding COPPA and other age–based privacy laws." Indeed, this paper could really shake up the debate over online kids' privacy regulation. I will have more analysis of the paper in my weekly Forbes column this weekend.

Additional reading for COPPA background and current controversies: Berin Szoka & Adam Thierer, "COPPA 2.0: The New Battle over Privacy, Age Verification, Online Safety & Free Speech," (May 21, 2009); and Adam Thierer, "Kids, Privacy, Free Speech & the Internet: Finding the Right Balance," (August 12, 2011).

FCC Requires Online Public Inspection Files, But Misses Point of OpenGov: Data Accessibility

At last Thursday's FCC Open Commission Meeting, the Commission proposed to require television stations to make their "public inspection file" available online. But availability is not accessibility.
If the FCC follows its usual practice of having filers submit PDFs
(many of which are often scanned from printed documents), this data may
be nearly useless to the small number of researchers who would really
benefit from having a large set of public inspection files available
online.

The
public inspection file, a traditional hallmark of broadcast regulation,
is a collection of documents that all radio and television stations
must maintain and make available to anyone who asks to see it. Under the
FCC's existing rules, the file must contain, among other things:

A complete record of airtime purchases by, or on behalf of, any political
candidates or political issues of national importance.
A quarterly report on the "programs containing [the station's] most significant treatment of community issues."

Neither is filed with the FCC and thus both are available only directly from the station. But accessing the file shouldn't be difficult. The FCC's rules clearly state
that the file should be "available to members of the public at any time
during regular business hours." You can even ask the station staff to
make photocopies for you (though you'll have to pay for the copies).

Although the proposal voted on yesterday hasn't yet been released publicly, the plan as reported
would require stations to submit information to the FCC, which will
develop a publicly-searchable online database of the submissions. This
is in marked contrast to a 2007 FCC rule which required stations to put public inspection files on their own websites. Broadcasters sued
to block the implementation of the previous rule, arguing that the FCC
underestimated the paperwork burden and voicing First Amendment
concerns. The court sent the previous rule back to the FCC for revision,
which the FCC had been silent about until today.

At yesterday's meeting, Commissioner Clyburn complained that most public inspection files are "in the deep recesses of broadcast stations, in dilapidated filing cabinets,"
but this complaint misses the point. Stations don't bring members of
the public into their "deep recesses." They ask them to have a seat in
their lobby while some station staffer retrieves the file. What could be
easier? You might even see a local celebrity while you wait!

But in fact, the public inspection files of most stations are almost never
requested. In 2007, Viacom stated that visits to its stations' public
inspection files were "exceedingly rare … less than one annually,
virtually all of whom are college students on assignment." That's probably because most people don't know of their existence.

Just putting the public inspection files online would certainly make them more accessible and might lead
to more public review. But the real beneficiaries of the FCC's new rule
are researchers. The primary "research" that researchers do is
comparing data across stations and/or across time to identify larger trends.
But if the new system the FCC develops for the public inspection file
data is like many of the FCC's existing online databases, it will be of
limited use. Most FCC databases allow users to only search for a single licensee and most of the data they contain is only available in separate PDF files for each licensee.
This makes it very time-consuming to, for example, determine which
station in a city receives the most political airtime purchases, or to
track political airtime purchases over time.

This
outdated approach to disclosure is fundamentally inconsistent with the
broader efforts of the Obama Adminstration to implement Open Government
through meaningful disclosure. The Open Government Directive directs agencies to

"publish
information online in an open format that can be retrieved, downloaded,
indexed, and searched by commonly used web search applications. An open
format is one that is platform independent, machine readable, and made
available to the public without restrictions that would impede the
re-use of that information."

In a 2010 memo to the heads of executive departments and agencies, Cass Sunstein, head of the Office of Information and Regulatory Affairs, explained
"There is a difference between making a merely technical
disclosure–that is, making information available somewhere and in some
form, regardless of its usefulness–and actually informing choices."
Sunstein's vision of transparency isn't merely a means of
opening up government, but also a less restrictive alternative to
prescriptive regulation. That's exactly why we have public files in the
first place: because forced disclosure is less restrictive than limiting
political advertisements or meddling (even more) with public interest
programming.

The idea of transparency as an alternative to regulation goes all the way back to President Clinton's Executive Order 12866 (1993):
"Each agency shall identify and assess available alternatives to direct
regulation, including … providing information upon which choices can
be made by the public." And in another memo to agency heads from just last month, Sunstein explained the benefits of Smart Disclosure, which

"makes
information not merely available, but also accessible and usable, by
structuring disclosed data in standardized, machine readable formats. …
In many cases, smart disclosure enables third parties to analyze,
repackage, and reuse information to build tools that help individual
consumers to make more informed choices in the marketplace."

Thus, if the FCC is going to require stations to collect certain information and make that information available to the public, it should make that information accessible
too. That means requiring stations to submit the data in
machine-readable format and ensuring that the submitted data is then
made available in compliance with the 8 Principles of Open Government Data. While these principles were not developed by the Federal government, they are in keeping with the spirit of the FCC's Data Innovation Initiative. FCC Chairman Julius Genachowski is exactly right: "public data should be accessible to the public in meaningful ways using modern digital tools."

Fine words, Mr. Chairman. Why not start with public files?

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Preliminary Thoughts on Stop Online Piracy Act (SOPA)

This afternoon the Stop Online Piracy Act (H.R. 3261) was introduced by Rep. Lamar Smith of the House Judiciary Committee. This bill is a companion to the PROTECT IP Act and S.978, both of which were reported by the Senate Judiciary Committee in May.

There's a lot some to like about the bill, but I'm uneasy about some quite a few of its provisions. While I'll have plenty to say about this bill in the future, for now, here are a few preliminary thoughts:

The bill's definition of "foreign infringing sites" at p. 10 borrows heavily from 18 U.S.C. § 2323, covering any site that commits or facilitates the commission of criminal copyright infringement and would be subject to civil forfeiture if it were U.S.-based. Unfortunately, the outer bounds of 18 U.S.C. § 2323 are quite unclear. The statute, which was enacted only a few years ago, encompasses "any property used, or intended to be used, in any manner or part to commit or facilitate" criminal copyright infringement. While I'm all for shutting down websites operated by criminal enterprises, not all websites used to facilitate crimes are guilty of wrongdoing. Imagine a user commits criminal copyright infringement using a foreign video sharing site similar to YouTube, but the site is unaware of the infringement. Since the site is "facilitating" criminal copyright infringement, albeit unknowingly, is it subject to the Stop Online Piracy Act?
Section 103 of the bill, which creates a DMCA-like notification/counter-notification regime, appears to lack any provision encouraging ad networks and payment processors to restore service to a site allegedly "dedicated to theft of U.S. property" upon receipt of a valid counter-notification and when no civil action has been brought. The DMCA contains a safe harbor protecting service providers who take reasonable steps to take down content from liability, but the safe harbor only applies if service providers promptly restore allegedly infringing content upon receipt of a counter notification and when the rights holder does not initiate a civil action. Why doesn't H.R. 3261 include a similar provision?
The bill's private right of action closely resembles that found in the PROTECT IP Act. Affording rights holders a legal avenue to take action against rogue websites makes sense, but I'm uneasy about creating a private right of action that allows courts to issue such broad preliminary injunctions against allegedly infringing sites. I'm also concerned about the lack of a "loser pays" provision.
Section 104 of the bill, which provides immunity for entities that take voluntary actions against infringing sites, now excludes from its safe harbor actions that are not "consistent with the entity's terms of service or other contractual rights." This is a welcome change and alleviates concerns I expressed about the PROTECT IP Act essentially rendering certain private contracts unenforceable.
Section 201 of the bill makes certain public performances via electronic means a felony. The section contains a rule of construction at p. 60 that clarifies that intentional copying is not "willful" if it's based on a good faith belief with a reasonable basis in law that the copying is lawful. Could this provision cause courts to revisit the willfulness standard discussed in United States v. Moran , in which a federal court found that a defendant charged with criminal copyright infringement was not guilty because he (incorrectly) thought his conduct was permitted by the Copyright act?

Preliminary Thoughts on Stop Online Piracy Act

This afternoon the Stop Online Piracy Act (H.R. 3261) was introduced by Rep. Lamar Smith of the House Judiciary Committee. This bill is a companion to the PROTECT IP Act and S.978, both of which were reported by the Senate Judiciary Committee in May.

There's a lot to like about the bill, but I'm uneasy about some of its provisions. While I'll have plenty to say about this bill in the future, for now, here are a few preliminary thoughts:

The bill's definition of "foreign infringing sites" at p. 10 borrows heavily from 18 U.S.C. § 2323, covering any site that commits or facilitates the commission of criminal copyright infringement and would be subject to civil forfeiture if it were U.S.-based. Unfortunately, the outer bounds of 18 U.S.C. § 2323 are quite unclear. The statute, which was enacted only a few years ago, encompasses "any property used, or intended to be used, in any manner or part to commit or facilitate" criminal copyright infringement. While I'm all for shutting down websites operated by criminal enterprises, not all websites used to facilitate crimes are guilty of wrongdoing. Imagine a user commits criminal copyright infringement using a foreign video sharing site similar to YouTube, but the site is unaware of the infringement. Since the site is "facilitating" criminal copyright infringement, albeit unknowingly, is it subject to the Stop Online Piracy Act? Who knows.

Section 103 of the bill, which creates a DMCA-like notification/counter-notification regime, appears to lack any provision encouraging ad networks and payment processors to restore service to a site allegedly "dedicated to theft of U.S. property" upon upon receipt of a valid counter-notification and when no civil action has been brought. The DMCA contains a safe harbor protecting service providers who take reasonable steps to take down content from liability, but the safe harbor only applies if service providers promptly restore allegedly infringing content upon receipt of a counter notification and when the rights holder does not initiate a civil action. Why doesn't H.R. 3261 include a similar provision?

The bill's private right of action closely resembles that found in the PROTECT IP Act. Affording rights holders a legal avenue to take action against rogue websites makes sense, but I'm uneasy about creating a private right of action that allows courts to issue such broad preliminary injunctions against allegedly infringing sites. I'm also concerned about the lack of a "loser pays" provision.

Section 104 of the bill, which provides immunity for entities that take voluntary actions against infringing sites, now excludes from its safe harbor actions that are not "consistent with the entity's terms of service or other contractual rights." This is a welcome change and alleviates concerns I expressed about the PROTECT IP Act essentially rendering certain private contracts unenforceable.

Section 201 of the bill makes certain public performances via electronic means a felony. The section contains a rule of construction at p. 60 that clarifies that intentional copying is not "willful" if it's based on a good faith belief with a reasonable basis in law. Could this provision cause courts to revisit the willfulness standard in United States v. Moran , in which a federal court found that a defendant charged with criminal copyright infringement was not guilty because he wrongly thought his conduct was not unlawful?

Adam Thierer on Internet sales tax

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On the podcast this week, Adam Thierer, a Senior Research Fellow with the Technology Policy Program at the Mercatus Center, discusses his new paper, co-authored with Veronique de Rugy, The Internet, Sales Tax, and Tax Competition. With several states in the midst of budget crunches, states and localities struggle to find a way to generate revenue, which, according to Thierer, leads to an aggressive attempt to collect online sales tax. He discusses some of these attempts, like the multi-state compact, that seeks taxation of remote online vendors. Thierer believes this creates incentives for large online companies like Amazon to cut deals with certain states, where jobs will be created in exchange for tax relief. This, according to Thierer, creates unfairness for smaller online companies as well as for brick and mortar shops who have to pay taxes to the state where they have a physical presence. He proposes an origin-based tax, which imposes the tax where the purchase is made instead of tracing the transaction to its consumption destination. This proposal, he submits, will level the playing field between brick and mortar companies and online companies, and promote tax competition.

Related Links


The Internet, Sales Taxes, and Tax Competition , by Thierer & de Rugy
The Main Street Fairness Act
The Streamlined Sales and Use Tax Agreement
"Working up a tax storm in Illinois", George F. Will

To keep the conversation around this episode in one place, we'd like to ask you to comment at the webpage for this episode on Surprisingly Free. Also, why not subscribe to the podcast on iTunes?

Web Pro News Interview on Net Tax Debate [video]

Web Pro News invited me on the show this week to chat about the ongoing Internet sales tax debate. Video embedded below. Here's the new Mercatus paper that Veronique de Rugy and I wrote on the issue, which is referenced during the discussion.

More WebProNews Videos

Time to Regulate These Tech Titans

Ladies and gentlemen, it is time for decisive action. Cyberlaw scholars have been warning us for years that tech titans dominate the digital landscape.  Our leaders must act immediately to ensure that the 4 Internet gatekeepers don't lock us in their walled gardens and turn us into their cyber-slaves. The future of Internet freedom is at stake. It's market failure! There is no possibility of escaping their evil clutches. And there's certainly no possibility markets will evolve to give us better choices. Only decisive regulatory action can give us a more competitive, innovative future.

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TechFreedom Joins Call to Action to Reform ECPA on Its 25th Anniversary

TechFreedom is calling on all Americans to stand up for their digital Fourth Amendment rights. The Constitution delicately balances privacy with the needs of law enforcement by making judges responsible for determining whether law enforcement has established 'probable cause.' This judicial warrant requirement has always been the crown jewel of our civil rights. Our Founding Fathers would be appalled to learn that this fundamental principle does not extend to our electronic communications and location. After all, they fought–and won–a revolution to prevent similar abuses by British authorities.

TechFreedom has joined with a philosophically diverse coalition of public interest groups in supporting the "Not Without a Warrant" grass-roots petition, which reads as follows:

The government should be required to go to a judge and get a warrant before it can read our email, access private photographs and documents we store online, or track our location using our mobile phones. Please support legislation that would update the Electronic Communications Privacy Act of 1986 (ECPA) to require warrants for this sensitive information and to require the government to report publicly on the use of its surveillance powers.

Today marks the 25th anniversary of ECPA's passage. Anyone can sign the petition at NotWithoutAWarrant.com or show their support by liking the Facebook version.

TechFreedom Senior Adjunct Fellow Charlie Kennedy spoke at a Cato Institute event on Wednesday about modernizing ECPA. The video is archived here.

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What Does It Mean to Declare Broadband a "Human Right," and What Are the Costs?

Freelance journalist Laurence Cruz was kind enough to call me recently looking for comment on whether broadband should be considered a human right. Well, actually, he probably didn't have many options. If you do a quick search on the topic, you'll find an endless stream of essays in favor of the proposition.  Then, somewhere in the mix, you'll find a few dissenting rants I've penned here in the past. So I'm getting used to playing the baddie in this drama.

Cruz's essay is now up over at "The Network," which is Cisco's technology news site. Here's what I had to say in opposition to the proposition:

Not everyone is so ready to jump aboard this particular broadband bandwagon. "I don't think there is any such thing as a human right to free, unlimited broadband service," says Adam Thierer, a senior research fellow at the Mercatus Center, a market-oriented academic research institution at George Mason University in Arlington, Va. "The entitlement or rights mentality in America today is completely out of control."

Thierer says he's a firm believer in such fundamental human rights as freedom of speech, expression, movement and association—so-called "negative rights" that don't require any assertion of government authority or demand payment from anybody. But he says any proposed right to broadband access is a different animal altogether—one likely to come at taxpayers' expense and to have all manner of unintended consequences, from squelching competition to providing a poor level of service.

Thierer says the universal telephone service provided in America in the early 20th century by the original AT&T should serve as a cautionary tale against governments stepping in to provide universal broadband. He says the government-sanctioned Bell System monopoly provided mediocre telephone service to 93 percent of the U.S. population at best—whereas TV and radio hit 98 percent and 99 percent respectively, even though neither was subsidized or regulated. And what of the Bell System's cheap prices? "We have no idea if it could have been much cheaper because competition was not allowed to develop," Thierer says.

To clarify that last point… I'm certainly aware that broadcast TV and radio were regulated in various ways. In fact, I've spent a lifetime writing about it. But policymakers did not regulate broadcasting as aggressively as telephony in an attempt to achieve universal service. Indeed, "universal service" was the driving force behind communications monopolization in this country, but it had horrific consequences for consumers as I noted in my 1994 history of how communications competition was destroyed in the U.S. (See:  "Unnatural Monopoly: Critical Moments in the Development of the Bell System Monopoly.")

But here's the critical point: We live in a world of trade-offs and there is no free lunch. One doesn't just mandate broadband for all and then expect there won't be any costs — both direct and indirect. The direct cost is the cost to taxpayers or ratepayers in form of higher taxes or bills. The indirect costs usually arrive in the form of diminished competition, limited innovation, lackluster options, and the various problems associated with the regulatory capture that will ensue.

We must never forget that the best universal service policy is market competition. When we get the basic framework right — low taxes, property rights, contractual enforcement, anti-fraud standards, etc. — competition takes care of the rest.

For example, last week we learned that the number of wireless phone subscribers in the U.S. is now greater than the nation's population: 327.6 million wireless subscriptions compared to a total population of 315.5 million people. That's a penetration rate of nearly 104%. Of course, some of this is due to multiple subscription households. Even so, this is a rather astonishing development, and no one doubts that more Americans of every demographic group today have available to them an unprecedented array of wireless phones and plans. Prepaid plans are currently the hottest growth segment, in fact.

This amazing "universal service" story didn't happen because of regulation or subsidies. It was vigorous competition and incessant innovation that spurred the spread of better, faster, and cheaper phones and service. We should remember that lesson next time anyone starts calling broadband–or other technological services–an inalienable human right.

Simon Chesterman on electronic intelligence surveillance

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On the podcast this week, Simon Chesterman, Vice Dean and Professor of Law at the National University of Singapore, and Global Professor and Director of the NYU School of Law Singapore Programme, discusses his new book, One Nation Under Surveillance: A New Social Contract to Defend Freedom Without Sacrificing Liberty. The discussion begins with a brief overview of the NSA and how it garnered the attention of Americans after 9/11. Chesterman discusses the agencie's powers and the problems the NSA encounters, including how to sort through large amounts of data. The discussion then turns to how these powers can become exceptions to constitutional protections, and how such exceptional circumstances can be accommodated. Finally, Chesterman suggests that there has been a cultural shift in western society, where expectations of privacy have dimished with technological and cultural trends, so that information collection by the government is generally accepted. However, he says, society is concerned with how that information is used. According to Chesterman, there should be limits and accountability mechanisms in place for government agencies like the NSA.

Related Links

One Nation Under Surveillance: A New Social Contract to Defend Freedom Without Sacrificing Liberty , by Chesterman"Warrantless Wiretaps: A Guide to the Debate", NPRStronger Online Privacy Regulation Comes with Tradeoffs, TIME.com Techland

To keep the conversation around this episode in one place, we'd like to ask you to comment at the webpage for this episode on Surprisingly Free. Also, why not subscribe to the podcast on iTunes?