Adam Thierer's Blog, page 128

Sarkozy, Facebook, Moral Panics & the Third-Person Effect Hypothesis

John Naughton, a professor at the Open University in the U.K. and a columnist for the U.K. Guardian, has a new essay out entitled "Only a Fool or Nicolas Sarkozy Would Go to War with Facebook." I enjoyed it because it touches upon two interrelated concepts that I've spent years writing about: "moral panic" and "third-person effect hypothesis" (although Naughton doesn't discuss the latter by name in his piece.) To recap, let's define those terms:

"Moral Panic" / "Techno-Panic": Christopher Ferguson, a professor at Texas A&M's Department of Behavioral, Applied Sciences and Criminal Justice, offers the following definition: "A moral panic occurs when a segment of society believes that the behavior or moral choices of others within that society poses a significant risk to the society as a whole." By extension, a "techno-panic" is simply a moral panic that centers around societal fears about a specific contemporary technology (or technological activity) instead of merely the content flowing over that technology or medium.

"Third-Person Effect Hypothesis": First formulated by psychologist W. Phillips Davison in 1983, "this hypothesis predicts that people will tend to overestimate the influence that mass communications have on the attitudes and behavior of others. More specifically, individuals who are members of an audience that is exposed to a persuasive communication (whether or not this communication is intended to be persuasive) will expect the communication to have a greater effect on others than on themselves." While originally formulated as an explanation for how people convinced themselves "media bias" existed where there none was present, the third-person-effect hypothesis has provided an explanation for other phenomenon and forms of regulation, especially content censorship. Indeed, one of the most intriguing aspects about censorship efforts historically is that it is apparent that many censorship advocates desire regulation to protect others, not themselves, from what they perceive to be persuasive or harmful content. That is, many people imagine themselves immune from the supposedly ill effects of "objectionable" material, or even just persuasive communications or viewpoints they do not agree with, but they claim it will have a corrupting influence on others.

All my past essays about moral panics and third-person effect hypothesis can be found here. These theories are also frequently on display in the work of some of the "Internet pessimists" I have written about here, as well as in many bills and regulatory proposals floated by lawmakers. Which brings us back to the Naughton essay.

Naughton comments on French president Nicolas Sarkozy's recent speech at the eG8 summit, which many regarded as an attack on the Internet and online freedoms. Naughton argues:

in a way, he was just acting as a mouthpiece for the political, judicial, commercial and security establishments which are becoming increasingly hysterical about the way the internet is upending their respective applecarts. In that sense, Sarky was echoing the fulminations of England's lord chief justice that "technology is out of control", by which he meant, as Peter Preston has pointed out, is beyond his control.

Establishment panic about the net's disruptiveness is matched by renewed outbreaks of an age-old neurosis – moral panic about the impact of new communications technology on young people. This was fuelled last week by a report that Facebook was going to allow children under the age of 13 to become members. US law currently insists that websites that collect information about users (as Facebook does) aren't allowed to sign on anyone under the age of 13.

I think Naughton's probably on to something here. I'm not quite sure Sarkozy's speech fit the classic "moral panic" model, but I did sense a bit of third-person effect hypothesis at work in some of Sarkozy's comments.  Naughton continues on to discuss the rising fears about social networking sites in particular and notes "the fixed conviction of the adult world that young people are being seduced, hoodwinked, fixated, dumbed down (insert favourite downside here) by Facebook and Twitter."  To this concern Naughton rightly notes:

Much of the moral panic about social networking is a projection of adult fears. A neurosis, as Ken Tynan wisely observed, is a secret that you don't know you're keeping. Many teenagers do silly things online; what their parents forget is that they also did silly things in their youth.

Quite right. This is actually a very old story. From the waltz to rock and roll to rap music, from movies to comic books to video games, from radio and television to the Internet and social networking websites—every new media format or technology spawns a fresh debate about the potential negative effects it might have on kids. In each case, the adult generation forgets they, too, were once kids and somehow got through the trials and tribulations of the adolescent experience.

The late University of North Carolina journalism professor Margaret A. Blanchard once noted: "[P]arents and grandparents who lead the efforts to cleanse today's society seem to forget that they survived alleged attacks on their morals by different media when they were children. Each generation's adults either lose faith in the ability of their young people to do the same or they become convinced that the dangers facing the new generation are much more substantial than the ones they faced as children." And Thomas Hine, author of The Rise and Fall of the American Teenager, argues that: "We seem to have moved, without skipping a beat, from blaming our parents for the ills of society to blaming our children. We want them to embody virtues we only rarely practice. We want them to eschew habits we've never managed to break."

What is needed, as I argued in my old book on Parental Controls and Online Child Protection, is a measured and balanced approach to children's exposure to media content and online interactions — whether the fear is objectionable content or privacy.  All-or-nothing extremes are not going to work. In particular, fear-mongering and "techno-panics" are never the proper response. "Fear, in many cases, is leading to overreaction, which in turn could give rise to greater problems as young people take detours around the roadblocks we think we are erecting," argue John Palfrey and Urs Gasser, authors of the brilliant recent book, Born Digital: Understanding the First Generation of Digital Natives. What parents, guardians, and educators need to understand, they argue, "is that the traditional values and common sense that have served them well in the past will be relevant in this new world, too."

That is good advice to parents and policymakers alike.

 

Does Spin Magazine Own the Word "Spin"?

Their lawyers seem to think so.

Unlocked Bootloaders, Increased Smartphone Openness & Zittrainian Generativity

In my work critiquing the Lessig-Zittrain-Wu school of thinking–which fears the decline and fall of online "openness" and digital  "generativity"–I have argued that, while there is no such thing as perfect "openness," things are actually getting more open and generative all the time. All that really counts from my perspective is that we are witnessing healthy innovation across the generativity continuum.

Will some devices and platforms continue to be "closed"? Sure. Think Apple and cable set-top boxes. But (a) there's a ton of innovation taking place on top of those supposedly "closed" platforms and (b) there are other options consumers can exercise if they don't like those content /information delivery methods. [See this chapter from the Next Digital Decade book for my fuller critique.]

And, even if one adopts a rigid Zittrainian view of openness and generativity, each day seems to bring more good news. From that perspective it's hard to find a better headline than this one: "Smartphone Makers Bow to Demands for More Openness." That's from ArsTechnica today and it refers to the fact that smartphone giant HTC just announced it would no longer attempt to lock the bootloader on its smartphones, meaning geeks like me can root and hack their devices to their heart's content. As the Ars story notes:

HTC has long been seen as a relatively modder-friendly phone manufacturer. Although many of their phones have had locked bootloaders, workarounds were easy enough for software developers to spot in order to gain superuser access to their phones. That changed recently, however, when modders discovered that two new Android phones—the HTC Sensation and Evo 3D—would come with software that prohibited bypassing locked bootloaders.

"The system was locked but exploitable before," Android enthusiast Irwin Proud told Wired.com in an interview. "Suddenly they required signature checks," or digital verification of software that allows it to load. An Android activist, Proud has organized online campaigns to fight against locked-down phone releases. After hearing this, the modding community wasn't happy. Users launched WakeUpHTC.com, a website which gave upset modders all of HTC's contact info, encouraging them to bombard the company with requests for a change in its bootloader policy. On Thursday, the company relented.

Here's specifically what HTC's CEO Peter Chou had to say in a Facebook post:

"There has been overwhelmingly customer feedback that people want access to open bootloaders on HTC phones. I want you to know that we've listened. Today, I'm confirming we will no longer be locking the bootloaders on our devices. Thanks for your passion, support and patience."

Now that's what I call a Zittrainian success story! Markets and public pressure prevailed and led to more openness and generativity in the purest sense of the terms.

I suppose that some will still worry and retort that "well, the carriers might still try to lock down the devices." That story might have been more believable five years ago but the new reality of the smartphone world today is that the OS and app makers now hold most of the cards. Carriers are practically giving away the store (literally!) as they rush to get the latest and greatest phones and operating systems from the likes of Apple, Google, Microsoft, HTC, Motorola, LG, and so on.  This is amazingly dynamic ecosystem with multiple layers of innovation and competition.

I don't think there's any way the generativity genie could be put back in the bottle at this point. Too many people want tinker-friendly devices and more "open" platforms.  Of course, it's also true that some devices will remain somewhat more locked-down to ensure "stability" or simplicity for those users who desire it. But what's wrong with that? Shouldn't they have that choice? Again, it's the innovation across the full range of devices and platforms that is so important and impressive in this case. That's all we should really care about. Finally, if goes without saying that even the most heavily fortified security can be broken when determined people try hard enough.

I hope Zittrain, Wu, and Lessig appreciate this and that they and others acknowledge these beneficial developments so that we can avoid foolish calls to regulate this healthy information ecosystem. These guys should declare victory and pop the champagne. The vision they favor is prevailing.

Data in the "Cloud" Needs Fourth Amendment Protection

"Cloud computing" is the term for applications that are handled by third-party software and storage on the Internet, like Google Docs and QuickBooks Online, as opposed to programs like Microsoft Word and Quicken, which you load and access from your PC.

Gmail and Hotmail were early examples of cloud computing. The cloud computing concept has since expanded to include popular applications like photo editing and sharing, money management and social networking. It also takes in the increasing number of cloud-based storage services, like Dropbox, which allows you to port documents from client to client, and Carbonite, which performs near real-time back-up of data and documents on your PC.

What most Americans don't realize is that data stored in the cloud is not protected by the Fourth Amendment the way that same data is if stored on a PC, CD or detachable hard drive in the home. My op-ed in the Washington Times today outlines this problem, and points to a new bill in Congress, S.1011, introduced last week by Sen. Patrick Leahy (D-VT), as a big step toward closing this loophole. S.1011, also cited by Berin here, extends the due process provisions against illegal wiretapping in the existing Electronic Communications Privacy Act (ECPA) to personal data stored in data centers owned and operated by third parties.

As online services and applications evolve, it is critical that these due process protections extend to cloud services. Public cloud infrastructure, applications and platforms are growing at 25 percent per year, according to International Data Corp., a market research firm specializing in high-tech. IDC found that, as of year-end 2010, 56 percent of Internet users use webmail services, 34 percent store personal pictures online, 7 percent store personal videos, 5 percent pay to store files and 5 percent back up their hard drive to a website. These numbers are all expected to grow rapidly.

But this is about more than convenience or personal preference for data storage. Internet applications are becoming geared for the "cloud." Cloud computing will be the easiest, cheapest and most efficient way users can access personal data on any device, in any location, at any time. It's not simply an option in the way one chooses to manage data. Cloud computing is becoming necessary to go about one's daily business. Legal protections need to be there.

Financial Crises as Information Problems

If you haven't seen it already, be sure to give a read to Friedman Prize winner Hernando de Soto's recent piece in Business Week, "The Destruction of Economic Facts." It's a fascinating perspective on the economic and financial turmoil that is wracking the United States and the world.

As de Soto perceives more easily from working in developing economies, an important input into functioning markets is good information—about property, ownership, debts, and so on. The "destruction of economic facts" is one of the roots of instability and uncertainty in Europe and the United States, he says. "In a few short decades the West undercut 150 years of legal reforms that made the global economy possible."

The law and markets are information systems, says de Soto:

The rule of law is much more than a dull body of norms: It is a huge, thriving information and management system that filters and processes local data until it is transformed into facts organized in a way that allows us to infer if they hang together and make sense.

If you're interested in information and transparency, it's worth a read.

Sprint throws cellular backhaul in with the merger kitchen sink

For CNET this morning, I write about the latest tempest in the AT&T/T-Mobile USA merger teapot: cellular backhaul or "special access" as its known in the industry.

Like a child sitting on Santa's lap at the mall, Sprint CEO Dan Hesse included backhaul in his wish list of conditions he'd like to see attached to the deal.  Yesterday, Public Knowledge duly confirmed that yes, backhaul is a "multiplier" problem for the deal.

(Sprint says they would like the deal blocked, but that is mere posturing.  What they really want is to use the FCC's bloated and unprincipled merger review process to sneak in as many private concessions for themselves as they can get.   And who can blame them for trying?  More on that in a moment.)

For those who don't know, backhaul is the process of moving cellular traffic (voice and data) to other high-speed networks (traditionally landline copper but now including cable, fiber, microwave and local Ethernet) to transport them to their ultimate destination.  As mobile use increases, of course, the necessity of reliable, high-speed backhaul to keep overall performance up becomes more critical than ever.

Let's work backwards:

1.  The merger has no impact whatsoever on backhaul.  PK's Harold Feld told The Hill that "One measure of just and reasonable is comparing similarly situated customers. So AT&T has to at least be reasonably consistent in pricing. That means T-Mobile benefits to some degree from any pricing concessions that Sprint can negotiate, and vice versa. And if AT&T is too unreasonable to either one, or both, having two similarly situated companies complain to the FCC and produce evidence that AT&T is being unreasonable makes a stronger case than having just one company."

Except that T-Mobile is not a customer.  T-Mobile, like Sprint's own subsidiary Clearwire, does not buy backhaul from AT&T or Verizon or any other landline infrastructure provider, relying instead on alternate backhaul technologies including microwave and Ethernet.  T-Mobile doesn't sell backhaul, and it doesn't buy it from landline providers.  So whatever part of the backhaul market AT&T holds today will be exactly the same the day after the merger.  All Sprint loses is another company who could theoretically join it in complaining about AT&T's rates to the FCC–except that T-Mobile doesn't care about AT&T's rates, because T-Mobile doesn't buy from AT&T.

2.  Sprint has only itself to blame if it's too reliant on others for backhaul – The backhaul market, like many aspects of the communications industry (e.g., peering arrangements), is notoriously secret.  No one really knows who is paying how much to whom for what–and those that do know are prohibited from disclosing.

But we do know that landline and cable companies have been investing billions over the last decade to upgrade, update, and extent their infrastructure.  And we know that Sprint has not made a similar investment in landline infrastructure, putting its money in its wireless network.  Which means that Sprint has known all along that it would remain reliant on its competitors for backhaul.  The company made a strategic choice to lease rather than to build, knowing that while the FCC no longer regulates backhaul rates, the agency is there to keep prices in check.  The merger doesn't change that reality one iota.

Sprint says it pays "very very high" prices for backhaul from AT&T and Verizon, and that the backhaul business is exceptionally profitable.  That sounds like a great opportunity, if it's true, for someone else to enter the market.  And indeed, dozens of companies large (Comcast) and small (local Ethernet) have entered the market.  (Comcast projects $1 billion in its backhaul revenue in the near future.)  Just not Sprint.  Why should the FCC bail them out of what may have been a series of bad business decisions?

3.  The real problem is merger review – As the two Republican FCC Commissioners said at the time of the Comcast-NBC Universal merger and its 200 pages of largely unrelated conditions, the FCC's "regulation by merger" habit has grown life-threatening for the industries it regulates.  Despite having nothing to do with the merger, and despite pure rent-seeking by Sprint to cut its backhaul costs in the name of antitrust, it seems possible that–sure, why not?–backhaul rate regulation concessions will be added to what will surely be the mother of all condition lists.  (For AT&T, not Verizon or anyone else–at least not until their next merger review)

That is, when the FCC finally gets around to approving the deal.  (The agency maintains a 180-day review deadline, but also grants itself the power to stop the clock anytime it likes.  That's how XM-Sirius took sixteen months, for example.)

The dangers of  regulation by merger condition are obvious and getting worse.  The merged entity is often crippled in its ability to operate for years after the merger, with each condition overseen by the FCC (and/or DOJ and/or FTC).  Different companies offering similar products and services live by different sets of regulations, some of which exceed what the agencies could have legally done had they simply regulated everyone under their Congressional powers.  The net result does nothing to improve competition in the relevant market.  Quite the opposite.

Inviting competitors like Sprint to add to the list of unrelated conditions its Christmas list of kickbacks, sweetheart deals, tribute and plenary indulgences only makes a bad problem worse.  Looking beyond the AT&T/T-Mobile merger, Sprint of all companies should know that…and know better.

Reform Sarbox To Galvanize High-Tech IPOs

Last week's blockbuster LinkedIn IPO valued the company at nearly $9 billion, surprising many investors, especially given the company's initial valuation of about $4 billion. While some analysts have pointed to LinkedIn's valuation as evidence that we may be headed into another tech bubble (a la 2000), it's important to remember that major tech IPOs remain far less frequent in comparison to their heyday in the dot com boom. While there are many good reasons behind the recent reduction in IPO frequency, ill-conceived public policies have distorted the decision-making process of thriving startups.

In an op-ed in tomorrow's Investor's Business Daily, Jacque Otto and I elaborate on this argument:

Silicon Valley is teeming with budding startups whose user bases and valuations are skyrocketing. As these companies seek breathing room to grow, they will face a tough decision: stay private, seek out a buyer or go public.

Making this complex choice all the more challenging is government uncertainty. Filing for an initial public offering is harder than ever due to the onerous regulations and burdensome laws Washington has handed down over the past decade. Microsoft's $8.5 billion purchase of Skype surprised analysts, many of whom had predicted Skype would seek an IPO or a deal with Facebook or Google.

Meanwhile, Facebook has kept quiet in face of speculation over whether it might file for an IPO. So far, the social networking giant has focused on raising capital privately. Given the risks of going public in this environment, Facebook's decision is understandable.

While some tech firms — including LinkedIn, Kayak and Demand Media — have gone public or filed for IPOs in the past year, many others — including Hulu, Zynga, and Twitter — are reportedly leaning against going public this year. Some of these may be acquired, as happened with AdMob, a mobile advertising startup rumored to be pondering an IPO until Google bought it for $750 million in 2009.

Why do tech companies appear more reluctant to go public today than they were during the tech sector's heyday of the early 2000s?

While many factors are at play, new regulations on the finance sector and heavy-handed legislation enacted since the dot-com boom deserve much of the blame. Raising capital through an IPO is especially tough, discouraging startups from seeking to go public. This increases the attractiveness of raising capital through private sources or by being acquired by a bigger firm.

The Sarbanes-Oxley Act, enacted in 2002 after the Enron scandal, has been devastating for investors and promising startups. The law's onerous mandates on public companies have forced many nascent companies to forget about or delay going public.

Read the rest of the piece here.

video & slides from Hill Briefing on Online Privacy Policy

Last week, I spoke to a group of Capitol Hill staffers about the current debate over online privacy policy. The topic is red-hot right now with 6 major bills pending and plenty of international and state-based activity percolating. I offered the staffers an overview of these issues as well as an alternative vision for how we might handle privacy concerns going forward.

I have embedded the video of my briefing below and it can also be found on the Mercatus website here. And the slide deck I used that day can also be found down below or over on Scribd here.

Privacy & the Internet

Related Reading:

Adam Thierer, Filing to Federal Trade Commission in 'Do Not Track' Proceeding, February 18, 2011.
Adam Thierer, "Birth of the 'Privacy Tax,'" Forbes, April 4, 2011.
Adam Thierer, "Online Privacy Regulation: Likely More Complicated (And Costly) Than Imagined," Mercatus on Policy, Mercatus Center at George Mason University, December 6, 2010 .
Adam Thierer, "Erasing Our Past on the Internet," Forbes, April 17, 2011.
Adam Thierer, "Unappreciated Benefits of Advertising and Commercial Speech," Mercatus on Point 86, Mercatus Center, January 2011.
Berin Szoka and Adam Thierer, "COPPA 2.0: The New Battle over Privacy, Age Verification, Online Safety & Free Speech," Progress on Point 16, no.11, The Progress & Freedom Foundation,  May 21, 2009.

Micah Sifry on government transparency and WikiLeaks

On the podcast this week, Micah Sifry, co-founder of the Personal Democracy Forum, editor of techPresident.com, and author of the new book, Wikileaks and the Age of Transparency, discusses government transparency. Sifry talks about the various purposes of government transparency, technology's effect on it, and bi-partisan competition that can promote it. He also discusses Bradley Manning's case, the evolution of WikiLeaks, and the transparency, or lack thereof, within the WikiLeaks organization.

Related Links


"WikiLeaks, Assange, and Why There's No Turning Back," by Sifry at the Huffington Post
"WikiLeaks and the Age of Transparency: Micah Sifry explores the history, successes and failures of online transparency," BoingBoing
"April Book of the Month: 'WikiLeaks and the Age of Transparency,'" Yale Books

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

video: Robert Corn-Revere on "The High Value of Low Speech"

My good friend and mentor Robert Corn-Revere, a First Amendment attorney with the law firm Davis Wright Tremaine, gave a terrific talk on "The High Value of Low Speech" at a recent Reason Foundation event.  Bob is one of the greatest living defenders of freedom of speech and expression and his talks are always inspiring, informative, and entertaining. I recommend you check it out. The video is embedded below or can be found on the ReasonTV website here.

"All First Amendment cases are about the power," Corn-Revere argues. "Who should have the power to tell individuals what to read, think, believe or feel?" He continues on to explain the recent history of controversial First Amendment jurisprudence — much of which he has been personally responsible for litigating — and explains why even "low speech" is worth defending if we cherish our speech rights.