Adam Thierer's Blog, page 130

Event reminder: "State of Wireless Competition" (Wed., 4:00 at GMU-Arlington)

Just a final reminder that it isn't too late to still register for this Wednesday's Mercatus Center event on "The State of Wireless Competition" featuring Thomas W. Hazlett, Professor of Law & Economics, George Mason University School of Law; Joshua D. Wright, Assistant Professor of Law, George Mason University School of Law; Robert M. Frieden, Professor of Telecommunications & Law, Penn State University; and Harold Feld, Legal Director, Public Knowledge. These experts will discuss the FCC's upcoming Wireless Competition Report and the debate:

What does a proper analysis of wireless competition look like?
What should we expect from the FCC's report this year?
How should the FCC address competition in the future?

Again, the event will take place this Wednesday (May 18) from 4:00 – 5:30 p.m at George Mason University's Arlington Campus, just ten minutes from downtown Washington. (Founders Hall, Room 111, 3351 N. Fairfax Drive, Arlington, VA). A reception will follow.

To RSVP for yourself and your guests, please contact Megan Gandee at 703-993-4967 or mmahan@gmu.edu no later than May 16, 2011. Hope to see some regular TLF readers there!

Worrying over Internet content wars: Protect IP and the nuclear option

I've written two articles on the Protect IP Act of 2011, introduced last week by Sen. Leahy (D-Vt.).

For CNET, I look at some of the key differences, better and worse, between Protect IP and its predecessor last year, known as COICA.

On Forbes this morning, I have a long meditation on what Protect IP says about the current state of the Internet content wars.  Copyright, patent, and trademark are under siege from digital technology, and for now at least are clearly losing the arms race.

The new bill isn't exactly the nuclear option in the fight between the media industries and everyone else, but it does signal increased desperation.

I'm not exactly a non-combatant here.  Increasingly, everyone is being dragged into this fight, including search engines, ISPs, advertisers, financial transaction processors, and, in Protect IP is passed, anyone who uses a hyperlink.

But as someone who earns his living from information exchanges–what the law anachronistically calls "intellectual property"–I'm not exactly an anarchist either (or as one recent commenter on CNET called me, a complete anarchist!).

The development of an information economy will stabilize and mature at some point, and, I believe, the new supply chain will be richer, more profitable, and give a greater share of the value than the current one does to those who actually create new content.  (Most of the cost of information products and services today is eaten up by middlemen, media, and distribution.)

But it's not an especially smooth or predictable trajectory.  Joseph Schumpeter didn't call it creative destruction for nothing.

 

Be Wary of T-Mobile and "Protection" You Don't Want

As a rule of thumb, when I have to spend a given amount of time straightening out a company's poor service or unscrupulous practices, I'll spend an equivalent amount of time giving that company some payback. Today's victim: T-Mobile. Fear the blog post.

A letter from Asurion Warranty Services arrived in my mail today thanking me for signing up for their "Premium Handset Protection Bundle" for T-Mobile phones.

Oh no I didn't. It costs $5.99 a month for repair and replacement of my newly upgraded phone. That's pretty much the price of a phone per year for such protections. Bad deal. I haven't lost or damaged a phone in a decade, and I didn't agree to get have this charge added to my phone bill.

I am on hold right now, trying to learn just how this got onto my bill. Friendly, helpful T-Mobile customer service people have told me that I should go down to the T-Mobile store where I upgraded in order to straighten this out. No I shouldn't. T-Mobile should be straightening this out right now over the phone, with an apology and a thank you.

I am done with my 40-minute phone call, in which friendly customer service supervisor Kassidy K. (#1204178) tried to assign me the task Monday of calling the store where I upgraded my phone to get this straightened. I explained to Kassidy K. that I've made the only call I need to—that's the call we were on. Her next work-day is Wednesday, and I told her I expected to hear from her about this being cleared up.

If I have to make another call, it's just as likely to be about returning my phone and canceling my service as getting this charge removed from my bill.

You people can argue all you want about top-down—whether the government should allow the AT&T-T-Mobile merger. I'll do bottom-up—whether T-Mobile should get my business.

Celebrating Section 230

My latest Forbes column is a celebration of 47 U.S.C. §230, otherwise known as "Section 230." Sec. 230 turns 15 years old this year and I argue that this important law has "helped foster the abundance of informational riches that lies at our fingertips today" and has served as "the foundation of our Internet freedoms."  Sadly, however, few people have even heard of it. Worse yet, as I note in my essay, this important law is under attack from various academics and organizations who want it modified to address a variety of online problems. But, as I note:

If the threat of punishing liability is increased, the chilling effect on the free exchange of views and information would likely be quite profound. Many site administrators would immediately start removing massive amounts of content to avoid liability. More simply, they might just shut down any interactive features on their sites or limit service in other ways.

Head over to Forbes to read the rest. And here's a graphic I put together illustrating all the new fault lines in the war against Sec. 230. It will be included in a new paper on the issue that I am wrapping up right now.

Congress takes another stab at combating Rogue Websites with the PROTECT IP Act

Last November, I penned an essay on these pages about the COICA legislation that the U.S. Senate Judiciary Committee had unanimously approved. While I praised Congress's efforts to tackle the problem of "rogue websites" — sites dedicated to trafficking in counterfeit goods and/or distributing copyright infringing content — I warned that the bill lacked crucial safeguards to protect free speech and due process, as several dozen law professors also cautioned. Thus, I suggested several changes to the legislation that would have limited its scope to focus on truly bad actors and reduced the probability of burdening protected expression through "false positives." Thanks in part to the efforts of Sen. Ron Wyden (D-Ore.), COICA never made it a floor vote last session.

Today, three U.S. Senators introduced a similar bill, entitled the PROTECT IP Act (bill text), which, like COICA, establishes new mechanisms for combating Internet sites that are "dedicated to infringing activities." I'm glad to see that lawmakers adopted several of my suggestions, making the PROTECT IP Act a major improvement over its predecessor. While the new bill still contains some potentially serious problems, on net, it represents a more balanced approach to fighting online copyright and trademark infringement while recognizing fundamental civil liberties.

Some of the major differences between COICA and PROTECT IP include:

Under COICA, a website would have been deemed "dedicated to infringing activities" if it had no "demonstrable, commercially significant purpose other than" (emphasis added) to facilitate infringing activities. PROTECT IP, however, only covers websites with "no significant use other than" to facilitate infringing activities. This slight change in wording may seem trivial, but it's actually quite significant, as lots of blogs, forums, and other sites engaged in noncommercial, but still protected, speech that may well have been subject to domain name disabling under COICA would likely be in the clear under PROTECT IP. However, as Public Knowledge's Sherwin Siy points out, PROTECT IP's definition of sites "dedicated to infringing activities" remains overly broad, as it doesn't explicitly exempt online intermediaries that are otherwise protected by the 17 U.S.C. § 512(c) safe harbor. A site operator that is not engaged in direct or willful secondary infringement should be exempt from actions taken under the PROTECT IP Act if the site abides by the DMCA notice and takedown process, has no actual knowledge of infringing activities, does not derive a financial benefit directly attributable to infringement, and does not induce infringement.



PROTECT IP, unlike COICA, does not categorically deem websites "otherwise subject to civil forfeiture" under 18 U.S.C. § 2323 to be "dedicated to infringing activities." Given the extraordinary breadth of section 2323, which permits the government to seize any  "property used, or intended to be used, in any manner or part to commit or facilitate the commission of" criminal copyright infringement, it's a relief that language was removed.



PROTECT IP requires that the Justice Department or a rights holder, in bringing an action against a site under the statute, attempt to commence an in personam action against the operator of an allegedly infringing website before an in rem action can be brought. From a due process perspective, this change is an improvement over COICA (which only provided for in rem actions), as it's much more likely that an in personam action will provide a site operator with an opportunity to participate in an adversarial hearing prior to the issuance of a temporary restraining order or preliminary injunction requiring an intermediary to disable service to the site.



PROTECT IP adds interactive computer services to the list of intermediaries that are required to disable service or cease linking to a website upon being served with a court order deeming the site "dedicated to infringing activities." This provision would apply not only to search engines, but also to blogs, chat rooms, and message boards. The law, like COICA, also applies to DNS servers, financial transaction providers, and Internet advertising services.



PROTECT IP allows the Justice Department to take action only against nondomestic domain names. (DHS asserts that it is already empowered to seize domestic domain names in accordance with 18 U.S.C. § 2323, as it has done on numerous occasions in recent months.)



PROTECT IP contains a new private right of action under which a rights holder may seek a court order against any domain name. Actions initiated by rights holders, if successful, only require ad networks and/or payment processors – but not DNS servers or interactive computer services – to disable service to infringing sites.

Considering all the changes made to the bill, I'm inclined to disagree with commentators, such as Techdirt's Mike Masnick, who've argued that the PROTECT IP, a.k.a. the "Son of COICA," is worse than its father. On net, PROTECT IP appears to be less likely to impose incidental burdens on protected expression and more likely to afford website operators a chance to successfully challenge actions brought against their sites.

However, I'm still concerned about several aspects of PROTECT IP. Its private right of action, while limited in scope, may result in small websites whose users frequently post infringing content being targeted by costly, burdensome litigation initiated by rights holders. The voluntary actions clause is also quite troubling, as I've argued before and as Wendy Seltzer argues here. While I'm all for voluntary actions in principle, such actions should not override private contracts or terms of service agreements that would otherwise be enforceable.

Because the PROTECT IP Act, unlike COICA, covers "interactive computer services" — a category that includes blogs, chat rooms, and myriad other online platforms — it's unfortunate that the bill does not include a cost reimbursement section, as I suggested last year, or at least an exemption for small entities. While the bill establishes an affirmative defense for an interactive service provider that doesn't comply with an order "by showing that the defendant does not have the technical means to comply . . . without incurring an unreasonable economic burden," it's far from clear what exactly court would deem "unreasonable." News of the Justice Department seeking injunctive relief against a blog operator for failing to comply with a court order issued under PROTECT IP will have a chilling effect on all kinds of small-time Internet platforms.

As lawmakers consider the PROTECT IP Act in coming weeks and months, they should also revisit 18 U.S.C. § 2323, a civil forfeiture provision enacted in 2008 as part of the PRO-IP Act. This extraordinarily broad statute has recently been by many . Rep. Zoe Lofgren has been very critical of the way in which seizures have been conducted. The statute should be narrowed to include only websites "dedicated to infringing activities," and it should require the government to attempt to commence in personam actions in all instances. Domain names aren't movable property; unlike, say, illegal drugs or weapons, there is no risk of a criminal "hiding" a domain name or destroying it before evidence of its illegality can be secured.

How the "Magic" of the Market Protects Privacy

Sometimes free-marketeers are branded "free market fundamentalists" or something similar by their ideological opponents. The implication is that our preference for a society in which free people interact voluntarily to organize society's resources is an irrational desire or a religion. I'm sure there's a similar epithet we give to nanny staters—oh, there's one, "nanny staters"—who we believe to have excessive faith in government solutions.

Market processes have decent theoretical explanations, such as Friedrich Hayek's essay, "The Use of Knowledge in Society." It's not the easiest read, but lovers of the Internet, who see the genius of its decentralization, should see similar genius in markets as a method for discovering society's wants and uniting to achieve them—without coercion.

From time to time, we also point out examples of how market processes work to deliver even intangible goods like privacy. So, for example, I noted market pressure against Facebook's privacy-invasive "beacon" advertising system in 2007. Berin pointed out in 2008 that market forces caused Google to remove an oppressive clause from the Chrome end user license agreement. Google competitor Cuil made a run at the search behemoth based on privacy that year, something I noted briefly then (and Ryan and I discussed in the comments). I've also noted the failure of many to find true market failures.

As Cuil illustrates, not every privacy play works, but companies routinely pitch the public on the privacy merits of their products and the demerits of others'. It's not a highly visible process, but it sometimes gets a little more visible when it fails. So thank you, Facebook, for a big #FAIL in the privacy competition area this week. You provide us a nice lesson in one of the ways markets work to meet consumer privacy demands.

You see, Facebook hired PR firm Burson-Marsteller to do a whisper campaign on the privacy demerits of a Google product called Social Circle. By pushing the story of privacy problems with a Google effort in the social networking space, Facebook hoped to thwart a competitor that it fears. Success would also be a success for privacy protection. If Google were doing something wrong, and Facebook were to make the case to the public, Google would lose face and it would lose business. Most importantly, a privacy-invasive product—as determined by public consensus—would recede. Markets often work by silently shunning products that don't cut it. (Again, hard to see if you're not looking for it, or if you're committed to disbelieving it.)

Facebook appears not to have succeeded. Prickly privacy advocate Chris Soghoian outed the Burson-Marsteller campaign. Dan Lyons of the Daily Beast cornered Facebook into confessing its role in the attack on Google. And privacy commentator Kashmir Hill gives the privacy issues with Social Circle a "meh."

When it happens differently, you get a change in a service like Social Circle—the way Facebook changed "beacon" and Google changed the Chrome EULA. These are anecdotes, and they reflect but one element of the market processes that shape products and services. But it's something that "market denialists" should consider as they dig deep to explain to themselves and others how various mechanisms in our society work.

Yet another non-consensual use of cell geo-data

In a post at Techland yesterday I noted that the FCC and FEMA's new "PLAN" text-based emergency alert system might do little good since new media seems to always beat government to get out critical information:

If history is any guide, however, you may not get any messages from 1600 Pennsylvania. Since the Emergency Alert System was created in 1963, it's never been activated, despite hurricanes, earthquakes, tornadoes, the Cuban Missile Crisis, the Oklahoma City bombing, and 9/11. Why?

The chairman of the FCC during the 9/11 attacks, Michael Powell, says that "The explosion of 24-hour-a-day, 7-day-a-week media networks in some ways has proven to supplant those original conceptions of a senior leader's need to talk to the people."

Given that it was Twitter, and the President's address, that recently broke the killing of Osama Bin Laden, you have to wonder whether the new service will be just as swiftly supplanted.

Another thing occurred to me talking to a colleague today. The PLAN system relies on cell carriers' ability to track your geographic location so that targeted warning messages can be sent to your phone depending on where it is you are at the moment. Also, as far as I can tell from the FCC's fact sheet, you're automatically signed up for the system when you buy a phone and you cannot opt-out of presidential messages. I wonder if we'll see a congressional hearing on the use of geo data without consumer consent?

San Francisco backs off controversial cell phone radiation ordinance

San Francisco, often the breeding ground for "interesting" public policy proposals, decided recently to back off its mandate the would have required retailers of cell phones to label them with radiation levels and pass out material explaining the level of SAR in each device (SAR= Specific Absorption Rate).

This has not been done anywhere else and faced stiff opposition from the wireless industry, which filed suit against the ordinance last year.

We've commented on the ridiculous nature of this ordinance before. Suffice to say, in the year since this issue hit, there has still been no evidence offered that cell phones pose any sort of carcinogenic threat. This great piece in the NY Times Magazine goes into more detail on the problems of testing this hypothesis but also highlights the common error of confusing causality with coincidence. The author's main point:

"In truth, many substances of modern life do not — cannot — cause cancer. Some do, and it's absolutely critical to identify and reduce exposure to them. Other's don't, and it's absolutely worthwhile identifying these, so that we can focus on the real carcinogens around us. If we lump everything into the category of "potentially carcinogenic," from toxic potatoes to McCarthys grave, then our scientific language around cancer begins to degenerate. The effect is like crying "wolf" about cancer…" (emphasis added)

An interesting factoid pointed out in the San Francisco Chronicle's article (one that I must admit I had been previously unaware) was that Specific Absorption Rate measures the peak output of electromagnetic radiation. This could lead to consumers thinking that the lower SAR rate is the end-all-be-all statistic they should take into account if they are concerned with radiation.

In fact, while SAR measures peak radiation levels, it does not measure average SAR levels. So, it's highly possible that a handset that emits higher SAR levels has a lower overall SAR average output, while a lower SAR handset may actually have a higher average SAR level. Therefore, the customer could end up purchasing a handset that emits more radiation than they think. Again, numerous scientific communities and the FCC have concluded that cell phone radiation does not cause cancer.

We're seeing a "precautionary principle" develop in the technology/digital arena and the result is this type of policymaking. An upcoming paper of mine will explore how this is taking place and why it's not a good thing for technology or innovation.

The bottom line is San Francisco moved forward with this ordinance because it thought regulations like these would help people decided for themselves which handset to purchase. But failing to incorporate science and plain facts created even more confusion and stoked unnecessary fears. There really are genuine health concerns in our environment, ones that have a strong correlation with cancer, and we should remain focused on those and not waste time trying to make politicians look good.

Event Video: What Should Lawmakers Do About Rogue Websites?

POLITICO reports that a bill aimed at combating so-called "rogue websites" will soon be introduced in the U.S. Senate by Sen. Patrick Leahy. The legislation, entitled the PROTECT IP Act, will substantially resemble COICA (PDF), a bill that was reported unanimously out of the Senate Judiciary Committee late last year but did not reach a floor vote. As more details about the new bill emerge, we'll likely have much more to say about it here on TLF.

I discussed my concerns about and suggested changes to the COICA legislation here last November; the PROTECT IP Act reportedly contains several new provisions aimed at mitigating concerns about the statute's breadth and procedural protections. However, as Mike Masnick points out on Techdirt, the new bill — unlike COICA — contains a private right of action, although that right may not permit rights holders to disable infringing domain names. Also unlike COICA, the PROTECT IP Act would apparently require search engines to cease linking to domain names that a court has deemed to be "dedicated to infringing activities."

For a more in-depth look at this contentious and complex issue, check out the panel discussion that the Competitive Enterprise Institute and TechFreedom hosted last month. Our April 7 event explored the need for, and concerns about, legislative proposals to combat websites that facilitate and engage in unlawful counterfeiting and copyright infringement. The event was moderated by Juliana Gruenwald of National Journal. The panelists included me, Danny McPherson of VeriSign, Tom Sydnor of the Association for Competitive Technology, Dan Castro of the Information Technology & Innovation Foundation, David Sohn of the Center for Democracy & Technology, and Larry Downes of TechFreedom.

CEI-TechFreedom Event: What Should Lawmakers Do About Rogue Websites? from CEI Video on Vimeo.

Privacy Not a Focus of Senate Mobile Privacy Hearing

This morning, the Senate Judiciary Committee's Subcommittee on Privacy, Technology, and the Law had a hearing entitled: "Protecting Mobile Privacy: Your Smartphones, Tablets, Cell Phones and Your Privacy." It was a remarkably scattered affair, and I blogged three key—and very distinct—elements of it on the Cato@Liberty blog:

The Department of Justice used this "mobile privacy" hearing to call for increased surveillance of Internet and mobile phone users.
To escape a prosecutorial dead-end, Senator Blumenthal (D-CT) strongly suggested that he would outlaw the collection of radio signals. Where this government power would lead is quite profound.
Ignoring mobile privacy, Senator Schumer (D-NY) touted his hobby-horse, mobile app censorship.

Valid concerns with what mobile operating system providers Google and Apple have done with location information were somewhat lost in this disjointed and confused hearing.