Adam Thierer's Blog, page 158

Resurrecting the National Broadband Plan: Why is Washington Fighting a No-Brainer?

I published an opinion piece today at CNET, calling on all tech stakeholders in Washington to stop the pointless quibbling and sniping about net neutrality, reclassification, and other side-show issues.  (I'm too depressed to list them here—but see "Fox-Cablevision and the Net Neutrality Hammer" for an example of just how degraded the conversation has become.)

Instead, why not focus on a positive message, one that has the potential for win-win-win-win?  For example, the National Broadband Plan, issued in March, eloquently made the case for a U.S. commitment to universal broadband adoption.  Not as a matter of gee-whiz futurism but in the interest of giving Americans "a better way of life."

As a technology optimist, I happen to agree.  Broadband Internet provides users with much more than cute kitten videos and finding old friends on social networking sites (not that there's anything wrong with these).  As the plan makes clear, it also gives them access to education and employment opportunities otherwise hard to find (and certainly at a much higher price), access to government services, public safety and better health care options. The Internet will play a key role in the development of a "smart" energy grid.

And as more urban countries with higher penetration rates and faster speeds have learned to their delight, the network effects of having everyone online generate all kinds of serendipitous positive returns.

Even better, achieving the goals of the NBP won't require massive taxpayer spending, making it palatable to both Democrats and Republicans.  Most of the $350 billion it will cost to get 100 mbps speeds to 100 million Americans—a key benchmark of the plan—will come from private investment, much of it already planned for.

So moving forward with the Plan will improve the lives of ordinary citizens, make government more responsive and responsible, stimulate the economy, and help keep the U.S. competitive in a global information economy.  And it can be done without significant taxpayer expense or new regulatory overhead.

This is the feel-good story of the decade.  Come on, everybody!  We can use my barn.

It's all in the plan. But given the strum and drang exerted over largely inside-the-beltway minutia, the NBP's positive messages have been drowned out.

Case in point:  a recent report from the NTIA reveals that among the 25% of American homes that don't have a single Internet user, the most frequently cited reason not to sign up for a broadband service is that they just don't want it.  A full two thirds of the non-users, according to the report, "reported a lack of need or interest as their primary reason for not having broadband at home."  Cost was a much lower factor.  Only four percent cited lack of availability.

It's depressing and disappointing that so many of my fellow citizens haven't gotten the message:  the Internet is cool, and broadband access will pay for itself many times over.

It's also frustrating to the authors of the NBP, whose herculean efforts were unfairly and unduly overshadowed by the universal hand-wringing that followed the D.C. Circuit's decision in the Comcast case, which came out just a few weeks later.  (For the record, NBP executive director Blair Levin agrees with legal scholars who don't believe Comcast undermined the FCC's ability to move forward with the plan itself:  "I think there is a lot of good stuff that can be done to advance the National Broadband Plan," he recently told CNET's Marguerite Reardon, "that doesn't require any action from Congress.")

In some sense the mid-term elections have provided the opportunity for all stakeholders—Congress, the FCC, lobbyists and advocacy groups—to resurrect the NBP and feature it as the central document in a national dialogue on technology policy.  It's the right thing to do for the economy, and for individuals.  And in one of those rare harmonic convergences, it's also politically expedient.  It's positive!  It's bi-partisan!  It's high-tech!

So why isn't anyone doing it?

Yet another cybersecurity bill

Another day, another cybersecurity bill. The Homeland Security Cyber and Physical Infrastructure Protection Act of 2010 has been introduced by House Homeland Security chairman Bennie Thompson along with Reps. Jane Harman and Yvette Clark. According to the one-pager they've put out (I can't find the bill) the Act would:

Require DHS to determine which private assets should be designated "covered critical infrastructure" although there would be a reconsideration process for a firm to challenge such a designation.

Require DHS to develop cyber security standards that would be enforceable on private sector networks determined to be critical infrastructure.

Authorize DHS to recommend (Safety Act) liability protection for firms that comply with the standards.

Some questions come to mind: Is there any limit to what can be designated "critical infrastructure"? What evidence is there that the private sector is under-providing security for its networks? What exactly are the performance metrics that would be used to measure compliance? And what is the evidence that federal standards will be more effective than those developed by industry individually or collaboratively in industry groups? Again, as far as I can tell the bill is not cyber available yet, but if other bills in the House and Senate are any indication, these questions haven't really been considered.

One thing that I think is new in this bill is liability protection for firms that comply with DHS security regulations. I'm afraid this can't be good for firms' incentives to innovate.

The internet, bulwark of liberty

At the risk of pointing out the obvious, I'd like to remark that the popular revolt against intrusive TSA searches would not have been possible without the internet and digital technologies.

It was John Tyner's cell phone video recording of his encounter with TSA, which he posted to his blog, that really galvanized folks to take action.

The Fly With Dignity campaign was conceived and organized by folks collaborating on the Reddit community.

It is through online social networks that the meme of Nov. 24 as National Opt-Out Day has spread.

Without the internet, we would have been at the mercy of the news media to get the word out about citizen frustration. Complaining would have been relegated to writing your congressman. And organizing a wide-spread protest would likely have been impossible.

Instead, we'll hopefully see Americans engaging in peaceful civil disobedience comforted by the knowledge that they're not alone. So with a nod to Evgeny Morozov's critique, it makes me happy to see that the internet can still serve to empower the citizens of a democracy to tell its government, enough is enough. This moment should also remind us why we should not ever cede to government the ability to control the flow of information.

Mandatory Cell Phone Jammers in Cars: Unwise, Unsafe, Unneeded

Jeff Winkler of The Daily Caller was kind enough to call me for comment after seeing some tweets of mine about a new proposal floated by U.S. Transportation Secretary Ray LaHood to potentially mandate cell phone jamming technology be embedded in every car to minimize the risk of distracted driving.  While I am sympathetic to the concerns he and others have raised about the serious dangers associated with distracted driving, LaHood has been continuously upping the ante in terms of proposed regulatory responses to the problem.

Back in October, La Hood suggested that a ban on all cell phone communications in cars might be needed. He argued that even hands-free phone conversations are a "cognitive distraction" and should be prohibited and has also suggested that such a ban should extend to in-vehicle information and entertainment systems such as Ford Motor Co.'s Sync and General Motors Co.'s OnStar system. This means almost every conceivable in-vehicle technology could be regulated under LaHood's "cognitive distraction" paradigm, including your car stereo and GPS system.  This week LaHood went further and suggested that it may be necessary to also mandate some sort of scrambling technology be embedded in all vehicles to completely block any potential wireless communications or connectivity.

My comments on that proposal appear in Winkler's piece today, although Winkler notes that LaHood appears now to be backing off the idea.  However, just in case this idea (or the idea of banning all communications devices from cars more generally) pops up again, here's what I find wrong with LaHood's approach:

Not practical : It's simply not possible to eliminate all technology from cars, at least not with creating an Auto Police State — and a huge headache for law enforcement officers to boot.  Even if you banned integration at the factory of in-vehicle technologies, plenty of people would find after-market alternatives.  There's just no stopping people from lugging their devices around with them wherever they go and finding ways to connect. And even if government forced signal jammers to be embedded in every vehicle, determined hackers would likely find a way around them fairly quickly and then tell the public how to defeat those systems.
Potential unintended safety consequences :  We simply can't eliminate every risk from life and trying to do so can have equally dangerous unintended consequences. For example, if all communications devices were banned from automobiles and then jamming devices were mandated for good measure, what happens when a driver veers of a snowy road into a ditch and needs to call or text for help? Perhaps there will be a switch to disable the jammer in a time of emergency, but wouldn't people just flick it off preemptively, undercutting the ban entirely?
Contradicts other laws : For some of the reasons listed in (2), the Federal Communications Commission generally disallows jamming technologies that would create negative externalities for others on the network through excessive signal interference. (See Section 333 of the Communications Act.)
There are better solutions : There are more constructive solutions than outright technology bans or extreme measures like mandatory jammers. First, use technology to solve a problem technology has created.  Most new communications and computing devices have increasingly sophisticated voice-activated / hands-free features that make them safer to use.  Second, more driver education – especially for younger drivers — is also a big part of the solution. We need to step up those efforts. Finally, stiffer fines for erratic driving infractions may be necessary.
It's a local issue : On that last point, is there anything that lends itself better to state and local experimentation than road safety?  Seems to me that this is a good chance to let federalism work and see what various communities come up with in terms of solutions. Of course, wireless communications is regulated at the national level and efforts by local officials to take LaHood extreme approach could run afoul of federal wireless rules.  However, as noted in (4) there are plenty of alternative approaches that they could consider.
Just too intrusive : I'm no anarchist; we do need some rules of the road to ensure driver safety. But there should also be some limits.  Conversations (and arguments) between passengers are a huge distracted driving problem, too, but we wouldn't ban them. Nor would we ban singing at the wheel. Your liberties don't completely disappear when you get in your car. Policymakers needs to avoid extreme solution such as those suggested by LaHood and instead find more constructive approaches that balance safety and liberty.

Hacking the Kinect & How Not to do PR

Kinect has been hacked, or has it? If you've been following the story about the release of Microsoft's new controller-free interface for the XBOX 360, you're probably a bit confused as to exactly has happened. But don't worry, so is Microsoft.

Shortly—very shortly as a matter of fact—after Kinect was released last week, enterprising nerds snatched up the $150 device and started repurposing its exception hardware for all sorts of unintended purposes. Rather than waving their hands frantically in their living rooms and unintentionally injuring loved ones (HT Brooke Oberwetter), these geeks were using Microsoft's innovative camera technology to create new ways of interacting with their computers, methods for capturing 3D objects, and iPhone-like image manipulation—and that's just the beginning.

Microsoft's reaction to an enthusiastic group of incredibly tech-savvy consumers taking such an interest in their products? First, Redmond issued a warning about the dangers of hacking.

According to Gamespot's run-down of Microsoft's evolving reaction the company first issued this statement to CNET:

Microsoft, however, seems actively hostile to the idea. "Microsoft does not condone the modification of its products," a company spokesperson said. "With Kinect, Microsoft built in numerous hardware and software safeguards designed to reduce the chances of product tampering. Microsoft will continue to make advances in these types of safeguards and work closely with law enforcement and product safety groups to keep Kinect tamper-resistant."

Shortly after this statement was released, a slightly softer statement was issued:

Kinect for Xbox 360 has not been hacked–in any way–as the software and hardware that are part of Kinect for Xbox 360 have not been modified. What has happened is someone has created drivers that allow other devices to interface with the Kinect for Xbox 360. The creation of these drivers, and the use of Kinect for Xbox 360 with other devices, is unsupported. We strongly encourage customers to use Kinect for Xbox 360 with their Xbox 360 to get the best experience possible.

So, Microsoft has softened its tone in rather short order, abandoning its talk of law enforcement and instead taking the bold of position of "we won't support your hacked Kinect."

But what could Microsoft do anyway? According to fellow TLFer Jerry Brito during a recent recording of our podcasts In Conversation, Microsoft could attempt to shut down hackers using the DMCA. Even though none of the DIY Kinect-heads out there claim to have modified the hardware—which Microsoft itself acknowledge in the quote above—software involved in getting the Kinect to play nice with PCs running Windows, Linux, or OS X may circumvent anti-tampering provisions integrated into the device by Microsoft. This sort of circumvention could trigger the DMCA, turning these awesome hacks into contraband and the awesome—if not pathetically nerdy—hackers into outlaws.

Though what good would pursuing these hackers in court do for Microsoft? Their handling of the Kinect hacks have already been a textbook example of how not to run your PR department, and a lawsuit would make matters much worse, taking away attention from an awesome products and instead focusing public attention on Microsoft suing a bunch of well-meaning nerd

As Jerry also pointed out to me, Apple would have never issued a statement of the kind the Microsoft did, let alone the two different versions. Instead, why not just let hackers be hackers, score yourself some geek cred by turning a blind eye to a small group of folks doing really innovative things with your product? Or better yet, why not run your own contest for the best hacks of the Kinect with the hopes that you might be able to buy up some geek's homebrew infrared awesomeness and make your product even better?

But of course, Microsoft is Microsoft, and not Apple, let alone a cool crowd-sourcing company like Lego. So we may have to brace ourselves for Microsoft protecting its cross-subsidized Kinect by attacking the people who seem to love it most.

Special Thanks: I was inspired to post today after a guilt trip that seemed to last about as long as the flight I'm currently on (thanks, gogo infligth Internet!) from fellow TLFer and my newest Mercatus colleague, Adam Thierer.  Thanks for the inspiration, Evil Spock.

Europe Reimagines Orwell's Memory Hole

Inspired by thoughtful pieces by Mike Masnick on Techdirt and L. Gordon Crovitz's column yesterday in The Wall Street Journal, I wrote a perspective piece this morning for CNET regarding the European Commission's recently proposed "right to be forgotten."

A Nov. 4th report promises new legislation next year "clarifying" this right under EU law, suggesting not only that the Commission thinks it's a good idea but, even more surprising, that it already exists under the landmark 1995 Privacy Directive.

What is the "right to be forgotten"?  The report is cryptic and awkward on this important point, describing "the so-called 'right to be forgotten', i.e. the right of individuals to have their data no longer processed and deleted when they [that is, the data] are no longer needed for legitimate purposes."

The devil, of course, will be in the forthcoming details.  But it's important to understand that under current EU law, the phrase "their data" doesn't just mean information a user supplies to a website, social network, or email host.  Any information that refers to or identifies an individual is considered private information under the control of the person to whom it refers.  So "their data" means anyone's data, even if the individual identified had nothing to do with its collection or storage.

And EU law doesn't just limit privacy protections to computer data. Users have the right to control information about them appearing in printed and other analog formats as well.

As I say in the piece, the "right to be forgotten" begins to sound like Big Brother's "memory hole" in Orwell's classic 1984.  But instead of Winston Smith "rectifying" newspaper articles at the direction of his faceless masters at the Ministry of Truth, a right to be forgotten creates a kind of personal memory hole.  Something you did in the past that you would prefer never happened?  Just issue orders to anyone who knows about, and force them to destroy any evidence.

Of course such a right would be as impractical to enforce as it is ill-conceived to grant.

Both Masnick and Crovitz, in particular, worry about the free speech implications of such a right, both for the press and for individuals.  And those are indeed potentially catastrophic.  Having the power to rewrite history devalues any information, including information that hasn't been erased.

The social contract operates on facts and the ability to sort out truth from lie.  A right to be forgotten gives every individual the power to rewrite that contract whenever they feel like.  So who would sensibly enter into such a relationship in the first place?

My concern, however, is even more metaphysical.  The privacy debate currently going on in public policy circles is disturbing, perhaps most of all because it is being framed as a policy discussion.  Rather than work out what costs and benefits we get from increased information sharing with each other, those who are feeling anxious about the pace of change in digital life are running, as anxious people often do, to regulators, demanding they do something—anything—to alleviate their future shock.  And regulators, who are pretty anxious people themselves, are too-often happy to oblige, even when they understand neither the technology nor the implications of their lawmaking.

Beyond the worst possible choice of forum to begin a conversation, the privacy debate in its current form is no debate at all.  It is mostly a bunch of emotional people hurling rhetorical platitudes at each other, trading the worst-case examples of the deadly potential of privacy invasions (teen suicides, evil corporations) with fear-inspiring claims of the risk of keeping information secret (terrorists win).

It's not really a debate at all when the two "sides" are talking about entirely different subjects.  And when no one's really listening anyway. All that is happening is that the stress level amps up, and those not participating in the discussion get the distinct impression that the world is about to end.

A starting point for a real conversation about privacy—one that is dangerously absent from any of the current lawmaking efforts—is an understanding about the nature of information.  Privacy in general and a right to be forgotten specifically begins with the false assumption that information (private or otherwise) is a kind of property, a discrete, physical item that can be controlled, owned, traded, used up, and destroyed.  (Both "sides" have fallen into this trap, and can't seem to get out.)

The fight often breaks down into questions of entitlement—who initially owns the information that refers to me?  The person who found it and translated it into a form that could be accessed by others, or the person to whom it refers, regardless of source?  Under what conditions can it be transferred?  Does the individual maintain a universal and inalienable right of rescission—the ability to take it back later, for any reason, and without compensating the person who now has it?

But these are the wrong questions to be asking in the first place.  Information isn't property, at least not as understood by our industrial-age legal system or popular metaphors of ownership.  Information, from an economic standpoint, is a virtual good.  It can be "possessed" and used by everyone at the same time.  It can become more valuable in being combined with other information.  It can maintain or improve its value forever.

And, whether the law says so or not, it can't be repossessed, put back in the safety deposit box, buried at sea, or "devoured by the flames" like the old newspaper articles Winston Smith rewrites when the truth turns out to be inconvenient to the past.  That of course was Orwell's point.  You can send down the memory hole the newspaper that reported Big Brother's promise of increased chocolate rations, but people still remember that he said it.  You can try to brainwash them, too, and limit their choice of language to eliminate the possibility of unsanctioned thoughts.  You can destroy the individual who rebels against such efforts.

But it still doesn't work.  The facts, warts and all, are still there, even when their continued existence is subjectively embarrassing to an individual.  Believe me, I wish sometimes it were otherwise.  I would very much like to "rectify" high school, or my parents, or the recent death of my beloved dog.  The truth often hurts.

But burning all the libraries and erasing all the bits in the world doesn't change the facts.  It just makes them harder to access.  And that makes it harder to learn anything from them.

Maybe the European Commission was just being sloppy in its choice of words.  Perhaps it has something much more limited in mind for a "right to be forgotten."  Or perhaps as it begins the ugly process of writing actual directives that must then be implemented in law by member countries, it will see both the impossibility and danger of going down this path.

Perhaps they'll then pretend they never actually promised to "clarify" such a right in the first place.

But we'll all know that they did.  For whatever it's worth.

What is a Tech Libertarian?

THE MASTER SWITCH was written to be readable and hopefully entertaining.   But its real goal is to urge readers to examine our relationship with all forms of centralized power.  There are deep contradictions between a fully centralized society and a free one; indeed I am not sure the two can co-exist.   Its message to libertarians is this:   if human freedom is truly the value that matters most, we need pay attention to the size of the institutions that govern the most important human functions.

As this suggests, while my book is designed to be relatively easy reading, at deeper levels it is a mediation on human freedom.  And while this may be unkind, I will respond to Thierer's review to show how I think that contemporary libertarianism, has begun to lose its way and betray its own creed.   Instead of a philosophy of freedom, it is at risk of becoming a theory of villianization, where every single wrong must be traced, somehow, to "government;" to say otherwise is to betray the movement.   To my mind that's not true libertarianism in the tradition of John Stuart Mill, but just another theology of blame.

(N.B. I am grateful for Adam for inviting me to post a response.   Why we disagree in profound ways, I am flattered by his engagement with the book, and his readiness to give me space to response).

Let's get to the basics.  I define a libertarian as someone who is, at the deepest levels, prioritizes freedom over other values.  He is willing to forgo a preferred substantive outcomes he might prefer, in exchange for a system that gives him freedom.  The classic example, of course, is the speech system: many of us might prefer that certain people to shut up forever (pick your favorite), but nonetheless still support a system of free speech.

Anyone deeply interested in freedom as a value should, by implication, be interested any non-chosen limits on that freedom, no matter what the source. Whether you are kidnapped or wrongly arrested, the fact is that you are no longer free.  If you do not speak your mind for fear of being shamed or fined, the fact in both cases that you do not speak your mind.  All of these are limits on freedom, which, as we've said, is the value paramount to a libertarian.   That their source is "public" "social" or "private" matters a little, but not completely, if, again, if you really believe it is freedom that matters most.

While Mill agreed explicitly with this point, 20th century American libertarians tend to elevate one category, namely state-based infringements over any other.   The main reason is obvious and a very good one.  For people like Hayek, the experience of fascism and communism proved convincingly that a totalitarian, centralized state is the greatest enemy of basic human freedom ever invented.   Furthermore, the path from here to there is often premised on excessive optimism and good intentions; that's the point of The Road to Serfdom.

But the question remains:  even if state rules are the worst, why pointedly ignore all of the other threats to human freedom?   What about everything else?   Here is, I suggest, where contemporary libertarianism is in deep danger of betraying its creed.  For any attachment to a value – say, a deep hate for all "law" or "regulation" – necessarily takes you away from a view that freedom is paramount.   It creates a blindness to other limits on freedom,  tolerates excessive concentrations of private power as "natural."

The point is obvious with my kidnapper / wrongful arrest example.  One is the fault of too little law, the other the fault of too much.   But if you hate law and the state more than anything, you become blind to the kidnapping as an infringement of freedom because there's no state power involved.   It might, rather, be described, rather, as the market in action.  You're worth a ransom, and supply has simply met demand in the market for kidnapping services.   To borrow another trope, it is simply "natural" and not a cause for concern.

This example is exaggerated, but it makes an important point.  You can be a committed deregulationist or a libertarian, but not both.  For you either care about freedom most, or something else.    You cannot serve two masters.

This leads me to my criticism of Thierer's review.  It is so fixated on my relatively mild recommendations of federal oversight at the end that the review is mostly blind to the deeper issues of human freedom that the book is really about.  Instead, Thierer is like the Freudian who suspects a childhood fixation  must lie behind every problem.  It must always, in the end, government that is the cause of all that ails us – no other villain is allowed.

The truth is that my book is full of both heros and villain, private and public, sometimes combined in a single figure at different stages.   The FCC is terrible from the 1920s through the 1960s, but does brilliant work in the 1970s.   The leaders of the Hollywood studios break the censorial hold of the Edison Trust in the 1910s, but then themselves become censors in the 1930s.   The book refuses to dish up a theory where government or private industry is consistently evil or good, because that just isn't how it was.   The real villains in my book are excessive centralization, stagnation and suppression of speech or innovation.   And unfortunately no man has a monopoly on that.

I don't blame Thierer for his approach for he is merely following the libertarian speech code of our times.   As in the Hollywood endings in the 1930s, you can tell whatever story you want, but in the end you must blame Government for all manifest evil.  It is the conformity demanded of a movement supposedly dedicated to non-conformity.   Blaming one set of enemies for all of our problems is an easy and indeed comforting way to look at the world.  But it is a one note instrument, and after a while, nothing but a squawking sound.

The point also leads me to address Thierer's argument that I am too pessimistic.   I am surprised to hear this criticism from a so-called libertarian.  A libertarian by nature ought not, perhaps, be paranoid, but certainly wary of infringements on human freedom.   What Thierer calls "optimism" can quickly and easily become good old fashioned worship of power.   And, to repeat what I said above, Hayek pointed out best, excessive optimism is, in fact, the road to serfdom.

I've gone on long enough on this.  For my part, I think that one thing libertarians in our time should be thinking about are three harder questions:

One is the relationship between freedom and centralization – a favorite topic of Fredrick Hayek's.   In other words, they should ask whether Joseph Schumpeter's vision of capitalism as a series of successive monopolies is, say, good enough for J.S. Mill.  Perhaps it is, and perhaps not: I don't know the answer, but I do know that there are inherent dangers in centralization that ought not be ignored.

Second, and here I will, however, concede one point to Adam's review.    Since writing the book I think I should have emphasized for explicitly the danger that any complex government schema, however well intentioned as a tool of competition, can easily become a tool of lasting monopolization.   The book points this out with reference to the 1913 Kingsbury commitment and the 1996 telecom act, both instruments designed to open competition that soon destroyed it.   The spectrum auctions are similar:  designed originally to open the wireless markets, they now help insulate Verizon and AT&T from disruptive competition.

Libertarians, then, should be trying to understand how pro-competitive regulatory systems can become the opposite; and whether it is possible to enact laws or take actions that actually have long-term pro-competitive effects.   Perhaps this leads to a greater taste for episodic breakups.

Third, libertarians ought be asking whether open or closed systems are more conducive to human freedom.  I tend to think the former are but I there is definitively room for debate:  for example, some systems by their nature need to be closed to be what they are, like, say, a private home, or a private club.  When it comes to code, many West Coast tech libertarians are obsessed with this issue, without having to invent plots by the federal government.

My final message is this.  To my mind, real libertarianism is a philosophy of human freedom, not a theology of blame.  Worship of the private sector is simply another form of power worship of the kind Hayek warned of; I believe a libertarian should be wary of any concentrated power.   And in the end, resistance to any non-chosen limit on freedom should be the creed of any true libertarian; you can care about other things, but you should care about freedom most.

Duncan Hollis on cyber security

On the podcast this week, Duncan Hollis, professor of law and associate dean at Temple University Beasely School of Law, discusses cyber security and his recommendation to counter cyber exploits — an electronic SOS. Hollis gives a brief history of online threats, notes the difference between cyber attack and cyber espionage, discusses the difficulty of deterring online exploits due to the anonymity of the internet, and talks about how governments and individuals have responded to cyber threats. He then outlines his proposal — a duty to assist others when they are under duress online — which was inspired by laws of the sea and an episode in which a U.S. Navy warship aided a North Korean vessel that was under attack by Somali pirates.

Related Links


"An e-SOS for Cyberspace", by Hollis
"The Online Threat: Should we be worried about a cyber war?", by Seymour Hersh
"Battling the Cyber Warmongers", by Evgeny Morozov
"Defending a New Domain", by William Lynn

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?

On the Definition of Monopoly

Adam Thierer's claim that I am redefining monopoly in my Wall Street Journal piece is sowing confusion and misleading the public.  Hence this corrective.

A monopoly is any firm that has a dominant share in the market for a given good or service (legal definitions range between 40% – 70%) resulting in power over that market.   That is the beginning and the end of the definition.   There is no further requirement that the firm be evil, gigantic, have caused consumer harm, be long-lasting, or anything else.

What Adam is thinking about is what a lawyer would call an "actionable" or "unlawful" monopoly; or perhaps a monopoly that violates s. 2 of the Sherman Act.   But I never said in the Wall Street Journal that the Internet monopolies are unlawful.   The point was that these are firms in the early age of monopoly, indeed in a kind of Golden Age.

To be more specific, by the economic and legal definition, in one or more markets, Google, Apple, Facebook, and eBay are pretty clearly monopolists.   Google has market power over search.   Apple, portable music players and iTunes downloads.   Facebook, social media sites.   eBay, online auctions.

Amazon and Twitter are closer cases; it all depends on market definition.  Twitter's market may be small, but the size of the market isn't the point.

The key is understanding — and this is where a law degree can come in handy — that monopoly by itself is not unlawful in the United States.  It is abuse of monopoly that is actionable.

I post this corrective because, for example, Techdirt has become confused by Adam's post, writing that "domination of a market, by itself, does not create a monopoly."   Actually, Techdirt, it does.   That is exactly the definition of monopoly.

Finally, whether the monopoly may disappear tomorrow is an important question.   But it doesn't mean there isn't a monopoly right now.

One more corrective.  Adam says the piece  "completely ignores the competition taking place among many of these giants."

From the Wall Street Journal:  "There are digital Kashmirs, disputed territories that remain anyone's game, like digital publishing. But the dominions of major firms have enjoyed surprisingly secure borders over the last five years, their core markets secure. Microsoft's Bing, launched last year by a giant with $40 billion in cash on hand, has captured a mere 3.25% of query volume (Google retains 83%). … Though the border incursions do keep dominant firms on their toes, they have largely foundered as business ventures."

End of corrective.

(Tomorrow:  a full response to the Master Switch Review.)

CORRECTION: On the Definition of Monopoly

Adam Thierer's claim that I am redefining monopoly in my Wall Street Journal piece is sowing confusion and misleading the public.  Hence this corrective.

A monopoly is any firm that has a dominant share in the market for a given good or service (legal definitions range between 40% – 70%) resulting in power over that market.   That is the beginning and the end of the definition.   There is no further requirement that the firm be evil, gigantic, have caused consumer harm, be long-lasting, or anything else.

What Adam is thinking about is what a lawyer would call an "actionable" or "unlawful" monopoly; or perhaps a monopoly that violates s. 2 of the Sherman Act.   But I never said in the Wall Street Journal that the Internet monopolies are unlawful.   The point was that these are firms in the early age of monopoly, indeed in a kind of Golden Age.

To be more specific, by the economic and legal definition, in one or more markets, Google, Apple, Facebook, and eBay are pretty clearly monopolists.   Google has market power over search.   Apple, portable music players and iTunes downloads.   Facebook, social media sites.   eBay, online auctions.

Amazon and Twitter are closer cases; it all depends on market definition.  Twitter's market may be small, but the size of the market isn't the point.

The key is understanding — and this is where a law degree can come in handy — that monopoly by itself is not unlawful in the United States.  It is abuse of monopoly that is actionable.

I post this corrective because, for example, Techdirt has become confused by Adam's post, writing that "domination of a market, by itself, does not create a monopoly."   Actually, Techdirt, it does.   That is exactly the definition of monopoly.

One more corrective.  Adam says the piece  "completely ignores the competition taking place among many of these giants."

From the Wall Street Journal:  "There are digital Kashmirs, disputed territories that remain anyone's game, like digital publishing. But the dominions of major firms have enjoyed surprisingly secure borders over the last five years, their core markets secure. Microsoft's Bing, launched last year by a giant with $40 billion in cash on hand, has captured a mere 3.25% of query volume (Google retains 83%). … Though the border incursions do keep dominant firms on their toes, they have largely foundered as business ventures."

End of corrective.

(Tomorrow:  a full response to the Master Switch Review.)