Well, it's been more than 48 hours since my last post blasting the Wu-Skype proposal, so I've been itching to write another essay about my favorite subject du jour! Luckily, when I arrived home today I found my monthly copy of PC World magazine in the mail--yes, I am a geek--and randomly opened to an article by Cyrus Farivar entitled "Six Things You Never Knew Your Cell Phone Could Do" He begins the essay by noting that:

Right before your eyes, your cell phone has morphed into a portable computer. Whether you're searching Google via text messages, using Short Message Service (SMS) to make international calls, or e-mailing a voice message, these tips will help jump-start your cell phone's inner PC--and make your life easier to boot.

... and then Farivar goes on to highlight many "useful tips and tricks that you can teach even an old cell phone to do." As I read through the article, all I kept thinking to myself is: "But according to Tim Wu and Skype, this stuff isn't supposed to be possible!"

My former PFF colleague Randy May, now president of the Maryland-based Free State Foundation, had an editorial in The Washington Times over the weekend about the ominous new trend of state governments pushing Net Neutrality mandates. He notes that Maryland has just introduced such a measure, joining California, Maine and Michigan as states who have tried to go at it alone on this front.

This is a dangerous development for reasons made clear in another Free State Foundation report, this one by James Speta of the Northwestern University School of Law. Speta points out that:

Although some issues in telecommunications have salience at more than one jurisdictional level, network neutrality is the quintessential federal issue. First, applications and content on the Internet are distributed nationally -- and internationally. Almost never will a user access only in-state websites. Network neutrality regulation addresses the relationship between Internet access providers on the one hand and applications and content providers on the other. As a matter of telecommunications doctrine, therefore, network neutrality is a federal issue. Indeed, the FCC has already defined what it considers to be the best network neutrality regime: a general statement of policies to be applied, if necessary, on a case-by-case basis. State attempts to regulate in this area are therefore preempted.

Second, Internet access providers themselves have national footprints, design their networks based on national business practices, and advertise in national media. As a matter of policy, any fragmentation caused by different state network neutrality rules would introduce inefficiencies at a time when expanding the availability of broadband is a high national priority.

I would hope that even supporters of federal Net neutrality regulation would understand the dangers associated with giving state government more authority over the day-to-day workings of the Net. It could be a disaster in the making if a patchwork of parochial policies was applied to this global medium, especially if states use NN rules as a way to embark on other forms of Net regulation.

Frank Ahrens, the Washington Post's outstanding media affairs reporter, has posted a short review of a new book I've been meaning to review myself by Eric Klinenberg called "Fighting for the Air: The Battle for America's Media." Klinenberg's book is another "sky-is-falling" anti-media consolidation screed that serves as a call-to-arms for media activists to "take back" media. But as Ahrens points out, Klinenberg fails to acknowledge the radical changes underway in today's media marketplace that undermine his argument.

In particular, Ahrens points to the growing media DE-consolidation trend that I've been discussing here in my ongoing series of essays on the issue. Ahrens provides a nice summary:

Here's a partial list of recent upheavals since [Klinenberg] wrote his book: Viacom split in two. Clear Channel is selling its TV stations and one-third of its radio stations. The New York Times sold its TV stations. The Knight Ridder newspaper chain dissolved. Tribune sold TV stations and may yet be broken up. Walt Disney sold its radio stations. Emmis Communications sold its TV stations. Wave after wave of deconsolidation.

This review is terribly late, but I finally got around to watching the DVD of Kirby Dick's documentary "This Film Is Not Yet Rated," which goes after the MPAA's movie rating system. Dick tries to paint the MPAA's private, voluntary ratings board as a "star chamber" that sits in judgment of visual arts and routinely "censors" content it finds at odds with the desires of the studios, government, the military, churches, and so on. But to me, the whole film is much ado about nothing and, worse yet, it fails to adequately address the very real risk of a government censorship popping up in the absence of a private ratings system.

By way of quick background, the MPAA's familiar ratings system was created by former MPAA president Jack Valenti back in 1968. It was partially a response to the growing pressure for film censorship. Back then - - and this is one of many things Dick's documentary largely ignores - - there were local censor boards who sat in judgment of films and decided if they could be shown in their communities. And there were ongoing efforts by many lawmakers at all levels to impose regulation on movies or at least strong-arm movie makers into changing content in certain ways.

And so the MPAA ratings system was born. A crucial feature of the MPAA system was that those doing the ratings would be anonymous. The reason this was done was to protect them from being pressured by both those who made the films (who obviously want less restrictive ratings) and those in government or the public who critique the films (many of whom would want stricter ratings).

But keeping raters and the rating process secretive has always had one obvious downside: The system lacks transparency. Why is it that two films with very similar content get two different ratings? Sometimes it's obvious, other times it's not. And this is what has Kirby Dick, and the many directors or film critics he interviews in the documentary, up in arms.

Carlo of TechDirt has posted a detailed deconstruction of the Wu "Wireless Net Neutrality" paper and Skype "Carterfone for Wireless" petition that we have been picking apart here. I highly recommend you read the entire thing because Carlo is covering some new ground that we haven't hit here yet. Specifically, Carlo picks up on a theme that I was planning on discussing in a follow-up post this week, namely, the myth that the wireless sector is dominated by walled gardens that restrict content flows, and which will only disappear with regulation. Carlo destroys this argument:

The House Judiciary Committee:

announced today that its newly formed Antitrust Task Force will hold a hearing titled, "Competition and the future of Digital Music," which will focus on the proposed XM-Sirius Satellite Radio merger. The hearing will be held on the afternoon of Wednesday, February 28, 2007 at 3 pm. Mel Karmazin, CEO of Sirius Satellite Radio, will testify. Additional witnesses are to be determined.

Today I released a new PFF study entited "Rep. Bean's 'SAFER Net Act': An Education-Based Approach to Online Child Safety." The short paper argues that education, not increased governmental regulation, is the most effective method of ensuring online child safety going forward. Luckily, there finally exists a piece of federal legislation that embodies that philosophy.

Rep. Melissa Bean (D-IL) recently introduced H.R. 1008, the "Safeguarding America's Families by Enhancing and Reorganizing New and Efficient Technologies (SAFER NET) Act of 2006." The bill would create an Office of Internet Safety and Public Awareness at the Federal Trade Commission, establish federal grants to promote Internet safety programs and create a national public awareness campaigns. While I'm not usually in favor of new government programs and spending (and I'm certain that my colleagues will give me hell for doing so in this case!), I think the government can play a constructive role here in terms of informing parents and kids about how to deal with objectionable material online or other cyber-threats.

More practically, I think it is essential that we have an education-based vehicle to counter all the regulation-based approaches coming out of Congress these days. Congress always wants to do something on this front, so it is certainly better that they do something that is both constitutional and likely to have lasting impact like safety education. Read my entire paper for the details.

Two days ago, I posted a short essay expressing my strong reservations about the new Skype petition requesting that the FCC impose Carterfone-like regulations on wireless operators. Over on the the TLF, James Gattuso followed up yesterday with a piece of his own. And this followed last week's series of essays about Tim Wu's "Wireless Net Neutrality" paper by Jerry Brito, Hance Haney, James Gattuso, Tim Lee, Scott Wallsten, and Randy May. (The Skype petition essentially asks the FCC to implement Prof. Wu's ideas into law, so for purposes of this essay I will treat them as the same proposal.) I wanted to elaborate a bit more on this proposal because I think this issue is profoundly important to the future of innovation and competition in the wireless sector.

Burning the Village to Save It?
The fundamental question raised by the Skype-Wu proposal is whether America will continue to allow competition in wireless network architectures and business models to see which systems and plans (a) consumers truly prefer and that also (b) allow carriers to recoup fixed capital costs while (c) expanding and innovating to meet future needs. The Skype-Wu proposal would foreclose such marketplace experimentation by essentially converting cellular networks into a sort of quasi-commons and forcing private network operators to provide network access or services on someone else's terms. That someone else, of course, is the Federal Communications Commission (FCC), which will be tasked with devising rules and price regulations to ensure "fair and non-discriminatory" access / interconnection pricing.

In my opinion, when you get right down to it, this proposal is a declaration of surrender. That is, Skype and Prof. Wu almost seem to be saying that while it's nice we've seen innovation at the core of the wireless sector over the past two decades, we now need to get on with the important business of establishing rules to ensure the maximum amount of output or innovation at the edge of networks while largely ignoring what happens at the core, or even prohibiting certain things from happening at the core. In other words, to maximize the freedom to innovate at the edge of networks, we must now restrict the freedom to innovate at the core in some ways.

In essence, therefore, this proposal represents a call for the forced commoditization of cellular networks and would necessitate at return to the rate-of-return regulatory methods of the past. It would freeze network innovation in place and stop of the clock on one of the great American success stories of the past quarter century. For these reasons, I will argue that it is essential it be rejected.

My former Cato Institute colleague Tom Palmer has penned an important editorial in today's Washington Post along with Raja Kamal of the University of Chicago that illustrates how very lucky we are to live in a country that respects freedom of speech and religious differences. Palmer and Kamal tell the story of Abdelkareem Nabil Soliman, a 22 year old student who is sitting in an Egyptian prison, awaiting sentencing tomorrow. "His alleged 'crime': expressing his opinions on a blog. His mistake: having the courage to do so under his own name," note Palmer and Kamal. They continue:

Soliman.. was expelled from Al-Azhar University last spring for sharply criticizing the university's rigid curriculum and faulting religious extremism on his blog. He was ordered to appear before a public prosecutor on Nov. 7 on charges of "spreading information disruptive of public order," "incitement to hate Muslims" and "insulting the President." Soliman was detained pending an investigation, and the detention has been renewed four times. He has not had consistent access to lawyers or to his family. ... Soliman has criticized Egyptian authorities as failing to protect the rights of religious minorities and women. He has expressed his views about religious extremism in very strong terms. He is the first Egyptian blogger to be prosecuted for the content of his remarks. Remarkably, the legal complaint originated with the university that had expelled him; once, it was a great center of learning in the Arab world, but it has been reduced to informing on students for their dissent from orthodoxy. ... Whether or not we agree with the opinions that Abdelkareem Nabil Soliman expressed is not the issue. What matters is a principle: People should be free to express their opinions without fear of being imprisoned or killed. Blogging should not be a crime.

Amen. Again, it's stories like this that should remind us how good we have it here in America.

By the way, a website has been set up to petition for his freedom: www.FreeKareem.org

University of Chicago Professor Geoffrey Stone, one of America's leading experts on First Amendment law, has an editorial in today's New York Times calling for the passage of a federal journalist-source priviledge law, or "shield law." Such a law would, in Stone's words, "protect journalists from compelled disclosure of their sources' confidential communications in the same way psychiatrists and lawyers are protected."

Prof. Stone notes that 49 states already have such a shield law and that 13 of those states provide journalist-source confidentiality absolutely. In the 36 other states the right is qualified but still provides a great deal of protection. Stone argues that the same protections need to be granted at the federal level because: