Privacy Trade-offs: Why We Don't Really Care about Our Privacy as Much as We Say
I was reading this Sun Magazine interview with the always-interesting Nick Carr and I liked what he had to say here about the public's inconsistent views on privacy:
If you ask people whether they're concerned about the ability of the government or corporations to gather information about them online, they'll say yes. But if you look at how they behave online, they don't display much fear of exposing themselves. What that says about people -- and it's true for most of us -- is that we will readily forgo our privacy in exchange for convenient and useful services, particularly if they're free. That's a trade-off you make all the time on the Internet. Even if people were more conscious of how this information might be exploited, I doubt most would change their behavior.
This reminds me of the classic "hamburgers for DNA" quip from security expert Bruce Schneier who once famously noted that:
If McDonalds in the United States would give away a free hamburger for an DNA sample they would be handing out free lunches around the clock. So people care about their privacy, but they don't care to pay for it. In the United States we have frequent shopper cards, which will track down people's purchases for a 5 cents discount on a can of tuna fish. I don't think you can convince the public to care about it.
There's been plenty written about the death spiral that America's newspaper industry finds itself stuck in -- here's an amazing summary of the recent online debates -- and I've spent a lot of time writing on this issue here in the past, too. Ben Compaine, one of America's sharpest media analysts and the co-author of the classic study Who Owns the Media?, has added his own two cents in his latest essay over at the Rebuilding Media blog. Like everything Ben writes, it is well worth reading:
If newspapers have essentially been able to thrive on the revenue from advertisers alone (again, with cost of printing more or less covered by circulation revenue), why are they having so much trouble today? The answer is not one single factor, but a major contributor is that newspapers - whether print or digital--are just worth less to advertisers than they were 20 years ago. Back then, local advertisers did not have many options for reaching the mass local audience. What was the alternative for auto dealers? For real estate agents? Supermarkets or department stores? For some, direct mail was one possible option. But that was about it. Using pre-prints instead of ROP became attractive for some large display advertisers, leaving the publishers with a piece of the cash flow. Advertisers were hit with regular rate increases. And they pretty much had to pay, The publishers made good money.
But then a double whammy. Just about the time the Internet became a real alternative for classified listings--think Craigslist, Monster.com, eBay, Autotrader.com--and for retailers--think DoubleClick, Google, et al--the boys at the cable operators had perfected the insertion of highly local spots into their feeds. Between 1989 and 2007 local cable advertising increased from $500 million to $4.3 billion--or from 0.4% of all advertising to 1.6%. Advertising in newspapers fell from 26% to 15% in this period. Although some of the highly local advertisers going to cable may have taken some of their funds from budgets for radio or other local media, it is probable that a significant share came from the hides of newspapers. I estimate perhaps up to 20% of the decline in local newspaper advertising share can be attributed to local cable spots.
The other whammy, the gorilla in the room, is Internet advertising. No need to elaborate. But its impact on newspapers is not just that it has siphoned off dollars per se. Much more importantly is that the Internet has given most advertisers greater market power against newspaper publishers. Many big advertisers--like car dealers, real estate offices and big box retailers--don't need the newspapers as much.
Ben's got it exactly right. The decline of newspapers comes down to the death of "protectable scarcity" (thanks to Canadian media expert Ken Goldstein for that phrase). There's just too much other competition out there online already for our eyes and ears. We're witnessing substitution effects on a scale never seen in the media world, with disruptive digital technologies and networks splintering our attention spans. That de-massification of media means that high fixed cost endeavors like daily newspapers are not going to be able to sustain the cross-subsidies they've long gotten from advertisers.
If you want to boil the newspaper death spiral down to an equation, it would look something like this:
I've got a new PFF paper out today entitled, "Who Needs Parental Controls? Assessing the Relevant Market for Parental Control Technologies." In this piece, I address the argument made by some media and Internet critics who say that government intervention (perhaps even censorship) may be necessary because parental control technologies are not widely utilized by most Americans. But, as I note in the paper, the question that these critics always fail to ask is: How many homes really need parental control technologies? The answer: Far fewer than you think. Indeed, the relevant universe of potential parental control users is actually quite limited.
I find that the percentage of homes that might need parental control technologies is certainly no greater than the 32% of U.S. households with children in them. Moreover, the relevant universe of potential parental control users is likely much less than that because households with very young children or older teens often have little need for parental control technologies. Finally, some households do not utilize parental control technologies because they rely on alternative methods of controlling media content and access in the home, such as household media rules. Consequently, policymakers should not premise regulatory proposals upon the limited overall "take-up" rate for parental control tools since only a small percentage of homes might actually need or want them.
If you don't care to read the whole nerdy thing, I've created this short video summarizing the major findings of the paper.
And the document is embedded below the fold in a Scribd reader.
Ferree: Satellite Video Regulatory Structure Outdated
Ken Ferree testified earlier this week at a House Communications, Technology, and the Internet subcommittee hearing on renewal of the Satellite Home Viewer Extension and Reauthorization Act. The crux of his argument: Congress should take into account the current competitive market for video delivery services and, specifically, they should amend rules that prevent DBS carriers from providing consumers signals from stations located within their state of residence and refrain from imposing enhanced carriage mandates on satellite video distributors.
Ken's written testimony can be found here and a webcast of hearing can be found here.
Looks like we can count on another tax landing on our cell phones soon thanks to the taxaholics in the Obama Administration. According to Jeff Silva of RCR Wireless:
Though details on the Obama budget are few and far between, some information was made available. The administration estimates that spectrum license fees would raise $4.8 billion over the next 10 years.
Don't be fooled into thinking that wireless carriers will just eat those fees. Those fees will be coming to bill near you soon in the form of another stupid government tax burden on our wireless phones.
I was over at the Federal Communications Commission (FCC) the other day chatting with someone about various regulatory issues and Rush Limbaugh's WSJ editorial came up. The person I was speaking with made a comment about how conservatives have really been energized and unified in opposition to the re-imposition to the Doctrine. I reminded them, however, that it wasn't always the case that conservatives stood together in the fight over the Fairness Doctrine. In fact, when I first came to town almost 20 years ago, there were still plenty of conservatives who actually favored it. I was reminded of that fact when reading a new piece in Engage about "Broadcast 'Fairness' in the Twenty-First Century" by my friend Robert Corn-Revere. Bob is one America's great First Amendment defenders and his new essay offers an excellent history of efforts to micro-manage speech on the broadcast airwaves over the years. In it, he reminds us that:
Given the recent vocal opposition to the Fairness Doctrine in the interest of preserving conservative talk radio, it is easy to forget that many prominent conservatives championed the doctrine before its demise. Phyllis Schlafly was a vocal proponent of the Fairness Doctrine because of what she described as "the outrageous and blatant anti-Reagan bias of the TV network newscasts," and she testified at the FCC in the 1980s in support of the policy "to serve as a small restraint on the monopoly power wielded by Big TV Media." Senator Jesse Helms was another long-time advocate of the Fairness Doctrine, and conservative groups Accuracy in Media and the American Legal Foundation actively pursued fairness complaints at the FCC against network newscasts.
Likewise, in our book, A Manifesto for Media Freedom, Brian Anderson and I note that some other prominent right-leaning politicians, such as Sen. Trent Lott, favored the Fairness Doctrine. Moreover, even though most of those conservative individuals and groups have now turned against the Fairness Doctrine, some Republicans still defend (or even seek to expand) the same underlying regulatory concepts that served as the foundation of the Fairness Doctrine. As Corn-Revere notes:
A classic piece here by Farhad Manjoo of Slate about how "the Internet of 1996 is almost unrecognizable compared with what we have today." It's a fun look back at just how far the Internet has come over the past 13 years. I love this passage:
We all know that the Internet has changed radically since the '90s, but there's something dizzying about going back to look at how people spent their time 13 years ago. Sifting through old Web pages today is a bit like playing video games from the 1970s; the fun is in considering how awesome people thought they were, despite all that was missing. In 1996, just 20 million American adults had access to the Internet, about as many as subscribe to satellite radio today. The dot-com boom had already begun on Wall Street-- Netscape went public in 1995 -- but what's striking about the old Web is how unsure everyone seemed to be about what the new medium was for. Small innovations drove us wild: Look at those animated dancing cats! Hey, you can get the weather right from your computer! In an article ranking the best sites of '96, Time gushed that Amazon.com let you search for books "by author, subject or title" and "read reviews written by other Amazon readers and even write your own." Whoopee. The very fact that Time had to publish a list of top sites suggests lots of people were mystified by the Web. What was this place? What should you do here? Time recommended that in addition to buying books from Amazon, "cybernauts" should read Salon, search for recipes on Epicurious, visit the Library of Congress, and play the Kevin Bacon game.
God, do you remember those days? I sure do. I penned a piece last month about the amazing technological progress we have witnessed over the past decade.
Meanwhile, we have a whole town full of clowns here in DC looking to regulate the Internet and digital technology for one reason or another. All these would-be regulators need to step back and appreciate just how well markets have been working and why regulation would be a disaster for technological progress. Viva la (Technology) Revolution!
Nuts & Bolts: A User's Guide to ISP Network Management
This is the third in a series of articles about Internet technologies. The first article was about web cookies. The second article explained the network neutrality debate. This article explains network management systems. The goal of this series is to provide a solid technical foundation for the policy debates that new technologies often trigger. No prior knowledge of the technologies involved is assumed.
As I explained previously, the Network Neutrality debate is best understood as a debate about how to best manage traffic on the Internet.
Those who advocate for network neutrality are actually advocating for legislation that would set strict rules for how ISPs manage traffic. They essentially want to re-classify ISPs as common carriers. Those on the other side of the debate believe that the government is unable to set rules for something that changes as rapidly as the Internet. They want ISPs to have complete freedom to experiment with different business models and believe that anything that approaches real discrimination will be swiftly dealt with by market forces.
But what both sides seem to ignore is that traffic must be managed. Even if every connection and router on the Internet is built to carry ten times the expected capacity, there will be occasional outages. It is foolish to believe that routers will never become overburdened-they already do. Current routers already have a system for prioritizing packets when they get overburdened; they just drop all packets received after their buffers are full. This system is fair, but it's not optimized.
Will VSDA v. Schwarzenegger Be First Major Supreme Court Video Game Case?
This week, the Ninth Circuit Court of Appeals struck down a California video game statute as unconstitutional, holding that it violated both the First and Fourteenth Amendments to the federal Constitution. The California law, which passed in October 2005 (A.B.1179), would have blocked the sale of "violent" video games to those under 18 and required labels on all games. Offending retailers could have been fined for failure to comply with the law. It was immediately challenged by the Video Software Dealers Association and the Entertainment Software Association and, in August of 2007, a district court decision in the case of Video Software Dealers Association v. Schwarzenegger [decision here] enforced a permanent injunction against the law. The Ninth Circuit heard the state's challenge to the injunction last year and handed down it's decision this week [decision here] holding the statute unconstitutional. The key passage:
We hold that the Act, as a presumptively invalid content based restriction on speech, is subject to strict scrutiny and not the "variable obscenity" standard from Ginsberg v. New York , 390 U.S. 629 (1968). Applying strict scrutiny, we hold that the Act violates rights protected by the First Amendment because the State has not demonstrated a compelling interest, has not tailored the restriction to its alleged compelling interest, and there exist less-restrictive means that would further the State's expressed interests. Additionally, we hold that the Act's labeling requirement is unconstitutionally compelled speech under the First Amendment because it does not require the disclosure of purely factual information; but compels the carrying of the State's controversial opinion. Accordingly, we affirm the district court's grant of summary judgment to Plaintiffs and its denial of the State's cross-motion. Because we affirm the district court on these grounds, we do not reach two of Plaintiffs' challenges to the Act: first, that the language of the Act is unconstitutionally vague, and, second, that the Act violates Plaintiffs' rights under the Equal Protection Clause of the Fourteenth Amendment.
ICANN's Revised gTLD Proposal Still Comes Up Short
ICANN has just released a second draft of its Applicant Guidebook, which would guide the creation of new generic topmore generic top-level domains (gTLDs) such as .BLOG, .NYC or .BMW. As ICANN itself declared (PDF), "New gTLDs will bring about the biggest change in the Internet since its inception nearly 40 years ago." PFF Adjunct Fellow Michael Palage and former ICANN Board member addressed the key problems with ICANN's original proposal in his paper ICANN's "Go/ No-Go" Decision Concerning New gTLDs (PDF & embedded below), released earlier this week.
ICANN deserves credit for its detailed analysis of the many comments on the original draft which Mike summarized back in December. ICANN also deserved credit for addressing two strong concerns of the global Internet community in response to the first draft:
ICANN has removed its proposed 5% global domain name tax on all registry services, something Mike explains in greater detail in his "Go/No-Go" paper.
ICANN has commissioned a badly-needed economic study on the dynamics of the domain name system "in broad." But such a study must address how the fees ICANN collects from specific user communities relate to the actual costs of the services ICANN provides. The study should also consider why gTLDs should continue to provide such a disproportionate percentage of ICANN's funding--currently 90%--given increasing competition between gTLDs and ccTLDs (e.g., the increasing use of .CN in China instead of .COM).
These concerns are part of a broader debate: Will ICANN abide by its mandate to justify its fees based on recovering the costs of services associated with those fees, or will ICANN be free to continue "leveraging its monopoly over an essential facility of the Internet (i.e., recommending additions to the Internet's Root A Server) to charge whatever fees it wants?" If, as Mike has discussed, ICANN walks away from its existing contractual relationship with the Department of Commerce and claims "fee simple absolute" ownership of the domain name system, who will enforce such a cost-recovery mandate?
But ICANN simply "kicked the can down the road on the biggest concern": how to minimize abusive domain name registrations (e.g., cybersquatting, typosquatting, phishing, etc.) and reduce their impact on consumers.