The Wired article ("Great Wall of Facebook: The Social Network's Plan to Dominate the Internet -- and Keep Google Out") I discussed yesterday touched on another issue near & dear to my heart (besides the importance of smarter advertising): the future of online anonymity. The article lays out Facebook's "4-Step Plan for Online Domination," which involves "colonizing" the web though Facebook's Connect (launched Dec. 2008) and Open Stream API (launched April 2009) initiatives, which:

don't just allow users to access their Facebook networks from anywhere online. They also help realize Facebook's longtime vision of giving users a unique, Web-wide online profile. By linking Web activity to Facebook accounts, they begin to replace the largely anonymous "no one knows you're a dog" version of online identity with one in which every action is tied to who users really are.

To hear Facebook executives tell it, this will make online interactions more meaningful and more personal. Imagine, for example, if online comments were written by people using their real names rather than by anonymous trolls. "Up until now all the advancements in technology have said information and data are the most important thing," says Dave Morin, Facebook's senior platform manager. "The most important thing to us is that there is a person sitting behind that keyboard. We think the Internet is about people."

Some free speech advocates are sure to bemoan Identity Integration as directly undermining online anonymity.

The advocates of regulation pay lip service to the importance of advertising in funding online content and services but don't seem to understand that this quid pro quo is a fragile one: Tipping the balance, even slightly, could have major consequences for continued online creativity and innovation.

Who is this handsome young man and why does he have "Mr. Yogato Stamped Me!!!" on his forehead? More importantly, why does he look so darn happy?

Flashback: Earlier this week, my partner Michael (pictured) and I visited Mr. Yogato, a frozen yogurt shop in Washington's Dupont Circle neighborhood which describes itself as "the FUNNEST yogurt experience you'll ever have."

Apart from serving exceptionally tasty frozen yogurt and letting customers play a vintage Nintendo, Mr. Yogato is famous for the eight "Rules of Yogato," which offer discounts if users achieve certain feats, including:

• Answering devilishly difficult trivia (10% off--or extra if you fail)
• Reciting the Stirling battlefield speech from Braveheart in a great Scottish accent (20% off)

So, the next time you hear Adam Thierer and I talk about the benefits of advertising, especially online, just remember that while there is no free lunch (nor free frozen yogurt), there is discounted frozen yogurt. It's a simple, obvious quid pro quo: 10% off in exchange for spreading the Gospel of Yogato.

Eric Goldman offers a terrific--and concise--summary of Section 230 and how courts have recently interpreted its grant of broad immunity to online intermediaries, most notably:

47 USC 230 tries to divide online content into first party content and third party content. In its simplest form, 230 says that online actors can't be liable for third party content unless (1) ECPA, (2) federal criminal enforcement, or (3) IP claims.

Fred Vogelstein's essay in Wired, "Great Wall of Facebook: The Social Network's Plan to Dominate the Internet -- and Keep Google Out" describes the intensifying clash between Google and Facebook--a clash that focuses on the ability to target advertising:

Like typical trash-talking youngsters, Facebook sources argue that their competition is old and out of touch. "Google is not representative of the future of technology in any way," one Facebook veteran says. "Facebook is an advanced communications network enabling myriad communication forms. It almost doesn't make sense to compare them."

1. Build critical mass. In the eight months ending in April, Facebook has doubled in size to 200 million members, who contribute 4 billion pieces of info, 850 million photos, and 8 million videos every month. The result: a second Internet, one that includes users' most personal data and resides entirely on Facebook's servers.

2. Redefine search. Facebook thinks its members will turn to their friends--rather than Google's algorithms--to navigate the Web. It already drives an eyebrow-raising amount of traffic to outside sites, and that will only increase once Facebook Search allows users to easily explore one another's feeds.

3. Colonize the Web. Thanks to a pair of new initiatives--dubbed Facebook Connect and Open Stream--users don't have to log in to Facebook to communicate with their friends. Now they can access their network from any of 10,000 partner sites or apps, contributing even more valuable data to Facebook's servers every time they do it.

4. Sell targeted ads, everywhere. Facebook hopes to one day sell advertising across all of its partner sites and apps, not just on its own site. The company will be able to draw on the immense volume of personal data it owns to create extremely targeted messages. The challenge: not freaking out its users in the process.

If you're in D.C. on July 10, I hope you'll join us for the following panel discussion (noon-2pm in Room 208 at the U.S. Capitol Visitor Center), which I'll lead as moderator:

Proposals to regulate advertising and data collection on the Internet, mobile phones, and interactive television, hold the promise of enhancing consumer privacy. On the other hand, "smart advertising" allows more relevant advertising to be targeted directly to individual consumers, making markets more competitive, significantly increasing the funding available for creating free content and services, and increasing the effectiveness of all forms of free speech. These issues and more will be discussed at "Regulating Online Advertising: What Will it Mean for Consumers, Culture & Journalism?" a congressional seminar hosted by The Progress & Freedom Foundation.

A panel of experts will discuss such topics as the cost of regulation to consumers, its impact on journalism and other non-commercial content, and First Amendment issues concerning the future of culture and political discourse.

Please RSVP here.

Adam Thierer and I have been trying to drive home a simple message in the ongoing debate about targeted online advertising and privacy: "There is no Free Lunch!" We don't have a lot of friends in this debate, since nearly everyone else seems to assume that online content and services will just continue to fall like manna from heaven if politicians strangle advertising online. So I was particularly heartened to read the following from Shelly Palmer:

This is the most serious question facing content producers today. Content costs money to produce. Third-party advertising/sponsor support is one model, promoting your own products is another, subscription is a third. At the end of the day, there are only three ways it works: I pay, you pay or someone else pays. Unfortunately, there is no business model called "no one pays." In the case of MediaBytes, the model is "I pay." It works for me as stated above. But, apparently, a fairly large number of people in my audience are uninterested in seeing even relevant product offerings. Is advertising over? If so, what's next?

The show is produced every business day and requires a research staff, a writer (me), an editor, an encoding/distribution manager and an affiliate relations staff. The reason for the production overview is that, this particular two-minutes may look like a talking head combined with some graphics and clips, but the work flow for any given show takes approximately 6 hour and all of the people involved in the production are on salary here at Advanced Media Ventures Group. And, for the record, MediaBytes, and the associated production materials, takes up approximately 25% of my day.

Over at SiliconAngle, my friend Andrew Feinberg has posted an interesting column defending federal oversight of "sponsored blogging," or blogging that might be in some way be tied to a financial interest. The Federal Trade Commission (FTC) is now looking into that matter and threatening to bring the blogosphere under the thumb of federal regulators. In his essay, "Why the FTC is Absolutely, 100 Percent Right on Sponsored Blogging," Andrew argues that:

The Federal Trade Commission wants to keep an eye out for unscrupulous behavior by corporations and media. This is their job. They could leave well enough alone for fear of being accused of meddling with the internet, but they recognize that as technology changes, the rules that govern the relationship between marketers and consumers must be made to fit those changes.

This is not always easy. The Federal Communications Commission has had a rulemaking open on embedded advertising (product placement) in children's programming for some time now. It is well know that it's unlawful to market directly to children during certain times, and on certain programs. But FCC efforts to adapt the rules have been stymied by a cumbersome process and a lack of authority (the FCC may only regulate content on broadcast television).

On the other hand, the Federal Trade Commission has much broader authority. And their job is to keep things fair.

Here are my comments (PDF) on the NTIA's recent Notice of Inquiry regarding ICANN's future.  

I have been an active participant within the Internet Corporation for Assigned Names and Numbers (ICANN) process since its inception as an intellectual property lawyer and information technology specialist.  Over the last ten years, I have served in a number of leadership positions within ICANN, including a three-year term on its Board of Directors (2003-2006).   I applaud the NTIA for using the broad scope of this NOI to refocus the global Internet community on the original intent/focus of ICANN's MoU/JPA with the Department of Commerce (USG).  Unfortunately, over the last few years, ICANN has strayed from its narrow mission as the technical coordinating body originally envisioned in the 1998 White Paper, and has instead become a quasi-monopolistic regulator accountable to no one but itself.  This NOI provides the global Internet community the opportunity to deconstruct the current 

"ICANN 2.0" governance model and refocus on a successor "ICANN 3.0" governance model.  I submit that ICANN 3.0 needs to be a mix of getting "back to basics" (restoring ICANN's original mission) and implementing important "lessons learned" since ICANN's creation about how to make the organization more effective and accountable.  I discuss four broad issues:

1. ICANN's Periodic Review of its internal operations and supporting organizations has failed, and has become nothing more than a "perpetual motion machine of public comments and documentation producing no meaningful results." Only a second Evolution and Reform Process can solve ICANN's current deficiencies;
2. ICANN must hardcode into its policies and its contracts the principle that its policies cannot supersede national laws;
3. ICANN must cease any operational role in technical infrastructure as required by its bylaws and focus instead on its mission as a technical coordinator; and
4. Congress must avoid "kicking the JPA can down the road" and instead provide much-needed leadership by creating a solid foundation for ICANN 3.0 in legislation after proper consultation with the Government Accountability Office.

By Berin Szoka & Adam Thierer

We've just released a new PFF white paper (PDF) entitled, "Cyberbullying Legislation: Why Education is Preferable to Regulation." In this 24-page study we note that, compared to previous fears about online predation, which have been greatly overblown, concerns about cyberbullying are more well-founded. Evidence suggests the cyberbullying is on the rise and that it can have profoundly damaging consequences for children.

Unsurprisingly, in the wake of a handful of high-profile cyberbullying incidents that resulted in teen/tween suicides, some state lawmakers began floating legislation to address the issue. More recently, two very different federal approaches have been proposed. One approach is focused on the creation of a new federal crime to punish cyberbullying, which would include fines and jail time for violators. In April 2008, Rep. Linda Sánchez (D-CA) introduced H.R. 1966 (originally H.R. 6123), the "Megan Meier Cyberbullying Prevention Act," a bill that would create a new federal felony:

"Whoever transmits in interstate or foreign commerce any communication, with the intent to coerce, intimidate, harass, or cause substantial emotional distress to a person, using electronic means to support severe, repeated, and hostile behavior, shall be fined under this title or imprisoned not more than two years, or both."

In response to my essay last night about this new Free Press campaign to layer price controls on the Internet by banning metered prices via Rep. Massa's new bill (the "Broadband Internet Fairness Act"), George Ou and Richard Bennett reminded me of some of the contradictory statements that the (Un)Free Press crew have made on this issue. Indeed, if you look back at what Free Press and their chairman have said about the matter over just the past 18 months, they seem to be whistling two very different tunes.

For example, George Ou reminded me of what Free Press had to say in its November 2007 filing in the FCC's Comcast-Bit Torrent proceeding:

"More importantly, if Comcast is concerned that the collective set of users running P2P applications are affecting quality of service for other users on a cable loop... they could also charge by usage." (p. 29)

[...]

"Indeed, in many nations, network providers do meter, and bill their customers on the basis of amount used. So the transaction costs of doing so must not be prohibitively high. Indeed, a network provider can apparently meter cheaply because, in most networks, users' traffic to and from the Internet passes through a single gateway, the network access server." (p. 31)

"I don't quite see [metering] as an outrage, and in fact is probably the fairest system going -- though of course the psychology of knowing that you're paying for bandwidth may change behavior."