Author Archive
Three Libertarians Raise Concerns about the Stop Online Piracy Act
Two weeks ago, a new bill called the Stop Online Piracy Act was introduced in the House. The bill has attracted criticism from a wide variety of libertarian thinkers. In this post I’ll highlight three of the most compelling responses.
First, at Ars Technica, I interviewed Ryan Radia of the Competitive Enterprise Institute, who argues that SOPA threatens to undermine the legal “safe harbor” that protect sites like YouTube and Flickr from liability for the actions of their users.
Supporters of SOPA say it’s needed to combat “rogue” websites hosted overseas. Such rogue sites deliver infringing content to American consumers while remaining out of reach of American law enforcement. But Radia argues that supporters of the bill are being disingenuous when they claim the bill only targets rogue sites:
“The bill is written in a way that covers a far broader category of sites” than ordinary “rogue” websites, Radia told Ars. “I think this is intentional.”
“Many of the companies that have long wished that the DMCA imposed a greater obligation on online intermediaries to act against infringement see this bill as an effective means of accomplishing their end goals without opening the can of worms of revisiting the DMCA safe harbor,” he said.
Radia pointed out that “it’s entirely possible that an intermediary that is protected by the DMCA safe harbor could also fit within the category of sites dedicated to infringement.” So companies that build websites based on the rules of the DMCA might suddenly find themselves on shaky legal ground.
Radia notes that the legislation is broadly unpopular in the venture capital community and warns that the uncertainty it would introduce could chill high-tech investment.
Also today on Time’s website, the Mercatus Center’s Jerry Brito argues that SOPA is a “cure worse than the disease.” He focuses on a provision that allows the government to create a blacklist of alleged rogue websites and compel ISPs to remove them from their domain name servers:
At a moment when Secretary of State Hillary Clinton is urging world governments to keep their hands off the Internet, creating a blacklist would send the wrong message. And not just to China or Iran, which already engage in DNS filtering, but to liberal democracies that might want to block information they find naughty. Imagine if the U.K. created a blacklist of American newspapers that its courts found violated celebrities’ privacy? Or what if France blocked American sites it believed contained hate speech? We forget, but those countries don’t have a First Amendment.
The result could be a virtually broken Internet where some sites exist for half the world and not for the other. The alternative is to leave the DNS alone and focus (as the bills also do) on going after the cash flow of rogue websites. As frustrating as it must be for the content owners who are getting ripped off, there are some cures worse than the disease.
Finally, at CNet Larry Downes of Tech Freedom calls SOPA “Hollywood’s latest effort to turn back time.”
Larry, Jerry, and Ryan all believe that some kind of “rogue sites” legislation is necessary. I’m not so sure; I think Congress struck the right balance when it created the DMCA’s safe harbor in 1998. But either way, we’re all concerned about the detrimental effects that SOPA—and its Senate companion legislation known as the PROTECT IP Act—will have on Internet freedom.
More on Nominal Sales and Monetary Policy
In my last post I pointed out that Bill Niskanen, writing in the most recent edition of the Cato Handbook for Policymakers, suggested that the Fed should focus on keeping the economy growing at a nominal rate of around 5 percent per year. This allows for an average annual growth rate of around 3 percent and an annual inflation rate of around 2 percent.
He illustrated the idea with this chart:
This shows how far nominal sales has deviated from the trend of 5.5 percent per year over the last two decades. It ends in early 2008, which was the most recent data available at the time he was writing. According to Niskanen’s theory, values above the line are a sign that monetary policy is too loose, while values below the line are a sign that monetary policy is too tight.
In his analysis, Niskanen focused on the three positive deviations in the chart, which started around 1988, 1999, and 2005, respectively. He argues that too-loose monetary policy during these periods created bubbles, which then popped and sparked recessions.
Karl Smith has helpfully reproduced and extended the chart to the present day. The results are striking:
Here we can see that nominal final sales to domestic purchasers fell way, way below trend starting in late 2008. And not only has it not recovered, it’s actually been falling further behind! Which suggests that according to Niskanen’s rule, monetary policy started to be too tight in mid-2008, and has been too tight ever since.
Beckworth, Ponnuru, and Niskanen on Monetary Policy
Economist David Beckworth and conservative commentator Ramesh Ponnuru have an interesting piece in the New Republic blaming the Federal Reserve’s unduly tight monetary policy for the recent recession and current slow recovery:
For the 25 years leading up to our current mess—the period economists have come to call “the great moderation”—the Fed did a pretty good job of stabilizing the economy. The result of its monetary policies was that the economy, measured in current-dollar or “nominal” terms, grew at about 5 percent a year, with inflation accounting for 2 percent of the increase and real economic growth 3 percent. Keeping nominal spending and nominal income on a predictable path is important for two reasons. First, most debts, such as mortgages, are contracted in nominal terms, so an unexpected slowdown in nominal income growth increases their burden. Also, the difficulty of adjusting nominal prices makes the business cycle more severe. If workers resist nominal wage cuts during a deflation, for example, mass unemployment results.
During the great moderation, people began to expect spending and incomes to grow at a stable rate and made borrowing decisions based on it. But maintaining this stability requires the Fed to increase the money supply whenever the demand for money balances—people’s preference for cash over other assets—increases. This happened in 2008 when, as a result of the recession and the financial crisis, fearful Americans began to hold their cash. The Federal Reserve, first worried about increased commodity prices as a harbinger of inflation and then focused on saving the financial system, failed to increase the money supply enough to offset this shift in demand and allowed nominal spending to fall through mid-2009.
That drop in nominal spending was the most severe decline since 1938. Since then, none of the Fed’s much-debated moves toward monetary ease have brought nominal spending back to where it would have been had the expected 5 percent growth been maintained all along. Consequently, incomes are lower, debt burdens are higher, and banks are weaker than they should be.
Beckworth and Ponnuru’s focus on maintaining a steady growth in nominal GDP is very similar to the position espoused by the late Bill Niskanen. Writing in the most recent edition of the Cato Handbook for Policymakers, Niskanen called for the Fed to maintain the growth of nominal domestic spending:
The intent of Congress would be better served and monetary policy would be more effective if Congress instructed the Federal Reserve to establish a monetary policy that reflects both their concerns in a single target. The best such target, I suggest, would be the nominal final sales to domestic purchasers—the sum of nominal gross domestic product plus imports minus exports minus the change in private inventories. First, this is a feasible target: nominal final sales to U.S.-based purchasers are almost completely determined by U.S. monetary policy, whereas the rate of economic growth and the inflation rate are separately affected by a variety of domestic and foreign conditions. Second, this target provides the correct incentives: for any rate of increase in final sales, a reduction of the inflation rate increases the rate of economic growth. Congress is best advised (1) to specify a target rate of increase of final sales and (2) to instruct the Federal Reserve to minimize the variance around this target rate. The target rate of increase of final sales may best be about 5 percent a year, sufficient to finance a realistic rate of economic growth of 3 percent and an acceptable rate of inflation of about 2 percent.
For the past 20 years, actual final sales increased at a 5.4 percent annual rate with an average inflation rate of 2.4 percent, illustrating that a 5 percent annual increase of final sales would be both feasible and a slightly superior target. The primary problem of U.S. monetary policy during this period, as illustrated by Figure 36.1, is that the Federal Reserve overreacted to three financial crises, creating three ‘‘bubbles’’ of aggregate demand—the correction of which caused two subsequent shallow recessions and, most likely, a third.
Niskanen was writing in mid-2008, before the full extent of the financial crisis had become apparent. He worried that the Fed was over-reacting with easy money:
Most of the variation in demand during the past 20 years has been triggered by the Fed’s response to financial crises. A second lesson is that the Fed seems to overreact. A reasonable standard by which to judge the Fed’s response to a financial crisis would be to avoid a decline in the growth of demand relative to the target path. Instead, the Fed’s response to financial crises has led demand to increase relative to the target path. A third lesson is that the necessary measures to deflate the demand bubbles caused by overreacting to financial crises should be expected to lead to a recession.
“This story is not yet over,” Niskanen wrote. The fall in nominal spending in 2008-09 cited by Beckworth and Ponnuru suggests that the Fed may have underreacted to an unusually severe financial crisis.
The Kindle Fire and the Triumph of Open Source
Today’s big tech news is the release of a new generation of Amazon Kindles. Of particular interest is the Kindle Fire, a $199, 7-inch color touchscreen tablet based on Android. It seems destined to become the most credible competitor to the iPad.
One point I haven’t seen anyone make about this is the importance of open source software to the evolution of the tablet computing market. Google decided to make Android an open-source operating system, which meant that third parties could take the code, tweak it for their own needs, and sell competing Android-based products. That’s what Barnes and Noble did last year with the Nook Color, and it’s what Amazon did to create the Kindle Fire.
Obviously, the fact that Android was available has made it much easier for Barnes and Noble and Amazon—as well as traditional consumer electronics firms like Samsung and Motorola—to enter the market. But it also has important implications for the long-term future of competition in the tablet market. Software platforms tend to be a winner-take-all affair thanks to network effects. In the PC operating system market, the 1980s were a period of intense competition and rapid innovation, followed by the 1990s when Windows became utterly dominant and the pace of innovation slowed. The same thing happened with browsers: intense competition in the late 1990s between Netscape and Microsoft, followed by a period in the early 2000s where Microsoft was utterly dominant and browser innovation slowed.
Things are different now because both the browser and OS markets are becoming dominated by open source software. In the browser market, the two fastest-growing browsers—Safari and Chrome—are both built on top of WebKit, an open source project started by Apple. And now Amazon’s new browser, called Silk, is also built on WebKit. It’s unlikely Amazon would have entered the browser market if they’d had to build a browser from scratch.
Meanwhile, Amazon’s announcement of the Kindle Fire adds to Android’s already-considerable momentum. The Kindle Fire and stock Android tablets will reportedly be able to run each others’ apps, which means that the success of one will expand the market for the other.
It’s hard to make predictions, especially about the future, but I suspect that tablets and browsers will be dominated by Android and WebKit, respectively. Yet because Android and WebKit are open source projects, there’s little danger that their growing popularity will lead to the dominance of one firm, with the resulting stagnation. Even if the market is dominated by a single platform, that market share will be shared among several companies that build products using that platform, who wil compete with each other to produce enhancements to the underlying, shared code. And because firms won’t have to build new OSes or browsers from scratch, barriers to entry will be low. The future of the open Internet is looking really bright.
Cross-posted from Forbes.com
Zoning Laws Are Strangling Silicon Valley
Many of the best jobs for computer programmers are concentrated in the San Francisco Bay Area, where dozens of innovative software companies—Google, Facebook, Apple, Intel, Cisco, Adobe—are located. This concentration of innovative, rapidly-growing firms shows up in income statistics. For example, the average wage in the San Jose metropolitan area, around $80,000, is among the nation’s highest.
Yet strangely, the Bay Area as a whole has been growing slowly. Between 1990 and 2000, the population of the Bay Area grew by 12.6 percent, slower than the 13.2 percent growth rate of the nation as a whole. Between 2000 and 2010, the Bay Area grew by just 5.4 percent, barely half the 9.7 percent growth rate of the nation as a whole. Compare that to the Phoenix metropolitan area. Despite dramatically lower wages (the average is less than $50,000) it attracted enough people to grow by a whopping 45 percent in the 1990s, and by 29 percent in the last decade.
A major factor is a severe shortage of housing in the Bay Area. Lots of people would like to live there, but the supply of homes hasn’t kept up. As a result, the median home in the Bay Area cost about $600,000 in 2009. This means that even though Silicon Valley firms offer some of the nation’s highest wages, many families can still increase their standard of living by moving to cities like Phoenix, where the median home costs about a third as much.
This pattern has been with us for long enough that most of us just take it for granted. Everyone knows that large cities are outrageously expensive, and that families often have to move to less glamorous cities to find homes they can afford. But in his new book The Gated City, Ryan Avent argues that this complacency is misguided. Living in the heart of a large city will never be as cheap, per square foot, as living in an outer-ring suburb. But the enormous discrepancy in housing costs between Silicon Valley and the Sun Belt is mostly a result of government regulations, not the inevitably higher costs of urban life.
In the 19th Century, the most innovative cities tended to also be the fastest growing. New York, Chicago, and Detroit all grew by an order of magnitude in the late 19th and early 20th centuries as key American industries grew in them. Skyscrapers sprang up in these cities’ downtowns. In New York and Chicago especially, developers built dense, walkable neighborhoods to accommodate the surging demand for housing. And this, in turn, helped keep supply in balance with demand and avoided large price increases.
This isn’t happening in Silicon Valley. If Wikipedia is to be believed, the tallest skyscraper in San Jose, the self-styled capital of Silicon Valley, is a pathetic 22 stories tall. Silicon Valley continues to be dominated by low-density, suburban patterns of development, even as housing prices have skyrocketed.
Why is this happening? In a nutshell, it’s because high-density development is illegal. The city of San Jose has 350 pages of regulations that place an effective ceiling on building density. The regulations include minimum lot sizes, minimum building setbacks, maximum building heights, minimum parking requirements, and so on. Of course, developers can apply for exceptions to these rules, but when they do so, city officials are besieged by what Avent calls NIMBY’s (“Not In My Back Yard”), local activists who strenuously oppose having more people live or work in their neighborhoods.
Avent argues that this isn’t just an aesthetic or lifestyle dispute between those who like the suburban lifestyle and those who prefer to live in cities. By strangling the growth of America’s densest and most productive cities, restrictive zoning laws actually make the nation poorer. When an engineer leaves his $80,000 job in Mountain View for a $60,000 job in Scottsdale, he may wind up with a larger house and more disposable income. But the economy as a whole becomes less productive. In a free market, developers would be allowed to supply more housing in Mountain View so that engineer could enjoy a higher salary and an affordable home. And the phenomenon isn’t limited to the Bay Area. Large, coastal cities like New York and Boston also have high wages but anemic population growth. Meanwhile, people flock to cities like Atlanta, Las Vegas, and Charlotte with lower wages but cheaper housing. Deregulation would not only allow more people to enjoy life in America’s most dynamic cities, but it would have a real impact on the nation’s economic growth.
The Gated City is a Kindle Single. It’s just $2, and short enough that you’ll be able to finish it in an afternoon.
Internet Censorship Bill Threatens Free Speech, Rule of Law
On Thursday the Senate Judiciary Committee unanimously approved the Combating Online Infringements and Counterfeits Act. Its backers, including Hollywood and the recording industry, are hoping to rush the legislation through Congress during the current “lame duck” session. The legislation empowers the attorney general to draw up a list of Internet domain names he considers to be “dedicated to infringing activities,” and to obtain a variety of court orders designed to block access to these sites for American Internet users.
To understand the proposal, it helps to know a bit about the Domain Name System, or DNS, that is the focus of the bill. The DNS is the Internet’s directory service. Computers on the Internet are assigned (mostly) unique numbers like “72.32.118.3,” but these numbers are not convenient for human users to remember. So instead websites use domain names like “cato.org,” and our computers use the DNS system to automatically translates these names into their corresponding IP addresses. DNS is a distributed system; thousands of Internet Service Providers operate DNS servers for the use of their own customers.
Under COICA, when the attorney general accused a domain name of being “dedicated” to copyright infringement, the courts would issue orders not against the owners of the domain name (who may be overseas) but against domain-name registrars and the operators of DNS servers here in the United States. This means that thousands of systems administrators would be required to maintain a large and constantly-changing list of blacklisted domains. This is a significant and unfair administrative burden on private parties who have absolutely no connection to infringing activities.
The legislation falls far short of constitutional due process requirements. Legal injunctions would be issued upon the attorney general’s mere accusation of “infringing activities.” Not only would the owner of the domain name not have an opportunity to contest the allegations, he would not even have to be notified. And the parties who would receive notice under the legislation—DNS registrars and server administrators—will typically have no knowledge of or connection to the accused domain, which means they would have neither the knowledge or the motivation to dispute unreasonable orders.
This is especially problematic because we are talking about constitutionally-protected speech here. The Supreme Court has long held that prior restraints of speech are unconstitutional. The websites on the government’s blacklist may have a large amount of constitutionally-protected speech on them, in addition to allegedly-infringing material. Not only does COICA not require the government to prove its allegations before a domain name is blocked, it doesn’t require the government to ever prove them.
Earlier this year, my colleague Jim Harper praised Secretary Clinton’s speech making Internet freedom a centerpiece of the Obama administration’s diplomatic agenda. Secretary Clinton was right to lecture foreign governments about the evils of Internet censorship; her former colleagues in the US Senate should listen to her.
Free Parking and the Geography of Cities
Unlike Randal O’Toole, I was delighted by Tyler Cowen’s New York Times article on the high cost of free parking. And indeed, if I’m reading O’Toole’s post right, it sounds like Cowen and O’Toole don’t actually disagree on the policy issue: both agree that business owners should be free to decide how much parking to supply.
The debate so far has focused on whether parking mandates push the price of parking below the market rate. But I think the more important effect is on the geography of cities. Parking mandates (and other regulations) preclude developers from catering to people who want to live in pedestrian-friendly neighborhoods.
Parking mandates necessarily mean that every large building is surrounded by a large parking lot. And for someone who doesn’t own a car, a parking lot is just a nuisance: a big, empty space he must walk across to get anywhere. Regulations that effectively require a parking lot around every store and restaurant almost guarantees that walking to them won’t be practical.
As Jane Jacobs pointed out, pedestrian traffic is highly sensitive to density. Even a modest reduction in the density of a neighborhood can have a big effect on pedestrian traffic. And as the number of pedestrians falls, so too will the number of businesses that cater to pedestrians. So it’s probably true, as O’Toole says, that charging for parking spaces wouldn’t dramatically reduce the amount of driving people do. But this is partly because the proliferation of parking lots has made walking impractical. Fewer free parking spaces wouldn’t just raise the price of car ownership; it would make car non-ownership more pleasant and convenient.
Government regulations often have subtle unintended consequences. Parking regulations have been on the books so long that the results have come to seem perfectly natural to us. But free markets are unpredictable. If developers had the freedom to decide how much parking to supply, the results might surprise us.
Litan Warns Dodd Bill Would Harm Startups
I haven’t been following the debate over Sen. Dodd’s financial overhaul closely enough to have an opinion on the overall package, but Mike Masnick flags one aspect of the legislation that seems really troubling. Bob Litan explains:
Under existing law, startup companies can raise money easily and quickly from “accredited investors” — individuals with substantial wealth or income. There is no need for the companies or the investors to gain approval from any state or regulatory official.
All of this would change if Section 926 of the Dodd bill is included in any final reform legislation. That section would require, for the first time, companies seeking angel investment to make a filing with the Securities and Exchange Commission, which would have 120 days to review it. This would both raise the cost of seeking angels and delay the ability of companies to benefit from their funding.
The negative impact of the SEC filing requirement would be aggravated by the proposed doubling of the net worth or income thresholds required for investors to be “accredited.”
It’s hard to overstate how important a favorable regulatory climate is to the success of startups. Some of the most important startups have been founded by 20-somethings without the resources to hire lawyers or navigate regulatory bureaucracies. And startups frequently find themselves within weeks of insolvency before they have a big breakthrough. Having a crucial round of funding delayed by four months can be the difference between success and failure. If this description of the bill is accurate (and I have no reason to doubt that it is), this provision would be very bad for the future of high-tech innovation in the United States.
John Paul Stevens, Defender of High-Tech Freedom
I’m saddened to hear of the retirement of Justice John Paul Stevens. Whatever you might say about his jurisprudence in other areas, one place where Justice Stevens really shined was in his defense of high-tech freedom.
Justice Stevens wrote the majority opinion in some of the most important high-tech cases of the last four decades. In other cases, he wrote important (and in some cases prescient) dissents. Through it all, he was a consistent voice for freedom of expression and the freedom to innovate. His accomplishments include:
- Free speech: Justice Stevens wrote the majority decision in ACLU v. Reno, the decision that struck down the infamous Communications Decency Act and clearly established that the First Amendment applies to the Internet. In the 13 years since then, the courts have repeatedly beat back attacks on free speech online. For example, Justice Stevens was in the majority in ACLU v. Ashcroft, the 2004 decision that struck down another attempt to censor the Internet in the name of protecting children.
- Copyright: Justice Stevens wrote the majority opinion in the 1984 case of Sony v. Universal, the case in which the Supreme Court upheld the legality of the VCR by a 5-4 vote. The decision, which today is known as the “Betamax decision” after the Sony VCR brand, made possible the explosion of digital media innovation that followed. When the recording industry tried to stop the introduction of the MP3 player in 1997, the Ninth Circuit cited the Betamax precedent in holding that “space shifting” with your MP3 player is permitted under copyright’s fair use doctrine. The iPod as we know it today probably wouldn’t exist if Sony had lost the Betamax case. Justice Stevens also wrote an important dissent in the 2003 decision of Eldred v. Ashcroft, in which he (like the Cato Institute) argued that the Constitution’s “limited times” provision precluded Congress from retroactively extending copyright terms.
- Patents: The explosion of software patents is one of the biggest threats to innovation in the software industry, and Justice Stevens saw this threat coming almost three decades ago. Stevens wrote the majority decision in the 1978 case of Parker v. Flook, which clearly disallowed patents in the software industry. Three years later, Stevens dissented in the 1981 case of Diamond v. Diehr, which allowed a patent on a software-controlled rubber-curing machine. Although the majority decision didn’t explicitly permit patents on software, Stevens warned that the majority’s muddled decision would effectively open the door to software patents. And he has been proven right. In the three decades that followed, the patent-friendly U.S. Court of Appeals for the Federal Circuit has effectively dismantled limits on software patents. And the result has been a disaster, with high-tech firms being forced to spend large sums on litigation rather than innovation.
So if you enjoy your iPod and your uncensored Internet access, you have Justice Stevens to thank. Best wishes for a long, comfortable, and well-deserved retirement.
Citizens United and Corporate Money in Politics
As several of my colleagues noted yesterday, the Supreme Court handed down its landmark decision in Citizens United v. FEC. While I regarded the decision as a victory for free speech, a large number of folks on the left — many of whom support free speech in other contexts — were aghast at the decision, arguing that it would vastly enhance the influence of large corporations in the political process.
Part of my disagreement with these guys is that I’m just a free speech zealot. The First Amendment says “Congress shall make no law … abridging the freedom of speech,” and I don’t see how that language can be squared with a statute that limits the distribution of a political documentary. The best you can say, I think, is that limiting corporate influence is a “compelling state interest” sufficient to overcome the First Amendment’s ban on speech abridgment, but that’s just another way of saying that you don’t care about free speech very much.
Second, I think it’s important to remember that “corporations” encompass much more than large, for-profit businesses. They also include a wide variety of non-profit and advocacy groups, including the ACLU, the NRA, and NARAL, that are, by any reasonable definition, grassroots organizations advocating the views of large numbers of voters. Indeed, as the ACLU pointed out in its amicus brief, the Bipartisan Campaign Reform Act (BCRA) prohibited the ACLU from running ads criticizing members of Congress who voted for the awful FISA Amendments Act of 2008. Even if you think it’s appropriate for Congress to regulate the speech of Exxon-Mobil and Pfizer, I think it’s awfully hard to square the First Amendment with a law that limits the ability of NARAL or the NRA to advocate for its members’ views.
But more fundamentally, I don’t buy the idea that limiting corruption is a state interest sufficiently compelling to overcome the First Amendment interest in free speech. I think supporters of BCRA misunderstand how corporations wield influence and dramatically overestimate the power of television advertisements. It’s true, of course, that a corporation prepared to spend $1 million on ads criticizing a particular legislator will get that legislator’s attention. But there’s nothing unique about this. It can also get his attention by hiring a lobbying firm that employs a former staffer. It can get his attention by arranging $100,000 in bundled contributions from executives, clients, and friends of the company. It can get his attention by creating astroturf organizations. And there are probably lots of other mechanisms I haven’t thought of.
The key difference between independent expenditures and the other mechanisms is that independent expenditures are the most open and transparent. To run an effective “issue ad,” a corporation has to make an argument that is persuasive to voters. I don’t want to sugar coat the situation; sometimes independent expenditures finance ads that are sleazy and misleading. But given a choice between corporations spending their money on ads about how Senator Smith hates America or spending their money on K Street, I’ll take the ads, because at least voters still get the final decision.
Siding with the Geeks on Network Neutrality
One of the perennial tropes of the network neutrality debate has been the tendency of the pro-regulation side to paint it as a David-and-Goliath struggle between big, evil corporations and the little guy. Way back in 2006, James Gattuso pointed out how silly this is: in fact, the push for network neutrality is backed by some of the largest companies in Silicon Valley. Julian points out a particularly lazy example of this kind of ad hominem that happens to target Cato: It seems that we’re one of the “15 greatest enemies of net neutrality.” And that along with CEI, Cato “seems to draw its funding from a smattering of every major corporation ever to fund lobbyists.”
As Julian points out, if “VoIP News” had done its homework, it might have discovered that Cato makes its annual report freely available online. Then they they would have noticed that corporate support accounts for about 1 percent of Cato’s budget, and that none of Cato’s corporate funders are major opponents of network neutrality regulation.
Shoddy reporting aside, the “VoIP News” article does actually highlight an important point: the people who built the Internet are deeply split on the issue of regulating the Internet, with eminent computer scientists including Bob Kahn (co-inventor of the Internet’s TCP/IP protocols with Vint Cerf) and Dave Farber (another networking pioneer) on the anti-regulation side. And based on conversations I’ve had here at Princeton, Kahn and Farber are far from the only computer scientists who are skeptical that the FCC is up to the job of regulating the Internet.
In a vacuous appearance on Rachel Maddow last week, blogger Xeni Jardin cited Vint Cerf’s support of regulation and urged viewers to “side with the geeks who actually built the Internet.” She did not, of course, mention that Kahn and Farber, who fit that description as well as Cerf does, are on the other side. “The geeks” are as split on this issue as everyone else.
Update: Tim Carney has an excellent article making a similar point: Internet companies like Google and Amazon, who have lobbied hard for network neutrality, gave overwhelmingly to Obama over McCain in the 2008 election. This doesn’t prove Obama and Chairman Genachowski are insincere in their support for network neutrality. But it does mean we should take both side’s arguments with a grain of salt.
Washington Legal Foundation Opposes GBS Deal
Via James Grimmelmann, the Washington Legal Foundation, a group known for its defense of property rights, filed an objection to the Google book deal earlier this month focusing on concerns related to those I raised in my posts earlier this week.
WLF points out that the Supreme Court has mandated that plaintiffs seeking to certify a class must make a diligent effort to notify all affected class members. According to the high court’s Shutts decision, this effort must include—at a minimum—sending a letter to every identifiable member of the class. In this case, this would mean sending a letter to every address in the US Copyright Office’s database of authors. WLF questions whether this was done; the foundation reports that it never received notification related to any of the books for which it holds the copyrights.
Now, it might be objected that this process would be prohibitively expensive. But if the class is so large that it’s impractical to notify all of its members, then the class is certainly too large to expect a judge to verify that the interests of all class members is being served by the settlement. If the class is too large to notify, then it’s too large to certify.
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