In response to an earlier post on Net Neutrality, a reader asks if my “position changed since John McCain introduced his ‘Internet Freedom Act of 2009.’”  That bill, introduced as the FCC was announcing its proposed Neutrality rulemaking, is only one page long.  If passed, it would mean that the Commission could not "propose, promulgate, or issue any regulations regarding the Internet or IP-enabled services."

The reader goes on:  “Essentially, McCain wants to make it so FCC has zero regulatory powers of the internet. So, if COMCAST wants to block Hulu…or charge usuers [sic] extra, then they can and will. It seems all that separates us from a doomsday scenario with the internet is a Republican controlled government, which will happen eventually.”

The short answer is that the McCain bill does not change my position at all.

First of all, I doubt that the bill, or the opposing “Internet Freedom Preservation Act of 2009,” have much chance of passage.  The focus of activity is clearly on the FCC’s proposed rulemaking.  If that fails, or if the courts determine that the Commission doesn’t have the authority to pass neutrality rules absent new powers from Congress, than the action may shift to the legislature.  If it does, I suspect something more substantive would be offered.  The McCain bill seems to have been offered as a sign of unhappiness over the FCC’s rulemaking rather than as a genuine effort to pass a law.

Even if the McCain bill did pass as written, by the way, it’s not entirely correct to say that the FCC would have “zero regulatory powers of the Internet.”  Even in a one-page law, McCain included a number of exceptions to the general prohibition, and the bill also makes clear that any regulations related to the Internet already in place at the time of the bill’s passage would not be superseded.  If, in other words, the FCC had already enrolled the new neutrality rules before the McCain bill became law, those rules would stay in place.

But there’s a much bigger point here I want to make.  The reader believes that absent the FCC’s meddling hands, we face an imminent “doomsday scenario with the Internet.”  It’s true that there would be no law to stop Comcast from blocking Hulu, nor a law that would stop Comcast from charging extra to users who wanted that content.  But that wouldn’t mean Comcast would or could do either of these things.  Even if they did, I don't understand the hyperbole that doing so constitutes the end of the world as we know it.

To me, the biggest hole in the neutrality-or-apocalypse argument is the idea that the best--indeed, the only--defense against corporate interference with Internet content is the federal government, and specifically the Federal Communications Commission.  Often that argument comes from those who are otherwise, and rightly, skeptical of the motives or abilities of the federal bureaucracy to look out for consumer interests.

But somehow when it comes to neutrality, all of the disappointments, suspicions, and failures of government, in particular the FCC, are put aside.  The government—or anyway the current administration—believes in the open network, the argument goes, so we can trust them to regulate it in our best interests.

I’m not willing to suspend my disbelief in the face of so much evidence to the contrary, visible in communications policy and everywhere else.  But for those who need more evidence that the federal government is less likely to preserve the open network than the communications industry, look no farther than the White House.

As reported two days ago by the Washington Post’s Cecilia Kang, White House Deputy Technology Officer Andrew McLaughlin told attendees at a recent conference that the Obama administration is committed not only to neutrality but to global free speech, and that indeed, neutrality “underlies free speech on the Web.”  The two are “intrinsically linked,” according to McLaughlin, because without neutrality, there is the possibility of censorship.

“If it bothers you that the China government does it, it should bother you when your cable company does it,” McLaughlin, whose was previously responsible for global policy for Google, was quoted as saying.

The First Amendment, in other words, ought to apply to Internet access providers, and the White House sees Net Neutrality as the mechanism for ensuring that it does.

There’s just one problem with this description of the administration’s plans:  it has utterly no basis in the U.S. Constitution.

As any first-year law student (or, indeed, any reader of The Laws of Disruption) knows, the First Amendment protects citizens from interference of their speech by the government. There is no legal basis to McLaughlin’s view that it applies to private actors, whether cable companies, employers, or your mother-in-law.

Private censorship of specific content, of course, is bad.  But it is not a “free speech” problem.

(McLaughlin might be excused from this gaffe by the fact that he was speaking at a conference rather than in writing.  But no, the White House Office of Science and Technology Policy has since defended the comments.)

There are very good reasons why the First Amendment applies only to the government.  The government is the only body that has the coercive power of the military, and the power to deprive individuals of their liberty through imprisonment.  The Founding Fathers had good reason to fear interference with political speech by those with that kind of power.  So under the First Amendment, you can say all you want about McLaughlin’s views.  All he can do is refer you to the NSA for secret surveillance.  Oops.

But there is no right to free speech that U.S. citizens or their government can assert against private actors.  You have no right to proselytize your religion in the office.  You cannot stage a protest on behalf of native plants in the middle of the Safeway.  You don’t get to walk into the local newspaper and demand they print your version of the news on page one.  Your five year old cannot practice foreign curse words in school without fear of being suspended.

As those examples suggest, extending the First Amendment to everybody to assert against everybody else would be catastrophic.  Democratic society depends on a “marketplace of ideas” free of government interference.  But free of private restrictions, the marketplace becomes noise and the participants a mob.

Internet access providers can, do, and should limit what their customers do in a variety of ways for a variety of reasons.  They can limit the amount of shared bandwidth a customer can use at any given time.  They can block applications for wireless customers that the wireless network doesn’t have the capacity to handle.

And yes, they can even decide that certain websites aren’t suitable for their customers based on whatever misguided reason they have.  (Many local cable companies do in fact limit the channels their subscribers can watch based on personal morality.)  Doing so would be bad business, but it would not be a violation of “free speech.”

McLaughlin has it backwards.  The First Amendment protects even bad business decisions from interference by the government.  “Free speech” doesn’t underlie the open network.  Rather, it restricts the FCC from telling access providers what content they can or cannot promote or block.

Thank goodness it does.  Because there’s absolutely no doubt what the government would do if it had that power.  In the last ten years, administrations under both Republican and Democratic control have passed three different laws banning “indecent” content from appearing on the Internet.  (President Clinton signed the first and worst of these, “The Communications Decency Act.”)  State governments have tried even more offensive "experiments" with controlling Internet content, as I describe in Law Three, "Social Contracts in Digital Life."

The Supreme Court rejected two of the federal laws as violations of the First Amendment; the third was narrowly upheld as a restriction on libraries accepting government funding.  The FCC, meanwhile, still relishes its narrowly-allowed content control powers over broadcast television to ensure errant nipples and swear words don’t appear on live broadcasts.

It’s more than a little ironic that the White House is accusing cable companies of Chinese-style censorship for twice blocking bandwidth-hogging peer-to-peer applications.  All the evidence we have is that it is the government that would have done the real damage to the free flow of information on the Internet.  Would have, that is, if they hadn’t been blocked by the First Amendment.

In any case, it's not as if all that stands between Internet users and the gaping abyss is an empowered FCC.

Who else will protect consumers from misguided or even evil corporations?  How about the consumers themselves?  Many would be unhappy with any significant interference with the free flow of information imposed for financial or other reasons by an Internet access providers.  Believe it or not, even communications companies have to be responsive to customers sometimes.

At least for the past 200+ years of American history, most complaints and disagreements between service providers and their customers have been resolved efficiently and quickly by market forces.  If consumers don’t like restrictions imposed by a service provider, they are free to find a more enlightened or more generous provider, or pay higher fees to use more resources, or work with their local municipality to implement free WiFi service.

You can even start your own ISP—and if you do, the FCC will make sure the phone company leases its entire network to you at bargain basement prices.

If the market is broken—if real censorship takes place, and consumers find they have no other choices, and structural problems exist that make it unlikely other choices will emerge—the government already has the overused and misunderstood tool of antitrust to fix it.

But before you start storming the Bastille demanding the micromanagement or nationalization of the communications industry, consider for a moment not the odd examples where the system doesn’t work but all the times when it does.

And then consider how much worse it might be if the FCC took over “enforcement” of the open network principle.  The current administration might have one set of priorities about what constitutes “open,” but the rules will live on much longer than that.  The FCC’s proposal is not to establish specific rules in any case, but to evaluate complaints of non-neutral behavior on a “case-by-case” basis.  You know, like they do with broadcast content today.  How’s that working out for us?

We don’t need “free speech” to protect us from access providers.  We need it to protect us from the wolves in sheep’s clothing who claim to be working for our best interests.


mpaa logoI’m fascinated by the firestorm that has erupted over what sounds on paper like the most boring combination of a legal and technical discussion: the recent appeal by Hollywood for a waiver from the FCC’s Selectable Output Control (SOC) rule.

First a little background, greatly simplified. (Those wanting the gory details can read the excellent coverage of the story over at Ars Technica.) Older television sets receive cable programming through analog component wires. Newer TVs include the old analog interface but also added digital ports, such as HDMI, that can reproduce a higher-quality picture.

The SOC rule, adopted in 2003, prohibits content providers (including cable and phone companies offering television content) from manipulating transmissions in a way that turns off or otherwise disables the analog ports, which would have forced consumers either to use the digital interface or, if they don’t have those ports, buy a new set that does.

In addition to quality, the other relevant difference between analog and digital outputs is that the latter can be programmed to obey increasingly sophisticated forms of digital rights management (DRM), used to limit the reception, quality and use of received content. HDMI interfaces, among other features, support signal encryption that ensures the output is being directed to an authorized device—a television set registered for on-demand viewing, for example.

The MPAA has asked the FCC for a waiver to allow studios to broadcast new movies before they are made available on DVD. To make such broadcasts more secure, the MPAA wants permission to block the signal from being output through the analog interface. While digital outputs can be hacked and DRM bypassed, the MPAA believes that the most likely and most dangerous form of piracy of these early releases would come from users with active analog ports--what is sometimes referred to as “the analog hole.”

If the waiver is granted, content providers would be able to disable analog ports when transmitting early-release movies to the set. The digital ports could then be manipulated to ensure that the programming was not copied in violation of the new service’s terms.

The MPAA’s request is being supported by content providers including cable TV, satellite, and phone companies, as well as some device manufacturers. The principal opposition is coming from the Consumer Electronics Association, the main trade group for device manufacturers, as well as a coalition of public interest groups including Public Knowledge and the EFF. (See CEA President Gary Shapiro’s open letter to the FCC on The Huffington Post and John Bergmayer’s “SOC in Context” at Public Knowledge, as well as Ars Technica’s Matthew Lasar's response to the cable industry.)

This is not an open-and-shut case, though both sides would like to characterize it as such. The objectors argue that consumers who only have analog outputs (25 million, according to CEA) should not have their TV’s “broken” by SOC, in essence forced to upgrade to newer TVs if they want to watch early releases of new movies.

They also point out the there is no evidence that content piracy has anything to do with home viewers intercepting transmissions and translating them to media or file-sharing copies through analog interfaces or otherwise; that, indeed, the most significant source of piracy for new movies comes from insiders who get hold of production copies before or soon after movie releases.

The public interest groups are particularly concerned that a SOC waiver here is at best a Trojan Horse, giving the entertainment industry a foot in the door to control the use of more kinds of broadcasts, including those for which today there are no or fewer restrictions.

The waiver could be a start, in other words, toward more restrictive content limitations, along the lines of so-called “broadcast flag” technology embedded into TV sets that Hollywood had earlier convinced the FCC to mandate. (A federal appeals panel laughed the FCC out of court on that one, reversing the Commission as wildly out of its jurisdiction.)

Ultimately, the public interest groups believe, the SOC waiver could lead to the end of long-established rights for viewers to record and time-shift programming, a right that the Supreme Court underscored nearly 25 years ago when the same parties asked for a ban on VCRs.

The requested waiver, however, doesn’t apply beyond the “narrow” exception of the early-release movies. (A number of companies, including TiVo, have urged the FCC to allow the waiver, but only after significantly tightening up just how narrow the exception really is.) And supporters point out that without the SOC waiver that new service simply won’t be offered, harming everyone.

As the National Cable & Telecommunications Association (NCTA) put it in a letter to the FCC, “MPAA has sought waiver of the ban on SOC to permit [content providers] to provide consumers with more viewing options, which can only be made available if the ban on SOC is waived.” (emphasis added)

The implication of that statement is that the SOC waiver is a kind of technological requirement for early-release movies, which isn’t the case. What the NCTA means is that without the waiver, Hollywood won’t risk showing movies before DVD releases for fear that piracy will undermine the subsequent market for media.

Well, maybe. But even absent rampant piracy, the likelihood is that DVD and other media purchases will continue to decline (see “Hollywood: We Have Met the Enemy”) and the studios will be forced into new (potentially more-profitable) on-demand and/or subscription models. Indeed, Warner Home video is already experimenting with early release video-on-demand for new movies even without a SOC waiver.

I share the public interests groups’ fears of a slippery slope. As I write in “The Laws of Disruption,” since the advent of the Gutenberg Press, content industries have demonstrated an uncanny consistency in lobbying and litigating against every new consumer technology that threatens their control over distribution and use, including several that have, ironically, saved them from extinction.

Consumers are understandably wary of promises from their content providers and the entertainment industry that a small inconvenience is needed in order to give consumers what they want. There’s something frankly irritating not so much in the argument but in the tone with which the NCTA is making its case (“sounds like a slam dunk to me, but surprisingly, some object” NCTA head Kyle McSlarrow writes. Come on!)

On the other hand, the SOC waiver, more narrowly defined, won’t take away any abilities or rights consumers have now. Though the analogy isn’t perfect, consumers who want to see HD broadcasts must buy HD television sets. The MPAA is arguing that it won’t offer pre-release movies if it can’t stop them from coming out an analog interface. (Technically, of course, they can come out that interface.)

Eventually, the 25 million analog-only TV sets left in the U.S. will be replaced anyway, and the “analog hole” will be plugged with more secure (though hardly bulletproof) digital technology. At that point the analogy is a little better: if you want the new service, you need to plug it into a port you will likely have and not one that you have but which isn’t permitted.

In the end, I’m with TiVo and Sony (both a content producer and a device manufacturer), who “now believes that under certain, very narrow, circumstances, SOC could bring benefits to consumers that on balance would outweigh any potential drawbacks.”

At the same time, I’d sure like to see Hollywood and its partners stop listening to consumers with such a tin ear. If they devoted even a fraction of the energy they put into trying to control the uncontrollable into experimenting with a holistic approach to offering access through all the channels—media, on-demand, virtual libraries, etc.—consumers are interested in, these fights could largely be avoided. Profits would be higher and more secure, and the pressure for piracy would be greatly diminished.

As Internet Research Group's Peter Christy puts it, "The Internet is playing a fascinating role here by enabling experimentation. In the end the content owners are king, and their objective is maximum revenue capture from a menu of distribution alternatives. I think they are starting to know enough data not to act in way that will cost them money."

I'm not quite that optimistic.  But I hope he's right.

apple logoFollowing reports by Randall Stross in The New York Times and elsewhere that Apple had filed a patent application for technology that forces users of mobile or other devices to watch ads, the blogosphere lit up with lamentations. One blogger quoted by The Independent on Monday, to pick a representative example, called it “the most invasive, demeaning, anti-utopian and downright horrible piece of cross-platform software technology that anybody’s ever thought of.”

Sigh. Slow down, folks.

As Randy Stross correctly pointed out in his article, applying for a patent does not indicate an intention to use the technology in question. I also put very little significance to the fact that Steve Jobs himself is named as one of the inventors of the patent.

Here’s the reality. Companies file patent, trademark, and copyright applications for a variety of reasons. These days, perhaps the most common reason to file a patent is defensive; that is, to ensure that another patent holder can’t sue you for infringement, especially problematic given the absurdly broad applications that the Patent Office has been routinely granting in the last decade. (See my earlier post on the Bilski case.) If sued by a competitor, dormant patents can be useful bargaining chips in cross-licensing, pooling or other industry arrangements.

More to the point, the connection between patent filings and corporate strategy, especially for large technology companies, is generally nonexistent. For better and often for worse, company lawyers and the rest of the executive team historically only speak when something goes wrong.

Recently there have been movements to treat patents and other information assets using the same asset management tools applied to physical plant. That’s a good first step, but hardly the end of the road here. The full integration of legal and business strategy, including for patents, isn’t even a dream most executives dare to dream.

Apple’s patent filing almost certainly signals nothing about the company’s future intentions one way or the other.

There’s plenty of things for bloggers to get agitated about. This isn’t one of them.