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John Perry Barlow famously said that in cyberspace, the First Amendment is just a local ordinance.  That's still true, of course, and worth remembering.  But at least today there is good news in the shire.  The local ordinance still applies with full force, if only locally.

As I write in CNET this evening (see "Video Games Given Full First Amendment Protection"), the U.S. Supreme Court issued a strong and clear opinion today nullifying California's 2005 law prohibiting the sale or rental to minors of what the state deemed "violent video games."

The 7-2 decision in Brown v. EMA follows last week's decision in Sorrell, which also addressed the role of the First Amendment in the digital economy.  Sorrell dealt with a Vermont law that banned data mining of pharmacy information.  That application, the Court said, was also protected speech.

The CNET article is quite long (duh), and I'll let it speak for itself.  There is also excellent commentary on both decisions from Adam Thierer and Berin Szoka at the Technology Liberation Front.  Adam and Berin submitted an amicus brief in the EMA case that closely tracked the Court's opinion, which in fact quoted from another amicus brief from the Cato Institute.  Berin also contributed a brief in the Sorrell case, again on the winning side.

Perhaps the most interesting commentary on today's decision, however, comes from Prof. Susan Crawford.  Prof. Crawford's blog on EMA notes that an important feature of the majority decision (written by Justice Scalia and joined by Justices Kennedy, Ginsburg, Sotomayor and Kagan) is what she calls the "absolute" view it takes of speech.  Crawford writes of Scalia's opinion:

“Whether government regulation applies to creating, distributing, or consuming speech makes no difference,” he says in response to Justice Alito’s attempt to say that sale/rental is different from “creation” or “possession” of particular speech.

That view is absolute in the sense that it does not distinguish between different stages of the supply chain of information provisioning.  The "speaker," for First Amendment purposes, is not only the author of the content, but also distributors, retailers, and consumers.  Each is equally protected by the First Amendment's prohibition on government interference, whether that interference is a ban on certain content (violent video games) or a requirement to promote it (must-carry rules for cable).

Why does this matter?  Though I have written and tesftified extensively about the FCC's December, 2010 "Open Internet" order, I have so far avoided discussion of a possible First Amendment challenge.  Frankly, I hadn't initially thought it to be the strongest available argument against the legality of the rules.

But Prof. Crawford, a strong advocate for "net neutrality" in general, reads EMA as adding support to such an argument:

Today’s opinion may further strengthen the carriers’ arguments that any nondiscrimination requirement imposed on them should be struck down.  Although a nondiscrimination requirement arguably promotes speech rather than proscribes it, the long-ago Turner case on “must-carry” obligations for cable already suggested that the valence of the requirement doesn’t really matter.

If challengers to the Open Internet order (which today added the State of Virginia to the list of those waiting in the wings to file lawsuits) can convince a court that rules requiring nondiscriminatory treatment of packets are effectively requiring carriers to speak, such a rule would be seen as content-based.  Under EMA and last year's decision in Stevens, such a rule could fail a First Amendment challenge.

It's an interesting argument, to say the least.  I think I'll give it a little more thought.

Larry will be giving a short keynote on "The Future of Communications" as part of eComm 2011.  The conference takes place from June 27-29 at the San Francisco Marriott hotel, and Larry's talk will be on Tuesday, June 28 in the afternoon.  Larry will address the dangerous call to treat communications industry companies as "public utilities."

Last week the Senate Commerce Committee passed--with deep bi-partisan support--the Public Safety Spectrum and Wireless Innovation Act. The bill, co-sponsored by Committee Chairman Jay Rockefeller and Ranking Member Kay Bailey Hutchison, is a comprehensive effort to resolve several long-standing stalemates and impending crises having to do with one of the most critical 21st century resources:  radio spectrum.

My analysis of the bill appears today on CNET.  See "Spectrum reform, public safety network move forward in Senate."

The proposed legislation is impressive in scope; it offers new and in some cases novel solutions to more than half-a-dozen spectrum-related problems, including:

1.  Voluntary incentive auctions - The bill authorizes the FCC to coordinate "voluntary incentive auctions"  (VIA) of under-utilized spectrum from over-the-air TV broadcasters to better uses, including mobile broadband.  Broadcasters giving up some or all of their licensed spectrum would share the proceeds with the government.  The FCC has been asking for this authority for two years.

2.  Public safety network - The bill would break the logjam over the long-desired nationwide interoperable public safety network.  It would create a new non-profit public-private partnership to build the network, with an outright grant of the D-block of 700 Mhz. spectrum.  (That block, freed up as part of the 2009 transition to digital TV, has sat idle since a failed auction in 2008.)  Financing for the build-out would come from proceeds of the VIAs.  The public safety network has been in limbo since it was first proposed soon after 9/11.  (The proposed bill is S. 911.)

3.  Spectrum inventory - The FCC would be required to complete a comprehensive inventory of existing licenses (which, amazingly, doesn't exist) within 180 days.  President Obama ordered the agency to complete the inventory over a year ago, but so far only a "baseline" inventory has been created.

4.  Secondary markets - The FCC would be required to begin a rulemaking to review current limits to secondary spectrum markets that interfere with liquidity, in the hopes of making them more robust.  (VIAs could take years to organize and conduct.)

5.  Public spectrum - The National Telecommunications and Information Administration would be required to identify significant blocks of underutilized federal spectrum allocations and make them available for auction by the FCC.

6.  Spectrum innovation - The National Science Foundation and other grant-making agencies would be required to accelerate research grants for new technologies that would make spectrum use more efficient.

7.  Repacking - While the FCC can't require broadcasters to participate in VIAs, it can force them to move to nearby channels if doing so would free up more valuable blocks of spectrum for auction.  A fund would be created to compensate stations for the disruption of switching channels.

The range of issues that S.911 deals with suggests the breadth of the current spectrum crisis.  Here it is in a nutshell.  Radio frequencies are a limited public resource.  Up until recently, however, there's been more than enough to go around.  Following the advice of Nobel prizewinning economist Ronald A. Coase, the FCC has used auctions to find the best and highest use for this resource, generating significant revenue in the process.

But the digital age has changed the dynamics of spectrum.  Mobile uses are exploding, as are mobile devices, mobile applications, mobile users and mobile everything else.  Moore's Law is rapidly overtaking FCC law once again.  Existing wireless networks are groaning under the strain of volume that has increased 8000% since the launch of the iPhone.

Last year's National Broadband Plan, for example, predicted that 300 Mhz. of additional spectrum would need to be found to keep mobile broadband on track.

But the government's current processes of finding and allocating more spectrum are simply too slow to keep pace with the current wave of technological innovation.  It will get worse as 3G moves to 4G and from there--well, who knows?  All we can safely predict is that the "G"s will keep coming, and arrive faster all the time.  So radical re-thinking of spectrum management is urgent.  We need serious spectrum policy reform, and we need it yesterday.

Part of the solution will come from technology itself, including innovation to make more efficient use of existing allocations, expanding the range of usable spectrum for more uses, capabilities to dynamically share spectrum and rebalance loads, and so on.  There are impressive developments in these and other strategies for coping with the potential of spectrum exhaustion, but no one can say with confidence that the solutions will outpace the problems.

The bigger issue underlying spectrum exhaustion is the glacial pace with which current regulatory systems work to rebalance allocations.

Once a license is granted, the licensee can largely rely on keeping it indefinitely.  If they operate in a stable or shrinking market (such as over-the-air broadcast, which the Consumer Electronics Association said recently has shrunk to only 8% of U.S. households), there's no incentive to optimize the property, which, for the licensee, is a sunk cost.

Given the limits of secondary markets, there's also little  incentive to find more efficient uses of the allocation and free up spectrum that is no longer needed for its licensed purpose.  Indeed, even for operators who want to exit the market in part or in whole, use limitations on existing allocations make transfer through secondary markets cumbersome if not impossible.

Even if the FCC unblocks these markets, game theory problems may constrain the effectiveness of either the VIAs or the secondary markets.

Federal users, of course, feel no competitive threat to optimize their allocations, and fall back to the conversation-ending "national defense" excuse whenever the possibility emerges of giving up some of the frequencies they are warehousing.

And then there are state and local authorities, who also share jurisdiction over communications.  Limits on cell tower construction, use, and other technical improvements aren't addressed in the proposed legislation.  But they are equally to blame for the crisis mentality.

S. 911 is a good start toward removing some of the institutional barriers that limit our flexibility in rebalancing spectrum needs and spectrum allocations.  But it's only a start.  If the information revolution is to continue uninterrupted, we need a lot more improvements.

And soon.

We’ve added about a dozen new posts to the Media Page on my website, reflecting a sampling of articles, media quotes, and radio appearances from the last few months. These include several pieces for CNET and Forbes, as well as links to appearances on NPR’s “Science Friday” (debating Sen. Al Franken on privacy law) and “Marketplace.”

I continue to be called on to help business leaders understand the confusing and dangerous new interest that national, state and local governments are taking in the “management” of the digital economy. I’ve been speaking most recently about Apple’s iPhone privacy flap (which turned out to have nothing to do with privacy), the AT&T/T-Mobile merger, and pending legislation in Congress aimed at curbing online piracy of movies and trademarked goods, the so-called “Protect IP” Act.

Next week, I’ll be making my tenth visit this year to Washington to meet with Congressional staffers and other policy makers to discuss these and other worrisome developments. Increasingly, my role seems to be as an unofficial representative of Silicon Valley helping regulators see the potential damage to innovation from ill-considered laws.

Of course I continue my long-standing work with companies working to introduce new products and services that exploit digital technology. The introduction of “killer apps” only gets faster with time, and more than ten years since the publication of my first book, I’m deeply flattered to hear from entrepreneurs who tell me the book still works as a manual for success in the digital age.

"Larry Downes on IP enforecement online," Mercatus Center, June 7, 2011. Larry was the guest for Jerry Brito's "Surprisingly Free" podcast to discuss the pros and cons of proposed new legislation aimed at curbing online piracy. (30 minutes)

"For AT&T merger, Sprint dusts off its Christmas list," CNET, May 25, 2011. Larry review the facts about Sprint's claim that the AT&T/T-Mobile merger would impact the obscure but essential "backhaul" market for mobile communications, concluding that regulatory arbitrage is well underway.