SiliconValley.com reports that the US House has approved a measure that would outlaw deceptive Caller ID spoofing.
Since I'm currently enamored of a principles-based approach to regulating rapidly changing technology businesses -- that is, policy makers should specify the goals to be achieved, and delegate the means to agents nearer the action -- I'm on the look-out for working examples.
This seems to be one: the bill leaves it up to the FCC to figure out the details of regulation and enforcement.
The FCC itself could delegate further if is so chose, for example by waiting to see if telephone companies come up with effective ways of regulating this problem themselves before trying to devising and imposing its own detailed rules.
Friday, April 16, 2010
Friday, March 26, 2010
Trying to explain the Resilience Principles
I was honored to participate in a panel in DC on "An FCC for the Internet Age: Reform and Standard-Setting" organized by Silicon Flatirons, ITIF and Public Knowledge on March 5th, 2010. My introductory comments tried to summary the "resilience principles" in five minutes: the video is available on the Public Knowledge event page, starting at time code 02:04:45. The panel starts at around 01:57:00.
The earlier, fifteen minute pitch I gave on a panel on "The Governance Challenges of Cooperation in the Internet Ecosystem" at the Silicon Flatirons annual conference in Boulder on February 1st, 2010 can be found here at time code 01:36:00. My slides are up on Slideshare.net, and a paper is in preparation for JTHTL.
This work is an outgrowth of my TPRC 2008 paper “Internet Governance as Forestry” (SSRN).
The earlier, fifteen minute pitch I gave on a panel on "The Governance Challenges of Cooperation in the Internet Ecosystem" at the Silicon Flatirons annual conference in Boulder on February 1st, 2010 can be found here at time code 01:36:00. My slides are up on Slideshare.net, and a paper is in preparation for JTHTL.
This work is an outgrowth of my TPRC 2008 paper “Internet Governance as Forestry” (SSRN).
Saturday, March 06, 2010
Obviating mandatory receiver standards
Two remarks I heard at a meeting of a DC spectrum advisory committee helped me understand that endless debates about radio receiver standards are the result of old fashioned wireless rights definitions. The new generation of rights definitions could render the entire receiver standards topic moot.
First, a mobile phone executive explained to me that his company was forced to develop and install filters in the receiver cabinets used by broadcasters for electronic newsgathering because it had a “statutory obligation to protect” these services, even though they operated in different frequency ranges.
Second, during the meeting the hoary topic of receiver standards was raised again; it’s long-rehearsed problem that shows no sign of being solved. It’s a perennial topic because wireless interference depends as much on the quality of the receiver as the characteristics of the transmitted signal. A transmission that would be ignored by a well-designed receiver could cause severe degradation in a poor (read: cheap) receiver. Transmitters are thus at the mercy of the worst receiver they need to protect.
A statutory obligation to protect effectively gives the protectee a blank check; for example, the protectee can change to a lousy receiver, and force the transmitting licensee to pay for changes (in either their transmitters or the protectee’s receivers) to prevent interference. This is an open-ended transfer of costs from the protectee to the protector.
The protectors thus dream of limiting their downside by having the regulator impose receiver standards on the protectee. If the receiver’s performance can be no worse than some lower limit, there is a limit on the degree of protection the transmitter has to provide.
The problem with mandatory receiver standards is that it gets the regulator into the game of specifying equipment. This is a bad idea, since any choice of parameters (let alone parameter values) enshrines a set of assumptions about receiver design, locks in specific solutions, and obviates innovation that might solve the problem in new ways. Manufacturers have always successfully blocked the introduction of mandatory standards on the basis that they constrain innovation and commercial choice.
An open-ended statutory obligation to protect therefore necessarily leads to futile calls for receiver standards.
One could moot receiver standards by changing how wireless rights are defined. Rather than bearing an open-ended obligation to protect, the transmitter should have an obligation to operate within specific limits on energy delivered into frequencies other than their own. These transmission limits could be chosen to ensure that adjacent receivers are no worse off than they were under an “open-ended obligation to protect” regime. (The “victim” licensee will, though, lose the option value of being able to change their system specification at will.)
The main benefit is certainty: the recipient of a license will know at the time of issue what kind of protection they’ll have to provide. The cellular company mentioned above didn’t find out until after the auction how much work they would have to do to protect broadcasters since nobody (including the FCC) understood how lousy the broadcasters’ receivers were.
The regulatory mechanisms for doing this are well known, and have been implemented; they include the “space-centric” licensing approach used in Australia (PDF), and Spectrum Usage Rights (SURs) in the UK.
Moving to new rights regimes is a challenging; Ofcom’s progress has been slow. One of the main difficulties is that licensees for new allocations prefer to do things the old, known, way. One of the supposed drawbacks of SURs is that the benefits of certainty seem to accrue a licensee’s neighbor, rather than the new licensee themselves. However, removing the unlimited downside in an open-ended obligation to protect adjacent operations should prove attractive. The whining will now come from the neighbors who will lose their blank check; careful definition of the licensee’s cross-channel interference limits to maintain the status quo should take the sting out of the transition.
First, a mobile phone executive explained to me that his company was forced to develop and install filters in the receiver cabinets used by broadcasters for electronic newsgathering because it had a “statutory obligation to protect” these services, even though they operated in different frequency ranges.
Second, during the meeting the hoary topic of receiver standards was raised again; it’s long-rehearsed problem that shows no sign of being solved. It’s a perennial topic because wireless interference depends as much on the quality of the receiver as the characteristics of the transmitted signal. A transmission that would be ignored by a well-designed receiver could cause severe degradation in a poor (read: cheap) receiver. Transmitters are thus at the mercy of the worst receiver they need to protect.
A statutory obligation to protect effectively gives the protectee a blank check; for example, the protectee can change to a lousy receiver, and force the transmitting licensee to pay for changes (in either their transmitters or the protectee’s receivers) to prevent interference. This is an open-ended transfer of costs from the protectee to the protector.
The protectors thus dream of limiting their downside by having the regulator impose receiver standards on the protectee. If the receiver’s performance can be no worse than some lower limit, there is a limit on the degree of protection the transmitter has to provide.
The problem with mandatory receiver standards is that it gets the regulator into the game of specifying equipment. This is a bad idea, since any choice of parameters (let alone parameter values) enshrines a set of assumptions about receiver design, locks in specific solutions, and obviates innovation that might solve the problem in new ways. Manufacturers have always successfully blocked the introduction of mandatory standards on the basis that they constrain innovation and commercial choice.
An open-ended statutory obligation to protect therefore necessarily leads to futile calls for receiver standards.
One could moot receiver standards by changing how wireless rights are defined. Rather than bearing an open-ended obligation to protect, the transmitter should have an obligation to operate within specific limits on energy delivered into frequencies other than their own. These transmission limits could be chosen to ensure that adjacent receivers are no worse off than they were under an “open-ended obligation to protect” regime. (The “victim” licensee will, though, lose the option value of being able to change their system specification at will.)
The main benefit is certainty: the recipient of a license will know at the time of issue what kind of protection they’ll have to provide. The cellular company mentioned above didn’t find out until after the auction how much work they would have to do to protect broadcasters since nobody (including the FCC) understood how lousy the broadcasters’ receivers were.
The regulatory mechanisms for doing this are well known, and have been implemented; they include the “space-centric” licensing approach used in Australia (PDF), and Spectrum Usage Rights (SURs) in the UK.
Moving to new rights regimes is a challenging; Ofcom’s progress has been slow. One of the main difficulties is that licensees for new allocations prefer to do things the old, known, way. One of the supposed drawbacks of SURs is that the benefits of certainty seem to accrue a licensee’s neighbor, rather than the new licensee themselves. However, removing the unlimited downside in an open-ended obligation to protect adjacent operations should prove attractive. The whining will now come from the neighbors who will lose their blank check; careful definition of the licensee’s cross-channel interference limits to maintain the status quo should take the sting out of the transition.
Friday, February 26, 2010
Engineers, Commissars and Regulators: Layered self-regulation of network neutrality
My post Ostrom and Network Neutrality suggested that a nested set of self- or co- regulatory enterprises (Ostrom 1990:90) could be useful when designing regulatory approaches to network neutrality, but I didn’t give any concrete suggestions. Here’s a first step: create separate arenas for discussing engineering vs. business.
One’s immediate instinct when devising a shared regulatory regime (see the list of examples at the end) might be to involve all the key players; at least, that’s what I pointed to in When Gorillas Make Nice. However, I suspect that successful self-regulatory initiatives have to start with a relatively narrow membership and scope: typically, a single industry, rather than a whole value chain. That’s the only way to have a decent shot at creating and enforcing basic norms. Legitimacy will require broadening the list of stakeholder, but too many cooks at the beginning will lead to kitchen gridlock.
Let’s stipulate for now that the key problem is defining what “acceptable network management practices” amount to. Most participants in the network neutrality debate agree that ISPs should be able to manage their networks for security and efficiency, even if there is disagreement about whether specific practices are just good housekeeping or evil rent-seeking.
The engineering culture and operating constraints of different networks are quite distinct: phone companies vs. cable guys; more or less symmetrical last mile pipes; terminating fiber in the home vs. at cabinet; and not least, available capacity in wireline vs. wireless networks. Reconciling these differences and creating common best practices within the network access industry will be hard; that’s the lowest layer of self-regulation. The “Engineers” should be tasked with determining the basic mechanisms of service provision, monitoring compliance with norms, and enforcing penalties against members who break the rules.
The core participants are the telcos (e.g. Verizon, AT&T) and cable companies (e.g. Comcast, Time Warner Cable), in both their wireline and wireless incarnations. Only within a circumscribed group like this is there is any hope of detailed agreement about best practices, let alone the monitoring and enforcement that is essential for a well-functioning self-regulatory organization. Many important network parameters are considered secret sauce; while engineers inside the industry circle can probably devise ways monitor each other’s compliance without giving the MBAs fits, there’s no chance that they’ll be allowed to let Google or Disney look inside their network operating centers.
The next layer of the onion adds the companies who use these networks to deliver their products: web service providers like Google, and content creators like Disney. Let’s call this group the “Commissars”. This is where questions of political economy are addressed. The Commissars shape the framework within which the network engineers decide technical best practices. It’s the business negotiation group, the place where everybody fights over dividing up the rents; it needs to find political solutions that reconcile the very different interests at stake:
The Engineers can work in parallel to the Commissars, and don’t need to wait for the political economists to fight out questions about rents; in any case, it will be helpful for the Commissars to have concrete network management proposals to argue about. There will be a loop, with the conclusions of one group influencing the other. The Commissars inform the Engineers about the constraints on what would constitute acceptable network management, and the Engineers inform the Commissars about what is practical.
Finally, government actors – call them the “Regulators” – set the rules of the game and provide a backstop if the Engineers and Commissars fail to come up with a socially acceptable solution, or fail to discipline bad behavior. Since the internet and the web are critical infrastructure, governments speaking for citizens are entitled to frame the overall goals that these industries should serve, even though they are not well qualified to define the means for achieving them. Final adjudication of unresolved disputes rests with the Regulators.
References
Ofcom, Initial assessments of when to adopt self- or co-regulation, December 10, 2008,
http://www.ofcom.org.uk/consult/condocs/coregulation/condoc.pdf
Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge University Press, 1990
Philip J. Weiser, Exploring Self Regulatory Strategies for Network Management: A Flatirons Summit on Information Policy, August 25, 2008,
http://www.silicon-flatirons.org/documents/publications/summits/WeiserNetworkManagement.pdf
Examples of self- and co-regulatory bodies
The Internet Watch Foundation (IWF) in the UK works to standardize procedures for the reporting and taking-down of abusive images of children. It was established in 1996 by the internet industry to allow the public and IT professionals to report criminal online content in a secure and confidential way. (Ofcom 2008:9, and IWF)
The UK “Classification Framework” for content on mobile phones is provided by the Independent Mobile Classification Body (IMCB) with the aim of restricting young people’s access to inappropriate content. It is the responsibility of content providers to self-classify their own content as “18” where appropriate; access to such content will be restricted by the mobile operators until customers have verified their age as 18 or over with their operator. (Ofcom 2008:9, and IMCB)
The Dutch organization NICAM (Nederlands Instituut voor de Classificatie van Audiovisuele Media) administers a scheme for audiovisual media classification. It includes representatives of representatives of public and commercial broadcasters, film distributors and cinema operators, distributors, videotheques and retailers. (Ofcom 2008:9, and NICAM)
Amateur radio service and frequency coordinators provide examples of self-regulation in spectrum policy. The American Radio Relay League (ARRL) has an understanding with the FCC that it manages the relevant enforcement activities related to the use of ham radio. Only in the most egregious cases will ARRL report misbehavior to the FCC Enforcement Bureau. (Weiser 2008:23)
The Better Business Bureau’s National Advertising Division (NAD) enforces US rules governing false advertising, using threats of referrals to the FTC to encourage compliance with its rules. (Weiser 2008:24, and NAD)
US movie ratings are provided by a voluntary system operated by the MPAA and the National Association of Theater Owners.
One’s immediate instinct when devising a shared regulatory regime (see the list of examples at the end) might be to involve all the key players; at least, that’s what I pointed to in When Gorillas Make Nice. However, I suspect that successful self-regulatory initiatives have to start with a relatively narrow membership and scope: typically, a single industry, rather than a whole value chain. That’s the only way to have a decent shot at creating and enforcing basic norms. Legitimacy will require broadening the list of stakeholder, but too many cooks at the beginning will lead to kitchen gridlock.
Let’s stipulate for now that the key problem is defining what “acceptable network management practices” amount to. Most participants in the network neutrality debate agree that ISPs should be able to manage their networks for security and efficiency, even if there is disagreement about whether specific practices are just good housekeeping or evil rent-seeking.
The engineering culture and operating constraints of different networks are quite distinct: phone companies vs. cable guys; more or less symmetrical last mile pipes; terminating fiber in the home vs. at cabinet; and not least, available capacity in wireline vs. wireless networks. Reconciling these differences and creating common best practices within the network access industry will be hard; that’s the lowest layer of self-regulation. The “Engineers” should be tasked with determining the basic mechanisms of service provision, monitoring compliance with norms, and enforcing penalties against members who break the rules.
The core participants are the telcos (e.g. Verizon, AT&T) and cable companies (e.g. Comcast, Time Warner Cable), in both their wireline and wireless incarnations. Only within a circumscribed group like this is there is any hope of detailed agreement about best practices, let alone the monitoring and enforcement that is essential for a well-functioning self-regulatory organization. Many important network parameters are considered secret sauce; while engineers inside the industry circle can probably devise ways monitor each other’s compliance without giving the MBAs fits, there’s no chance that they’ll be allowed to let Google or Disney look inside their network operating centers.
The next layer of the onion adds the companies who use these networks to deliver their products: web service providers like Google, and content creators like Disney. Let’s call this group the “Commissars”. This is where questions of political economy are addressed. The Commissars shape the framework within which the network engineers decide technical best practices. It’s the business negotiation group, the place where everybody fights over dividing up the rents; it needs to find political solutions that reconcile the very different interests at stake:
- The ISPs want to prevent regulation, and be able to monetize their infrastructure by putting their hand in Google’s wallet, and squeezing content creators.
- Google wants to keep their wallet firmly shut, and funnel small content creators’ surplus to Mountain View, not the ISPs.
- Large content creators want to get everybody else to protect their IPR for them.
- New content aggregators (e.g. Miro) want a shot at competing in the video business with the network facility owners.
The Engineers can work in parallel to the Commissars, and don’t need to wait for the political economists to fight out questions about rents; in any case, it will be helpful for the Commissars to have concrete network management proposals to argue about. There will be a loop, with the conclusions of one group influencing the other. The Commissars inform the Engineers about the constraints on what would constitute acceptable network management, and the Engineers inform the Commissars about what is practical.
Finally, government actors – call them the “Regulators” – set the rules of the game and provide a backstop if the Engineers and Commissars fail to come up with a socially acceptable solution, or fail to discipline bad behavior. Since the internet and the web are critical infrastructure, governments speaking for citizens are entitled to frame the overall goals that these industries should serve, even though they are not well qualified to define the means for achieving them. Final adjudication of unresolved disputes rests with the Regulators.
References
Ofcom, Initial assessments of when to adopt self- or co-regulation, December 10, 2008,
http://www.ofcom.org.uk/consult/condocs/coregulation/condoc.pdf
Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge University Press, 1990
Philip J. Weiser, Exploring Self Regulatory Strategies for Network Management: A Flatirons Summit on Information Policy, August 25, 2008,
http://www.silicon-flatirons.org/documents/publications/summits/WeiserNetworkManagement.pdf
Examples of self- and co-regulatory bodies
The Internet Watch Foundation (IWF) in the UK works to standardize procedures for the reporting and taking-down of abusive images of children. It was established in 1996 by the internet industry to allow the public and IT professionals to report criminal online content in a secure and confidential way. (Ofcom 2008:9, and IWF)
The UK “Classification Framework” for content on mobile phones is provided by the Independent Mobile Classification Body (IMCB) with the aim of restricting young people’s access to inappropriate content. It is the responsibility of content providers to self-classify their own content as “18” where appropriate; access to such content will be restricted by the mobile operators until customers have verified their age as 18 or over with their operator. (Ofcom 2008:9, and IMCB)
The Dutch organization NICAM (Nederlands Instituut voor de Classificatie van Audiovisuele Media) administers a scheme for audiovisual media classification. It includes representatives of representatives of public and commercial broadcasters, film distributors and cinema operators, distributors, videotheques and retailers. (Ofcom 2008:9, and NICAM)
Amateur radio service and frequency coordinators provide examples of self-regulation in spectrum policy. The American Radio Relay League (ARRL) has an understanding with the FCC that it manages the relevant enforcement activities related to the use of ham radio. Only in the most egregious cases will ARRL report misbehavior to the FCC Enforcement Bureau. (Weiser 2008:23)
The Better Business Bureau’s National Advertising Division (NAD) enforces US rules governing false advertising, using threats of referrals to the FTC to encourage compliance with its rules. (Weiser 2008:24, and NAD)
US movie ratings are provided by a voluntary system operated by the MPAA and the National Association of Theater Owners.
Friday, February 12, 2010
Ostrom and Network Neutrality
My previous post scratched the surface of a self-regulatory solution to network neutrality concerns. While this isn’t exactly a common pool resource (CPR) problem, I find Elinor Ostrom’s eight principles for managing CPRs are helpful here (Governing the Commons: The evolution of institutions for collective action, 1990).
Jonathan Sallet boils them down to norms, monitoring and enforcement, and that’s a good aide memoire. It’s useful, though, to look at all of them (Ostrom 1990:90, Table 3.1):
In addition to the lack of sanctions, two other key issues are not addressed. Principle #1 addresses a key requisite for a successful co-regulatory approach: that industry is able to establish clear objectives. Given the vagueness of the principles in the filing, it’s still an open question whether the parties can draw a bright line around the problem.
I believe #8 can help: create a nested set of (self- or co-) regulatory enterprises. While I don’t yet have concrete suggestions, I’m emboldened by the fact that nested hierarchy is also a hallmark of complex adaptive systems, which I contend are a usable model for the internet governance problem. Ostrom’s three levels of analysis and processes offer a framework for nesting (1990:53):
Jonathan Sallet boils them down to norms, monitoring and enforcement, and that’s a good aide memoire. It’s useful, though, to look at all of them (Ostrom 1990:90, Table 3.1):
1. Clearly defined boundaries: Individuals of households who have rights to withdraw resource units from the CPR must be clearly defined, as must the boundaries of the CPR itself.Many but not all of these considerations are addressed in the filing and my comments: The headline of section B that “self-governance has been the hallmark of the growth and success of the Internet” reflects #2. My point about involving consumers speaks to #3. The TAGs mooted in the letter address #4 and #6, but not #5. The purpose of the letter is to achieve #7.
2. Congruence between appropriation and provision rules and local conditions: Appropriation rules restricting time, place, technology, and/or quantity of resource units are related to local conditions and to provision rules requiring labor, material, and/or money.
3. Collective-choice arrangements: Most individuals affected by the operational rules can participate in modifying the operational rules.
4. Monitoring: Monitors, who actively audit CPR conditions and appropriator behavior, are accountable to the appropriators or are the appropriators.
5. Graduated sanctions: Appropriators who violate operational rules are likely to be assessed graduated sanctions (depending on the seriousness and context of the offense) by other appropriators, by officials accountable to these appropriators, or by both.
6. Conflict-resolution mechanisms: Appropriators and their officials have rapid access to low-cost local arenas to resolve conflicts among appropriators or between appropriators and officials.
7. Minimal recognition of rights to organize: The rights of appropriators to devise their own institutions are not challenged by external governmental authorities.
8. (For CPRs that are parts of larger systems) Nested enterprises: Appropriation, provision, monitoring, enforcement, conflict resolution, and governance activities are organized in multiple layers of nested enterprises.
In addition to the lack of sanctions, two other key issues are not addressed. Principle #1 addresses a key requisite for a successful co-regulatory approach: that industry is able to establish clear objectives. Given the vagueness of the principles in the filing, it’s still an open question whether the parties can draw a bright line around the problem.
I believe #8 can help: create a nested set of (self- or co-) regulatory enterprises. While I don’t yet have concrete suggestions, I’m emboldened by the fact that nested hierarchy is also a hallmark of complex adaptive systems, which I contend are a usable model for the internet governance problem. Ostrom’s three levels of analysis and processes offer a framework for nesting (1990:53):
- Constitutional choice: Formulation, Governance, Adjudication, Modification
- Collective choice: Policy-making, Management, Adjudication
- Operational choice: Appropriation, Provision, Monitoring, Enforcement
When Gorillas Make Nice
Verizon and Google’s recent joint FCC filing about the values and governance of the internet largely echoes the conclusions of a Silicon Flatirons summit in August 2008 (PDF): that self-governing institutions are the best way to manage day-to-day questions of network neutrality, with the government acting as a backstop when market forces and self-regulation fail.
The filing seems to come in two parts: a statement of principles, and a sketch of how self-governance might work. I’ll largely ignore the first part, since clearly Google and Verizon found little to agree on. The three key principles are motherhood (consumer transparency and control), Google’s non-negotiable (openness) and Verizon’s (encouraging investment), respectively; it’s hard to argue with any of this, except to observe that the hard work lies in achieving them simultaneously.
The most useful resource on self-regulation in communications I’ve seen is Ofcom’s 2008 statement on “Identifying appropriate regulatory solutions: principles for analysing self- and co-regulation” (PDF). It concluded that self-regulation is most likely to work when “industry collectively has an interest in solving the issue; industry is able to establish clear objectives for a potential scheme; and the likely industry solution matches the legitimate needs of citizens and consumers.”
If their effort is to succeed, the companies will have to build an institution that represents all interests. Let's stipulate that the three main stakeholder groups are content players, network operators and consumers; Google and Verizon fall in the first two groups. On the network side, they’ll need to add the cable industry (always much more leery of network neutrality than the long-regulated telcos), and on the content side, the studios. The trickiest part will be finding a “consumer voice” with some legitimacy; everybody, not least these companies, claims to have the consumer’s best interest at heart.
The filing is predictably vague about the basis on which government would become involved, and is silent about how its proposed institution would enforce its own norms. That’s a mistake. It’s in the companies’ best interest to declare which sword they want hanging over their heads. If they don’t, there won’t be sufficient incentive to Do the Right Thing in the short term (the CEO will ask, “If I’m not breaking a law, why should I go the extra mile?”), which means that eventually a mountain of punctilious rules will be imposed on them. (It’s my understanding that this is what happened over the last decade with accessibility to the internet for those with disabilities: tech companies promised a decade ago they’d solve the problem, didn’t do all that much, and now Rep. Markey is writing detailed rules.)
It’s not clear to me whether the filing is proposing self- or co-regulation, defined by Ofcom (2008) as follows:
The filing seems to come in two parts: a statement of principles, and a sketch of how self-governance might work. I’ll largely ignore the first part, since clearly Google and Verizon found little to agree on. The three key principles are motherhood (consumer transparency and control), Google’s non-negotiable (openness) and Verizon’s (encouraging investment), respectively; it’s hard to argue with any of this, except to observe that the hard work lies in achieving them simultaneously.
The most useful resource on self-regulation in communications I’ve seen is Ofcom’s 2008 statement on “Identifying appropriate regulatory solutions: principles for analysing self- and co-regulation” (PDF). It concluded that self-regulation is most likely to work when “industry collectively has an interest in solving the issue; industry is able to establish clear objectives for a potential scheme; and the likely industry solution matches the legitimate needs of citizens and consumers.”
If their effort is to succeed, the companies will have to build an institution that represents all interests. Let's stipulate that the three main stakeholder groups are content players, network operators and consumers; Google and Verizon fall in the first two groups. On the network side, they’ll need to add the cable industry (always much more leery of network neutrality than the long-regulated telcos), and on the content side, the studios. The trickiest part will be finding a “consumer voice” with some legitimacy; everybody, not least these companies, claims to have the consumer’s best interest at heart.
The filing is predictably vague about the basis on which government would become involved, and is silent about how its proposed institution would enforce its own norms. That’s a mistake. It’s in the companies’ best interest to declare which sword they want hanging over their heads. If they don’t, there won’t be sufficient incentive to Do the Right Thing in the short term (the CEO will ask, “If I’m not breaking a law, why should I go the extra mile?”), which means that eventually a mountain of punctilious rules will be imposed on them. (It’s my understanding that this is what happened over the last decade with accessibility to the internet for those with disabilities: tech companies promised a decade ago they’d solve the problem, didn’t do all that much, and now Rep. Markey is writing detailed rules.)
It’s not clear to me whether the filing is proposing self- or co-regulation, defined by Ofcom (2008) as follows:
Self-regulation: Industry collectively administers a solution to address citizen or consumer issues, or other regulatory objectives, without formal oversight from government or regulator. There are no explicit ex ante legal backstops in relation to rules agreed by the scheme (although general obligations may still apply to providers in this area).I think co-regulation is indicated here. Without a backstop there will not be sufficient incentive for good behavior. Politically, too, the term “self-regulation” has become anathema in Washington DC because the financial melt-down is deemed to have been due to a failure in the same. (Not that it matters, but I think this assessment is incorrect on two counts: self-regulation is only part of a much larger problem in the financial crisis; and even if it weren’t, the lessons learned are not easily transposable to communications policy. Still, it’s probably best to use another term, like shared regulation, supervised delegation or bounded autonomy.)
Co-regulation: Schemes that involve elements of self- and statutory regulation, with public authorities and industry collectively administering a solution to an identified issue. The split of responsibilities may vary, but typically government or regulators have legal backstop powers to secure desired objectives.
Wednesday, February 10, 2010
The internet is not an ecosystem, but…
The “internet ecosystem” metaphor is ubiquitous; I’ve used it myself, though with some trepidation. I think I can now reconcile why it’s both wrong and useful.
It’s wrong, strictly speaking, since many aspects of the ecosystem-internet mapping are questionable. As I blogged in 2007 about the “business ecosystem” terminology, the validity of the metaphor is undermined by quite a large number of mapping mismatches:
It’s wrong, strictly speaking, since many aspects of the ecosystem-internet mapping are questionable. As I blogged in 2007 about the “business ecosystem” terminology, the validity of the metaphor is undermined by quite a large number of mapping mismatches:
Number: a food web consists of billions of interactions among animals and plants; a business web comprises a relatively small number of companies
Metrics: Biomass a typical rough measure of an ecosystem; does that map to total revenue, profitability, return on investment, or something else?
Topology: An ecosystem is a lossy, one-way energy flow; as each organism is eaten by the next, energy is lost. Business relationships are reciprocal, and generate value.
Time scales: Species change slowly, but companies can change their role in a system overnight through merger, acquisition or divestiture.
Choice: Interactions between firms can be changed by contract, whereas that between species is not negotiable except perhaps over very long time scales by evolution of defensive strategies.
Foresight: Humans are pre-eminent among animals in their ability to anticipate the behavior of other actors, explore counter-factuals, think through What If scenarios, etc. The response of a system containing humans to some change is therefore much more complex than that of a human-free ecosystem. “Dumb” agents in an adaptive system respond to the change; humans respond to how they think other humans will respond to their response to those people’s responses etc.
Goals: Biological systems don’t have goals, but human ones do. There are no regulatory systems external to ecosystems in a state of nature (if such things still exist on this planet), but there are many, such as rule of law and anti-trust, in human markets. Natural processes don’t care about equity or justice, but societies do, and impose them on business systems. If ecosystems were a good model for business networks, there would be no need for anti-trust regulation.
The connotations of the metaphor are also misleading. Ecosystems are often used to connote stability and vibrant self-regulation; in fact, they often suffer catastrophic collapses. Companies are exhorted to invest in their ecosystem with the goal of becoming a keystone species. It’s not clear why they should do so, from the ecosystem perspective: keystone species don’t typically represent a lot of biomass. Their “bottleneck position”, however, is attractive from the perspective of a company that wants to extract rents through market power.
However, the ecosystem concept has gained traction because there is a deeper truth: both the internet and ecosystems are both examples of complex adaptive systems. (A complex adaptive system may be defined as a collection of interacting, adaptive agents; other examples include the immune system, the human body, stock markets, and economies. Note that adaptive systems are often nested.)
Thus, the internet is to an ecosystem as a whale is to an elephant. It could be useful to think in terms of elephants if one has to manage oceans but doesn’t know much about whales, since both are large, social mammals. However, one can just as well explain whales in terms of elephants – and the differences, e.g. living on land vs. in water – can be decisive in some cases.
With this realization, the utility and limitations of using an ecosystem metaphor when thinking about the internet, as I did in my Internet Governance as Forestry paper, have become much clearer to me. Lessons from managed ecosystems can illuminate the dynamics and pitfalls of managing the internet, and principles (such as the Resilience Principles I outlined in my recent talk at Silicon Flatirons; my presentation starts around time code 01:36:00 of the video) derived from one can be applied to the other.
However, the ecosystem concept has gained traction because there is a deeper truth: both the internet and ecosystems are both examples of complex adaptive systems. (A complex adaptive system may be defined as a collection of interacting, adaptive agents; other examples include the immune system, the human body, stock markets, and economies. Note that adaptive systems are often nested.)
Thus, the internet is to an ecosystem as a whale is to an elephant. It could be useful to think in terms of elephants if one has to manage oceans but doesn’t know much about whales, since both are large, social mammals. However, one can just as well explain whales in terms of elephants – and the differences, e.g. living on land vs. in water – can be decisive in some cases.
With this realization, the utility and limitations of using an ecosystem metaphor when thinking about the internet, as I did in my Internet Governance as Forestry paper, have become much clearer to me. Lessons from managed ecosystems can illuminate the dynamics and pitfalls of managing the internet, and principles (such as the Resilience Principles I outlined in my recent talk at Silicon Flatirons; my presentation starts around time code 01:36:00 of the video) derived from one can be applied to the other.
Monday, February 08, 2010
Resilience and Realpolitik
Resilience is a fashionable meme - rightly so, since it offers an alternative to the "find the efficient optimum" approach to solving problems in political economy. (I would say so, of course; see e.g. my presentation at Silicon Flatirons recently, and my paper on forestry as a metaphor for internet governance.)
As reported by The Economist (A needier era: The politics of global disruption, and how they may change, Jan 28th 2010), a report for the Brookings Institution on international politics in an age of want suggests that Governments should think more in terms of reducing risk and increasing resilience to shocks than about boosting sovereign power. This is analogous to advocating reducing risk and increasing resilience vs. boosting wealth creation in the economy. The reason given is that the new threats are networks (of states and non-state actors) and unintended consequences (of global flows of finance, technology and so on).
I've seen (and propagated) the same memes in the context technology policy: the determining factors are inter-locking networks of agents, and unintended consequences that shift more quickly than legislation.
It's ironic, given my claim that the resilience approach is a counter to neoclassical economics, that the article closes with a Milton Friedman quote...
As reported by The Economist (A needier era: The politics of global disruption, and how they may change, Jan 28th 2010), a report for the Brookings Institution on international politics in an age of want suggests that Governments should think more in terms of reducing risk and increasing resilience to shocks than about boosting sovereign power. This is analogous to advocating reducing risk and increasing resilience vs. boosting wealth creation in the economy. The reason given is that the new threats are networks (of states and non-state actors) and unintended consequences (of global flows of finance, technology and so on).
I've seen (and propagated) the same memes in the context technology policy: the determining factors are inter-locking networks of agents, and unintended consequences that shift more quickly than legislation.
It's ironic, given my claim that the resilience approach is a counter to neoclassical economics, that the article closes with a Milton Friedman quote...
Monday, December 28, 2009
Spectrum as Roads
This is about as explicit as the spectrum-as-land metaphor gets:
"Spectrum is the equivalent of our highways," says Christopher Guttman-McCabe, vice president of regulatory affairs for CTIA-The Wireless Association, an industry trade group. "That's how we move our traffic. And the volume of that traffic is increasing so dramatically that we need more lanes. We need more highways." (Joelle Tessler, "Wireless companies want a bigger slice of airwaves", Associated Press, posted to SiliconValley.com 12/28/2009)And its also as self-serving as they come. What the cellular companies need is data capacity. There are many ways to get that that don't require new radio licenses, notably increasing the density of cell towers and improving antenna technology. But those are more expensive than new licenses, hence the claim that they need "the land".
Sunday, December 27, 2009
A music/governance metaphor
I’m still struggling to find a usable taxonomy for “new methods of governance” for the internet. A conversation with Grisha Krivchenia, a music teacher, prompted this attempt at analogy. Since my knowledge of music and its history is sketchy, any corrective comments would be gratefully received.
Let’s start with a particular musical tradition: harpsichord pieces in the High Baroque. Bach wrote the Goldberg Variations, for example, with a particular instrument and even performer (Goldberg) in mind. The performer has many options, however, regarding tempo and mood. When the same score is played on a different instrument, e.g. the piano, an additional set of choices and opportunities arise.
Same score, different instrument(s)
A score written for one instrument can be played by another one with no change; for example, one can play a flute piece on the oboe. However, figurations that were easy for the intended instrument may be hard for the new one. Some instrument changes require transpositions of notes to a new key, for example playing the flute piece on a clarinet (pitched in C and B-flat, respectively). Even if the notes are the same, the music will be different.
As an example of the music/governance metaphor in action, consider libel. The same laws of defamation apply to web pages just as much as to a paper pamphlet; however, some additional interpretation is required from the judge when applying statute and common law developed for paper to the internet.
A slightly more extensive change comes about when music scored for one ensemble (e.g. strings) is re-arranged for another (woodwinds). Both the individual and blended characters of the instruments differ, and the character of the piece can change quite markedly. A possible analogy is the application 911 requirements for phone access to emergency services to Voice over IP devices. The desired policy result and the requirements in law are the same, but the implementation may have to be different. For example, “911” is actually an area code rather than a phone number, and its implementation in VoIP was debated. Further, 911 calls are delivered to a Public Safety Answering Point (PSAP) determined by the location of the caller – which may not be easy to determine for an internet device.
Once the piano exists, it enables new forms of music. First, performers can radically rethink a piece: Glenn Gould’s Goldbergs, to cite a late example. Second, composers wrote pieces for the piano in ways that were inconceivable in the age of the harpsichord: Liszt and Chopin. An analogy in regulation might be the way in which the Kodak camera prompted the overhaul (or arguably invention) of privacy law. [1] Another one might be the way in which the internet if forcing a rethinking of common carriage rules as they apply to telecommunications carriers. [2]
New compositions, same instruments
However, new approaches to composition can come about without new instruments – the shift to atonal music (i.e. lacking a central key) associated with Berg, Schoenberg and Webern supposedly arose from the “crisis of tonality” in the late nineteenth and early twentieth century . An analogy in communications policy might be the emergence of exclusive-use radio licenses allocated by auctions in wireless regulation: they were prompted by insights from economics (e.g. Coase and the privatization movement more generally) rather than by changes in technology.
New performances
A change in venue also makes a difference. The Wikipedia article on the history of the orchestra suggests that the 18th century change from civic music making where the composer had some degree of time or control, to smaller court music making and one-off performance, placed a premium on music that was easy to learn, often with little or no rehearsal. The results were changes in musical style from the counterpoint of the baroque period to the classical style, and emphasis on new techniques such as notated dynamics and phrasing. I believe that the shift in the stakeholder landscape in telecoms from an insider’s club of a few, large firms and regulators to a global plethora of companies and regulators of all sizes is in the process of changing governance, but we don’t have the luxury of 200 years to discern the key developments.
Tentative conclusions
The analogy of music to governance is as follows:
This short taxonomy focuses on the upstream part of the performance value chain. New kinds of music arise most visibly from new compositions and/or new instruments, but performance and audience play roles in disseminating and validating them. Likewise, new forms of governance need to be enacted by courts and accepted by stakeholders before taking hold; new technology and new law are only part of the picture.
Update 12/28/2009: See the comments for some great thoughts from Jon Sallet about the role of improvisation in music and governance. His conclusion: "In a world of change and uncertainty, discretion is an important tool; discretion that is applied by professionals (like trained musicians), within guidelines (like the old rule against using augmented fourths) but that calls upon the expertise of the composer and the performer both to work, as it were, in harmony."
Footnotes
[1] Robert E. Mensel, ""Kodakers Lying in Wait": Amateur Photography and the Right of Privacy in New York 1885-1915", American Quarterly, Vol. 43, No. 1 (Mar., 1991), pp. 24-45, PDF available.
[2] James V DeLong, “Avoiding a Tech Train Wreck”, The American, May/June 2008
Let’s start with a particular musical tradition: harpsichord pieces in the High Baroque. Bach wrote the Goldberg Variations, for example, with a particular instrument and even performer (Goldberg) in mind. The performer has many options, however, regarding tempo and mood. When the same score is played on a different instrument, e.g. the piano, an additional set of choices and opportunities arise.
Music can also change purely as a result of changes in performance practice. An unattributed assertion in Wikipedia states that “changes in performance practice made by prominent musicians often reverberated in the playing of many other musicians.” Other candidates for this phenomenon is the use of bel canto in early 20th century opera, the use of a clear declamatory vocal style in the French operatic tradition, and the dramatic increases in the minimum technical accuracy required of performers of classical music. One can see this effect in governance too, particularly where common-law is used; interpretations and precedent are cumulative. An ongoing example is software patents: legal scholar Mark Lemley stated at a Silicon Flatirons conference in March 2009 that over the last three years, courts have fixed most of the problems that have been grist for the software patent debate. I presume there are also fashions in jurisprudence, just as there are in music – but here again my lack of knowledge fails me…
- Composer – policy maker (legislator or regulator with quasi-legislative powers, like the FCC)
- Score – law, rule or regulation
- Instrument – technology and social context
- Performer – judge (or quasi-judicial actor, e.g. the FCC)
- Audience – interest groups, stakeholders, citizens, etc.
In terms of new kinds of music/governance, we see
- Changes of instruments (technology) that require only minor changes in the score (law)
- Changes that prompt composers (policy makers) to invent new genres (rules), either as a result of new technologies or the internal development of the genre itself
- Changes brought about by shifts in performance (judicial) practice
The performers (judges) plays an important creative role; they can change the import of a score (law) by their interpretation in the context of a new instrument (technology). It may be that judges are most influential when the policy makers have not yet caught up with changes in technology – they are making music on new instruments using the old scores.
Update 12/28/2009: See the comments for some great thoughts from Jon Sallet about the role of improvisation in music and governance. His conclusion: "In a world of change and uncertainty, discretion is an important tool; discretion that is applied by professionals (like trained musicians), within guidelines (like the old rule against using augmented fourths) but that calls upon the expertise of the composer and the performer both to work, as it were, in harmony."
[1] Robert E. Mensel, ""Kodakers Lying in Wait": Amateur Photography and the Right of Privacy in New York 1885-1915", American Quarterly, Vol. 43, No. 1 (Mar., 1991), pp. 24-45, PDF available.
[2] James V DeLong, “Avoiding a Tech Train Wreck”, The American, May/June 2008
Saturday, December 26, 2009
A skeptic’s approach to regulation
I don’t know.
You don’t know either, even if you’re a lawyer or scholar who’s written confident diagnoses of, and persuasive curative prescriptions for, various policy problems.
If you’re a regulator, you know you don’t know.
Decision makers have always operated in a world of complexity, contradiction and confusion: you never have all the information you’d like to make a decision, and the data you do have are often inconsistent. It is not clear what is happening, and it is not clear what to do about it. What’s most striking about the last century is that policy makers seem to have been persuaded by economists that they have more control, and more insight, than they used to.
We have less control over the world than we’d like. We are either confronted by unwanted situations we cannot prevent, or desired situations are precluded. We would like to prevent unwanted situations, but can’t; or we would like favorable circumstances to continue, but they don’t.
There is a small part of the world where the will has effective control; for the rest, one has to deal with necessity, i.e. circumstances that arise whether you will or no. Science and technology since the Enlightenment has dramatically widened our scope of control; economics has piggy-backed on the success of classical physics to make large claims about its ability to explain and manage society. However, this has had the unfortunate consequence that we no longer feel comfortable accepting necessity. If a situation is avoidable – say, postponing the moment of death through a medical intervention – then it becomes tempting to think that when it comes, someone or something can be held responsible.
As Genevieve Lloyd tells it (and I understand it) in Providence Lost (2009), our culture opted to follow Descartes in his framing of free will: we should do the best we can, and leave the rest to divine Providence, which provides a comforting bound to our responsibilities. In the absence of providence, however, we have no guidance on how to deal with what lies beyond our control. As Lloyd puts it, “the fate of the Cartesian will has been to outlive the model of providence that made it emotionally viable.” She argues that Spinoza’s alternative account of free will, built on the acceptance of necessity, is better suited to our time; there is freedom in how we shape our lives in the face of necessity, and a providential deity is not required.
Our Cartesian heritage can be seen in the response to the financial collapse of recent years: someone or something had to be responsible. If only X had done Y rather than Z… but an equally plausible account is that crises and collapse are inevitable; it was only a matter of time.
I submit that the best response to an uncertain and ever-changing world is to accept it and aim at resilience rather than efficiency. Any diagnosis and prescription should always be provisional; it should be made in the knowledge that it will have to be changed. Using efficiency as the measure of a solution, as neoclassical economics might, is the mark of the neo-Cartesian mind: it assumes that we have enough knowledge of the entire system to find an optimum solution, and that we have enough control to effectuate it. In fact, an optimum probably doesn’t exist; if it does exist, it’s probably unstable; and even if a stable solution exists, we have so little control over the system that we can’t implement it.
The best conceptual framework I’ve found for analyzing problems in this way is the complex systems view, and the most helpful instantiation is the approach to managing ecosystems encapsulated in C. S. Holling’s “adaptive cycle” thinking. (See e.g. Ten Conclusions from the Resilience Project). The adaptive cycle consists of four stages: (1) exploitation of new opportunities following a disturbance; (2) conservation, the slow accumulation of capital and system richness; (3) release of accumulation through a crisis event – cf. Shumpeter’s creative destruction; and (4) reorganization, in which the groundwork for the next round is laid.
Two techniques seem to be particularly helpful in applying this approach to governance: simulation and common law. Simulation and modeling exploit the computing power we now have to explore the kinds of outcomes that may be possible given a starting point and alternative strategies; it gives one a feel for how resilient or fragile different proposed solutions may be. Simulation may also help understand outcomes; for example, Ofcom uses modeling of radio signal propagation rather than measurement to determine whether licensees in it Spectrum Usage Rights regime are guilty of harmful interference with other licensees. (See e.g. William Webb (2009), “Licensing Spectrum: A discussion of the different approaches to setting spectrum licensing terms”.)
A common law approach helps at the other end of the process: Jonathan Sallet has argued persuasively that common-law reasoning is advantageous because it is a good way of creating innovative public policies, and is a sensible method of adapting government oversight to changing technological and economic conditions.
But I could be wrong…
Update 12/28/2009: See the fascinating comments from Rich Thanki, below. He takes two salient lessons from complexity theory: avoid monoculture, and develop rules of thumb. He also provides more of the usual quick Keynes quote about "slaves of some defunct economist."
You don’t know either, even if you’re a lawyer or scholar who’s written confident diagnoses of, and persuasive curative prescriptions for, various policy problems.
If you’re a regulator, you know you don’t know.
Decision makers have always operated in a world of complexity, contradiction and confusion: you never have all the information you’d like to make a decision, and the data you do have are often inconsistent. It is not clear what is happening, and it is not clear what to do about it. What’s most striking about the last century is that policy makers seem to have been persuaded by economists that they have more control, and more insight, than they used to.
We have less control over the world than we’d like. We are either confronted by unwanted situations we cannot prevent, or desired situations are precluded. We would like to prevent unwanted situations, but can’t; or we would like favorable circumstances to continue, but they don’t.
There is a small part of the world where the will has effective control; for the rest, one has to deal with necessity, i.e. circumstances that arise whether you will or no. Science and technology since the Enlightenment has dramatically widened our scope of control; economics has piggy-backed on the success of classical physics to make large claims about its ability to explain and manage society. However, this has had the unfortunate consequence that we no longer feel comfortable accepting necessity. If a situation is avoidable – say, postponing the moment of death through a medical intervention – then it becomes tempting to think that when it comes, someone or something can be held responsible.
As Genevieve Lloyd tells it (and I understand it) in Providence Lost (2009), our culture opted to follow Descartes in his framing of free will: we should do the best we can, and leave the rest to divine Providence, which provides a comforting bound to our responsibilities. In the absence of providence, however, we have no guidance on how to deal with what lies beyond our control. As Lloyd puts it, “the fate of the Cartesian will has been to outlive the model of providence that made it emotionally viable.” She argues that Spinoza’s alternative account of free will, built on the acceptance of necessity, is better suited to our time; there is freedom in how we shape our lives in the face of necessity, and a providential deity is not required.
Our Cartesian heritage can be seen in the response to the financial collapse of recent years: someone or something had to be responsible. If only X had done Y rather than Z… but an equally plausible account is that crises and collapse are inevitable; it was only a matter of time.
I submit that the best response to an uncertain and ever-changing world is to accept it and aim at resilience rather than efficiency. Any diagnosis and prescription should always be provisional; it should be made in the knowledge that it will have to be changed. Using efficiency as the measure of a solution, as neoclassical economics might, is the mark of the neo-Cartesian mind: it assumes that we have enough knowledge of the entire system to find an optimum solution, and that we have enough control to effectuate it. In fact, an optimum probably doesn’t exist; if it does exist, it’s probably unstable; and even if a stable solution exists, we have so little control over the system that we can’t implement it.
The best conceptual framework I’ve found for analyzing problems in this way is the complex systems view, and the most helpful instantiation is the approach to managing ecosystems encapsulated in C. S. Holling’s “adaptive cycle” thinking. (See e.g. Ten Conclusions from the Resilience Project). The adaptive cycle consists of four stages: (1) exploitation of new opportunities following a disturbance; (2) conservation, the slow accumulation of capital and system richness; (3) release of accumulation through a crisis event – cf. Shumpeter’s creative destruction; and (4) reorganization, in which the groundwork for the next round is laid.
Two techniques seem to be particularly helpful in applying this approach to governance: simulation and common law. Simulation and modeling exploit the computing power we now have to explore the kinds of outcomes that may be possible given a starting point and alternative strategies; it gives one a feel for how resilient or fragile different proposed solutions may be. Simulation may also help understand outcomes; for example, Ofcom uses modeling of radio signal propagation rather than measurement to determine whether licensees in it Spectrum Usage Rights regime are guilty of harmful interference with other licensees. (See e.g. William Webb (2009), “Licensing Spectrum: A discussion of the different approaches to setting spectrum licensing terms”.)
A common law approach helps at the other end of the process: Jonathan Sallet has argued persuasively that common-law reasoning is advantageous because it is a good way of creating innovative public policies, and is a sensible method of adapting government oversight to changing technological and economic conditions.
But I could be wrong…
Update 12/28/2009: See the fascinating comments from Rich Thanki, below. He takes two salient lessons from complexity theory: avoid monoculture, and develop rules of thumb. He also provides more of the usual quick Keynes quote about "slaves of some defunct economist."
Thursday, December 24, 2009
Hard consequences of the soft revolution
What characteristics (if any) of 21st century communications justify a change in methods of governance?
Any change in policy has unintended consequences; some of them will be adverse. One has to think carefully before advocating radical change: the benefits of change or the costs of doing nothing should be substantial. One way of beginning a cost/benefit analysis is to understand the underlying forces.
Many arguments have been given for new internet regulation. Cowhey and Aronson (Transforming Global Information and Communication Markets 2009:17) cite three factors that will force change: the modular mixing and matching of technology building blocks; the need to span traditional policy and jurisdictional divides (aka Convergence); and the need to rely more on non-governmental institutions to coordinate and implement global policy. In my paper “Internet Governance as Forestry”, I cite three characteristics of the internet that require new responses: modularity, decentralized self-organization, and rapid change.
Let’s consider, then, the following candidates for radical, unprecedented and transformational change in the internet economy taken from these two lists: modularity, convergence, the “third sector”, decentralization, and rate of change.
Modularity
I doubt modularity will persist as a characteristic of the internet business. While it is clearly a hallmark of our current stage, it has a long history: the standardization of interchangeable parts is dated back to Eli Whitney’s process for manufacturing muskets for the US government in 1798, but there is evidence for standardization of arrowheads and uniform manufacturing techniques in the bronze age, and some anthropologists claim there was standardization of stone age tools. However, modular technology does not lead inescapably to a modular industry structure. Standard parts have not rendered pre-internet industries immune to anti-trust problems, and it is likely they will do so now. The role of modularity in the relationships between companies waxes and wanes, depending on rather than driving industry consolidation and market power.
Convergence
The good old convergence argument is a true enough, but tired. The mixing of broadcasting, telecom and intellectual property regulation brought about by common digital formats will undoubtedly require a huge amount of creative reform of regulation, but I no longer think that the result will be the abolition of regulatory categories based on the commercial and technological status quo.
I would very much like to see such an abolition; I proposed a re-organizing the FCC by policy imperatives rather than industry categories in my FCC Reform paper, but I don’t think it’s going to be practical. The human rage to classify [1] will reassert itself. Classifying by policy concern probably won’t work, sad to say, because of how regulation tends to work: take a new problem, fit it into an existing category, and apply the rules of that category. Even if this mechanism yields weird results in times of transition, it’s usually efficient and is likely to persist, even as categories change. We don’t yet have the new categories, but they may well emerge based more on how industry self-organizes than by logic. Judging by today’s behemoths, they might perhaps be networks, cloud services, devices and content (i.e. AT&T, Google/Microsoft, Apple/Dell and Hollywood) replacing broadcasting, telecom, cable and intellectual property (ABC/CBS/NBC, the old AT&T, Comcast and Hollywood).
Decentralization
The internet is no doubt much more decentralized than its forebears, e.g. the telephone network; it is by definition an affiliation of many networks, and a lot of processing is done “at the edges” rather than “in the middle”. There is a linkage between a decentralized architecture and modularity. Modularity allows decentralization, and is amplified by it. If or when either regresses to the mean, the other will tend to do so as well. Since I don’t believe that a high and increasing amount of modularity is an persistent attribute of the 21st century communications industry, I don’t believe that high and increasing decentralization is either. However, the current degree of modularity and decentralization in has probably put us into a qualitatively different regime; there has phase change, so to speak. The polity has just begun to work through the implications, and this will take a decade or more.
The “third sector”: Non-Governmental Institutions (NGOs), non-profits and civil society
Cowhey and Aronson’s interest in NGOs is based in trade, and the organizations they have in mind (ICANN, W3C, IETF) meet the four-part definition offered by Lester Salamon, a political scientist and scholar of US non-profits at Johns Hopkins: they are organizations, i.e., they have an institutional presence and structure; they are private, i.e., they are institutionally separate from the state; they are fundamentally in control of their own affairs; and membership/support is voluntary. Salamon argues that the prominence of NGOs represent an “associational revolution”. I cannot judge whether this phenomenon is transient or not; however, the large organizations clearly provide an alternative venue for governance. For example, Cowhey and Aronson argue that the IETF’s central role in internet standards came about because the US Government decided to delegate authority to it.
If one relaxes the requirement for formal institutional structure, the rise of private, voluntary engagement in politics facilitated by Web 2.0 represent an impetus and perhaps even a venue for new governance. Currently fashionable examples include http://transparencycorps.org/, http://opengov.ideascale.com/ and http://watchdog.net/; tools that facilitate engagement include http://www.opencongress.org/, http://www.opensecrets.org/lobbyists/ and http://www.govtrack.us/. The citizen’s ability to know about the activities of their legislators and petition has never been greater; tools for organizing into ad hoc coalitions (most famously the role of http://www.meetup.com/ in the 2004 and 2008 US campaigns) lead to a ferment of groups that may grow into more recognizable institutions. Policy makers will have to invent new ways to track and mollify these groups, at the very least; the Obama Administration appears to be using them to support policy making.
While the decentralized architecture of the internet and the rise of NGOs are different phenomena with different causes, Web 2.0 technologies are beginning to draw them together.
Rate of change
As to whether the rapidity of change is transformative and permanent, I think the answer is No and Yes. The rate of technical and commercial innovation on internet over the last two decades has been stunning. It has been abetted by modularity, and even more so by the ability of software to morph without having to retool a factory. (Retooling a code base is a non-trivial exercise, though.) However, the internet is growing up and it’s reasonable to expect that the industry and technology will settle into a phase of relative maturity. [2]
On the other hand, while the rate of change may not continue to accelerate, or even continue at its current pace, the political system has to adjust to the stresses that the increase to date has already imposed. William Scheuerman, for example, argues that the “social acceleration of time” has created a profound imbalance between the branches of government in liberal democratic systems like the US. [3] Even if the rate of techno-commercial innovation slows down, the rate at which global markets generate and propagate news will be a challenge for political systems whose time cycles are set in constitutions that change only very slowly, and human physiology which changes hardly at all. [4]
Back to Hard Intangibles
A change in context that forces a change in governance doesn’t need to be irreversible for the consequences to be profound. Since history is cumulative, a “phase change” in policy making is a change that never really reverts to its prior form, since the context changes with it. However, some changes are more portentous than others. I’ve argued above that the modularity, convergence and decentralization of the internet are temporary, and part of the regular cycle flow in industry structure. Changes in tempo and the rise of the third sector seem to me to be more momentous. I think both are rooted in the growing intangibility of our societies, which has been accelerated by ICT: complex software running on powerful processors linked by very fast networks.
I think there is a link back to my 2006/2007 obsession with “hard intangibles” (DeepFreeze9 thread). The ability to compose more components than the mind can manage makes programming/debugging very hard, particularly when those components are so easily mutable: it’s easier to change a line of code than to retool an assembly line. The “soft products” of these technologies, themselves complex, composable and mutable become the inputs for culture and thus policy making: it’s easier to change web artifacts and social networks than to manage a movement using letters and sailing ships.
Footnotes
[1] I first heard the term used by Rohan Bastin, Associate Professor of Anthropology at Deakin University, in a Philosopher’s Zone interview about Claude Levi-Strauss. “The human rage to classify” is also a chapter title in F. Allan Hanson, The Trouble With Culture : How Computers Are Calming The Culture Wars, SUNY Press 2007
[2] This prediction contradicts Ray Kurzweil’s contention that technological change accelerates at an exponential rate, and will continue to do so: his “Law of Accelerating Returns” [link, critique]
[3] William E. Scheuerman, Liberal Democracy and the Social Acceleration of Time (2004). Scheuerman defines social acceleration of time as “a long term yet relatively recent historical process consisting of three central elements: technological acceleration (e.g. the heightening of the rate of technological innovation), the acceleration of social change (referring to accelerated patterns of basic change in the workplace, e.g.), and the acceleration of everyday life (e.g., via new means of high-speed communication or transportation).” I’m indebted to Barb Cherry for introducing me to Scheuerman’s ideas; see e.g. her “Institutional Governance for Essential Industries Under Complexity: Providing Resilience Within the Rule of Law” CommLaw Conspectus 17.1
[4] Human thinking won’t speed up much, if at all – though tools can make it look as if it does. See for example the Edwin Hutchins’ wonderful Cognition in the Wild (1996). Hutchins contends that we need to think in terms of “socially distributed cognition” in a system that comprises people and the tools that were made for them by other people.
Any change in policy has unintended consequences; some of them will be adverse. One has to think carefully before advocating radical change: the benefits of change or the costs of doing nothing should be substantial. One way of beginning a cost/benefit analysis is to understand the underlying forces.
Many arguments have been given for new internet regulation. Cowhey and Aronson (Transforming Global Information and Communication Markets 2009:17) cite three factors that will force change: the modular mixing and matching of technology building blocks; the need to span traditional policy and jurisdictional divides (aka Convergence); and the need to rely more on non-governmental institutions to coordinate and implement global policy. In my paper “Internet Governance as Forestry”, I cite three characteristics of the internet that require new responses: modularity, decentralized self-organization, and rapid change.
Let’s consider, then, the following candidates for radical, unprecedented and transformational change in the internet economy taken from these two lists: modularity, convergence, the “third sector”, decentralization, and rate of change.
Modularity
I doubt modularity will persist as a characteristic of the internet business. While it is clearly a hallmark of our current stage, it has a long history: the standardization of interchangeable parts is dated back to Eli Whitney’s process for manufacturing muskets for the US government in 1798, but there is evidence for standardization of arrowheads and uniform manufacturing techniques in the bronze age, and some anthropologists claim there was standardization of stone age tools. However, modular technology does not lead inescapably to a modular industry structure. Standard parts have not rendered pre-internet industries immune to anti-trust problems, and it is likely they will do so now. The role of modularity in the relationships between companies waxes and wanes, depending on rather than driving industry consolidation and market power.
Convergence
The good old convergence argument is a true enough, but tired. The mixing of broadcasting, telecom and intellectual property regulation brought about by common digital formats will undoubtedly require a huge amount of creative reform of regulation, but I no longer think that the result will be the abolition of regulatory categories based on the commercial and technological status quo.
I would very much like to see such an abolition; I proposed a re-organizing the FCC by policy imperatives rather than industry categories in my FCC Reform paper, but I don’t think it’s going to be practical. The human rage to classify [1] will reassert itself. Classifying by policy concern probably won’t work, sad to say, because of how regulation tends to work: take a new problem, fit it into an existing category, and apply the rules of that category. Even if this mechanism yields weird results in times of transition, it’s usually efficient and is likely to persist, even as categories change. We don’t yet have the new categories, but they may well emerge based more on how industry self-organizes than by logic. Judging by today’s behemoths, they might perhaps be networks, cloud services, devices and content (i.e. AT&T, Google/Microsoft, Apple/Dell and Hollywood) replacing broadcasting, telecom, cable and intellectual property (ABC/CBS/NBC, the old AT&T, Comcast and Hollywood).
Decentralization
The internet is no doubt much more decentralized than its forebears, e.g. the telephone network; it is by definition an affiliation of many networks, and a lot of processing is done “at the edges” rather than “in the middle”. There is a linkage between a decentralized architecture and modularity. Modularity allows decentralization, and is amplified by it. If or when either regresses to the mean, the other will tend to do so as well. Since I don’t believe that a high and increasing amount of modularity is an persistent attribute of the 21st century communications industry, I don’t believe that high and increasing decentralization is either. However, the current degree of modularity and decentralization in has probably put us into a qualitatively different regime; there has phase change, so to speak. The polity has just begun to work through the implications, and this will take a decade or more.
The “third sector”: Non-Governmental Institutions (NGOs), non-profits and civil society
Cowhey and Aronson’s interest in NGOs is based in trade, and the organizations they have in mind (ICANN, W3C, IETF) meet the four-part definition offered by Lester Salamon, a political scientist and scholar of US non-profits at Johns Hopkins: they are organizations, i.e., they have an institutional presence and structure; they are private, i.e., they are institutionally separate from the state; they are fundamentally in control of their own affairs; and membership/support is voluntary. Salamon argues that the prominence of NGOs represent an “associational revolution”. I cannot judge whether this phenomenon is transient or not; however, the large organizations clearly provide an alternative venue for governance. For example, Cowhey and Aronson argue that the IETF’s central role in internet standards came about because the US Government decided to delegate authority to it.
If one relaxes the requirement for formal institutional structure, the rise of private, voluntary engagement in politics facilitated by Web 2.0 represent an impetus and perhaps even a venue for new governance. Currently fashionable examples include http://transparencycorps.org/, http://opengov.ideascale.com/ and http://watchdog.net/; tools that facilitate engagement include http://www.opencongress.org/, http://www.opensecrets.org/lobbyists/ and http://www.govtrack.us/. The citizen’s ability to know about the activities of their legislators and petition has never been greater; tools for organizing into ad hoc coalitions (most famously the role of http://www.meetup.com/ in the 2004 and 2008 US campaigns) lead to a ferment of groups that may grow into more recognizable institutions. Policy makers will have to invent new ways to track and mollify these groups, at the very least; the Obama Administration appears to be using them to support policy making.
While the decentralized architecture of the internet and the rise of NGOs are different phenomena with different causes, Web 2.0 technologies are beginning to draw them together.
Rate of change
As to whether the rapidity of change is transformative and permanent, I think the answer is No and Yes. The rate of technical and commercial innovation on internet over the last two decades has been stunning. It has been abetted by modularity, and even more so by the ability of software to morph without having to retool a factory. (Retooling a code base is a non-trivial exercise, though.) However, the internet is growing up and it’s reasonable to expect that the industry and technology will settle into a phase of relative maturity. [2]
On the other hand, while the rate of change may not continue to accelerate, or even continue at its current pace, the political system has to adjust to the stresses that the increase to date has already imposed. William Scheuerman, for example, argues that the “social acceleration of time” has created a profound imbalance between the branches of government in liberal democratic systems like the US. [3] Even if the rate of techno-commercial innovation slows down, the rate at which global markets generate and propagate news will be a challenge for political systems whose time cycles are set in constitutions that change only very slowly, and human physiology which changes hardly at all. [4]
Back to Hard Intangibles
A change in context that forces a change in governance doesn’t need to be irreversible for the consequences to be profound. Since history is cumulative, a “phase change” in policy making is a change that never really reverts to its prior form, since the context changes with it. However, some changes are more portentous than others. I’ve argued above that the modularity, convergence and decentralization of the internet are temporary, and part of the regular cycle flow in industry structure. Changes in tempo and the rise of the third sector seem to me to be more momentous. I think both are rooted in the growing intangibility of our societies, which has been accelerated by ICT: complex software running on powerful processors linked by very fast networks.
I think there is a link back to my 2006/2007 obsession with “hard intangibles” (DeepFreeze9 thread). The ability to compose more components than the mind can manage makes programming/debugging very hard, particularly when those components are so easily mutable: it’s easier to change a line of code than to retool an assembly line. The “soft products” of these technologies, themselves complex, composable and mutable become the inputs for culture and thus policy making: it’s easier to change web artifacts and social networks than to manage a movement using letters and sailing ships.
Footnotes
[1] I first heard the term used by Rohan Bastin, Associate Professor of Anthropology at Deakin University, in a Philosopher’s Zone interview about Claude Levi-Strauss. “The human rage to classify” is also a chapter title in F. Allan Hanson, The Trouble With Culture : How Computers Are Calming The Culture Wars, SUNY Press 2007
[2] This prediction contradicts Ray Kurzweil’s contention that technological change accelerates at an exponential rate, and will continue to do so: his “Law of Accelerating Returns” [link, critique]
[3] William E. Scheuerman, Liberal Democracy and the Social Acceleration of Time (2004). Scheuerman defines social acceleration of time as “a long term yet relatively recent historical process consisting of three central elements: technological acceleration (e.g. the heightening of the rate of technological innovation), the acceleration of social change (referring to accelerated patterns of basic change in the workplace, e.g.), and the acceleration of everyday life (e.g., via new means of high-speed communication or transportation).” I’m indebted to Barb Cherry for introducing me to Scheuerman’s ideas; see e.g. her “Institutional Governance for Essential Industries Under Complexity: Providing Resilience Within the Rule of Law” CommLaw Conspectus 17.1
[4] Human thinking won’t speed up much, if at all – though tools can make it look as if it does. See for example the Edwin Hutchins’ wonderful Cognition in the Wild (1996). Hutchins contends that we need to think in terms of “socially distributed cognition” in a system that comprises people and the tools that were made for them by other people.
Monday, December 21, 2009
Objects of governance: From things to behaviors
In spite of our penchant for abstraction, we think best in concrete terms. That means we prefer to think about things rather than processes, including when it comes to communications regulation. The growing intangibility of our world is making this harder to do, however.
The legal scholar William Boyd introduced me the concept of an “object of governance”, i.e. the explicit focus or nominal topic of regulatory activity. [1] Boyd is concerned with deforestation as an object of climate governance [2]; a quick web search throws up examples like organized crime, “The East”, the Sahel, and risk. Objects of communications regulation include personally identifiable information (PII), spectrum, phone service, and the internet.
While most of these objects are intangible, they are at least to some extent thing-like; they’re nouns. It becomes more tricky when regulation addresses behavior – that is, verbs. I’ll work through a few examples in communications regulation where the object of governance started off as a thing/noun, and is becoming a behavior/verb:
Privacy: From PII to Use
The current approach to protecting privacy on the web is rooted in the notion of data security: information exists somewhere, and needs to be protected. However, an alternative conception based on appropriate use rather than access restrictions is emerging. [3] [4] The idea is that the tradition Notice & Choice regime is complemented by use-and-obligations model where organizations disclose the purposes to which they intend to put information, and undertake to limit themselves to those uses.
Wireless regulation: From spectrum to radio operation
Radio regulation has been framed in terms of government management of a “spectrum asset” for many decades. Even though in practice the regulations concerned themselves with the operating parameters of transmitters, the idea that some underlying asset existed has been a useful fiction, particularly as the detailed technology and service choices have been increasingly privatized through auctions of general-use licenses.
However, a new generation of radio technologies has been used to call this approach into question. “Open Spectrum” advocates have argued that dynamic wireless technologies obviate many underlying assumptions of current regulation, and prefer “commons” access over exclusive licenses. [5] Some in the RF engineering community recommend that regulation take into account dynamic adaptation at all layers in the network stack, not just at the radio layer. [6] I have argued that a static, spectrum-as-asset approach is not a given; a more dynamic radio-as-trademark interference metaphor is perfectly workable. [7]
Universal Service: From telephony to internet access
The Universal Service Fund in the US, and its equivalents in other countries, was conceived of as guaranteeing phone service to those who would not otherwise be able to afford it, particularly in rural communities. There is no a great deal of debate about extending the universal service concept to the internet. However, since internet access can come in an unlimited variety of flavors, it is unclear what the goal of the program should be. Phone service is the same everywhere; but what broadband speed is “good enough”? The regulatory debate is moving away from how to fund phone service to how to define baseline access.
Common carriage: From a neutral network to network management
The most recent of these debates concerns the 21st century equivalent of common carriage for the internet. The rallying cry of Network Neutrality had satisfyingly thing-like connotations: there was a network, and it had to have the attribute of neutrality (noun/adjective). Over time is has largely been agreed that network operators should have some discretion in managing the behavior of their network. The question has now become a behavioral one: what is degree of network management (verb) is appropriate?
Implications
A shift in the objects of governance from things to behaviors suggests a shift in regulation from ex ante to ex post action, that is, from making detailed rules up-front to stating general principles and enforcing breach after the fact. In Law’s Order [8], economist David M. Friedman compares speed limits (ex ante) with reckless driving (ex post), and observes that ex post punishments are most useful when the behavior is determined by private knowledge that the regulator cannot observe.
Footnotes
[1] Note that this is not the traditional meaning of the term, which used “object” as synonymous with “objective”, e.g. Edmund Burke: “To govern according to the sense and agreement of the interests of the people is a great and glorious object of governance. This object cannot be obtained but through the medium of popular election, and popular election is a mighty evil.”
[2] Boyd, William, “Ways of Seeing in Environmental Law: How Deforestation Became an Object of
Climate Governance”, to be published in Ecology Law Quarterly
[3] Daniel J. Weitzner, Harold Abelson, Tim Berners-Lee, Joan Feigenbaum, James Hendler, Gerald J. Sussman (2007) “Information Accountability”, Computer Science and Artificial Intelligence Laboratory Technical Report, MIT-CSAIL-TR-2007-034, June 13, 2007
[4] Business Forum for Consumer Privacy, “A New Approach to Protecting Privacy in the Evolving Digital Economy: A Concept for Discussion”, March 2009
[5] Kevin Werbach (2003), "Radio Revolution: The Coming of Age of Unlicensed Wireless," New America Foundation and Public Knowledge, no date on document, dated 15 Dec 2003 on NAF site
[6] Preston Marshall (2009) “Quantifying Aspects of Cognitive Radio and Dynamic Spectrum Access Performance” (see slides 15, 16)
[7] J Pierre de Vries, (2008) "De-situating spectrum: Rethinking radio policy using non-spatial metaphors" New Frontiers in Dynamic Spectrum Access Networks, 2008 (DySPAN 2008). http://ssrn.com/abstract=1241342
[8] David M. Friedman, Law's Order: What Economics Has to Do with Law and Why It Matters, Princeton University Press: 2001. See Chapter 7 for a discussion of ex ante/ex post.
The legal scholar William Boyd introduced me the concept of an “object of governance”, i.e. the explicit focus or nominal topic of regulatory activity. [1] Boyd is concerned with deforestation as an object of climate governance [2]; a quick web search throws up examples like organized crime, “The East”, the Sahel, and risk. Objects of communications regulation include personally identifiable information (PII), spectrum, phone service, and the internet.
While most of these objects are intangible, they are at least to some extent thing-like; they’re nouns. It becomes more tricky when regulation addresses behavior – that is, verbs. I’ll work through a few examples in communications regulation where the object of governance started off as a thing/noun, and is becoming a behavior/verb:
Privacy: From PII to Use
The current approach to protecting privacy on the web is rooted in the notion of data security: information exists somewhere, and needs to be protected. However, an alternative conception based on appropriate use rather than access restrictions is emerging. [3] [4] The idea is that the tradition Notice & Choice regime is complemented by use-and-obligations model where organizations disclose the purposes to which they intend to put information, and undertake to limit themselves to those uses.
Wireless regulation: From spectrum to radio operation
Radio regulation has been framed in terms of government management of a “spectrum asset” for many decades. Even though in practice the regulations concerned themselves with the operating parameters of transmitters, the idea that some underlying asset existed has been a useful fiction, particularly as the detailed technology and service choices have been increasingly privatized through auctions of general-use licenses.
However, a new generation of radio technologies has been used to call this approach into question. “Open Spectrum” advocates have argued that dynamic wireless technologies obviate many underlying assumptions of current regulation, and prefer “commons” access over exclusive licenses. [5] Some in the RF engineering community recommend that regulation take into account dynamic adaptation at all layers in the network stack, not just at the radio layer. [6] I have argued that a static, spectrum-as-asset approach is not a given; a more dynamic radio-as-trademark interference metaphor is perfectly workable. [7]
Universal Service: From telephony to internet access
The Universal Service Fund in the US, and its equivalents in other countries, was conceived of as guaranteeing phone service to those who would not otherwise be able to afford it, particularly in rural communities. There is no a great deal of debate about extending the universal service concept to the internet. However, since internet access can come in an unlimited variety of flavors, it is unclear what the goal of the program should be. Phone service is the same everywhere; but what broadband speed is “good enough”? The regulatory debate is moving away from how to fund phone service to how to define baseline access.
Common carriage: From a neutral network to network management
The most recent of these debates concerns the 21st century equivalent of common carriage for the internet. The rallying cry of Network Neutrality had satisfyingly thing-like connotations: there was a network, and it had to have the attribute of neutrality (noun/adjective). Over time is has largely been agreed that network operators should have some discretion in managing the behavior of their network. The question has now become a behavioral one: what is degree of network management (verb) is appropriate?
Implications
A shift in the objects of governance from things to behaviors suggests a shift in regulation from ex ante to ex post action, that is, from making detailed rules up-front to stating general principles and enforcing breach after the fact. In Law’s Order [8], economist David M. Friedman compares speed limits (ex ante) with reckless driving (ex post), and observes that ex post punishments are most useful when the behavior is determined by private knowledge that the regulator cannot observe.
"Ex ante punishments can be imposed only on behavior that a traffic cop can observe; so far, at least, that does not include what is going on inside my head. Ex post punishments can be imposed for outcomes that can be observed due to behavior that cannot—when what is going on inside my head results in my running a red light and colliding with another automobile."When an object of governance is thing-like, and changes in the attributes of those things are easily observed – a data breach occurs, some packets don’t cross the network – then ex ante rules are attractive. When governance concerns behavior, particularly behavior that is difficult to observe – the uses to which data is put by a company, whether a particular network management technique discriminates against a competitor – then the regulator has to fall back on ex post enforcement. The difficulties with ex post are well-known, though: from providing sufficient clarity up-front about what would constitute a breach, to the political difficulty of exacting very occasional but very large penalties from powerful players.
Footnotes
[1] Note that this is not the traditional meaning of the term, which used “object” as synonymous with “objective”, e.g. Edmund Burke: “To govern according to the sense and agreement of the interests of the people is a great and glorious object of governance. This object cannot be obtained but through the medium of popular election, and popular election is a mighty evil.”
[2] Boyd, William, “Ways of Seeing in Environmental Law: How Deforestation Became an Object of
Climate Governance”, to be published in Ecology Law Quarterly
[3] Daniel J. Weitzner, Harold Abelson, Tim Berners-Lee, Joan Feigenbaum, James Hendler, Gerald J. Sussman (2007) “Information Accountability”, Computer Science and Artificial Intelligence Laboratory Technical Report, MIT-CSAIL-TR-2007-034, June 13, 2007
[4] Business Forum for Consumer Privacy, “A New Approach to Protecting Privacy in the Evolving Digital Economy: A Concept for Discussion”, March 2009
[5] Kevin Werbach (2003), "Radio Revolution: The Coming of Age of Unlicensed Wireless," New America Foundation and Public Knowledge, no date on document, dated 15 Dec 2003 on NAF site
[6] Preston Marshall (2009) “Quantifying Aspects of Cognitive Radio and Dynamic Spectrum Access Performance” (see slides 15, 16)
[7] J Pierre de Vries, (2008) "De-situating spectrum: Rethinking radio policy using non-spatial metaphors" New Frontiers in Dynamic Spectrum Access Networks, 2008 (DySPAN 2008). http://ssrn.com/abstract=1241342
[8] David M. Friedman, Law's Order: What Economics Has to Do with Law and Why It Matters, Princeton University Press: 2001. See Chapter 7 for a discussion of ex ante/ex post.
Friday, December 18, 2009
Norms, mechanisms and policy imperatives
As I stumble towards a paper about changes in governance required by changing technology (part of the Silicon Flatirons New Models of Governance project) I’ve found Peter Cowhey and Jonathan Aronson’s magisterial new book on the political economy of global communications [1] very useful.
In the Summary and Conclusions, co-written with Don Abelson, they introduce four “principles” for market governance in the light of current conditions, and ten “norms” needed to implement the principles (see Appendix 1 below). They define market governance as “the mixture of formal and informal rules and the expectations about how markets should logically operate.”
When I look at their norms, I see a set of choices for the set-points of a small number of governance mechanisms:
My list of policy imperatives does not include subsidy, which is implied by Cowhey & Aronson’s Norm 2, “Invest in virtual common capabilities”. In the light of their work, I now realize that this is an omission; distributing government largesse is a permanent policy imperative.
The mechanisms of competition policy and property rights are means to the end of economic vitality, my fifth policy imperative. The mechanism of regulatory “touch” is a means that I address in my paper under the heading of Principles (see Appendix 2, below); as it happens, I concur with their recommendations for light touch regulation.
The difference in emphasis is perhaps most noticeable in the absence of norms/mechanism that speak to the “soft” policy imperatives. While Cowhey & Aronson’s Norm 7 addresses media content, and thus recognizes some value in “culture and values”, my third policy imperative, it is not implementable in the way the others are; it merely recommends a balance between encouraging trade and protecting cultural values. The “public safety” imperative is completely absent. While one may argue that Imperative 2, “consumer protection”, is to be achieved through competition policy (Norms 3 and 5), Cowhey & Aronson do not explicit mention of consumers.
Footnotes
[1] Cowhey, Peter F. and Jonathan D. Aronson, Transforming Global Information and Communication Markets: The Political Economy of Innovation, MIT Press (February 15, 2009). Softcopy available at http://globalinfoandtelecom.org/book/ (look for the “Download free under Creative Commons license” link)
[2] It is telling that Cowhey and Aronson seem to equate the public interest with consumer welfare, an economic construct. For example, on p. 17 they write: “The main challenge for governance is creating appropriate new spaces for market competition that allow the most important potential for innovation to play out in a manner that enhances consumer welfare (the public interest).”
[3] De Vries, Pierre, “Internet Governance as Forestry: Deriving Policy Principles from Managed Complex Adaptive Systems”, TPRC 2008. Available at SSRN: http://ssrn.com/abstract=1229482
Appendix 1: Four guiding principles and ten norms to help implement them
(Cowhey & Aronson (2009) Table S.1, p. 265
Principles
In the Summary and Conclusions, co-written with Don Abelson, they introduce four “principles” for market governance in the light of current conditions, and ten “norms” needed to implement the principles (see Appendix 1 below). They define market governance as “the mixture of formal and informal rules and the expectations about how markets should logically operate.”
When I look at their norms, I see a set of choices for the set-points of a small number of governance mechanisms:
- Subsidy (Norm 2)
- Competition policy (Norms 3, 5)
- Regulatory “touch” (Norms 1, 4, 6)
- Property rights (Norms 8, 9, 10)
- Public Safety. Protecting citizens is a primary responsibility of government.
- Consumer Protection. Policy makers take action when lawmakers conclude that commercial activity needs to be circumscribed in the public interest.
- Culture and Values. In order to protect and express a culture’s values, policy makers seek to limit some kinds of speech and promote others.
- Government Revenue. Money needs to be raised and redistributed by federal, state and local treasuries; this includes taxes, fees, levies, subsidies, and tax breaks.
- Economic Vitality. A healthy market produces goods and services that citizens value.
Now, these two lists are different in kind; Cowhey & Aronson’s norms and implied mechanisms are means, and my policy imperatives are ends. However, the mismatches are revealing.
The mechanisms of competition policy and property rights are means to the end of economic vitality, my fifth policy imperative. The mechanism of regulatory “touch” is a means that I address in my paper under the heading of Principles (see Appendix 2, below); as it happens, I concur with their recommendations for light touch regulation.
The difference in emphasis is perhaps most noticeable in the absence of norms/mechanism that speak to the “soft” policy imperatives. While Cowhey & Aronson’s Norm 7 addresses media content, and thus recognizes some value in “culture and values”, my third policy imperative, it is not implementable in the way the others are; it merely recommends a balance between encouraging trade and protecting cultural values. The “public safety” imperative is completely absent. While one may argue that Imperative 2, “consumer protection”, is to be achieved through competition policy (Norms 3 and 5), Cowhey & Aronson do not explicit mention of consumers.
[1] Cowhey, Peter F. and Jonathan D. Aronson, Transforming Global Information and Communication Markets: The Political Economy of Innovation, MIT Press (February 15, 2009). Softcopy available at http://globalinfoandtelecom.org/book/ (look for the “Download free under Creative Commons license” link)
[2] It is telling that Cowhey and Aronson seem to equate the public interest with consumer welfare, an economic construct. For example, on p. 17 they write: “The main challenge for governance is creating appropriate new spaces for market competition that allow the most important potential for innovation to play out in a manner that enhances consumer welfare (the public interest).”
[3] De Vries, Pierre, “Internet Governance as Forestry: Deriving Policy Principles from Managed Complex Adaptive Systems”, TPRC 2008. Available at SSRN: http://ssrn.com/abstract=1229482
Appendix 1: Four guiding principles and ten norms to help implement them
(Cowhey & Aronson (2009) Table S.1, p. 265
Principles
- Enable transactions among modular ICT building blocks.
- Facilitate interconnection of modular capabilities.
- Facilitate supply chain efficiency, reduce transaction costs.
- Reform domestically to help reorganize global governance.
- Delegate authority flexibly.
- Invest in virtual common capabilities; be competitively neutral.
- Use competition policy to reinforce competitive supply chains.
- Intervene lightly to promote broadband networks.
- Narrow and reset network competition policy. All networks must accept all traffic from other networks. Narrow scope of rules to assure network neutrality. Separate peering and interconnection for provision of VANs.
- Government should allow experiments with new applications.
- Create rules for globalization of multimedia audiovisual content services that encourage international trade and foster localism, pluralism, and diversity.
- Tip practices toward new markets for digital rights.
- Promote commercial exchanges that enhance property rights for personal data and mechanisms to do so.
- Users own their information and may freely transfer it.
Appendix 2: Four ecosystem management principles
De Vries (2008), Table 3, p. 26- Flexibility: Determine ends, not means.
- Delegation: Most problems should be solved by the market and civil society.
- Big Picture: Take a broad view of the problem and solution space.
- Diversity: Multiple solutions are possible and desirable.
Thursday, December 17, 2009
Polling x Lobbying = ?
Polling and lobbying are powerful factors of government that aren’t usually covered in Civics 101. Both are huge industries, and both shape the way political decisions are made. The current wave of web technology is going to create a hybrid form that will reshape politics.
According to 2002 Census data, the marketing research & public opinion polling industry as a whole had revenues of $10.9 billion; special interests paid Washington lobbyists $3.2 billion in 2008 according to the Center for Responsive Politics. Lobbying is as old as politics, but polling is relatively new (19th century), as is its premise: the importance of mass public opinion in government and diplomacy (18th century). Lobbyists are key players in Washington DC, and there’s a revolving door that moves former federal employees into jobs as lobbyists, and that pulls former hired guns into government careers or political appointments. Polling expertise is a key attribute in top political advisors, and something that politicians – and administrations – do incessantly.
The social media technologies of Web 2.0 will create a lobbying/polling hybrid and create a new political power center to rival traditional lobbying and polling. Efforts by government to solicit citizen opinion, like the Ideascale site soliciting input on the National Broadband Plan, or the Open for Questions site run by the White House, are a way for citizens to engage in little-L lobbying. These channels invite manipulation that will amount to big-L lobbying. In the same way that astroturfing co-opted grassroots lobbying, political operatives will co-opt the forms of web 2.0 citizen participation. Those who are adept at viral marketing will propel political memes into real-time polling tools in way that amounts to lobbying.
The amplification of the randomly popular that is pervasive on social rating sites like digg will infuse politics, intensifying the temptations of “poll, then decide”. We’ll also likely see something akin to the hollowing out of the media industry mid-list that The Economist charted in “A world of hits”: In movies and books, both blockbusters and the long tail are doing well; the losers are titles (and retailers) in the not-quite-so-good middle ground. Similarly, blockbuster issues will be laid on for the mass public that doesn’t care about politics (shibboleths like taxes and abortion), and niche lobbying on topics like radio spectrum, prison reform, and privacy will become even more fine-grained. Citizen publics will be important in both: as armies of computer-generated extras in the first case, and as engaged semi-experts in the second. Worthy mid-ground issues like trade, education, and energy policy will get steadily shorter shrift.
One implication is that niche topics like hunger policy shouldn’t strive to move up the charts into the middle ground – they’ll just wither there. Rather, niche players should embrace their residence in the long tail and make the most of Web 2.0 phenomena, like Polling x Lobbying, that give them direct access to the appropriate sliver of the policy making elite.
According to 2002 Census data, the marketing research & public opinion polling industry as a whole had revenues of $10.9 billion; special interests paid Washington lobbyists $3.2 billion in 2008 according to the Center for Responsive Politics. Lobbying is as old as politics, but polling is relatively new (19th century), as is its premise: the importance of mass public opinion in government and diplomacy (18th century). Lobbyists are key players in Washington DC, and there’s a revolving door that moves former federal employees into jobs as lobbyists, and that pulls former hired guns into government careers or political appointments. Polling expertise is a key attribute in top political advisors, and something that politicians – and administrations – do incessantly.
The social media technologies of Web 2.0 will create a lobbying/polling hybrid and create a new political power center to rival traditional lobbying and polling. Efforts by government to solicit citizen opinion, like the Ideascale site soliciting input on the National Broadband Plan, or the Open for Questions site run by the White House, are a way for citizens to engage in little-L lobbying. These channels invite manipulation that will amount to big-L lobbying. In the same way that astroturfing co-opted grassroots lobbying, political operatives will co-opt the forms of web 2.0 citizen participation. Those who are adept at viral marketing will propel political memes into real-time polling tools in way that amounts to lobbying.
The amplification of the randomly popular that is pervasive on social rating sites like digg will infuse politics, intensifying the temptations of “poll, then decide”. We’ll also likely see something akin to the hollowing out of the media industry mid-list that The Economist charted in “A world of hits”: In movies and books, both blockbusters and the long tail are doing well; the losers are titles (and retailers) in the not-quite-so-good middle ground. Similarly, blockbuster issues will be laid on for the mass public that doesn’t care about politics (shibboleths like taxes and abortion), and niche lobbying on topics like radio spectrum, prison reform, and privacy will become even more fine-grained. Citizen publics will be important in both: as armies of computer-generated extras in the first case, and as engaged semi-experts in the second. Worthy mid-ground issues like trade, education, and energy policy will get steadily shorter shrift.
One implication is that niche topics like hunger policy shouldn’t strive to move up the charts into the middle ground – they’ll just wither there. Rather, niche players should embrace their residence in the long tail and make the most of Web 2.0 phenomena, like Polling x Lobbying, that give them direct access to the appropriate sliver of the policy making elite.
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