AMERICAN.COM

The attacks on industrial farming continue. The latest is from Jonathan Safran Foer, whose new book is getting tons of attention; it was excerpted in the New York Times magazine and is reviewed in this week’s New Yorker. Most of these attacks don’t wrestle with the arguments Blake Hurst advanced in his essay “The Omnivore’s Delusion” and until they do it will be difficult to take them too seriously. An even greater challenge than Blake’s compelling case, however, might be this: Wal-Mart (and industrial-scale farming) are making it possible for a family of modest means with two kids and four grandparents to gather during a recession and eat a whole Thanksgiving dinner… for 20 bucks.

Here’s an interesting post about Larry Summers inserting himself into the political action over net neutrality.

White House senior adviser Susan Crawford resigned last week to little fanfare, but some White House insiders say her leaving may reveal growing tensions inside the Obama Administration about just how radical the administration has become in developing policies.

Crawford, who was one of the leading voices during the Obama transition period, and then stayed on as Obama’s key adviser on technology and communications policy, was credited with putting in place the general policy overlays in those subject areas that guided many of the Administration’s hiring and appointments to the Federal Communications Commission and the Commerce Department. She was a strong proponent of Net Neutrality regulations, which would allow the government to regulate the Internet, and in her role sitting on the president’s councils on economic policy, she supported strong government interventions and controls of private business.

But White House sources say that she ran afoul of senior White House economics adviser Larry Summers, who claimed he and other senior Obama officials were unaware of how radical the draft Net Neutrality regulations were when they were initially internally circulated to Obama administration officials several weeks ago. “All of sudden Larry is getting calls from CEOs, Wall Street folks he talks to, Republicans and Democrats, asking him what the Administration is doing with the policies, and he isn’t sure what they’re talking about,” says one White House aide. “He felt blind-sided, and Susan was one of those people who heard about it.” In the end, the proposed regulations were slightly moderated from the original language FCC chairman Julius Genachowski, a Crawford ally, circulated.

The White House has a full plate these days, and it’s possible Summers felt it made little sense in the middle of a recession to begin regulating one of the sectors of the economy that has been doing pretty well lately.

I mentioned a while back that the net neutrality debate is getting more interesting. Here is further evidence from Sonia Arrison:

I was stunned last week when I saw many prominent tech VCs and CEOs from Silicon Valley sign letters endorsing the FCC’s move towards net neutrality, since, if the rule making goes ahead, it will mean regulating the Internet. I happen to know a bunch of these folks, so I decided to call them to see if they really were endorsing regulations for the Net or if something else was going on. Something else was going on.

Read her whole post to find out the whole story. Sonia is a thoughtful and prudent voice on tech issues and is in the camp of those of us trying to Avoid a Tech Train Wreck.

Here is an interesting interview with FCC Chairman Julius Genachowski, in which he makes the following claim:

First of all, we are not regulating the Internet.

Photo Courtesy Cawi2001.

He immediately follows that by describing the FCC’s efforts on net neutrality this way:

What we did yesterday was launch a rule-making process where over the months ahead, we will be getting a lot of public input on what are fair, common-sense rules of the road to ensure that any small business, any entrepreneur, any speaker engaging in a lawful activity can have access to the Internet and the ability to reach an audience.

In other words: we are regulating the Internet.

The whole interview is worth a look. While the net neutrality efforts are problematic, the chairman is also talking about freeing up more spectrum for wireless developers, which would be a positive development.

Adam Thierer has been named the new chief of the Progress and Freedom Foundation. It’s good news for PFF and for technology policy in the United States. Adam is a thoughtful and forceful advocate of consumer-oriented rules of the road for tech. He’s also the co-author of an important piece that will appear on THE AMERICAN in the next week or so.

The FCC chairman uttered some encouraging words recently about making more spectrum available for wireless services and even talked of secondary markets for spectrum. This is all to the good. His remarks contrast with his views on net neutrality. The best way to ensure consumers get the Internet they want is not through pre-emptive regulation of the Internet in the form of net neutrality regulations but through competition and innovation. The good news is freeing up more spectrum for 3G and 4G wireless will help ensure robust competition moving forward.

Here’s a very thoughtful piece that discusses some of the technical questions related to wireless net neutrality. Of note:

Defining and regulating “fairness” as it pertains to wireless Internet traffic is inherently difficult, says Mung Chiang, a Princeton electrical engineer working on broadband access algorithms. “The notion of congestion–what is it, how often it happens, who is to blame–it’s much harder to define,” compared to landline Internet connections, he says. “Who is going to take the blame when somebody close to a tower receives power and wipes out others, even if this guy may not be downloading movies?”

However the FCC chooses to define Net neutrality, Chiang says the specter of regulation hangs heavy over wireless Internet businesses. “As with other industries, uncertainty is worse than anything,” he says. “Deploying towers, digging up roads, and standardizing new equipment is a very long-term, expensive capital thing. If people don’t know what is going to happen, that will be a big deterrent to capital expenditures, and that generally is not good.”

Tim Lee has been trying to find a kind of middle ground in the network neutrality debate. He is pro–net neutrality and anti–net neutrality regulation. And his paper on net neutrality is one of the strongest challenges to the pro-regulation crowd (one to which there has not been a serious response by regulation advocates, which is telling). The fundamental soft neutrality that is already engineered into the Internet is what makes it attractive to consumers. One point often overlooked by regulation advocates is that this gives incumbent ISPs strong incentive to leave the basic rules of the road in place (there are also technical hurdles that Tim gets into in some detail). The FCC chairman and other regulation advocates believe there is insufficient competition to guarantee those rules will be respected. But the burden of proof weighs heavily on the advocates of regulation, who have yet to demonstrate that the market for Internet service is insufficiently competitive or innovative. This is especially the case in the wireless realm.

Felix Salmon writes in regarding my earlier post and says:

I have to say I find this kind of thing utterly depressing.

“Salmon says that if newspapers are so crass as to try to charge, then
bloggers should lift articles wholesale and pass them around to each
other”.

No I don’t, I say they *will*, not that they *should*.

“this is the ethical course”

I never say anything about ethics!

“News organizations should instead establish relationships with their
audiences”

No, I’ve said they’ve *already* established those relationships, and
that they shouldn’t do anything to damage them

“and then somehow monetize the relationship through some unspecified
business model that relies on advertising”

I said nothing about relying on advertising!

Why can’t people respond to what I actually write, rather than what
they think a straw-man Felix might write?

The border between prediction and prescription is sometimes murky, and if I misunderstood where Salmon stands on the issue, I apologize, and happily endorse his presence on the side of truth, goodness, and the importance of letting people be proud, paying customers.

On the business models, if one rules out direct charges, then I do not know what is left except advertising. There are various models that give away basic content and then charge for extras, but these certainly entail charging for content. There are also models in which someone builds a community and then sells the members to various purveyors, but these seem to me to be an advertising equivalent. So I do not know what alternatives he has in mind.

James V. DeLong is vice president and senior analyst with the Convergence Law Institute and special counsel with the law firm Kamlet Reichert.

Blogger Barry Ritholtz became the latest to suggest that maybe news really should not be free, and he endorsed a system of micropayments, introduced slowly so the blogger frogs do not object to the water getting hotter:

The problem facing journalism and newspapers is not one of technology—it is one of behavior. People are used to free, they don’t think they need to pay for content. A solution that ignores this simple fact is destined to fail, regardless of technology, software or widgets . . . This requires a behavioral change, from both the newspapers and its readers.

However, Reuters blogger Felix Salmon not only objects, he advocates kicking over the pot. The copyright doctrine of “fair use” allows for quotation from printed sources for the purposes of public dialogue, as long as the lifting is not so extensive as to substitute for the original and thus deprive the creator of his market. Salmon says that if newspapers are so crass as to try to charge, then bloggers should lift articles wholesale and pass them around to each other—this is the ethical course because:

We’re entering a share-and-remix culture, where the idea behind micropayments—that a small sum must be paid just to read something, and republishing or remixing are pretty much barred entirely—is increasingly untenable.

News organizations should instead establish relationships with their audiences, and then somehow monetize the relationship through some unspecified business model that relies on advertising.

There are two continuing puzzlements over this line of analysis. First, the economic. It fails to understand that any business model for producing original content depends upon being able to maintain control of the content, whether monetization is via direct sales or advertising. If others can free ride on your work, then they also get to siphon off part of the ad revenues. There is no business model without effective property rights.

Second is the ethical. Why are the communitarians so dead set against payments, however reasonable? Why does “share-and-remix” mean “free”? If one wants to comment on a news story, one must buy the computer on which to type; art requires purchase of paint and canvas; music requires instruments. There is something unfathomably strange about the mindset that rebels against payments that are necessary to make the whole structure of news gathering and commentary work, and that insists there is some as yet undiscovered magic business model that will solve all problems.

Perhaps the communitarian movement needs a theme song. I suggest “Big Rock Candy Mountain,” and if you have to pay a dime to hear Burl Ives sing it, that seems to me to be quite reasonable.

James V. DeLong is vice president and senior analyst with the Convergence Law Institute and special counsel with the law firm Kamlet Reichert.

The FCC is gearing up to start meddling with the wireless industry. One point of contention involves the handset exclusivity deals struck between wireless providers and handset makers. Under the terms of these deals, for example, only customers who subscribe to AT&T’s service can get the iPhone. This is a perfectly legitimate business practice, but nonetheless there are those calling for the government to step in and prohibit these kinds of deals.

The whole issue might soon be moot. According to All Things Digital, the exclusivity deal between Apple and AT&T might be ending soon. The point here is simple—the wireless marketplace in the United States is competitive, dynamic, and changing rapidly. In other words, it is precisely the sort of marketplace regulators should refrain from meddling in.

Broadcast.com founder and current Dallas Mavs owner Mark Cuban offers an illustration of how net neutrality regulations would slow media innovation to a crawl. It’s a good example of why engineers should be permitted to experiment with the evolution of the Internet absent excessive regulation. Mark is not a disinterested party, of course—he’s an entrepreneur trying to push a new generation of bandwidth intensive video applications into the market. But Capitol Hill should be listening to such entrepreneurs. I have more in this RealClearMarkets piece here.