Tales of the Sausage Factory

An insider’s view of the media hegemony

Auctioning a Chunk of 6 GHz Would be Phenomenally Bad Policy.

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Spectrum has once again become a hot topic in telecom. And in what is perhaps the oddest twist in this season’s telenovela Spectrum Wars is that on most of these items I’m in agreement with FCC Chairman Ajit Pai. Hey, gotta mix it up or the ratings are going to sag.

 

Specifically, we have 3 fairly big items on the table to resolved over the next month or two (hopefully!) as part of Federal Communications Commission (FCC) Chairman Ajit Pai’s “5G Fast Plan.” While I am less than persuaded by the 5G hype and the “OMG! China! We must deploy NOW!!!!” these issues have lingered long enough that we bloody well should resolve them and get moving and deploying.

 

If you follow spectrum policy at all, you will have heard about the C-Band Auction and the 5.9 GHz fight. Hopefully I’ll have time to blog more about them. But you would be forgiven if you hadn’t heard much about the fight over opening the 6 GHz band for an unlicensed underlay. “Underlay” means you allow unlicensed users to operate in the same band as licensed users on a non-interfering basis. While this may seem odd to you young ‘uns, underlays used to be the entirety of unlicensed spectrum. The first authorization for unlicensed was entirely an underlay. No one dreamed of providing a band entirely for unlicensed. Remember Mr. Microphone or your iTrip that let you play your iPod over your FM radio? That’s an underlay in the FM band.

 

Opening the 6 GHz band is incredibly important for the future of WiFi, particularly WiFi 6. that makes it super important for its own sake. But if you believe we need to “win the race to 5G,” then getting the 6 GHz unlicensed underlay up and running as quickly as possible is outrageously super urgent. As we keep discovering every time we “G up,” we need a new allocation of unlicensed spectrum alongside the new allocation of licensed spectrum to create space for the new stimulated demand. Despite spending the 00s bashing each others’ brains in (and still finding some die hards who hate either licensed or unlicensed), most folks now agree that licensed and unlicensed spectrum are synergistic, and you need a good allocation of both to keep winning (for whatever value of winning) the spectrum race. USA! USA!

 

Unfortunately, two things invariably happen when the FCC is considering spectrum for unlicensed use. First, all the existing users show up and say: “no no NO! No changes in our spectrum neighborhood! We don’t care how much engineering you do. Allowing unlicensed devices will mean terrible, terrible things and our vital services will crash and burn and everyone will hate you forever.” The other thing that happens is that CTIA, which represents the major wireless carriers and a good chunk of the rest of the industry, shows up and says “hey! If you can use that for unlicensed spectrum, you can use it even better for licensed spectrum!”

 

So no surprise, CTIA has shown up in the 6 GHz band proceeding to demand a chunk of the 6 GHz band get auctioned as well.  Setting aside that CTIA took half the CBRS band away for auction in 2018, gobbled up the remaining 2.5 GHz band from the non-commercial community in 2019, and is now getting over half the C-Band from the satellite community, they insist that a “fair” compromise would be to take half the 6 GHz allocation necessary for WiFi 6 and auction that as well. While CTIA’s voraciousness has a charming consistency to it, taking half the 6 GHz band for auction would be a phenomenally bad idea for a bunch of reasons. Aside from destroying a substantial amount of the utility of WiFi 6 by eliminating half the channels space (the gain/loss is exponential, not arithmetic; losing channels degrades you much more than simply subtracting the individual channel capacity), it would require relocating the existing 6 GHz licensed users (utility companies) and reorganizing the proposed new home for the existing utility company services — the neighboring 7.125 GHz band. That band currently houses lots of complicated top secret DoD operations, which makes the subsequent reorganization and repacking a tad difficult.

 

CTIA’s chief argument to Congress is — no shocker here — money. Spectrum auctions generate cash, although the history of spectrum auctions shows that trying to predict how much cash is almost impossible in any rational way. But for the reasons I will explain below, even if we take CTIA’s estimates of a 6 GHz auction generating $20 billion or so, the government would not actually receive anything close to that revenue. Unlike the C-Band auction, which has fairly predictable costs for relocating the existing users (and some extra revenue to compensate/bribe the satellite guys), relocating the existing 6 GHz users would cost some unpredictable amount of billions which will seriously reduce the net revenue of the auction available for deficit reduction or rural broadband or whatever. this assumes, of course, that the military even can reconfigure its systems to share with licensed use by utilities.

 

I get into all the reasons trying to squeeze in a last minute auction of 6 GHz is a bad idea below. . . .

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The Lessig Lawsuit (sung to the tune of “The Reynolds Pamphlet”).

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Cyberlaw Twitter has been mildly abuzz recently over the news that Professor Larry Lessig. Has decided to sue the New York Times for defamation. Specifically, Lessig claims that a NYT article describing this essay on Medium, explaining his position around the mess at MIT Media Lab and an anonymous donation from the late and utterly unlamented Jeffery Epstein. In his complaint, Lessig accuses the NYT of using a deliberately misleading headline and lede knowing that the vast majority of people do not click through to read the actual content they share with others and that therefore this “clickbait defamation” (as Lessig calls it) was knowingly defamatory even under the exacting standard of NYT v. Sullivan.

 

Perhaps unsurprisingly, in light of both the connection with Jeff Epstein and because newspapers don’t like to be sued, folks have reacted with particularly scathing criticism of this lawsuit. Many view this as contradictory to Lessig’s previous advocacy for an open internet and information freedom. Some have gone so far as to accuse Lessig of filing a “Strategic Lawsuit Against Public Participation” (SLAPP) complaint. Meanwhile, legal Twitter has been awash with rather melodramatic proclamations of how Lessig has lost his way by suing a newspaper, even if it did screw him over bigly.

 

Perhaps it is just the sheer overwrote nonsense that gets me contrarian here, but I’m going to disagree with the broader tech Twitter community on this. The Lessig Lawsuit actually raises a rather interesting new question of defamation law with a high degree of relevance in the modern world. It also highlights one of the things defamation law is concerned about — the ability of people to spread false statements that have very serious impact on your life or profession with virtually no repercussions. The complicated dance between needing defamation to protect people from harassment and potentially having their lives destroyed and the First Amendment protections for speech and the press has been pumped up on steroids in the information age — but we still need to remember that it is sometimes complicated. It is also important to keep in mind that while defamation law is frequently abused, it also plays a very important role in pushing back on deliberate misinformation and using a fairly powerful megaphone to make other people’s lives miserable — such as with the lawsuit by Sandy Hook families against Alex Jones. Defamation law requires a balance, which is why we cure the problem of SLAPP suits with Anti-SLAPP suit statutes rather than simply eliminating ye olde common law tort of defamation.

 

So I’m going to run through the Case for the Lessig Lawsuit below. To be clear, I’m not saying I agree with Lessig. Also, as someone who himself has a tendency to overshare and think things through online, I rank trying to work out complex highly emotionally charged issues online as up there with Hamilton’s decision to publish the Reynold’s Pamphlet.  On the other hand, the chilling effect on open and honest discussion from “clickbait defamation” is an argument in favor of finding for Lessig here. Indeed, I have hesitated to say anything because the “chain of association cooties” and the ancient legal principle of “why borrow trouble.” (I am so looking forward to headline before my Senate confirmation hearing under President Warren with the title “Nominee supported Taking Jeff Epstien donation at MIT” — despite the fact that nothing in this blog post could reasonably suggest such a thing and the likelihood of my being nominated for anything requiring Senate confirmation ranks just behind my winning MegaMillions.) But I am hoping that obscurity combined with mind-numbing historical and legal discussion about one of my favorite traditional actions at common law will save me from too much opprobrium. Besides, the actual legal question is interesting and highly relevant in today’s media environment, and deserves some serious discussion rather than dismissive mockery.

 

More below . . . .

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I get to deflate the 5G Hype Bubble a Bit at an Unusually Good Senate Hearing.

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Official Washington is generally consumed with all things impeachment — especially the Senate. Nevertheless, other business does go on. So while it surprised many, Senate Commerce Committee Chair Roger Wicker (R-Miss) and Ranking Member Mariah Cantwell (D-WA) scheduled a hearing this morning (Wed. 1/22) on “The 5G Workforce and Other Obstacles to Broadband Deployment.” (Warning! The video of the hearing doesn’t actually begin until about 15 minutes have passed after you hit “play.” Hopefully this will be corrected in the future.) And, in what will no doubt be to the surprise of many, it was actually a pretty good hearing.

 

It was a fairly good hearing. Sparsely attended (members, including Wicker, joked about holding a morning hearing after impeachment proceedings ran until 2 a.m.), but the members who were there were actually trying to find out facts rather than just score some points. Because it was sparsely attended, members had lots of opportunity to ask their questions and get thoughtful responses. It was cordial and substantive. You know, the kind of thing everyone claims they want to see and laments we never have but is actually reasonably common on technical stuff and when it does happen everyone zones out because, lets face it, actual substance on important issues bores the pants off nearly everyone.
 
I was there primarily to address the “barriers to deployment” piece (although I had some things to say about workforce training, which is critically important and a fantastic opportunity to promote digital equity in urban and rural America — hopefully I will be able to write that up in a separate blog post). In particular, I focused on ‘why we should stop stomping on local governments just because carriers repeat over and over that if we don’t give them what they want then China will win the “race to 5G” — whatever the Hell that means.’ (No surprise, but I also put in a plug for opening up the 5.9 GHz band and 6 GHz band for unlicensed use on a non-interfering basis as quickly as possible.)
In addition to everything else, I must add a personal note. In these times, I feel enormously grateful for the opportunity to wear my kippah when testifying before Congress. I am not there as a Jew, or to testify about Israel or some other issue people think is particularly a “Jew thing.” I am there as an American. Proud of my religion and ethnicity, but fully integrated into the world of policy and national affairs. I don’t dress like either of the two Jewish stereotypes you see on television: a Hassid or a Woody Allen clone. I’m a real person. So are all the other Orthodox Jews I know.
Anyway, t get back to the subject at hand, you can read my testimony here. I am reprinting my opening oral statement below.
Stay tuned . . . .

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A Farewell To Julie Knapp.

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Few people realize how much the spectrum world will change on January 3, 2020. That’s the day that Julius (Julie) Knapp, the Director of the Federal Communication Commission (FCC) Office of Engineering and Technology (OET) retires. You can read tributes to Julie Knapp from Chairman Pai, Commissioner O’Reilly, Commissioner Rosenworcel, Commissioner Carr, and Commissioner Stark. I would be remiss, however, if I failed to write something myself.

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My Insanely Long Field Guide To The C-Band Spectrum Fight, And Why This Won’t End In December.

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Like most everything else at the FCC these days, problems that have relatively simple and straightforward solutions turn into horrible complicated messes. Take the C-Band, a slice of spectrum that in the U.S. lies between 3.7 GHz and 4.2 GHz. When first authorized for commercial satellite use back in the day, these frequencies were considered far too high to have much value for terrestrial use. These days, of course, 3.7 GHz is considered prime “midband” spectrum perfect for mobile 5G deployment, and sits right on top of the CBRS spectrum the FCC intends to auction next June. So wireless carriers want the FCC to repurpose some or all of it for 5G. In addition, a bunch of folks (including my employer Public Knowledge) support opening up portions of the band in rural areas for point-to-point backhaul (on a secondary basis, which means the backhaul guys need to protect the incumbents from interference).

 

The logical and straightforward thing to do would be to treat this like we did the 700 MHz auction/DTV transition over ten years ago. Tell the C-Band guys “sorry guys, we’re shrinking your available spectrum from 500 MHz to 200 MHz and taking back the other 300 MHz for auction. We’re also going to allow point-to-point backhaul on a non-interfering basis because that will really help rural ISPs. Don’t worry, we’ll set aside some of the auction money for a transition fund.” Sure, the incumbent licensees would scream (they always do), but this is a fairly proven solution that worked well to get us spectrum for 4G (and raised $20 bn for the Treasury) so why not do it again?

 

Or, if you really want to bribe the incumbent licensees, we could do an incentive auction. I’m not a fan, especially when it’s folks who got their licenses for free. But fine. We crossed that bridge awhile ago with the broadcasters, the authority for incentive auctions is now part of 47 U.S.C. 309(j), let’s just use it.

 

But nooooooo . . . . . This FCC in particular seems to love delaying everything while it rethinks all the options so it can come up with its very own wrong decision. Just as the FCC delayed deployment of the CBRS spectrum by 2 years by reopening that proceeding to redo the rules at the behest of the big carriers, now the FCC apparently wants to try a “private auction” under which the current holders of the satellite licenses (as represented by a group of licensees called “C-Band Alliance” or “CBA”) will go off behind closed doors, “auction” the public spectrum themselves, and then promise to give a piece of the money back to the FCC.

 

After snoozing through this for over a year, members of Congress have suddenly woken up and made this all interesting. Why? Analysts estimate that an auction of 300 MHz of C-Band spectrum would yield $50-60 billion in revenue. If the government conducts the auction, then it gets to credit $60 bn as a “payfor” to the budget for things like rural broadband or Trump’s border wall (assuming the Congressional Budget Office, aka CBO, agrees with the estimate). Notably, Senator Kennedy (R-LA) of the appropriations Committee had a little hearing with Chairman Pai where he politely but firmly made it clear to Pai that he thinks a private sale is a dumb idea and he wants a public auction. When that apparently did not work to move the needle, Kennedy jumped over Pai’s head and took the matter to President Trump, although there is no indication that Trump has decided to do anything on the matter.

 

Meanwhile, in the House, Rep. Mike Doyle (D-PA), Chair of the House Telecom Subcommittee, dropped a bipartisan bill, the C-Band Act, that would require the FCC to do an auction. Doyle followed this up with a hearing where the majority of the Members in attendance made it clear they wanted the FCC to run an auction so they could use that money to pay for rural broadband.

 

To understand why the distinction between private sale and public auction matters so much to Congress, you need to understand one of the peculiarities of how Congressional budgeting works and and terms such as “CBO score,” “paygo” and “payfor.” To state the matter quickly, if the FCC holds an auction, CBO can score the projected revenue of the auction as part of its annual budgeting process and that projected revenue can be used to “pay for” other projects under Congress’ “pay as you go” (aka “paygo”) rules. But if the licensees have a private auction, there is no CBO score even if the licensees make a voluntary donation to the FCC. So from the perspective of Congress trying to find money to do stuff, the difference is not between $60 bn and something less than $60 bn. The difference is between $60 bn and zero. Granted, no one in Congress appears to worry about deficits these days, but as Senator Kennedy observed, that money could fund “several other government projects (including the wall),” and $60 bn is not a small amount of money whether you want to fund the wall (like Kennedy) or rural broadband (like the House E&C).

 

But what can Congress do, especially with Chairman Ajit Pai apparently determined to give C-Band Alliance what they want (especially now that AT&T and Verizon have supported C-Band)? Funny thing, we had a similar issue back in 2002 when the Powell FCC tried to move ahead with an unauthorized incentive auction, and Congress stopped that cold despite FCC authorization of the auction.

 

I explain below . . .

 

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Lindsay Ellis and the Future of Content in Europe

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I am a huge fan of media critic/video essayist/YouTube creator Lindsay Ellis. If you want to know why, check out her YouTube channel or this really amazing speech she gave at the XOXO Festival about surviving bad faith internet attack mobs. I’ve always had this daydream that someday I could get her interested in something we work on at my employer Public Knowledge. That way I’d be able to meet her, we’d geek out about policy and geek culture stuff, and she would become this amazing spokesperson for one of our causes, like net neutrality.

 

Well, daydream still just a daydream, but turns out Lindsay Ellis is now front and center in a fight about mandatory copyright filtering, and how it actually impacts artists and creativity that highlights what we and others have warned about for years. It also flags the likely future problems for creators in Europe, since Article 17 of the 2019 EU Copyright Directive essentially requires copyright filters for compliance. It also illustrates the importance of fair use in encouraging the creation of new works and new businesses (Lindsay Ellis has grown her video essay business to where she employs 4 people).

 

To give the headline: copyright filters can’t identify fair use, and the refusal of platforms to include an actual appeal process capable of making fair use determinations. As a result, copyright filtering does not “protect artists.” It heavily favors one particular and narrow set of creators over a much larger, broader set of creators — because things like education are not recognized as “art” or “creation” by the major labors and lobbyists driving the debate.

 

I unpack all this below . . . .

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A Slew of Minor Corrections On My Political Advertising Post From the Dean of Public Interest Telecom.

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There is an expression that gets used in the Talmud to praise one’s teacher that goes: “My Rabbi is like wine and I am like vinegar,” whereupon the Rabbi actually doing the talking quotes some superior wisdom from his teacher.

 

When it comes to FCC rules governing political advertising, Andrew Jay Schwartzman is like wine and I am like vinegar. Andy knows this stuff backward and forward. So after my recent blog post on Facebook political advertising, Andy sent me a very nice note generally complimenting me on my blog post (always appreciated), but pointing out a bunch of things I either got wrong or could have said more clearly. As Andy observed in his email to me, they don’t actually impact the substance. But in the spirit of transparency, admitting error, and generally preventing the spread of misinformation, I am going to list them out here (a la Emily Ruins Adam Ruins Everything) and correct them in the actual post.

 

List of my goofs below . . . .

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Political Advertising In Crisis: What We Should Learn From the Warren/Facebook Ad Flap.

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[This is largely a reprint from a blog post originally posted on the Public Knowledge blog.]

The last week or so has highlighted the complete inadequacy of our political advertising rules in an era when even the President of the United States has no hesitation in blasting the world with unproven conspiracy theories about political rivals using both traditional broadcast media and social media. We cannot ignore the urgency of this for maintaining fair and legitimate elections, even if we realistically cannot hope for Congress to address this in a meaningful way any time soon.

 

To recap for those who have not followed closely, President Trump has run an advertisement repeating a debunked conspiracy theory about former Vice President Joe Biden (a current frontrunner in the Democatic presidential primary). Some cable programming networks such as CNN and those owned by NBCU have refused to run the advertisement. The largest social media platforms — Facebook, Google, and Twitter — have run the advertisement, as have local broadcast stations, despite requests from the Biden campaign to remove the ads as violating the platform policy against running advertising known to contain false or misleading information. The social media platforms refused to drop the ads. Facebook provided further information that it does not submit direct statements by politicians to fact checkers because they consider that “direct speech.”

 

Elizabeth Warren responded first with harsh criticism for Facebook, then with an advertisement of her own falsely stating that Zuckerberg had endorsed President Trump. Facebook responded that the Trump advertisement has run “on broadcast stations nearly 1,000 times as required by law,” and that Facebook agreed with the Federal Communications Commission that “it’s better to let voters — not companies — decide.” Elizabeth Warren responded with her own tweet that Facebook was “proving her point” that it was Facebook’s choice “whether [to] take money to promote lies. You can be in the disinformation-for-profit business or hold yourself to some standards.”

 

Quite a week, with quite a lot to unpack here. To summarize briefly, the Communications Act (not just the FCC) does indeed require broadcast stations that accept advertising from political candidates to run the advertisement “without censorship.” (47 U.S.C. §315(a).) While the law does not apply to social media (or to programming networks like NBCU or CNN), there is an underlying principle behind the law that we want to balance the ability of platforms to control their content with preventing platforms from selectively siding with one political candidate over another while at the same time allowing candidates to take their case directly to the people. But, at least in theory, broadcasters also have other restrictions that social media platforms don’t have (such as a limit on the size of their audience reach), which makes social media platforms more like content networks with greater freedom to apply editorial standards. But actual broadcast licensees — the local station that serves the viewing or listening area — effectively become “common carriers” for all “qualified candidates for public office,” and must sell to all candidates the opportunity to speak directly to the audience and charge all candidates the same rate.

 

All of this begs the real question, applicable to both traditional media and social media: How do we balance the power of these platforms to shape public opinion, the desire to let candidates make their case directly to the people, and the need to safeguard our ability to govern ourselves? Broadcast media remain powerful shapers of public opinion, but they clearly work in a very different way from social media. We need to honor the fundamental values at stake across all media, while tailoring the specific regulations to the specific media.

 

Until Congress gets off its butt and actually passes some laws we end up with two choices. Either we are totally cool with giant corporation making the decision about which political candidates get heard and whether what they have to say is sufficiently supported and mainstream and inoffensive to get access to the public via social media, or we are totally cool with letting candidates turn social media into giant disinformation machines pushing propaganda and outright lies to the most susceptible audiences targeted by the most sophisticated placement algorithms available. It would be nice to imagine that there is some magic way out of this which doesn’t involve doing the hard work of reaching a consensus via our elected representatives on how to balance competing concerns, but there isn’t. There is no magic third option by which platforms acting “responsibly” somehow substitutes for an actual law. Either we make the choice via our democratic process, or we abdicate the choice to a handful of giant platforms run by a handful of super-rich individuals. So perhaps we could spend less time shaming big companies and more time shaming our members of Congress into actually doing their freaking jobs!!

 

(OK, spend more time doing both. Just stop thinking that yelling at Facebook is gonna magically solve anything.)

I unpack this below . . .

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Mozilla v. FCC Reaction, or Net Neutrality Telenovela Gets Renewed For At Least Two More Seasons.

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I’ve been doing network neutrality an awfully long time. More than 20 years, actually. That was when we started arguing over how to classify cable modem service. As complained almost a decade ago, this is the issue that just will not die. I understand that, given the central importance of broadband to our society and economy. Nevertheless, my feeling on this can be summed up by the classic line from Godfather III: “Just when I thought I was out, they pull me back in.” [subtle product placement] I even went so far as to write a book on platform regulation to try to get away from this (available free here). [/subtle product placement] . But no. Here we are again, with a decision that creates further muddle and guarantees this will keep going until at least after the 2020 election.

Sigh.

 

Getting on to the basics, you can find the decision in its 186-page glory here. You can find a good analysis of what potentially happens next for net neutrality by my colleague John Bergmayer here. The short version is that we lost the big prize (getting the Order overturned, or “vacated” as we lawyers say), but won enough to force this back to the FCC for further proceedings (which may yet result in the “Restoring Internet Freedom Order” or RIFO being reversed and/or vacated) and open up new fronts in the states. The net result on balance is rather similar to what we had after the 2014 court decision that tossed out the 2010 net neutrality rules but laid the groundwork for reclassifying broadband as Title II; a curve ball that lets all sides claim some sort of win and creates enough uncertainty to likely keep the worst ISP abuses in check for the time being. (Mind you, ISPs will continue to test the boundaries, as they are already doing without actual enforceable rights in place.)

 

Most importantly, industry and the FCC can’t get what they want most (preemption of state authority) without going full Title II. This puts the FCC in a bind, since it can’t deliver the thing industry most wants. It also means that various state laws (especially the comprehensive California net neutrality law) and various executive orders imposing some sort net neutrality obligations now go into effect get to be litigated individually. As with the California privacy law passed last year, industry now has significant incentive to stop fooling around and offer real concessions to get some sort of federal law on the books. Also like the California Privacy Law, this is not going to be enough to overcome industry reluctance against a law with teeth and therefore is unlikely to go anywhere. So we are likely stuck until after the 2020 election.

 

I also want to emphasize that even the parts where we lost, as in 2014, contain the groundwork for ultimately winning. This gets lost in the headlines (particularly in the triumphant crowing of FCC majority). But like any good telenovela, this latest dramatic plot twist has lots of foreshadowing for the next few seasons and a set up for an even BIGGER plot twist in future seasons.

 

My incredibly long, highly personal and really snarky dissection of the D.C. Circuit’s opinion in Mozilla v. FCC and what it means going forward below.

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A Tax on Silicon Valley Is A Dumb Way to Solve Digital Divide, But Might Be A Smart Way To Protect Privacy.

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Everyone talks about the need to provide affordable broadband to all Americans. This includes not only finding ways to get networks deployed in rural areas on par with those in urban areas. As a recent study showed, more urban folks are locked out of home broadband by factors such as price than do without broadband because of the lack of a local access network. The simplest answer would be to simply include broadband (both residential and commercial) in the existing Universal Service Fund. Indeed, Rep. Doris Matsui has been trying to do this for about a decade. But, of course, no one wants to impose a (gasp!) tax on broadband, so this goes nowhere.

 

Following the Washington maxim “don’t tax you, don’t tax me, tax that fellow behind the tree,” lots of people come up with ideas of how to tax folks they hate or compete against. This usually includes streaming services such as Netflix, but these days is more likely to include social media — particularly Facebook. The theory being that “we want to tax our competitors, “or “we hates Facebook precious!” Um, I mean “these services consume more bandwidth or otherwise disproportionately benefit from the Internet.” While this particular idea is both highly ridiculous (we all benefit from the Internet, and things like cloud storage take up more bandwidth than streaming services like Netflix) and somewhat difficult —  if not impossible — to implement in any way related to network usage (which is the justification), it did get me thinking about what sort of a tax on Silicon Valley (and others) might make sense from a social policy perspective.

 

What about a tax on the sale of personal information, including the use of personal information for ad placement? To be clear, I’m not talking about a tax on collecting information or on using the information collected. I’m talking a tax on two-types of commercial transactions; selling information about individuals to third parties, or indirectly selling information to third parties via targeted advertising. It would be sort of a carbon tax for privacy pollution. We could even give “credits” for companies that reduce the amount of personal information that they collect (although I’m not sure we want to allow firms to trade them). We could have additional fines for data breaches the way we do for other toxic waste spills that require clean up.

 

Update: I’m apparently not the first person to think of something like this, although I’ve expanded it a bit to address privacy generally and not just targeted advertising. As Tim Karr pointed out in the comments, Free Press got here ahead of me back in February — although with a more limited proposed tax on targeted advertising. Also, Paul Roemer wrote an op ed on this in the NYT last May. I have some real problem with the Roemer piece, since he seems to think that an even more limited tax on targeted advertising is enough to address all the social problems and we should forget about either regulation or antitrust. Sorry, but just as no one serious about global climate change thinks a carbon tax alone will do the trick, no one serious about consumer protection and competition should imagine that a privacy pollution tax alone is going to force these companies to change their business models. This is a push in the right direction, not the silver bullet.

 

I elaborate below. . . .

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