Perry Chen, co-founder and CEO of Kickstarter, an online platform for funding creative projects, discusses the enterprise. Chen talks about the inspiration behind Kickstarter and its business model, how project creators convince backers (not investors) to fund them, funding success rates, and the most interesting projects funded so far.
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How much happiness does Google search bring you every day? How many times a day do you visit the homepage or harness the power of the G through its embedded search bars? (And I haven’t even mentioned the happiness gained from chuckling at Google doodles that show up on holidays or other special occasions.)
Last week the New York Times ran an editorial suggesting that Google’s search algorithm should be subject to government oversight or possibly even regulation. Unfortunately, the Old Gray Lady came across more like an Old Gray Hag. To sum up her primary argument: it’s not fair that, because of its market share of search and subsequent tremendous power to determine search result rankings, Google wields immense authority over a company’s success — or even whether one flies or flops.
Search engine guru Danny Sullivan brilliantly satirized the editorial:
The New York Times is the number one newspaper web site. Analysts reckon it ranks first in reach among US opinion leaders. When the New York Times editorial staff tweaks its supersecret algorithm behind what to cover and exactly how to cover a story — as it does hundreds of times a day — it can break a business that is pushed down in coverage or not covered at all.
[. . .]
Some early suggestions for how to [ensure the paper doesn't play favorites] include having the New York Times explain with some specified level of detail the editorial policy that guides what it decides to covers [sic], what it doesn’t decide to cover, why it chooses to write a particular headline with a particular angle, to show all versions of a newspaper story that is written from start to finish, to reveal what’s been edited out. Another would be to give some government commission the power to look at all these aspects, perhaps the power to reside within the newsroom and ensure fairness.
Marissa Mayer, Google’s Vice President of Search Products & User Experience, weighed in in the Financial Times:
. . . The proponents of “search neutrality” want to put an end to [search competition], introducing a new set of rules in which governments would regulate search results to ensure they are fair or neutral.
Here the practical challenges would be formidable. What is fair in terms of ordering? An alphabetical listing? . . . Without competition and experimentation between companies, how could the rules keep up? There is no doubt that this will stifle the advance of the science around search engines.
[. . .]
But the strongest arguments [sic] against rules for “neutral search” is that they would make the ranking of results on each search engine similar, creating a strong disincentive for each company to find new, innovative ways to seek out the best answers on an increasingly complex web.
Incentives for search companies “to find new, innovative ways to seek out the best answers on an increasingly complex web” is what led (and continues to lead) Google to develop an excellent search product that brings millions of people copious information, knowledge, and happiness. It’s obvious even to internet-surfing grandmothers everywhere that search neutrality would stifle innovation and limit potential future happiness brought to all of us who regularly harness the power of the G.
I wonder why it’s seemingly so easy to see the negative unintended consequences of regulating search, yet most people are blind to similar consequences from government regulation of other stuff. I think one reason is because proponents of regulation can yell about fairness and “leveling the playing field,” which sounds intuitive and appealing, so most people never realize that there’s potential for unintended consequences. Let alone what the costs and benefits of those consequences might be.
One example is cybersecurity certification. It sounds so great and intuitive — government sponsored certification (“We must protect this networks!”) will lead to better information security — that most people wouldn’t bother to consider whether such certification would keep up with technological advance, hamstring innovation, or discourage security investment outside the scope of the certification.
Search neutrality would prevent creative innovation that could change the status quo. In general, people who like the status quo are either afraid that in the future they won’t be able to innovate as well as their competitors or already getting fat, happy, and rich and don’t see why they should expend time and energy to innovate further. Ultimately, the masses suffer with less-innovative and often more expensive products.
Neutrality neuters innovation. The playing field is level, it’s just that Google’s algorithm keeps smacking the Jabulani into the upper 90s while the competition can’t stop kicking it out of bounds when trying to make a simple square pass, all while the New York Times whines about not knowing how Google is kicking the ball.
You may have seen this recent article about Lila Kerr and Lauren Theis — two Rice University undergraduates who figured out how to turn a kitchen “salad spinner” into a centrifuge that can separate blood into plasma and red cells in about 20 minutes. The inventors hope it will have a lot of applications in developing countries, because it will allow clinics to check blood samples for anemia on location and in real time, instead of transporting blood samples miles to the nearest facility with a centrifuge.
If the field tests go well, the inventors surely deserve to be lauded for the lives their invention will save.
But I also think the students should be recognized for another aspect of their feat — namely, they figured out how to turn a really lame and pretty useless kitchen device into something useful! We have one of these (someplace). One attempted use was enough. I’m glad they found a way to unlock the true potential of this technology.
The Federal Communications Commission has an open proceeding in which it seeks advice on how to repurpose universal service subsidies for phone service in high cost areas to subsidize broadband instead. The FCC apparently wants to subsidize broadband with a minimum download speed of 4 megabytes per second (mbps) and upload speed of 1 mbps. These are the goals proposed in the commission’s National Broadband Plan.
I’m no lawyer, but I wonder if the FCC can do this legally. Section 254 of the Telecommunications Act of 1996 lays out criteria the FCC is supposed to consider when it decides whether to provide universal service subsidies for new services in addition to phone service. One of the criteria is that the new service must be subscribed to by a “substantial majority” of residential consumers.
Sixty-five percent of Americans have broadband at home. (National Broadband Plan, p. 167) But a minority of residential customers subscribe to broadband that meets the FCC’s 4 mbps/1 mbps definition. According to the FCC’s Omnibus Broadband Initiative technical report on the “Availability Gap” (p. 43), 48 million subscribers have download speeds of 4 mbps or higher. More subscribers – 53 million – have broadband download speeds of 3 mbps or lower. And 35 percent of Americans have no broadband at all. These figures imply that a “substantial majority” of Americans have not subscribed to broadband that meets the National Broadband Plan’s proposed definition.
Based on figures in the technical report, I calculated that approximately 59 percent of Americans subscribe to broadband with a download speed of 768 kbps or higher. Perhaps this figure qualifies as a “substantial majority,” but surely the 4 mbps/1 mbps definition does not.
A reasonable person might also question whether even 59 percent counts as a “substantial majority” for the purpose of declaring broadband a service eligible for subsidy. Surely Section 254 requires a “substantial majority” in part to ensure that consumers who have chosen not to subscribe to a service do not bear the injustice of having to subsidize the provision of that service to others. It is clear from the FCC’s figures that most of the 35 percent of American households without broadband have it available but choose not to subscribe. Therefore, subsidizing even 768 kbps broadband would force many consumers to pay universal service assessments to provide others with a subsidized service that they themselves have decided is not worth the cost.
Wait and see how the FCC addresses this issue once it starts creating a universal service program for broadband.
National Economic Council Director Lawrence Summers made a major policy speech yesterday at the New America Foundation, announcing the adminstration’s plan to find an additional 500 megaherz of spectrum for wireless broadband service by the end of the decade. The spectrum will come from two places: federal agencies who currently under-utilize their spectrum, and commercial users who volunteer to participate in “incentive auctions.”
In an incentive auction, the current spectrum user receives part of the proceeds in exchange for making the spectrum available for reallocation. Within the current US system of spectrum allocation, it’s about as close as we can come to allowing spectrum holders to sell their spectrum licenses to someone else who can put the spectrum to a more valuable use.
Summers even mentioned broadcasters specifically, noting that a local television station with a few hundred millions of dollars of revenue may currently control spectrum worth hundreds of millions of dollars. Federal agencies would get to use some of the proceeds to adopt “state-of-the-art communications.” Presumably this would include new equipment that doesn’t use so much spectrum.
In his speech, Summers gave appropriate credit to the Federal Communications Commission, which surfaced many of these ideas in its National Broadband Plan. Even more appropriately, the former Harvard University president and academic economist assigned proper credit for the original source of the idea:
Most of the freed-up spectrum will be auctioned off for use by mobile broadband providers. As the great law and economics scholar Ronald Coase originally pointed out, auctions ensure that spectrum is devoted to its most productive uses because it is determined by investors’ willingness to pay for it.
There are, of course, a few unanswered questions. How much of the spectrum will actually get auctioned for mobile broadband, rather than reserved for unlicensed use? Will the buyers have to use the spectrum for mobile broadband, or will the license be sufficiently broad that they could use it for other forms of personal communication that perhaps haven’t even been invented yet? Do we really have to wait ten years for this? Will the Ronald Coase Institute get any royalties for the government’s use of its namesake’s intellectual property? (Academics will recognize the joke in the last question.)
For now I’ll just say, “Bravo, Dr. Summers!”
Tim Stevens, PhD candidate in the Dept. of War Studies, King’s College London, where he researches the politics of cybersecurity and cyberwarfare, and regular contributor to The Guardian, Forbes’ cybersecurity blog The Firewall, and Current Intelligence discusses cyberwar. Stevens talks about the current cybersecurity climate; nuances between cyberespionage, cybercrime, and cyberwar; the balance between roles of government and private sector; and differences in cybersecurity attitudes in the U.K. and the U.S.
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Adrian Johns, professor in the Department of History at the University of Chicago, expert on the history of science and the history of the book, and author of the new book, Piracy: The Intellectual Property Wars from Guttenberg to Gates, discusses the history of intellectual property and piracy. He discusses origins of copyright law in London, the first pirates, and today’s digital piracy. He also addresses the future of books and potential tipping points that could prompt changes in copyright law, citing the Google Books project and pharmaceuticals in the developing world.
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This is a post for all those broadband fans out there who want to talk about something today besides the Federal Communication’s Commission’s decision to take comments on which legal classification it should use to regulate broadband.
A recent FCC survey revealed that 80 percent of home broadband users do not know the speed of their broadband service. I can easily imagine how this statistic could be spun to “prove” that consumers are woefully uninformed and the broadband market must be plagued with “market failures” because consumers do not have even the basic information they need to make intelligent decisions.
Before we go down that road, let me explain, based on my own experience, why this is a non-issue.
I’m part of that 80 percent. I do not know the speed of my broadband service at home. I know that when I signed up several years ago, I selected the slowest and cheapest broadband speed the provider offered. I also know that this speed is still plenty fast for anything we need to do at home (and usually faster than the speed at my university office). I remain blissfully ignorant of the actual speed, even though it would be very easy for me to find out by looking at the materials I received when I signed up or checking the provider’s web site online.
In economic jargon, I am “rationally ignorant” of my home broadband speed. I don’t know (or remember) the speed, but to me this information is not worth the 45 seconds it would take me to find out. And that also means any FCC initiatives to “improve consumer information” or “educate” me about it will not, for me, be worth the time and money the FCC might spend on them.
If some of our Internet applications were not working in a satisfactory manner, we would probably do an online speed test, check to see what other speeds our provider offers, and check offers from competing providers. All of these steps would be easy and would require no FCC policy initiatives to facilitate (beyond making sure that the providers aren’t lying about what speeds they will provide).
I’m probably not alone. The same survey reveals that 50 percent of Americans are satisfied with their broadband speeds, and another 41 percent are “somewhat satisfied.” So, 91 percent of consumers are more or less satisfied, even though 80 percent don’t know their speeds.
It would have been quite useful and instructive if the FCC survey had included an additional question: “Is your broadband speed adequate for the Internet applications you want to use?” And then cross-tabulate the responses with the responses on knowledge of broadband speed. Wanna bet that a substantial majority of people who do not know their speed would also have said that it is adequate?
Surely there are some broadband customers who use applications that require specific (fast) speeds, and these customers have a greater need to know what speed they’re receiving. That’s why providers tell prospective customers what speed tiers they offer. And that’s why one can find multiple web-based speed tests. This information is not hard to find if you want it.
But for some of us, it just ain’t worth it. And shame on anyone who tries to use my willful ignorance as an excuse for some new policy initiative. Rational ignorance is bliss, and I’m a bliss-ter.
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Catherine White on the Noisy Idiot Dilemma
by Jerry Brito on July 12, 2010 · View Comments
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