Danny Sullivan, an expert on the internet search industry and editor-in-chief of Search Engine Land, discusses search neutrality. He explains the concept of search neutrality and discusses a recent New York Times editorial suggesting Google’s search algorithm should be subject to government oversight or regulation. Sullivan points out flaws inherent to the notion of search neutrality and discusses competition in the search engine industry. He also imagines what it might take to topple Google from its perch atop internet search.
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Kevin King, a recent law school graduate now clerking for a federal court of appeals, discusses his recent paper, Geolocation and Federalism on the Internet: Cutting Internet Gambling’s Gordian Knot. In his paper King uses the online gambling industry to examine conflict between federalism and the internet — the borderless nature of the internet eschews traditional models of state jurisdiction. He discusses previous attempts to regulate online gambling, conflict between internet gambling providers and the Kentucky horse betting sector, Congress’ current online gambling bill, and a solution that utilizes geolocation technology.
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Peter Sunde, co-founder of BitTorrent tracker The Pirate Bay and creator of Flattr, a new online social micropayments system, discusses Flattr. Sunde explains the Flattr concept, how it differs from previous micropayment platforms, and why it’s more meaningful than the Facebook “like” button. He also briefly discusses progress of the Pirate Bay case.
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In a 3-2 vote, the Federal Communications Commission recently decided to jack up its official definition of “broadband” from 200 kbps download to the 4 mbps dpwnload/1 mbps upload used as a benchmark in Our Big Fat National Broadband Plan. The three commissioners in the majority also declared that the definition of broadband will continue to evolve as consumers purchase faster connections to utilize new applications.
Several months earlier, the FCC launched a proceeding to figure out how to convert universal service subsidies for rural telephone service into universal service subsidies for rural broadband service. Put these two decisions together, and it looks like the majority on the FCC is hell-bent on establishing rural broadband subsidies as a perpetual entitlement program that will never “solve” the rural availability problem because the goalposts will keep moving.
The current USF program taxes price-sensitive services (long distance and wireless) to subsidize a service that is not very price sensitive (local phone connections). If the FCC takes a further step on the funding side and starts collecting universal service assessments from broadband, it will diminish broadband subscribership by taxing a service that is even more price sensitive: broadband connections. (I explained this a few months ago here.)
It’s time to get off this merry-go-round. The solution was suggested by MIT economist Jerry Hausman back when the FCC first started creating the current universal service programs in response to the Telecom Act of 1996: use revenues from spectrum auctions.
Instead of having the FCC perpetually collect assessments from broadband or telephone services to subsidize broadband buildout in rural areas, Congress should earmark revenues from the next spectrum auction for one-time buildout grants in high-cost areas. The grants should be awarded via a competitive procurement auction that would force subsidy-seekers in different locations to compete with each other for the federal dollars. And Congress should explicitly wind down the universal service telephone subsidies in high cost areas and prohibit the FCC from using universal service assessments to fund broadband deployment in these places.
Using revenues from spectrum auctions would avoid the distortions and perverse consequences caused by ongoing universal service assessments on broadband or telephone services. One-shot deployment grants would ensure that the availability problem gets solved, so the federal government can declare victory and get out of the perpetual subsidy business.
Of course, some locations in the US are so expensive to serve that the potential revenues might not even cover the operating costs of broadband. But it does not follow that operators in these places need an ongoing stream of subsidies. When preparing their subsidy bids, they will have to calculate how large the one-shot payment needs to be to induce them to take on the capital costs and the ongoing operating costs. In other words, they can bank some of the one-shot subsidy and use it to cover the difference between revenues and operating costs.
This modest proposal does not address all aspects of the universal service fund. But it would achieve a clear objective — bringing broadband to rural areas — while allowing the FCC to extricate itself from the business of distributing $4.6 billion a year in subsidies. Let’s see a timetable for withdrawal!
Flattr is billed as “a social micropayment platform that lets you show love for the things you like.” It’s similar to the Facebook “like” button, except that each time you “like” (“flatter”) something you also donate a small amount.
That amount is capped, however, and the user determines the cap, thus avoiding the nickel and diming that plagued previous micropayment platforms. Clay Shirky notes that people hate to be nickel and dimed. With Flattr, they aren’t. Users decide to part with a specified amount of money per month (€2 minimum) to support content they like, and at the end of each month that amount is divvied among sites they’ve flattered. They nickel and dime themselves.
Rather than making micro-decisions about micro-transactions, Flattr aggregates the micro-transactions into one — deciding whether to give €X per month. This avoids the marginal mental effort, which people hate, required to decide whether a blog post is really worth 10¢.
Flattr avoids another micropayment pitfall that Shirky has noted — limiting content distribution. Flattr still allows what Shirky calls superdistribution. No content is sealed behind paywalls, so I can still tweet links all day without worrying whether friends will be able to access content I link to.
Further, Flattr isn’t really a micropayment, or even a social micropayment. It’s a microgift. People have a more positive connotation for gift-giving than payment-making. The system implicitly frames “flattering” as a value rather than a cost, which true micropayments are.
Lastly, people don’t like ads or being tracked online. Flattr feedback requires no tracking, and it’s a direct signal of how many users value something. Traffic is a similar signal that fosters online ads, half of which work, but, according to the old saying, no one knows which half. Innovations like AdWords help identify what works but don’t help mitigate users seeing most ads as noise.
Because it’s solved many problems of previous micropayment ventures, Flattr might “work.” People might give to WikiLeaks and Tor, or podcasters and bloggers might make a little money on the side, but Flattr will not save newspapers or old media. Such change on the margin, however, could be labeled a success, especially after the failure of micropayments so far.
But will Flattr exist in 5 years? It’s solved many micropayment problems but begs the question, “What problem does it solve?” Many, like Shirky and Tim Lee, have long argued that micropayments are a solution in search of a problem — we already award content-creators with fame by paying them with our eyeballs. Will microgifts find a problem to solve?
We’ll have Flattr founder Peter Sunde on the pod soon to discuss this question and more.
Birgitta Jónsdóttir, Member of the Icelandic Parliament for the Movement party, and one of the chief sponsors of the Icelandic Modern Media Initiative, discusses the initiative. She explains how it was crafted, who it would protect and how, and Wikileaks’ influence on it. Jónsdóttir specifically discusses the proposal’s impact on journalists, sources, whistleblowers, libel tourism, superinjunctions, freedom of information, prior restraint, and government transparency. She also talks about the inspiration behind the initiative, which stems partly from her background as a writer and activist, and her path to the Icelandic Parliament.
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Gilbert Wondracek, research fellow at the International Secure Systems Lab and postdoctoral fellow at the Vienna University of Technology, discusses his research on the online porn industry. He addresses various economic roles of online porn providers and the industry’s connections to malware and cybercrime. Wondracek also explains how he investigated the industry, how he set up adult websites to assess user vulnerabilities and examine traffic, what he learned, and how he got approval for the project.
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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.
Every week we bring you in-depth interviews with leading thinkers and entrepreneurs from the world of technology. The most recent episode features 