Tag: innovation

Technology: Debating the Pace of Progress

Last night, thanks to Craigslist and a Web-enabled cell phone, I unloaded two extra tickets to tonight’s World Cup qualifying game between the U.S. and Costa Rica in under an hour. (8:00, ESPN2 “USA! USA! USA!”)

Wanting to avoid the hassle of selling the tickets at RFK, I placed an ad on Craigslist offering them at cost, figuring I might find a taker and arrange to hand them off downtown today or at the stadium tonight. Checking email as I walked to the gym, I found an inquiry about the tickets and phoned the guy, who happened to live 100 feet from where I was walking. A few minutes later, he had the tickets and I had the cash.

This quaint story is a single data point in a trend line—the high-tech version of It’s Getting Better All the Time. Everyone living a connected life enjoys hundreds, or even thousands, of conveniences every day because of information technology. Through billions of transactions across the society, technology improves our lives in ways unimaginable two decades ago.

Before 1995, nobody ever traded spare soccer tickets in under an hour, on a Tuesday night, without even changing his evening routine. If soccer tickets are too trivial (you must not understand the game), the same dynamics deliver incremental, but massive improvements in material wealth, awareness, education, and social and political empowerment to everyone—even those who don’t live “online.”

Sometimes debates about technology regulation are cast in doom and gloom terms like the Malthusian arguments about material wealth. But the benefits we already enjoy thanks to technology are not going away, and they will continue to accrue. We are arguing about the pace of progress, not its existence.

This is no reason to let up in our quest to give technologists and investors the freedom to produce more innovations that enhance everyone’s well-being even more. But it does counsel us to be optimistic and to teach this optimism to our ideological opponents, many of whom seem to look ahead and see only calamity.

From the Oxymoron File: The Neutral Subsidy

Peter Van Doren points me to some revealing passages in a new article in the Journal of Economic Perspectives. In “Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality,” Robin S. Lee and Tim Wu caution against tiered pricing for Internet access services, writing:

[U]nless sufficient bandwidth and quality of service can be guaranteed for the “free” Internet, there is a risk that … tiering will serve to sidestep de facto prohibition on termination fees… . [A] priced-priority system could simply become a de facto fee charged for all content providers if the “free” Internet was of sufficiently poor quality and consumers shifted their usage behavior accordingly… . [T]his might dampen the introduction of new content and services and eliminate the subsidy for content innovation currently provided by net neutrality.

Locking in net neutrality by regulation would lock in a subsidy to content providers. Lee and Wu prefer it, and many of us may like the results, but it’s hard to call a subsidy regime “neutral.”

600 Billion Data Points Per Day? It’s Time to Restore the Fourth Amendment

Jeff Jonas has published an important post: “Your Movements Speak for Themselves: Space-Time Travel Data is Analytic Super-Food!”

More than you probably realize, your mobile device is a digital sensor, creating records of your whereabouts and movements:

Mobile devices in America are generating something like 600 billion geo-spatially tagged transactions per day. Every call, text message, email and data transfer handled by your mobile device creates a transaction with your space-time coordinate (to roughly 60 meters accuracy if there are three cell towers in range), whether you have GPS or not. Got a Blackberry? Every few minutes, it sends a heartbeat, creating a transaction whether you are using the phone or not. If the device is GPS-enabled and you’re using a location-based service your location is accurate to somewhere between 10 and 30 meters. Using Wi-Fi? It is accurate below 10 meters.

The process of deploying this data to markedly improve our lives is underway. A friend of Jonas’ says that space-time travel data used to reveal traffic tie-ups shaves two to four hours off his commute each week. When it is put to full use, “the world we live in will fundamentally change. Organizations and citizens alike will operate with substantially more efficiency. There will be less carbon emissions, increased longevity, and fewer deaths.”

This progress is not without cost:

A government not so keen on free speech could use such data to see a crowd converging towards a protest site and respond before the swarm takes form – detected and preempted, this protest never happens. Or worse, it could be used to understand and then undermine any political opponent.

Very few want government to be able to use this data as Jonas describes, and not everybody wants to participate in the information economy quite so robustly. But the public can’t protect itself against what it can’t see. So Jonas invites holders of space-time data to reveal it:

[O]ne way to enlighten the consumer would involve holders of space-time-travel data [permitting] an owner of a mobile device the ability to also see what they can see:

(a) The top 10 places you spend the most time (e.g., 1. a home address, 2. a work address, 3. a secondary work facility address, 4. your kids school address, 5. your gym address, and so on);

(b) The top three most predictable places you will be at a specific time when on the move (e.g., Vegas on the 215 freeway passing the Rainbow exit on Thursdays 6:07 - 6:21pm – 57% of the time);

(c) The first name and first letter of the last name of the top 20 people that you regularly meet-up with (turns out to be wife, kids, best friends, and co-workers – and hopefully in that order!)

(d) The best three predictions of where you will be for more than one hour (in one place) over the next month, not counting home or work.

Google’s Android and Latitude products are candidates to take the lead, he says, and I agree. Google collectively understands both openness and privacy, and it’s nimble enough still to execute something like this. Other mobile providers would be forced to follow this innovation.

What should we do to reap the benefits while minimizing the costs? The starting point is you: It is your responsibility to deal with your mobile provider as an adult. Have you read your contract? Have you asked them whether they collect this data, how long they keep it, whether they share it, and under what terms?

Think about how you can obscure yourself. Put your phone in airplane mode when you are going someplace unusual - or someplace usual. (You might find that taking a break from being connected opens new vistas in front of your eyes.) Trade phones with others from time to time. There are probably hacks on mobile phone system that could allow people to protect themselves to some degree.

Privacy self-help is important, but obviously it can be costly. And you shouldn’t have to obscure yourself from your mobile communications provider, giving up the benefits of connected living, to maintain your privacy from government.

The emergence of space-time travel data begs for restoration of Fourth Amendment protections in communications data. In my American University Law Review article, “Reforming Fourth Amendment Privacy Doctrine,” I described the sorry state of the Fourth Amendment as to modern communications.

The “reasonable expectation of privacy” doctrine that arose out of the Supreme Court’s 1967 Katz decision is wrong—it isn’t even founded in the majority holding of the case. The “third-party doctrine,” following Katz in a pair of early 1970s Bank Secrecy Act cases, denies individuals Fourth Amendment claims on information held by service providers. Smith v. Maryland brought it home to communications in 1979, holding that people do not have a “reasonable expectation of privacy” in the telephone numbers they dial. (Nevermind that they actually have privacy—the doctrine trumps it.)

Concluding, apropos of Jonas’ post, I wrote:

These holdings were never right, but they grow more wrong with each step forward in modern, connected living. Incredibly deep reservoirs of information are constantly collected by third-party service providers today.

Cellular telephone networks pinpoint customers’ locations throughout the day through the movement of their phones. Internet service providers maintain copies of huge swaths of the information that crosses their networks, tied to customer identifiers. Search engines maintain logs of searches that can be correlated to specific computers and usually the individuals that use them. Payment systems record each instance of commerce, and the time and place it occurred.

The totality of these records are very, very revealing of people’s lives. They are a window onto each individual’s spiritual nature, feelings, and intellect. They reflect each American’s beliefs, thoughts, emotions, and sensations. They ought to be protected, as they are the modern iteration of our “papers and effects.”

Some Thinking on “Cyber”

Last week, I had the opportunity to testify before the House Science Committee’s Subcommittee on Technology and Innovation on the topic of “cybersecurity.” I have been reluctant to opine on it because of its complexity, but I did issue a short piece a few months ago arguing against government-run cybersecurity. That piece was cited prominently in the White House’s “Cyberspace Policy Review” and – blamo! – I’m a cybersecurity expert.

Not really – but I have been forming some opinions at a high level of generality that are worth making available. They can be found in my testimony, but I’ll summarize them briefly here.

First, “cybersecurity” is a term so broad as to be meaningless. Yes, we are constructing a new “space” analogous to physical space using computers, networks, sensors, and data, but we can no more secure “cyberspace” in its entirety than we can secure planet Earth and the galaxy. Instead, we secure the discrete things that are important to us – houses, cars, buildings, power lines, roads, private information, money, and so on. And we secure these things in thousands of different ways. We should secure “cyberspace” the same way – thousands of different ways.

By “we,” of course, I don’t mean the collective. I mean that each owner or controller of a prized thing should look out for its security. It’s the responsibility of designers, builders, and owners of houses, for exmple, to ensure that they properly secure the goods kept inside. It’s the responsibility of individuals to secure the information they wish to keep private and the money they wish to keep. It is the responsibility of network operators to secure their networks, data holders to secure their data, and so on.

Second, “cyber” threats are being over-hyped by a variety of players in the public policy area. Invoking “cyberterrorism” or “cyberwar” is near-boilerplate in white papers addressing government cybersecurity policy, but there is very limited strategic logic to “cyberwarfare” (aside from attacking networks during actual war-time), and “cyberterrorism” is a near-impossibility. You’re not going to panic people – and that’s rather integral to terrorism – by knocking out the ATM network or some part of the power grid for a period of time.

(We weren’t short of careless discussions about defending against “cyber attack,” but L. Gordon Crovitz provided yet another example in yesterday’s Wall Street Journal. As Ben Friedman pointed out, Evgeny Morozov has the better of it in the most recent Boston Review.)

This is not to deny the importance of securing digital infrastructure; it’s to say that it’s serious, not scary. Precipitous government cybersecurity policies – especially to address threats that don’t even have a strategic logic – would waste our wealth, confound innovation, and threaten civil liberties and privacy.

In the cacophony over cybersecurity, an important policy seems to be getting lost: keeping true critical infrastructure offline. I noted Senator Jay Rockefeller’s (D-WV) awesomely silly comments about cybersecurity a few months ago. They were animated by the premise that all the good things in our society should be connected to the Internet or managed via the Internet. This is not true. Removing true critical infrastructure from the Internet takes care of the lion’s share of the cybersecurity problem.

Since 9/11, the country has suffered significant “critical-infrastructure inflation” as companies gravitate to the special treatments and emoluments government gives owners of “critical” stuff. If “criticality” is to be a dividing line for how assets are treated, it should be tightly construed: If the loss of an asset would immediately and proximately threaten life or health, that makes it critical. If danger would materialize over time, that’s not critical infrastructure – the owners need to get good at promptly repairing their stuff. And proximity is an important limitation, too: The loss of electric power could kill people in hospitals, for example, but ensuring backup power at hospitals can intervene and relieve us of treating the entire power grid as “critical infrastructure,” with all the expense and governmental bloat that would entail.

So how do we improve the state of cybersecurity? It’s widely believed that we are behind on it. Rather than figuring out how to do cybersecurity – which is impossible – I urged the committee to consider what policies or legal mechanisms might get these problems figured out.

I talked about a hierarchy of sorts. First, contract and contract liability. The government is a substantial purchaser of technology products and services – and highly knowledgeable thanks to entities like the National Institutes of Standards and Technology. Yes, I would like it to be a smaller purchaser of just about everything, but while it is a large market actor, it can drive standards and practices (like secure settings by default) into the marketplace that redound to the benefit of the cybersecurity ecology. The government could also form contracts that rely on contract liability – when products or services fail to serve the purposes for which they’re intended, including security – sellers would lose money. That would focus them as well.

A prominent report by a working group at the Center for Strategic and International Studies – co-chaired by one of my fellow panelists before the Science Committee last week, Scott Charney of Microsoft – argued strenuously for cybersecurity regulation.

But that begs the question of what regulation would say. Regulation is poorly suited to the process of discovering how to solve new problems amid changing technology and business practices.

There is some market failure in the cybersecurity area. Insecure technology can harm networks and users of networks, and these costs don’t accrue to the people selling or buying technology products. To get them to internalize these costs, I suggested tort liability rather than regulation. While courts discover the legal doctrines that unpack the myriad complex problems with litigating about technology products and services, they will force technology sellers and buyers to figure out how to prevent cyber-harms.

Government has a role in preventing people from harming each other, of course, and the common law could develop to meet “cyber” harms if it is left to its own devices. Tort litigation has been abused, and the established corporate sector prefers regulation because it is a stable environment for them, it helps them exclude competition, and they can use it to avoid liability for causing harm, making it easier to lag on security. Litigation isn’t preferable, and we don’t want lots of it – we just want the incentive structure tort liability creates.

As the distended policy issue it is, “cybersecurity” is ripe for shenanigans. Aggressive government agencies are looking to get regulatory authority over the Internet, computers, and software. Some of them wouldn’t mind getting to watch our Internet traffic, of course. Meanwhile, the corporate sector would like to use government to avoid the hot press of market competition, while shielding itself from liability for harms it may cause.

The government must secure its own assets and resources – that’s a given. Beyond that, not much good can come from government cybersecurity policy, except the occassional good, long blog post.

… But What Is “Cyber”?

Cyberwar. Cyberdefense. Cyberattack. Cybercommand.

You run across these four words before you finish the first paragraph of this New York Times story (as reposted on msnbc.com). It’s about government plans to secure our technical infrastructure.

When you reach the end of the story, though, you still don’t know what it’s about. But you do get a sense of coming inroads against Americans’ online privacy.

The problem, which the federal government has assumed to tackle, is the nominal insecurity of networks, computers, and data. And the approach the federal government has assumed is the most self-gratifying: “Cyber” is a “strategic national asset.” It’s up to the defense, intelligence, and homeland security bureaucracies to protect it.

But what is “cyber”?

With the Internet and other technologies, we are creating a new communications and commerce “space.” And just like the real spaces we are so accustomed to, there are security issues. Some of the houses have flimsy locks on the front doors. Some of the stores leave merchandise on the loading docks unattended. Some office managers don’t lock the desk drawers that hold personnel files. Some of the streets can be too easily flooded with water. Some of the power lines can be too easily snapped.

These are problems that should be corrected, but we don’t call on the federal government to lock up our homes, merchandise, and personnel files. We don’t call on the federal government to fix roads and power lines (deficit “stimulus” spending aside). The federal government secures its own assets, but that doesn’t make all assets a federal responsibility or a military problem.

As yet, I haven’t seen an explanation of how an opponent of U.S. power would use “cyberattack” to advance any of its aims. If it’s even possible, which I doubt, taking down our banking system for a few days would not “soften up” the country for a military attack. Knocking out the electrical system in one region of the country for a day wouldn’t let Russia take control of the Bering Strait. Shutting down Americans’ access to Google Calendar wouldn’t advance Islamists’ plans for a worldwide Muslim caliphate.

This is why President Obama’s speech on cybersecurity retreated to a contrived threat he called “weapons of mass disruption.” Fearsome inconvenience!

The story quotes one government official as follows:

“How do you understand sovereignty in the cyberdomain?” General Cartwright asked. “It doesn’t tend to pay a lot of attention to geographic boundaries.”

That’s correct. “Cyber” is not a problem that affects our sovereignty or the integrity of our national boundaries. Thus, it’s not a problem for the defense or intelligence establishments to handle.

The benefits of the online world vastly outstrip the risks - sorry Senator Rockefeller. With those benefits come a variety of problems akin to graffiti, house fires, street closures, petit theft, and organized crime. Those are not best handled by centralized bureaucracies, but by the decentralized systems we use to secure the real world: property rights, contract and tort liability, private enterprise, and innovation.

Walking Is Controlled Falling Forward

People walk by propelling themselves forward in a way that would cause them to fall, then swinging a leg ahead to prevent the collapse.

So it is with innovation and economic progress. Change comes in a way that threatens to land us on our faces, but we swing a leg forward and find ourselves further advanced than before.

I was reminded of this today when I saw the Washington Post headline about the digital television transition: “Digital TV Ready to Rule the Tube, Leaving Some Viewers in the Dark.”

If it’s true that 3,000,000 homes in the U.S. will find their TV screens blank on Saturday — and if the people in those homes care — they’ll swing a leg forward by getting a digital TV converter, and the march to progress will continue.

If you think about falling forward in isolation, it looks like a bad idea, and earlier this year Congress delayed the DTV transition. Thank goodness we’ll get to take that step now.