Tag: Tim Lee

Rand Paul Not So Hardcore On Farm Subsidies

Rand Paul, after setting the newswires alight with his controversial stance on the Civil Rights Act, is busy touting his “moderate” credentials.

Moderate, in this case, being a euphemism for “laughably timid.”

In a recent interview with a Kentucky radio station, Paul rejected the charge of his political opponent that he was opposed to farm subsidies. Not true, sayeth Paul. He is “much more moderate than that.”

According to an article in yesterday’s  Lexington Herald-Leader, Paul’s less-than-radical view on farm subsidies is that, well, maybe dead people should not receive them:

Let’s just agree that we will get rid of subsidies for dead farmers first,” he said.

After that, Paul said, the government should restrict subsidies to farmers who make more than $2 million a year.

Paul said 2,007 farmers last year whose income was greater than $2 million received subsidies.

“Let’s agree that maybe we can cut them out,” he said.

Despite his “ideologically pure” stance on the CRA, Rand Paul can compromise on issues of freedom when he wants to, for example on drug laws and gay marriage, as Tim Lee points out.  And now, apparently, he is to the left of Barack Obama (who favored a $500,000 adjusted gross income limit) when it comes to farm subsidies. Paul’s choice of when to be ideologically pure is curious indeed.

HT: Don Carr at the Environmental Working Group

The FCC Doesn’t Have Authority to Regulate the Internet—and Shouldn’t

In the fall of 2007, word emerged that Comcast had degraded the Internet traffic of some customers, whose use of a protocol called BitTorrent interfered with other Comcast customers’ Internet access.

Comcast handled it badly, and sites like TechLiberationFront covered the “Comcast Kerfuffle” extensively. Consumers prefer unfiltered access to the Internet.

By springtime, Comcast had sorted things out and made a deal with BitTorrent to develop a neutral traffic-management protocol.

Four months later, the FCC weighed in, finding that Comcast had acted badly and telling Comcast not to do that again. Today the U.S. Court of Appeals for the D.C. Circuit concluded that the FCC exceeded its authority and reversed the FCC’s order against Comcast.

The court’s decision marks another turning point in the debate over whether the federal government should regulate Internet access services. What’s entertaining about it is that the problem was solved two years ago by market processes—sophisticated Internet users, a watchdog press, advocacy groups, and interested consumers communicating with one another over the Internet.

The next step will be for advocates to run to Congress, asking it to give the FCC authority to fix the problems of two years ago.  But slow-moving, technologically unsophisticated bureaucrats do not know better than consumers and technologists how to run the Internet. The FCC’s “net neutrality” hopes are nothing more than public utility regulation for broadband. If they get that authority, your online experience will be a little more like dealing with the water company or the electric company and a little less like using the Internet.

As I’ve noted before, Tim Lee’s is the definitive paper. The Internet is far more durable than regulators and advocates imagine. And regulators are far less capable of neutrally arbitrating what’s in the public interest than most people realize.

The FCC doesn’t have authority to regulate the Internet. Congress and the president shouldn’t give it that authority.

Mr. Obama, Tear Down This Wall

On his personal blog, Bottom-Up, Cato adjunct scholar Timothy B. Lee compares the Berlin Wall to the wall along the southern border of the United States. There are differences, of course, but important similarities too.

[I]t’s jarring that less than 20 years after one Republican president gave a stirring speech about the barbarity of erecting a wall to trap millions of people in a country they wanted to leave, another Republican president signed legislation to do just that. Conservatives, of course, bristle at analogies between East Germany’s wall and our own, but they seem unable to explain how they actually differ.

Judging by its ‘wall’ policies, the United States appears to value the freedom of Europeans more than Americans.

‘Net Neutrality’ Regs: Corporate Interests Do Battle

Some people have labored under the impression that “net neutrality” regulation was about the government stepping in to ensure that large corporations would not control the Internet. Now that the issue is truly joined, it is clear (as exhibited in this Wall Street Journal story) that the debate is about one set of corporate interests battling another set of corporate interests about the Internet, each seeking to protect or strengthen its business model. The FCC is surfing the debate pursuing a greater role for itself, meaning more budget and power.

Tim Lee’s paper, The Durable Internet, dispels the idea that owners of Internet infrastructure can actually control the Internet. The preferred approach to “net neutrality” is to let Internet users decide what they want from their ISPs and let ISPs and content companies do unmediated battle with one another to create and capture the greatest value from the Internet ecosystem.

If the FCC were to reduce its power by freeing up more wireless spectrum—either selling it as property or dedicating it to commons treatment—competition to provide Internet service would strengthen consumers’ hands.

Online Privacy and the Commerce Clause

I fear that with the PATRIOT Act on the brain, I’ve been remiss in continuing the colloquy on behavioral ads and privacy regulation that I’d been having with Jim Harper—who flattered me by responding in a long and thoughtful essay a couple weeks back. Because there’s so much interesting stuff there, I hope he won’t mind if I restrict myself to the first part of his reply here, in the interest of making this all a bit more digestible to those whose fascination with the topic may not be quite as consuming as ours. I’ll consider briefly the constitutional issue Jim raises, and turn to some of the specifics of the issue—and the relative merits of the common law alternative—in another post.

So like every good dorm room bull session, we begin in the weeds of  policy and quickly find ourselves breathing the rarefied air of constitutional theory. Supposing for the moment that we thought it were a good idea on policy grounds, would it be within the power of Congress to set ground rules for online advertisers who gather personal data from Web browsers? Recall that there are two particular rules that I’ve said I’d be tentatively open to, but which Jim rejects: a requirement of notice when information is being collected (say via a small link from the adspace to a privacy policy) and a rule establishing that privacy policies are enforceable, so that individual users can sue for damages if a company knowingly  violates its stated policy (thus far, courts have not generally found these to be binding). Does this fall within the power to “regulate commerce … among the several states”? I think so. I’ll start with what I hope will be some uncontroversial arguments and go from there.

So first, let’s grant that there’s one type of “original intent” that everyone ought to care about, whatever their more general interpretive stance: what Ronald Dworkin calls the linguistic intent of the Framers. That is, if words like “commerce” and “regulate” had narrower meanings in 1787 than they do today, we must, of course, read them now in that light: “Commerce” means actual interstate traffic in goods and services, rather than economic activity more generally, and “regulation” is centrally about establishing uniform rules and procedures.  With these appropriately narrowed readings in mind, I think it’s still a slam-dunk that online ads are covered.

There are, in fact, at least three different senses in which behavioral ads might be classed as interstate commerce. First, the purchase of the ad space itself is obviously a commercial transaction—frequently though not necessarily between entities in different states—and there’s a reasonable question of whether a host site with posted privacy policy is implicitly committed to applying that policy as a condition on ad space sold to third parties. The ads themselves will typically propose a commercial transaction, and in a more direct way than other ads are, can plausibly be seen as the first step in the transaction itself, as clicking on the ad will often bring you directly to a page where you can complete the purchase it recommends. Finally, the personal and behavioral user data collected is itself a valuable commodity, and many sites function with a pretty explicit informational quid pro quo: You will receive access to our content in exchange for registering and providing us with certain data. Since the Internet is borderless, most sites will be getting most of their traffic from people located in different states or countries, and even narrowly state-focused sites are likely to have substantial border-crossing traffic. So on a pretty straight reading of the constitutional language, I find very little reason to doubt that Congress may set uniform default rules for these interstate transactions, rather than leaving it to a patchwork of state rules.

Now, Jim’s reason for questioning this seems to be that the primary concern of the Framers was to prevent states from creating trade barriers. That may be, but if we skip ahead to Article 1, Section 10, we find that Congress knew perfectly well how to enact general and purely prohibitory bans on such shenanigans  using more apt “no state shall” language. Instead, they used precisely the same language for interstate commerce as they did for international commerce, where history suggests that the Framers (many of them steeped in the mercantilist economic theories of the day) had been above all concerned to preserve the ability to erect protectionist trade barriers. So we’re left with a choice between ascribing to the Framers a frankly stunning level of linguistic incompetence or supposing that the Constitution actually does grant the affirmative power that a facial reading suggests.

Needless to say, this does not require us to adopt the post–New Deal reading that places anything with the least potential influence on economic activity under Congressional purview. But we’re pretty close to the core here. Indeed, one of the early cases I know Jim considers a lodestone for the “no trade barriers” reading, Gibbons v. Ogden, involves a congressional grant of a license to operate steamboats. The court found that this superseded the monopoly New York had sought to grant another steamboat operator, which fits Jim’s point to an extent, but it’s crystal clear from that (1824) ruling that the power of Congress here is a broad authority to grant or withhold a privilege to operate interstate vessels, and establish conditions on such vessels, including restrictions on ownership and personnel. It seems to me you’d have to get awfully creative to read the clause in a way that authorizes that kind of authority over an “instrumentality” of commerce (water navigation) but forbids Congress from specifying the kind of notice a merchant must provide when initiating an actual interstate commercial transaction.

A slightly more controversial suggestion: When the specific substantive intent of the Framers is not explicitly embedded in the Constitution’s language—by which I mean, the specific use they thought a wise Congress would make of enumerated powers in light of contemporary economic theories, whether liberal or mercantilist—I am not inclined to give it very great weight. Or more bluntly, when the legal language is abstract, I don’t think we’re bound by an original conception of how or where it applied in specific cases—to the extent such a consideration is even intelligible when we’re talking about Internet advertising. Manifestly, very few people at the time of the passage of the Fourteenth Amendment believed that the abstract guarantee of “equal protection” entailed a substantive right of black children to attend public schools the states restricted to whites. But insofar as what they wrote into law was the abstract guarantee, I don’t think we’re required to care what they believed. Our modern reading should be constrained by the original sense of the words used, and to some extent by the original structural purpose served (translated as necessary). But in specific application—whether privacy rules for online ads are encompassed within “regulation” of “commerce”—then even if you pulled out the Ouija board and got a personal verdict from James Madison, it would just be one more opinion.

Finally, and maybe most controversially: What kind of recommendations should we make in a world where our preferred interpretation of the Constitution lost the fight a long time ago? If the question is what we should recommend to judges, presumably we want to recommend that they start shifting back in the direction of a reading we regard as better justified. But what about when, as Jim imagines, we’re advising legislators? Should we only recommend what we believe to be authorized by what we hold to be the best reading of the Constitution, or will it sometimes make sense to endorse legislation that is plainly allowed by the current regnant interpretation, but that might be outside the scope of the interpretation we regard as superior? I think it will, partly for theoretical, and partly for pragmatic reasons.

At a practical level, both legislators and citizens widely believe Congress to have broader policy discretion than most of the authors here. So very generally speaking, I don’t think it serves limited government to refrain from weighing in on the relative merits of policy options that wouldn’t be on the table at all if our arguments had fared better at the meta-level. (Recall the old joke about the principled pacifist answer to how to respond to World War II: Don’t sign the Treaty of Versailles!) Now, on this particular question it’s not a sure thing that Congress or the FTC will act, and maybe “hands off” is the best advice to give. But there are plenty of areas where there’s no realistic chance that Congress is going to abstain altogether, even if we think that’s what the best interpretation of the Constitution requires. In those cases, I think it’s at least sometimes appropriate to flag the meta objection and then say something about the policy merits. Obviously there are limits—I don’t expect I’ll ever express a view on the “best” way to run a torture chamber—but there are plenty of issues where it seems perverse for the people most concerned with limited government to sit out the day-to-day debates and focus on getting Wickard v. Filburn overturned, glad as I am that there are folks hammering that.

That dovetails with the theoretical reason, which has to do with the broader question of why constitutional principles are binding on us at all. I assume it is not because the Founders, brilliant though they were, enjoyed some divine right of command that the inheritors of their institutions are compelled to obey. Partly it’s that the principles embedded in the Constitution are good ones, but a substantial piece of the answer, I think, is that they provide a stable framework within which we conduct our political and private lives. Judges give weight to stare decisis even when they think the case at the fountainhead of a line of precedent was poorly decided, in part because the legitimacy and authority of law are to a great extent a function of its predictability, of the way it allows us to take actions and make agreements and know pretty much what the legal consequences will be, however much else may remain unpredictable. Constitutional restraints do this one level up, establishing (albeit roughly) a domain of legal variation over the longer term. This is  not, for what it’s worth, wacky postmodern Critical Legal Studies stuff; it’s an extrapolation from Hayek. To imagine that you can remake a society’s institutions wholesale—even if your guide is the best interpretation of a founding document, and even if you’re pretty sure that interpretation held sway a couple centuries ago—is the fallacy of constructivist rationalists.

Now, I think the right account of why we should regard the Constitution as binding starts with considerations along these lines, but this has the (perhaps unfortunate) consequence that even if you had a super-awesome unanswerable argument for why the Constitution mandates libertopia, at least when read properly absent the accretions of precedent, you still wouldn’t have an argument that judges, legislators, and government officials must all start acting on this understanding as of tomorrow. What you’d have is a good starting point for a much more gradual process of paring government back down. Not, to be clear, because I think the Constitution “means whatever the Supreme Court says it does”—that would be incoherent, since the court’s practice is unintelligible, and its legitimacy illusory, unless we assume there’s an independent meaning for them to strive toward.  But an “independent” meaning can be located in a community of interpretation and practice that extends beyond the framing generation. By analogy: If I want to use language “correctly” to communicate, I don’t get to just assign whatever meanings I like to words. It’s even possible to make a strong argument that the majority of speakers at a particular historical moment are using a word—like “decimate” or “hopefully” or “brutalize”—improperly. But neither does it mean that the first person to coin the term gets to specify its legitimate uses forever. And, in fact, anyone who insisted on using “decimate” to mean only “reduce by ten percent” would probably find his attempts at communication misfiring badly. To say that meaning is necessarily public and independent—consult Hayek’s cousin Wittgenstein here—does not require a baptismal view of meaning. Or at any rate, whether it does or not depends on the function your interpretive practice serves.

So yeah, that’s all pretty far removed from our original discussion—and I’m hoping far enough below the fold that it doesn’t put me on the wrong end of another dozen arguments with colleagues. I’ll do another post later this week where I actually get to the policy question, and some potent objections that both Jim and Tim Lee have raised.

Preemptive Regulation of the Internet

Julian Sanchez has already done a fine job of assessing FCC Chairman Julius Genachowski’s speech announcing his plan for federal regulation of the Internet. There was nothing really new in it. No substantial problems justifying regulation have emerged, and—Genachowski’s claims to modest aims aside—any ‘net neutrality regulation is likely to be a substantive morass. Says Julian:

[I]t absolutely reeks of the sort of ad hoc ‘I know it when I see it’ standard that leaves telecoms wondering whether some innovative practice will bring down the Wrath of Comms only after resources have been sunk into rolling it out.”

If the FCC goes ahead with regulating the Internet, the public will get a good look at what closed systems are really like. The FCC’s retrograde “Electronic Comment Filing System” doesn’t even allow full-text searches of submissions. This is but one failing the Internet’s engineers all over the country—and not just in big telcos—will run into dealing with the FCC.  It’s laughable that this outdated telecommunications bureaucracy is trying to take over the Internet.

A complex array of network protocols and business processes make up “the Internet.” The Internet’s end-to-end architecture is good engineering because it is naturally open, flexible, and conducive to communications freedom. The Internet empowers consumers to fend for themselves, such as in their dealings with Internet Service Providers. When Comcast degraded the Bitorrent protocol, it took just weeks for consumer pushback to end the practice. The FCC opened an inquiry long after the matter was settled.

But some politicians and the FCC’s lawyers think their slow-moving, technologically unsophisticated bureaucracy knows better than consumers and technologists how to run the Internet. The FCC’s “net neutrality” plans are nothing more than public utility regulation for broadband. With federal regulation, your online experience will be a little more like dealing with the water company or the electric company and a little less like … well, the Internet!

As Julian said, Tim Lee’s is the definitive paper. The Internet is far more durable than regulators and advocates imagine. And regulators are far less capable of neutrally arbitrating what’s in the public interests than they imagine either.