Topic: Telecom, Internet & Information Policy

Federal Ban on Internet Gambling Marches On

Yesterday, I spoke with an aide to a Republican congressman who, as far as congressmen go, is somewhat libertarian. The aide told me that much to his chagrin, said congressman will be backing the ban on Internet gambling. What’s more, the aide said the congressman actually understands the economics of prohibitions, he just thinks that this will be the one time they don’t apply.

“For some reason, he thinks this is one instance where government can actually pull it off,” the aide said.

Unbelievable.

Internet gambling is already illegal, of course. That’s why gaming sites set up and operate offshore (several are actually traded on the London Stock Exchange). Yet, it’s still a $12 billion industry in the U.S. That means government already is trying, and failing, to prohibit it.

I guess the thinking is — as it is with the drug war — that if we try just a bit harder, spend just a bit more, harass private citizens just a bit more, and give government a bit more power, we’ll be able to buck history and finally make a vice prohibition stick.

Or perhaps lawmakers know it won’t work, and don’t care. The symbolism of trying to take a moral stand against gambling is more important than the policy actually working.

According to the New York Times, the gambling ban moves to the House floor for a vote next week, where it’s almost certain to pass. Here’s the kicker:

The majority leader, Representative John A. Boehner, Republican of Ohio, announced a few days ago that the measure would be voted on this summer as part of what the Republicans call their American Values Agenda.

So because the Republicans have garnered public scorn for the unethical, corrupt, morally bankrupt way they’ve governed over the last decade, they’ve decided to make a last-ditch attempt to hold on to power by passing judgment on the morals of their constituents (most of whom, polls show, oppose the bill).

Super.

The Times piece also looks at the free trade implications of Internet gambling prohibition, often overlooked in the debate. The Goodlatte-Leach bill will certainly exacerbate existing trade tensions between the U.S. and the 80 or so countries that allow online gambling. But many of those tensions have been bubbling over for years.

This bill brings up some new problems.

Because the bill effectively deputizes banks to sniff out and eradicate gambling among their customers (the creepy privacy implications of that alone ought to kill this bill), it amounts to a piece of blatantly protectionist legislation. Its practical effect will be to shield a domestic company (PayPal, which is owned by eBay) from foreign competitors like FirePay and Netteller.

I’ve explained a bit more about how this will work here.

Thus far, when countries like Antigua have challenged the U.S. gambling ban on free trade grounds, the Bush administration has fought tooth and nail to preserve its right to police the private behavior of American citizens. That means the administration has used millions of taxpayer dollars to prevent more liberty-minded countries from making too much freedom available to U.S. taxpayers over the Internet.

Of course, kicking Antigua around is one thing. When Britain mounts a challenge, as it likely will, this will all get much more interesting.

Gotta love the party of limited government.

Technology - er, Paying Attention - Will Save Us All

With masterful dry wit, ars technica skewers a new Defense Department research project.  The idea?  Using technology to find information.

The Air Force’s Office of Scientific Research has commenced a study called “Automated Ontologically-Based Link Analysis of International Web Logs for the Timely Discovery of Relevant and Credible Information.”  In translation, that means, “We’re going to pay attention to blogs.”  Price tag: $450,000. 

Talk about government waste. I would have sold them that idea for $399,000.

FCC Fading into Irrelevancy

A fun news item for free-marketers who enjoy watching technology make government regulation (and justification for regulation) obsolete: Today’s Washington Post reports that the Internet has so altered media conglomerates’ business models as to make the Federal Communications Commission’s broadcast media ownership limits irrelevant.

Few people know that the FCC has strict rules limiting broadcast media firms’ ownership of various outlets in both local and national markets. A firm that owns TV stations is barred from owning enough stations to broadcast to a majority of the U.S. population, and a firm that owns the largest newspaper in a local market cannot also own the most-watched TV station in that market.

Michael Powell’s FCC tried to relax those rules in 2003, and with good reason. But the courts and Congress stamped out that effort. As the WP explains, media firms have subsequently taken a second look at Internet communications, shaking off Time Warner’s bad experience with AOL and Disney’s with the go.com network.

The result? According to the WP, media firms are finding so many profitable outlets on the Internet that they’re hardly interested in Congress’s and the FCC’s new receptiveness to the idea of relaxing the ownership rules.

A.I. Yai Yai!

Economist Robin Hanson suspects that the world economy may soon be doubling every week or two. He arrived at that suspicion based on historical extrapolations, but he also has a theory as to how it might happen: the development, in the near future, of intelligent machines.

According to Hanson, efforts to computationally model the human brain, neuron by neuron, could reach fruition within the next 25 to 50 years. He plays pretty fast and loose with the details, though, so let’s take a closer look at the bleeding edge of the field.

The mother of all brain simulation projects is Blue Brain, a joint project of IBM and Ecole Polytecnique Fédérale de Lausanne (a Swiss town also known for its lower tech, but tastier, fondue). Announced with much fanfare in 2005, Blue Brain has as its anything-but-modest mission to create a complete and exhaustively accurate simulation of the human brain within a decade or so. They figure they can knock out the neo-cortex in the next few years.

Somebody buy these guys a calculator.

The current Blue Brain hardware has 8,000 processors and they have apparently set it up so that one chip models one or two neurons. That has allowed them, as of this month, to model a 10,000 neuron grouping called a “column.” That’s hugely impressive. But, umm, 10,000 down, 99,999,990,000 to go.

The human brain is estimated to have about 100 billion neurons, so they’re going to need another 10 million or so Blue Brain computers to finish the job given the current specs. They’re having a tough time convincing the Swiss government to spring for another one or two of them.

Mind you, computer processing power per dollar has been increasing exponentially over time since the earliest electromechanical computers. So maybe, in a generation, we’ll be revisiting this question. But that’s an awfully big maybe.

It seems doubtful that we’ll be able to create Marvin the paranoid android any time this century. And it’ll be some time after that before the technology is commercialized and we all have “plastic pals” who are “fun to be with!”

So keep contributing to that 401K. It’s gonna be a while before it starts doubling every week or two.

Sense and Sensenbrenner

Congressional whining over the FBI raid of Rep. William Jefferson’s office has reached the point of self-parody. Rep. James Sensenbrenner has now called for rare out-of-session hearings on the raid, titled, “Reckless Justice: Did the Saturday Night Raid of Congress Trample the Constitution?”

This would be the same James Sensenbrenner who wants to give federal law enforcement the power to snoop in on your Internet browsing, and who recently introduced a bill that would send parents to prison if they learn of drug activity near their children and fail to report it to authorities within 24 hours.

“Trampling the Constitution,” indeed. Amazing how reverent politicians get for the Constitution and the rights of the accused when one of their own is under the gun.