It was reported today that the Administration is going to ask the U.S. Supreme Court to review a Court of Appeals decision to strike down the Federal Communications Commission’s policy of regulating “fleeting expletives” on broadcast television.

The Second Circuit’s excellent opinion was a victory for free speech not only because it struck down a troubling policy, but also because it acknowledged the fact that technology allowing viewers to control their own media experiences is quickly eroding the original constitutional justification for the FCC’s censorship authority.

CDT strongly supports the opinion and urges the Supreme Court to uphold it, either by denying the government’s petition or by affirming the Second Circuit ruling.

The New York Times (registration required) reported yesterday that Verizon Wireless refused to allow an opt-in text messaging program from an abortion rights advocacy group. Verizon, to its credit, quickly reversed course, blaming the incident on an “incorrect interpretation of a dusty internal policy.” The reversal came as a relief, though not a great surprise. From the moment the story started drawing significant news coverage, it was hard to imagine that Verizon Wireless would stand by its initial decision. Abortion is a controversial topic, but the messages from Naral Pro-Choice America would have gone only to subscribers who signed up for them. And while Verizon may want to keep hate speech and spam off its network, there’s no reason to think Naral’s messages would come close to either category.

Anyway, Naral will now be allowed to run its text-messaging program. And Verizon will surely take a careful look at its policies and where they are intended to apply. Verizon Wireless reportedly had told Naral that its policy barred message programs that “promote an agenda” or “may be seen as controversial.” In contrast, the later-released Verizon statement spoke approvingly of text messaging being “harnessed by organizations and individuals communicating their diverse opinions” and being used “to communicate broadly.” CDT would like to see Verizon Wireless adopt an express policy reflecting those views, and make that policy public. Text messaging is a popular and effective means of communication, and there would be no good reason to allow its use for purely commercial interaction while sharply limiting it for other legitimate realms of discourse.

The bigger question, though, is how this incident bears on the ongoing “Internet neutrality” debate. I suspect both sides will say it supports their position.

Most obviously, neutrality proponents can cite this as an example of discrimination by a network operator. The network in this case was a mobile phone network, but it is not hard to imagine analogous scenarios involving the Internet. The incident highlights the wide latitude that the current legal framework gives carriers to decide when and how to treat certain traffic, based on the identity of the sender or the subject matter of the message. For text messaging, as for email or other Internet communications, network operators aren’t subject to common carrier requirements — so Verizon Wireless was and continues to be free to reject messaging efforts by Naral or anyone else.

Opponents of government-imposed neutrality policies can argue, however, that the Verizon Wireless incident illustrates the ability of the marketplace to control discriminatory behavior. The argument would go like this. Sure, once in a while some carrier — whether through error or by design — may take some action that discriminates against certain content. But the flap that Verizon Wireless quickly faced shows that such actions aren’t tenable. If the content is something that at least some subscribers actually want, publicity and related market pressures will force a quick reversal.
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CDT’s OpenCRS project collects and indexes Congressional Research Service (CRS) reports and makes them available to the public free of charge. Each week, PolicyBeta features a CRS report on an important topic. For more reports, or to help contribute new reports to the OpenCRS database, visit the Web site.

This week’s report identifies the critical factors that influence the state-level e-government programs, based on surveys completed by 38 state governments.

State E-Government Strategies: Identifying Best Practices and Applications
RL34104 - July 23, 2007

And since we missed last week, we thought we’d throw in this bonus:

Freedom of Information Act (FOIA) Amendments: 110th Congress
RL32780 - July 10, 2007

Classic examples of “fair use” often focus on personal, largely non-commercial activities — like quoting or excerpting copyrighted content as part of a school project, or recording a television episode for private viewing at a later time. Public interest advocates also stress the crucial role of fair use in promoting such civic values as free expression.

But the benefits of fair use, and of balanced copyright law generally, aren’t limited to the non-commercial sphere. All those private, individual activities add up, and they form the basis for important markets — after all, somebody has to make, market, and sell the gizmos and services that make those individual activities possible. In the age of computers and the Internet, moreover, all kinds of fully legitimate activities require data to be copied and manipulated in various ways. The online economy is heavily dependent on fair use, and fair use provides essential breathing space for emerging digital economy innovations.

A new report commissioned by the Computer and Communications Industry Association (CCIA), “Fair Use in the U.S. Economy,” seeks to quantify the contribution to the economy of industries that depend on fair use and other limitations included in copyright law. The numbers it comes up with are large — in 2006, industries relying on fair use (broadly defined to as legal limitations to the exclusive rights granted under copyright law) accounted for $2.2 trillion or 16.6 percent of gross domestic product. Interestingly, in tallying these numbers the study follows a methodology developed by the World Intellectual Property Organization for estimating the economic contribution of copyright-related industries.

The key take-home point is that fair use isn’t just a quaint little concept that has been tacked onto copyright’s framework of rights and incentives for largely extraneous, non-economic reasons. Promoting the growth of an information age economy requires both rights and protections for copyright owners and appropriate limitations and exceptions to those rights. Hopefully the new study will prompt more attention and awareness concerning the economic benefits of balanced copyright policies.

USA Today recently reported that the Federal Communications Commission (FCC) may be poised to bar apartment buildings and condominiums from signing exclusive deals with cable companies. A number of phone companies (who are moving into video) are unhappy about being prevented from offering service to the apartment/condo dwellers. The aim of FCC action would be to ensure that residents of these buildings retain the ability to select the video-programming provider of their choice.

Of course, apartment dwellers have the ability to move if they don’t like the building’s policy regarding cable choices. Meanwhile, the owners of apartment buildings have a marketplace incentive to accommodate consumer preferences, in order to be more attractive to potential residents.

Yet apparently, these marketplace pressures don’t entirely prevent exclusive deals from limiting consumer choice. Here’s a guess as to why. People have many factors to focus on when choosing an apartment, so it’s easy to overlook the issue of openness to multiple video choices. And once a resident moves in, they’re hardly likely to endure the huge hassle of moving again just because they’d like the choice of a different video-programming provider.

Anyone see an analogy here to the Internet neutrality debate?

Ok, it’s not a perfect analogy. But think about it. The ISP is like the apartment building. It’s got a bunch of subscribers (akin to residents) who are going to be reluctant to leave, because doing so is a hassle. Companies wanting to offer online applications to those subscribers (akin to companies seeking to offer cable to residents) need to traverse the ISP’s facilities. So the ISP is the exclusive gateway to access those potential customers. There may be limits on the extent to which it can leverage that gateway control without prompting a subscriber revolt. But an ISP may well conclude that so long as it does not completely deny access to a major category of applications (akin to an apartment building blocking all cable TV providers from serving the building), it has considerable ability to steer those subscribers to a specific application provider over its rivals.

Sure, changing apartments may be more of a hassle than changing broadband providers. But then again, most consumers still have very few options for broadband — whereas most local housing markets offer a variety of apartment buildings. In both cases, consumers aren’t likely to quickly and frequently switch. So once subscribers/residents have settled in, their ISP/apartment building has an effective monopoly over access to them. It’s not clear to me — and in the cable and apartment context, apparently not clear to the FCC either — that market forces automatically will prevent all possible efforts to leverage that monopoly power at the expense of consumer choice.

In an important ruling for consumers, a federal court in Seattle this week found that an anti-spyware provider was immune against the legal claims brought by a company that distributes potentially unwanted adware. The court ruled that the Communications Decency Act protected Kapersky Lab Inc. against claims that its spyware-filtering tool interfered with the functioning of Zango Inc.’s “adware” program. The case was one of two rulings against Zango in suits the company had filed against anti-spyware vendors. The other was Zango v. PCTools.

User empowerment is key in the fight against spyware. In both these cases, Zango was attempting to keep its adware program functioning even when users installed anti-spyware software to counteract such behavior.

Anti-spyware vendors have the difficult task of deciding what software is dangerous or objectionable to their users. However, providers of such tools have previously been threatened with legal action for targeting certain software for blocking or removal. Some software is unwanted by some users and not others. And many potentially unwanted programs exhibit both desirable and undesirable behavior. It is up to anti-spyware vendors to decide what poses a risk to their users, and provide their users with appropriate choices to deal with that risk.

The danger of the sort of lawsuit brought by Zango in these cases is that intimidation could discourage anti-spyware vendors from using their own best judgment about what software to target, in turn limiting the quality of tools available to the consumer. The Kapersky decision, in particular, offers important reassurance for anti-spyware companies, and will make it harder for companies like Zango to be successful in legal intimidation tactics.

Given the robust competition in the anti-spyware market, users have a great deal of choice regarding the level of targeting and protection that best suits them.

Anti-spyware providers, meanwhile, can look for guidance in the Anti-Spyware Coalition (ASC) standards. These guidelines were developed by anti-spyware software companies, academics, and consumer groups in order to create industry standards in the assessment of spyware. These guidelines ensure that vendors follow industry standard guidelines, providing grounds on which to defend their identification of spyware and the actions they take to protect consumers.

On Tuesday, the Federal Election Commission (FEC) released two important rulings that answer with a very clear “No” the question of whether bloggers who support or attack a political candidate are subject to campaign finance regulations. Although there was much controversy in 2005 and into 2006 about possible regulation of political speech on the Internet, in Spring 2006, the FEC issued regulations that provided strong protection for bloggers and individual political activists. The two rulings yesterday are the first to apply the rules to bloggers — and appropriately, the FEC found that the bloggers were not covered by the campaign finance rules.

The FEC used two different methods to reach its conclusions. First, in a challenge to the DailyKos political blog, the FEC determined that DailyKos was covered by the “news media exemption” that protects offline news and commentary sources. In the second challenge, the FEC decided that an individual blogger was protected because any payments he made to operate his blog would be covered by an exemption for “uncompensated Internet activities” and thus would not be treated as covered “expenditures” under the regulations. One or both of these exemptions will cover and protect most blogs. For a more detailed discussion of the rules, see CDT’s Net Democracy Guide.

These rulings are good news for political speech online. But the fact that two blogs were hauled before the FEC to defend themselves against meritless challenges is bad news. CDT has expressed strong concern that the FEC complaint process could be used as a weapon against political opponents — especially under-funded speakers. We can hope that these two clear rulings by the FEC will discourage future meritless complaints to the FEC.