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We recently explored the controversy over what has come to be called "net neutrality." Many commentators claimed that the FCC's proposed change to the rules governing the Internet would destroy the Internet as we know it. As we saw it, instead of destroying the Internet, the change instead took us back to the lightly-regulated time when the Internet was able to grow exponentially, as opposed to being more heavily regulated like nearly everything else in this country today.
Let's be clear: we do need regulations in order for our complex advanced society to function well. In June of 1969, the Cuyahoga River in Cleveland, Ohio caught fire because it was carrying so much flammable pollution. Unlike previous fires, this fire went viral, inspiring the Clean Water Act of 1972; it hasn't caught fire since, which we can all agree is a Good Thing.
It's interesting, though, that the picture which stirred up the desire to pass new laws wasn't taken during the 1969 fire. The river had caught fire many times before, and the picture that roused such passions was taken during an earlier fire in 1952. No picture of the 1969 fire is known to exist; it probably wasn't worth photographing. Was publicizing the 1952 picture as if it showed the more recent fire an example of "fake news"?
Similarly, at the time the Food and Drug administration was created on June 30, 1906, unscrupulous peddlers sold "medicines" which often did more harm than good. It's hard to argue that cleaning up waterways through regulation or keeping harmful medicines off the market is a bad idea.
Unfortunately, being populated exclusively by human beings, our regulatory agencies are subject to the permanent fixations of all bureaucracies:
These imperatives are found across all bureaucracies regardless of race, creed, color, national origin, or the public purpose for which the agency was founded. Businesses go bankrupt when they get too far out of touch with their customers, but nobody has come up with a method of ensuring that a government bureaucracy actually serves the purpose for which it was intended.
The closest anyone has come was Confucius' recommendation that the emperor find ineffective and corrupt bureaucrats and chop their heads off to encourage survivors to work honestly, but even so, Chinese governments tended to collapse due to excessive spending due to bureaucratic bloat every 350 years or so.
That being the case, regulations eventually go way beyond the
point
of diminishing returns and block innovations that
would be helpful. We've shown how the FDA got into a
fight with the vitamin companies which resulted in the FDA
being forbidden to regulate vitamins at all. This
is
not the ideal outcome, but it's what happens when politics gets into
the
mix as it inevitably does. It's arguably better than the
alternative, in which FDA regulations would be so costly that vitamins,
new ones anyway, would be basically impossible to market - so how would
we ever discover new and useful nutrients that don't happen to be
patentable?
We sometimes hear arguments that the Internet should not be subject to regulations of any kind, but that is patently absurd. The Internet cannot work at all unless every device attached to it follows the relevant technical standards extremely closely. These standards are so mind-bogglingly complex that it's a miracle that the Internet does work at all. These standards don't need a lot of politically-fraught discussion - a new protocol or box design or cabling method either works or it doesn't.
There is no such clear-cut "works / doesn't work" standard for evaluating product, service, or pricing standards. We need to address government regulations that might be applied to businesses such as Facebook, Amazon, Google, Twitter, and the like which are unrelated to the basic technical requirements that can't be avoided.
This may be shocking to regular readers of this magazine, but much as we dislike the inevitable unanticipated effects of regulation, we're persuaded that these businesses need some sort of rules, and there is no organization with the democratic legitimacy to establish them and the power to enforce them other than our government, flawed as it is.
The most obvious regulation which is applied to Amazon and other
e-commerce web sites is that the businesses cannot charge the
customer's credit card until the goods actually ship. This
regulation
was put in place very soon after e-commerce started for obvious
reasons, but it was inherited from decades if not centuries of
commercial law involving the remote sale of goods. The presence
of the Internet wasn't relevant to the fundamental issues involved - we
simply applied regulatory principles that have been worked out and
agreed to over a vast period of time.
Another regulation forbade states from collecting sales taxes on
Internet sales unless the vendor had a "physical presence" in the
state. The rationale was that there were so many different taxing
jurisdictions with such insanely complicated definitions of what was
and was not taxable, and how much tax to apply to each item, that web
merchants would have had no hope of being able to comply.
Similarly, this regulation originated long before the Internet was
invented and was applied to mail-order catalog companies which are, in
principle, the same thing even though the technology is different.
As we see it, out-of-state merchants derive no benefit from the
services supposedly rendered by the state governments. The
delivery
services which use the roads in the state benefit from them, but
delivery
companies like FedEx and UPS, being based in the various states, most
assuredly do pay state taxes which cover the cost of wear and tear on
the roads. The same is true of purely digital goods - your local
Internet-service provider that provides your Internet access charges
state taxes, but there's no reason for the online vendor to have to
deal with your state when they are in a different one.
The local communications and transport taxes are all that should
properly be due to the local
state if the selling company has no presence there. Today that's
less relevant as Amazon has offices in nearly every state and the
vast resources necessary to comply with every regulation everywhere,
but
for smaller firms, the problem of complying with sales tax rules is
still a major concern. Fighting against state efforts to impose
universal taxation is a proper role of the federal government, in its
Constitutional duty to regulate interstate commerce.
The most disturbing regulatory problem is illustrated by a number of cases where, we believe, the larger Internet companies are abusing their positions of market dominance.
The Wall Street Journal reports that Prager University has sued YouTube for blocking access to some of Prager's conservative videos. Prager's complaint
...says YouTube's more than 30 million visitors a day make the site so elemental to free speech in the digital age that it should be treated as a public forum. The suit argues the site must use the "laws governing free speech," not its own discretion, to make decisions about what to censor. ...
Since last year, more than three dozen PragerU videos-on subjects including the Korean War and Israel and Palestine-have been restricted by YouTube. As a result, those who use YouTube in "restricted mode," including students at some universities and children whose parents have put parental control filters in place, are prevented from seeing the videos; all potential ad revenue from the videos is also cut off. [emphasis added]
As usual, money cuts to the heart of the matter. YouTube displays advertising when people look at videos and whomever owns the video gets a cut of the revenue. This isn't insignificant - one 6-year-old makes millions of dollars because people enjoy watching him play with toys. By cutting PragerU off from searches and denying them revenue when people do find their films, YouTube is taking money away from Prager, which makes it harder for them to fund their films and express their viewpoint. Those of us who understand the total liberalism of those who work at YouTube suspect that stopping the spread of conservative ideas is the goal.
The lawsuit lists videos on similar subjects by other content creators - including Al Jazeera and The Daily Show - which weren't restricted, and argues that PragerU was targeted solely for its conservative views.
"Google/YouTube uses their restricted mode filtering not to protect younger or sensitive viewers from 'inappropriate' video content, but as a political gag mechanism to silence PragerU," the complaint says.
Mr. Trump also suffers from this form of liberal censorship. Wonder of wonders, a New York Times columnist had kind words for Mr. Trump:
... people who go into the White House to have a meeting with President Trump usually leave pleasantly surprised. They find that Trump is not the raving madman they expected from his tweetstorms or the media coverage. They generally say that he is affable, if repetitive. He runs a normal, good meeting and seems well-informed enough to get by.
Wow. That certainly contradicts the leftist narrative which describes Mr. Trump as an inarticulate fool who's close to insane. The anti-Trump crowd couldn't do much about the column in the Times, but YouTube seems bound and determined to suppress any video that contradicts their preferred anti-Trump messages.
We stumbled across a news article which goes into even more detail about Mr. Trump's positive characteristics:
Taylor Funk and his dad, Fred, played 18 holes of golf with President Donald Trump at Trump International Golf Club in West Palm Beach, Florida. Funk documented the whole thing in a YouTube video he posted Tuesday, which has since been deleted but can be seen below.
... "He's an amazing guy. Very engaging, very thoughtful. Asked a lot of questions, wanted to know how he could be a better golfer, better president. He gave us insights on business and life and the world. It was just an amazing time and an experience we'll never forget." [emphasis added]
It's interesting to contrast President Trump's game - "He shot 36 on the front 9!" - with President Clinton's well-known habit of cheating at golf.
Golf is an ancient and honorable game which, like tennis, is based on the assumption that players have enough character and respect for the game that they won't cheat. President Clinton dishonored the game; Mr. Trump's style is reportedly quite different - or would be reported, if YouTube hadn't pulled the video.
It's no surprise that YouTube liberals would bury any video which presented Mr. Trump in a favorable light. YouTube doesn't comment on their reasoning so we don't know whether this tribute to Mr. Trump was labeled "hate speech" or was simply news that they didn't consider fit to print. Either way, this is censorship pure and simple and you'll have to follow the link above to see the film of Mr. Trump's golf swing.
Twitter offers a service where people pay Twitter to help them increase their Twitter following. We have a right-ish friend who paid Twitter to help grow his audience to about 30,000 followers. Twitter followings are valued at about $3 per follower, so by current market value, our friend's network was worth about $90,000. Then with no explanation, Twitter suspended his account, after letting him pay them to grow it.
As a fiscal and regulatory conservative, our friend is reluctant to sue because he believes that Twitter, as a private organization, has the right to choose its customers just as people who bake cakes have the right to choose their customers. Since he paid Twitter for a service only to find Twitter arbitrarily destroying the value of what he had purchased from them, however, he might decide to sue for fraud under commercial laws.
It's recently been shown that Twitter has an organized operation to, in effect, ban conservatives' political views secretly, subtly, and without appeal. The link explains that Twitter uses "shadow banning" to "ban an entire way of talking."
Olinda Hassan, Policy Manager for Twitter Trust and Safety explains, "were trying to 'down rank'& shitty people to not show up," "were working [that] on right now"
Shadow banning means that Twitter shows all the tweets in the victim's page, but doesn't show them to everyone who follows the victim's tweets. Twitter uses their vast collection of user data to show the tweet to some, but not all, of the victim's followers. The goal is for the victim not to realize that the ban is in place. Depending on how many followers actually get the tweet, it will seem that the victim's tweets aren't getting much or any traction.
That would be like the Post Office accepting your packet of bulk mail, reading it carefully, and selectively not delivering your message to any of your addressees whom they do not want you to influence. Twitter's algorithms have enough data about individual users to do this effectively without human intervention. They carefully send your tweets to followers who already agree with you or who will never accept anything you say while not sending your tweets to anyone whom they think you might be able to persuade.
Twitter apologists say that the Twitter employees' quotes have been misrepresented, but Twitter's past actions in censoring conservative users makes us take their apologia with a grain of salt.
The Wall Street Journal uses a blunt form of shadow banning to suppress subscribers whose comments they don't appreciate. Comments show up in the victim's profile page as expected and are displayed if the victim reads the article, but they aren't shown to anyone else.
That would be like the Post Office accepting your packet of bulk mail, noting that you're on their block list, and not delivering your mail at all while telling you that it had been faithfully delivered. Forbes bans commentors by repeatedly asking them to log into the site or to reload the page whenever they enter a comment.
Google + is less subtle than Twitter, Forbes, or the WSJ - banned users can't log in to the G+ site at all so there's no doubt whatsoever that they think you're a badnik. Google tweaks their search algorithms to put conservative articles far, far down in the list or leave them out of Google's news feed entirely.
If users were paying for these services, they could bring complaints under commercial law, but since the services are free, it's not clear that there any legal remedies.
Is this how America is supposed to work? Should we just sit down and accept this form of censorship when Twitter, Google, and Facebook posses such commanding market positions?
In the next article in this series, we'll try to answer this question.