Last week, the Supreme Court handed down a decision in United States v. Jones. The Court held unanimously that because D.C. police entered a suspect’s car without a valid warrant or reasonable suspicion, they violated the suspect’s Fourth Amendment rights. But in the course of the decision, the Court raised — and ultimately failed to answer — a pivotal question about the future of privacy in America: Does the Fourth Amendment provide protection against warrantless electronic data collection and surveillance?

A great deal rests on the answer to this question. In order to fully enjoy the conveniences of the modern world, people today have voluntarily opted into GPS tracking on their mobile devices and in their vehicles. They’ve opted for E-Z Pass electronic tolling; for debit cards instead of cash; and for cloud web services instead of local storage. Most of us leave digital footprints, and we accept that it’s possible for someone to learn a lot about us from our footprints. But we’re also loathe to think that this information could be accessed by the government without probable cause.

The Supreme Court’s decision in U.S. v. Jones did not establish protections for electronically accessed information. The justices did, however, address today’s driving Fourth Amendment concerns, and they speculated on how recent jurisprudence will shape tomorrow’s digital age protections.

The Fourth Amendment

The Fourth Amendment reads:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

The amendment is rooted in 18th century English common law. Several U.S. Supreme Court decisions (including U.S. v. Jones) cite the 1765 English case Entick v. Carrington as an influential antecedent to the 1787 amendment. The Court in Entick sided with a writer whose private papers had been seized by the King’s messengers. In the decision, presiding Justice Lord Camden famously wrote, “[t]he great end, for which men entered into society, was to secure their property.” 95 Eng. Rep. 807 K.B. 1765.

But over the next two centuries, Fourth Amendment protections in America expanded to cover more than “property” in the 18th century Entick sense of the word.

In the landmark Katz v. United States case of 1967, the Supreme Court held that the Fourth Amendment protected citizens’ “reasonable expectations of privacy.” In that case, FBI agents had attached a recording device to a public telephone booth in order to eavesdrop on Charles Katz, who used the phone booth to transmit illegal gambling wagers. The Court ruled that even though Katz was in public, and even though his personal property hadn’t been trespassed upon, the agents had violated Katz’ Fourth Amendment protections.

In the majority opinion, Justice Stewart wrote that the Fourth Amendment “protects people, not places.” By entering a phone booth alone and closing the door behind him, Katz had seemingly attempted to ensure that his phone call wasn’t heard by the public. Stewart wrote that the FBI’s surveillance had “violated the privacy upon which [Katz] justifiably relied while using the telephone booth and thus constituted a search and seizure within the meaning of the Fourth Amendment.” In a concurrence, Justice Harlan wrote:

The point is not that the booth is “accessible to the public” at other times, but that it is a temporarily private place whose momentary occupants’ expectations of freedom from intrusion are recognized as reasonable.

The Supreme Court went on to apply Justice Harlan’s “reasonable expectation [of privacy]” standard in several Fourth Amendment cases after the 1967 Katz decision. E.g. Bond v. United States (2000); California v. Ciraolo (1986); Smith v. Maryland (1979).

Background of United States v. Jones

Antoine Jones was a D.C. nightclub owner who became the target of a narcotics investigation in 2004. Police obtained a warrant permitting them to attach a GPS tracker to a Jeep owned by Antoine Jones’ wife. The warrant stipulated that the tracker must be installed within ten days and in the District of Columbia. But police didn’t install it until the eleventh day, and they did it while in the state of Maryland.

For the next four weeks, investigators used the GPS device to track Jones’ movements, amassing over 2,000 pages of locational data. The data connected Jones to the location of a stash house which was found to contain $850,000 in cash, 97 kilograms of cocaine, and one kilogram of cocaine base. Police then arrested Jones on narcotics charges.

Before trial, Jones’ lawyers filed a motion to suppress the data obtained by GPS tracker, noting that investigators’ warrant was not valid at the time of the GPS installation. The D.C. District Court granted the motion, excluding data obtained from the tracker while the Jeep was parked in Jones’ garage, while ruling that the rest of the tracking data was admissible at trial since Jones didn’t have a reasonable expectation of privacy while he was driving out in the open on public streets Jones was subsequently convicted of conspiracy to distribute and sentenced to life in prison.

United States v. Jones Decision

All nine justices agreed that the police had violated Antoine Jones’ Fourth Amendment protections. But the justices disagreed about why the GPS tracking was a Fourth Amendment violation.

In the majority opinion, Scalia presented the case in the framework of Entick v. Carrington—a simple case of government trespass on private property for the purpose of gathering information. The police had violated the Fourth Amendment when they trespassed into Jones’ Jeep in an attempt to collect evidence on him.  Therefore, Scalia argued, Jones’ expectation of privacy while driving on public streets was irrelevant. Scalia wrote:

It may be that [tracking someone] through electronic means, without an accompanying trespass, is an unconstitutional invasion of privacy, but the present case does not require us to answer that question.

Scalia was joined by Chief Justice Roberts and Justices Kennedy, Thomas, and Sotomayor.

Justice Alito agreed with the outcome, but disagreed with the majority’s rationale. In his concurring opnion, he argued that Jones could not be decided like Entick – that is, it couldn’t be framed as a physical search upon private property, since the trespassory act of installing a GPS did not in itself constitute a search within the meaning of the Fourth Amendment.

For Alito, the Jones case hinged on precisely what Scalia dismissed as irrelevant: whether Jones’ reasonable expectations of privacy were violated by police actions. Alito answered yes, in this instance, they were — but only because of the significant length of time (four weeks) during which Jones was electronically tracked. He wrote:

[R]elatively short-term monitoring of a person’s movements on public streets accords with expectations of privacy that our society has recognized as reasonable. But the use of longer term GPS monitoring in investigations of most offenses impinges on expectations of privacy.

Alito was joined by Justices Ginsburg, Breyer, and Kagan.

Justice Sotomayor, writing a solo concurrence, agreed with the majority that Jones could be decided on the matter of police trespass. But she, like Alito, also believed that the GPS surveillance of Antoine Jones violated Jones’ reasonable expectations of privacy.

Sotomayor explained that GPS tracking allows the government to easily and inexpensively create a “precise, comprehensive record” of a person’s movements, which can then be stored and “efficiently mine[d]” for information for years to come. She explained:

The net result is that GPS monitoring—by making available at a relatively low cost such a substantial quantum of intimate information about any person whom the Government, in its unfettered discretion, chooses to track—may “alter the relationship between citizen and government in a way that is inimical to democratic society.”  United States v. Cuevas-Perez, 640 F. 3d 272, 285 (7th Cir. 2011) (Flaum, J., concurring).

Sotomayor was thus the lone justice who suggested that GPS tracking even in the short term may violate a person’s reasonable expectations of privacy because of the exhaustive nature of the technology itself.

But Sotomayor went further: She suggested that warrantless electronic surveillance of a person may violate the Fourth Amendment even if that person had voluntarily agreed to be tracked by a third party — say, his car security company or cell phone provider. Sotomayor argued that in the digital age, people share private information with third party companies but retain a reasonable expectation of privacy in that information. She wrote:

I for one doubt that people would accept without complaint the warrantless disclosure to the Government of a list of every Web site they had visited in the last week, or month, or year. But whatever the societal expectations, they can attain constitutionally protected status only if our Fourth Amendment jurisprudence ceases to treat secrecy as a prerequisite for privacy.

Sotomayor’s pro-privacy musings are hopefully an indication of the Court’s jurisprudence to come. But because the majority did not address these issues, the holding in Jones does almost nothing to fortify Fourth Amendment protections for the digital age concerns expressed by Sotomayor and Alito.

The Future of Fourth Amendment Protections

Post-Jones, the question remains: Does the Fourth Amendment provide protection against warrantless electronic data collection and surveillance? In 2010, the Sixth Circuit ruled in United States v. Warshak that government agents violated Steven Warshak’s Fourth Amendment rights when they compelled his ISP to turn over private emails without first obtaining a warrant. The Supreme Court, however, has yet to hear a case presenting that issue.

Until the Supreme Court expands Fourth Amendment protections to electronically transmitted and stored information — or until Congress sees fit to update the Electronic Communications Privacy Act – our information remains subject to discretionary government seizure.

Pundits have complained that the digital age has wrought the death of privacy — but perhaps, to paraphrase Justice Sotomayor, what we’re experiencing isn’t the death of privacy, but only the death of secrecy. As long as the Court acknowledges that secrecy is not a prerequisite for privacy, we may happily retain our constitutional right to privacy in the information-sharing years to come.

Have a listen here.

Wikipedia, Reddit, and other popular websites all went black today to protest SOPA and PIPA, two bills currently before Congress. Critics charge that the bills could potentially shut down the Internet as we know it. Associate Director of Technology Studies Ryan Radia explains how the bills would work, and how they would indeed stifle free speech.

By Berin Szoka, Geoffrey Manne, and Ryan Radia

As has become customary with just about every new product announcement by Google these days, the company’s introduction on Tuesday of its new “Search, plus Your World” (SPYW) program, which aims to incorporate a user’s Google+ content into her organic search results, has met with cries of antitrust foul play. All the usual blustering and speculation in the latest Google antitrust debate has obscured what should, however, be the two key prior questions: (1) Did Google violate the antitrust laws by not including data from Facebook, Twitter and other social networks in its new SPYW program alongside Google+ content; and (2) How might antitrust restrain Google in conditioning participation in this program in the future?

The answer to the first is a clear no. The second is more complicated—but also purely speculative at this point, especially because it’s not even clear Facebook and Twitter really want to be included or what their price and conditions for doing so would be. So in short, it’s hard to see what there is to argue about yet.

Let’s consider both questions in turn.

Should Google Have Included Other Services Prior to SPYW’s Launch?

Google says it’s happy to add non-Google content to SPYW but, as Google fellow Amit Singhal told Danny Sullivan, a leading search engine journalist:

Facebook and Twitter and other services, basically, their terms of service don’t allow us to crawl them deeply and store things. Google+ is the only [network] that provides such a persistent service,… Of course, going forward, if others were willing to change, we’d look at designing things to see how it would work.

In a follow-up story, Sullivan quotes his interview with Google executive chairman Eric Schmidt about how this would work:

“To start with, we would have a conversation with them,” Schmidt said, about settling any differences.

I replied that with the Google+ suggestions now hitting Google, there was no need to have any discussions or formal deals. Google’s regular crawling, allowed by both Twitter and Facebook, was a form of “automated conversation” giving Google material it could use.

“Anything we do with companies like that, it’s always better to have a conversion,” Schmidt said.

MG Siegler calls this “doublespeak” and seems to think Google violated the antitrust laws by not making SPYW more inclusive right out of the gate. He insists Google didn’t need permission to include public data in SPYW:

Both Twitter and Facebook have data that is available to the public. It’s data that Google crawls. It’s data that Google even has some social context for thanks to older Google Profile features, as Sullivan points out.

It’s not all the data inside the walls of Twitter and Facebook — hence the need for firehose deals. But the data Google can get is more than enough for many of the high level features of Search+ — like the “People and Places” box, for example.

It’s certainly true that if you search Google for “site:twitter.com” or “site:facebook.com,” you’ll get billions of search results from publicly-available Facebook and Twitter pages, and that Google already has some friend connection data via social accounts you might have linked to your Google profile (check out this dashboard), as Sullivan notes. But the public data isn’t available in real-time, and the private, social connection data is limited and available only for users who link their accounts. For Google to access real-time results and full social connection data would require… you guessed it… permission from Twitter (or Facebook)! As it happens, Twitter and Google had a deal for a “data firehose” so that Google could display tweets in real-time under the “personalized search” program for public social information that SPYW builds on top of. But Twitter ended the deal last May for reasons neither company has explained.

At best, therefore, Google might have included public, relatively stale social information from Twitter and Facebook in SPYW—content that is, in any case, already included in basic search results and remains available there. The real question, however, isn’t could Google have included this data in SPYW, but rather need they have? If Google’s engineers and executives decided that the incorporation of this limited data would present an inconsistent user experience or otherwise diminish its uniquely new social search experience, it’s hard to fault the company for deciding to exclude it. Moreover, as an antitrust matter, both the economics and the law of anticompetitive product design are uncertain. In general, as with issues surrounding the vertical integration claims against Google, product design that hurts rivals can (it should be self-evident) be quite beneficial for consumers. Here, it’s difficult to see how the exclusion of non-Google+ social media from SPYW could raise the costs of Google’s rivals, result in anticompetitive foreclosure, retard rivals’ incentives for innovation, or otherwise result in anticompetitive effects (as required to establish an antitrust claim).

Further, it’s easy to see why Google’s lawyers would prefer express permission from competitors before using their content in this way. After all, Google was denounced last year for “scraping” a different type of social content, user reviews, most notably by Yelp’s CEO at the contentious Senate antitrust hearing in September. Perhaps one could distinguish that situation from this one, but it’s not obvious where to draw the line between content Google has a duty to include without “making excuses” about needing permission and content Google has a duty not to include without express permission. Indeed, this seems like a case of “damned if you do, damned if you don’t.” It seems only natural for Google to be gun-shy about “scraping” other services’ public content for use in its latest search innovation without at least first conducting, as Eric Schmidt puts it, a “conversation.”

And as we noted, integrating non-public content would require not just permission but active coordination about implementation. SPYW displays Google+ content only to users who are logged into their Google+ account. Similarly, to display content shared with a user’s friends (but not the world) on Facebook, or protected tweets, Google would need a feed of that private data and a way of logging the user into his or her account on those sites.

Now, if Twitter truly wants Google to feature tweets in Google’s personalized search results, why did Twitter end its agreement with Google last year? Google responded to Twitter’s criticism of its SPYW launch last night with a short Google+ statement:

We are a bit surprised by Twitter’s comments about Search plus Your World, because they chose not to renew their agreement with us last summer, and since then we have observed their rel=nofollow instructions [by removing Twitter content results from "personalized search" results].

Perhaps Twitter simply got a better deal: Microsoft may have paid Twitter $30 million last year for a similar deal allowing Bing users to receive Twitter results. If Twitter really is playing hardball, Google is not guilty of discriminating against Facebook and Twitter in favor of its own social platform. Rather, it’s simply unwilling to pony up the cash that Facebook and Twitter are demanding—and there’s nothing illegal about that.

Indeed, the issue may go beyond a simple pricing dispute. If you were CEO of Twitter or Facebook, would you really think it was a net-win if your users could use Google search as an interface for your site? After all, these social networking sites are in an intense war for eyeballs: the more time users spend on Google, the more ads Google can sell, to the detriment of Facebook or Twitter. Facebook probably sees itself increasingly in direct competition with Google as a tool for finding information. Its social network has vastly more users than Google+ (800 million v 62 million, but even larger lead in active users), and, in most respects, more social functionality. The one area where Facebook lags is search functionality. Would Facebook really want to let Google become the tool for searching social networks—one social search engine “to rule them all“? Or would Facebook prefer to continue developing “social search” in partnership with Bing? On Bing, it can control how its content appears—and Facebook sees Microsoft as a partner, not a rival (at least until it can build its own search functionality inside the web’s hottest property).

Adding to this dynamic, and perhaps ultimately fueling some of the fire against SPYW, is the fact that many Google+ users seem to be multi-homing, using both Facebook and Google+ (and other social networks) at the same time, and even using various aggregators and syncing tools (Start Google+, for example) to unify social media streams and share content among them. Before SPYW, this might have seemed like a boon to Facebook, staunching any potential defectors from its network onto Google+ by keeping them engaged with both, with a kind of “Facebook primacy” ensuring continued eyeball time on its site. But Facebook might see SPYW as a threat to this primacy—in effect, reversing users’ primary “home” as they effectively import their Facebook data into SPYW via their Google+ accounts (such as through Start Google+). If SPYW can effectively facilitate indirect Google searching of private Facebook content, the fears we suggest above may be realized, and more users may forego vistiing Facebook.com (and seeing its advertisers), accessing much of their Facebook content elsewhere—where Facebook cannot monetize their attention.

Amidst all the antitrust hand-wringing over SPYW and Google’s decision to “go it alone” for now, it’s worth noting that Facebook has remained silent. Even Twitter has said little more than a tweet’s worth about the issue. It’s simply not clear that Google’s rivals would even want to participate in SPYW. This could still be bad for consumers, but in that case, the source of the harm, if any, wouldn’t be Google. If this all sounds speculative, it is—and that’s precisely the point. No one really knows. So, again, what’s to argue about on Day 3 of the new social search paradigm?

The Debate to Come: Conditioning Access to SPYW

While Twitter and Facebook may well prefer that Google not index their content on SPYW—at least, not unless Google is willing to pay up—suppose the social networking firms took Google up on its offer to have a “conversation” about greater cooperation. Google hasn’t made clear on what terms it would include content from other social media platforms. So it’s at least conceivable that, when pressed to make good on its lofty-but-vague offer to include other platforms, Google might insist on unacceptable terms. In principle, there are essentially three possibilities here:

1. Antitrust law requires nothing because there are pro-consumer benefits for Google to make SPYW exclusive and no clear harm to competition (as distinct from harm to competitors) for doing so, as our colleague Josh Wright argues.
2. Antitrust law requires Google to grant competitors access to SPYW on commercially reasonable terms.
3. Antitrust law requires Google to grant such access on terms dictated by its competitors, even if unreasonable to Google.

Door #3 is a legal non-starter. In Aspen Skiing v. Aspen Highlands (1985), the Supreme Court came the closest it has ever come to endorsing the “essential facilities” doctrine by which a competitor has a duty to offer its facilities to competitors. But in Verizon Communications v. Trinko (2004), the Court made clear that even Aspen Skiing is “at or near the outer boundary of § 2 liability.” Part of the basis for the decision in Aspen Skiing was the existence of a prior, profitable relationship between the “essential facility” in question and the competitor seeking access. Although the assumption is neither warranted nor sufficient (circumstances change, of course, and merely “profitable” is not the same thing as “best available use of a resource”), the Court in Aspen Skiing seems to have been swayed by the view that the access in question was otherwise profitable for the company that was denying it. Trinko limited the reach of the doctrine to the extraordinary circumstances of Aspen Skiing, and thus, as the Court affirmed in Pacific Bell v. LinkLine (2008), it seems there is no antitrust duty for a firm to offer access to a competitor on commercially unreasonable terms (as Geoff Manne discusses at greater length in his chapter on search bias in TechFreedom’s free ebook, The Next Digital Decade).

So Google either has no duty to deal at all, or a duty to deal only on reasonable terms. But what would a competitor have to show to establish such a duty? And how would “reasonableness” be defined?

First, this issue parallels claims made more generally about Google’s supposed “search bias.” As Josh Wright has said about those claims, “[p]roperly articulated vertical foreclosure theories proffer both that bias is (1) sufficient in magnitude to exclude Google’s rivals from achieving efficient scale, and (2) actually directed at Google’s rivals.” Supposing (for the moment) that the second point could be established, it’s hard to see how Facebook or Twitter could really show that being excluded from SPYW—while still having their available content show up as it always has in Google’s “organic” search results—would actually “render their efforts to compete for distribution uneconomical,” which, as Josh explains, antitrust law would require them to show. Google+ is a tiny service compared to Google or Facebook. And even Google itself, for all the awe and loathing it inspires, lags in the critical metric of user engagement, keeping the average user on site for only a quarter as much time as Facebook.

Moreover, by these same measures, it’s clear that Facebook and Twitter don’t need access to Google search results at all, much less its relatively trivial SPYW results, in order find, and be found by, users; it’s difficult to know from what even vaguely relevant market they could possibly be foreclosed by their absence from SPYW results. Does SPYW potentially help Google+, to Facebook’s detriment? Yes. Just as Facebook’s deal with Microsoft hurts Google. But this is called competition. The world would be a desolate place if antitrust laws effectively prohibited firms from making decisions that helped themselves at their competitors’ expense.

After all, no one seems to be suggesting that Microsoft should be forced to include Google+ results in Bing—and rightly so. Microsoft’s exclusive partnership with Facebook is an important example of how a market leader in one area (Facebook in social) can help a market laggard in another (Microsoft in search) compete more effectively with a common rival (Google). In other words, banning exclusive deals can actually make it more difficult to unseat an incumbent (like Google), especially where the technologies involved are constantly evolving, as here.

Antitrust meddling in such arrangements, particularly in high-risk, dynamic markets where large up-front investments are frequently required (and lost), risks deterring innovation and reducing the very dynamism from which consumers reap such incredible rewards. “Reasonable” is a dangerously slippery concept in such markets, and a recipe for costly errors by the courts asked to define the concept. We suspect that disputes arising out of these sorts of deals will largely boil down to skirmishes over pricing, financing and marketing—the essential dilemma of new media services whose business models are as much the object of innovation as their technologies. Turning these, by little more than innuendo, into nefarious anticompetitive schemes is extremely—and unnecessarily—risky.

The Fragmentation Claim

For some, the problem isn’t so much about antitrust but about the fragmentation of the web. John Battelle claims that tensions between search engines and social networking platforms threaten our culture, and we need a “public commons” for social data to set things right. In the abstract (and the real world is never “in the abstract”), the claim has appeal: the Web users of today might, in some sense, be better off if Facebook, Google, Twitter, and Bing could all just “get along” and share social content among themselves seamlessly so that users could find content from any major social media platform on Google (or Bing, for that matter). Instead of facing a choice among major search engines that each only offer a fragment of potentially relevant social networking content, users in this Social Commons Utopia would choose search engines based on the quality of the algorithm, or other features—not on which social networks the search engine indexes. Meanwhile, users active in multiple social networks would enjoy a one-stop shop for searching content shared by their friends.

That all sounds well and good, but it misses the forest for the trees. The question isn’t simply about consumer welfare in a static snapshot of today’s marketplace. From that myopic perspective, commoditizing search might make a lot of sense. But of course, what’s ultimately important is that search keeps evolving to become more social and more … who knows what else the future will bring? Achieving a static “utopia” might end up killing the contentious rivalry that fuels the evolution of the market in ways that dramatically outweigh any short-term gains for consumers. Incorporating a realistic appreciation for that into a court-ordered “reasonable” deal is a Sisyphean task—yet another reason why courts are (and should be) likely to err on the side of extreme caution about meddling here.

To be sure, a “public commons” for social data is an interesting idea, and it may well make sense someday. But how would such a regime, if implemented tomorrow, affect social networking firms looking to grow and innovate? Unlike Microsoft and Google, both among the world’s most profitable companies, Facebook and Twitter are still trying to figure out how to effectively monetize their massive user platforms. Inking creative deals to sell access to social data to search engines, or to other entities such as advertisers, is a logical way to generate the income that social networking companies need. This sort of arrangement may offend diehard believers in information commons, but it should seem perfectly natural to those who recognize that, to serve consumers, web companies need to innovate not just in new technologies but in strategies for monetizing those technologies.

Conclusion

Do we really want to live in a world where companies like Google have to wait to launch innovative new features until they’ve worked out how to to ensure that their competitors get to participate—on their competitors’ terms? This kind of “open access” requirement would be catastrophic for innovation. Even forcing companies to clearly define their terms of access on day one would essentially be equivalent to requiring them to file a rate tariff as if they were an old regulated utility—a recipe for stagnation, not innovation. Condemning Google to antitrust purgatory for failing to accept competitors’ offers to participate when those offers don’t even exist is nothing if not premature.

Geoffrey Manne is Executive Director of the International Center for Law & Economics and Lecturer in Law at Lewis & Clark Law School; Ryan Radia is Associate Director of Technology Studies at the Competitive Enterprise Institute; Berin Szoka is President of TechFreedom.

I’m fond of saying that the two iron laws of modernity are 1) things are getting better, and 2) people think they’re getting worse.

One more piece of evidence that these laws hold: this article complaining about Siri. Siri is a voice-activated program that comes with new iPhones. Users can ask their phone where, say, the nearest Thai restaurant is. Just say it out loud. No typing. In seconds, Siri gives out a dozen options, with maps, directions, and even menus.

It’s an amazing piece of technology, and it will only improve in the coming years. And this guy grouses that Siri “won’t tell me how much battery life is left, or turn my Wi-Fi antenna on or off.” What an astonishing mindset. It is disheartening that when faced with such cool innovations, people invariably find ways to complain about them.

On the other hand, if consumers weren’t such harsh sovereigns, many of today’s innovations might never happen in the first place. Modernity’s second iron law — people think things are getting worse — is a double-edged sword.

In a recent Washington Times op-ed, Mark Hyman of the Sinclair Broadcast Group makes some compelling arguments calling for a spectrum inventory. His suggestion that the NTIA and FCC fulfill their mandate from President Bush in 2003 to increase spectrum efficiencies is on point and laudable. It’s certainly true that plenty of spectrum currently sitting in government hands could be put to better use, and thus a part of the problem is spectrum management. But that’s about all Hyman gets right.

His assertion that the “looming spectrum crisis” is a ruse manufactured by FCC Chairman Genachowski and parroted by major cell phone companies is completely erroneous. Hyman points to “the only independent study” on this subject to support this claim, one conducted by Citigroup. That report claimed that cellular companies were using just a fraction of the spectrum assigned to them. Critics have since eviscerated the Citigroup report, pointing to its use of outdated figures and misunderstandings of mobile technology as the cause of its flawed and ultimately inaccurate conclusions.

Hyman also alludes to public statements from Sprint and Verizon as proof that no spectrum crunch exists. Yet this September Verizon’s CEO declared that the AT&T / T-Mobile merger “was kind of like gravity” and had to happen in part because of the government’s inability to get sufficient amounts of spectrum to carriers. Such a statement bolsters claims that we do in fact face a spectrum crunch.

The FCC was actually aware of this problem at least as far back as 2002, when the Spectrum Policy Task Force issued its report. That report detailed how FCC’s allocations of spectrum in 1994 were based on predictions that there would be 54 million mobile users by the year 2000. In 2000 however the number of mobile users was more than double that base amount; the authors explained that the FCC and industry “have significantly and consistently underestimated the need for additional spectrum and the public’s utilization of new technologies and applications.”

This trend has continued: a report by Cisco earlier this year indicated that smart phone traffic doubled from 2010 to 2011 and is projected to increase rapidly in coming years, increasing the strain on already buckling networks. That report also notes that as connection speeds increase, high-definition video and streaming consumption will increasing as well, consuming more bandwidth.

Despite this reality, Hyman suggests that mobile carriers should stop “hoarding” their spectrum. It’s unreasonable to expect that government can ensure that each segment of spectrum allocated to the private market will be immediately put to its most efficient use. For example, if someone buys a plot of land intending to build a mall, the mall won’t be built overnight. Development of a parcel of land necessarily takes time and resources, as there are transaction costs like construction permits and regulatory compliance that inflate the amount of time it takes to complete such a project.

Spectrum is not dissimilar. The labyrinthine nature of spectrum management over the past thirty years has meant carriers must incrementally gather spectrum blocks, integrate those blocks into existing network infrastructure and develop comprehensive plans for utilizing it. Like building a mall on a plot of land, integrating a block of spectrum into a network and putting it to use takes time and resources.

A perfect example of this complexity is DishNetwork’s recent acquisition of DBSD and Terrestar. The satellite TV provider purchased those companies and plans to combine the combined spectrum with its other holdings to roll out an advanced LTE network to compete in the mobile wireless market.

If you listened to the NAB’s version of events all you’d hear is that DishNetwork is hoarding spectrum. That simply isn’t the case. Nonetheless, NAB continues to insist upon a spectrum inventory before any of their precious broadcast spectrum is put up for incentive auctions.

A complete and accurate inventory of government, military, and commercial spectrum holdings would be useful in the long run, but it would not benefit mobile users who rely on already strained networks for phone and Internet services. Instead it would simply provide more time for broadcasters to continue their inefficient and antiquated model of spectrum usage.

Hyman compared the spectrum crunch fears to global warming hysteria. Reading his piece I was reminded of Luddites who feared the changes brought about by the Industrial Revolution. Spectrum is scarce, and mobile carriers are providing services to meet increasing consumer demand. We need to move away from legacy communication and focus spectrum allocation on the future of mobile telephony and broadband. To do otherwise is what would be truly regrettable.

Defenders of online gambling testified before the House today to beg for their right to gamble legally. Poker Players Alliance Chairman (and former U.S. Senator) Al D’Amato, who represents 1.2 million online poker players, detailed several problems in the current law he would like to see corrected. First, he noted that players currently cannot “play on a site that is located in the U.S.; that employs U.S. citizens; that pays U.S. taxes or is regulated by any level of government in the U.S.”

Second, he described how since Obama’s Justice Department cracked down on U.S.-based online poker sites last year, “many thousands of U.S. poker players have not been able to recover money that they deposited into Full Tilt Poker and Ultimate Bet/Absolute Poker accounts, or money they won playing on these sites.”

Third, he told Congressmen that “along with legislation to license Internet poker, Congress should finally clarify the laws governing Internet gambling and create effective enforcement against whatever is illegal…. Unlawful Internet Gambling Enforcement Act of 2006 simply told banks to block payments for ‘unlawful Internet gambling’ without defining that term.”

Ernest Stevens of the National Indian Gaming Association also testified. He called Indian gaming “the Native American success story.” He noted that the Supreme Court has held since 1987 that the Indian gaming is “crucial for tribal self-determination and self-governance.” He argued that Congress must respect Indian tribes as “sovereign governments with a right to operate, regulate, tax, and license Internet gambling” and “must be available to customers in any locale where Internet gaming is not criminally prohibited.”

While the critics of Internet gambling who testified engaged in such rhetorical excesses as comparing online poker to illicit drugs, defenders of the Internet gambling also argued for a laundry list of regulations both to handouts to their members and to make online gambling more palatable to lawmakers. Every witness identified the “threat of offshore gambling” and argued that regulation was needed to protect U.S. consumers from predation.

However, as a 2008 CEI study put it, “repeal of gambling-specific federal laws would not reduce online gambling to an anarchic ‘Wild West.’ A market-regulated system would still involve government enforcement of general business regulations, including laws against force and fraud, which would then be coupled with a naturally evolving system of competitive third-party regulation.”

In the end, the political reality is that legalization of Internet gambling will probably involve heavy federal regulatory oversight including identity verification and bans on unlimited play (two requests of the Poker Players Alliance among others). Why the federal government needs to determine how people spend their extra time and money is, nonetheless, still unclear.

Over at Pajamas Media today, I have some interesting news on the Shuttlyndra situation, which would be a huge scandal if anyone cared about space, or the waste of tens of billions of taxpayer dollars — past, present and future.

On 26 September 2011, Rep. Dana Rohrabacher (R-CA) issued a press release regarding fuel depots. This included a letter to former Administrator Mike Griffin who had dismissed the notion of fuel depots and commercial launch vehicles as being a viable alternative to the Space Launch System(SLS) during Congressional testimony.

Rohrabacher noted “When NASA proposed on-orbit fuel depots in this Administration’s original plan for human space exploration, they said this game-changing technology could make the difference between exploring space and falling short. Then the depots dropped out of the conversation, and NASA has yet to provide any supporting documents explaining the change,” says Rohrabacher.”

Well, despite what NASA may or may not have been telling Rep. Rohrabacher about its internal evaluations regarding the merits of alternate architectures that did not use the SLS (and those that incorporated fuel depots), the agency had actually been rather busy studying those very topics.

And guess what: the conclusions that NASA arrived at during these studies are in direct contrast to what the agency had been telling Congress, the media, and anyone else who would listen.

One of the problems with this is that it is a technically complex issue, hard for most lay people, and even most reporters to understand. It can just sound to the uninitiated like dueling experts. What’s interesting about the release of this document is just how devastating the case it makes against the Senate Launch System. Which explains why it has only become available via leaks from within the agency. Those inside the agency who have been feeding data to Congress to maintain support for the SLS are no doubt unhappy now. What is unclear is who they are, and how far up the chain of command this attempt to hide the ball goes. It raises the question of whether the NASA administrator himself was aware of it. If so, he was one of the people withholding data from Congress (and the public).

It’s hard for any rational person to read it and conclude that it makes any sense to continue with the SLS. Unless, of course, your goal for the agency is not to actually send people into space, but rather just keep in place existing jobs. And to hell with the taxpayer.

Much of the cybersecurity focus this year has been on Congress’s efforts to mandate data breach notifications and security standards. Now the Securities and Exchange Commission (SEC) is entering the fray. On Friday, The Washington Post reported that the agency issued a guidance document instructing publicly traded companies on the procedures they must follow relating to cybersecurity issues.

The SEC makes clear that these obligations are preexististing, and that the guidelines merely clarify the requirements as they pertain to cybersecurity. For example, regarding risk disclosure, the SEC states:

Consistent with the Regulation S-K Item 503(c) requirements for risk factor disclosures generally, cybersecurity risk disclosure provided must adequately describe the nature of the material risks and specify how each risk affects the registrant. Registrants should not present risks that could apply to any issuer or any offering and should avoid generic risk factor disclosure.⁵ Depending on the registrant’s particular facts and circumstances, and to the extent material, appropriate disclosures may include:

• Discussion of aspects of the registrant’s business or operations that give rise to material cybersecurity risks and the potential costs and consequences;
• To the extent the registrant outsources functions that have material cybersecurity risks, description of those functions and how the registrant addresses those risks;
• Description of cyber incidents experienced by the registrant that are individually, or in the aggregate, material, including a description of the costs and other consequences;
• Risks related to cyber incidents that may remain undetected for an extended period; and
• Description of relevant insurance coverage.

The guidance also states that companies “may need to disclose known or threatened cyber incidents to place the discussion of cybersecurity risks in context,” while at the same time indicating that “federal securities laws do not require disclosure that itself would compromise a registrant’s cybersecurity.” This will undoubtedly give companies a serious headache as they try to decipher what they must disclose and what information they may retain.

As far as the immediate impact on publicly traded companies, CNET’s Declan McCullaugh observed:

This kind of regulation may be what billionaire investor Peter Thiel, a member of Facebook’s board of directors, had in mind when he told CNET last month that there are good reasons for companies not to go public.

Thiel said: “There’s simply a degree to which public companies are given a scrutiny that is much greater and much more heavily regulated than private companies… The correct decision that people have made in the last decade in Silicon Valley has been to try to defer the IPO process as long as possible.”

With Congress considering various data breach bills, many of which call for the FTC to issue cybersecurity standards and notification requirements, companies will face a period of great uncertainty going into 2012.

NextGov reporter Jessica Herrera-Flanigan noted earlier this year that this development could also lead to more complications at the agency level in terms of addressing responsibility and jurisdiction:

While an interesting concept, the SEC’s increased presence in cyberspace could raise questions that will need to be resolved. As we see DoD and DHS (with Commerce and State thrown in for good measure) struggle with who will lead on cybersecurity, what does adding another agency to the mix of agencies that must be dealt with mean? How will an increased SEC presence in this space mesh with increased FTC and FCC efforts? What does any required significant reporting mechanism at the SEC mean for law enforcement investigations into cyber?

Although well-intentioned, the SEC’s guidance document will likely add more confusion to an already crowded policy debate. Congress should evaluate its pending legislation to see how this latest development will affect those efforts.

For thousands of years, no human traveled faster than a horse. Napoleon’s armies were no mobile than Caesar’s. That changed almost overnight with the automobile and then the airplane. Despite that rapid progress, flight times from New York to London have barely budged in 50 years.If anything, it’s slower now that the Concorde is out of service.

That could change in the next 15-20 years with the dawn of space tourism. A spacecraft has to travel about 17,000 miles per hour to stay in orbit. A partnership between KLM airlines and a wealthy Formula One mogul hopes to make first-generational suborbital crafts that can reach 2,200 miles per hour, with an eventual goal of hitting 13,750 miles per hour.

This is good for more than space tourism — a trip from London to Sydney would take an hour and 45 minutes. That’s about the same as a flight today from New York to Chicago.

Caesar and Napoleon would be astonished. Hopefully this venture doesn’t experience the crony capitalism problems that NASA has had with a similar project.

Rick Santorum has a Google problem, and everybody knows about it — mostly because Rick Santorum won’t stop talking about it. Last week, Politico reported that Santorum had contacted Google and asked them to do something about “spreadingsantorum.com,” the (hugely successful) revenge prank pulled by columnist Dan Savage after Santorum publicly compared homosexuality to bestiality.

After Google declined to manipulate their search results, Santorum said:

“If you’re a responsible business, you don’t let things like that happen in your business that have an impact on the country. [...] To have a business allow that type of filth to be purveyed through their website or through their system is something that they say they can’t handle but I suspect that’s not true.”

Santorum may regret giving Politico that quote, which reveals that the presidential hopeful is not entirely sure what Google is (a website? a system?) and how search engine algorithms work. As Noam Cohen at The New York Times says:

“The immediate reaction to Mr. Santorum’s statement has largely been, ‘How quaint. He thinks he can get Google to fix the Internet for him if he asks?’ Mr. Santorum could have hurt his cause more only if he had told the company’s officials to roll up their sleeves and put a plug in the tubes carrying the offensive material. “

Yet Cohen and many others — like Politico‘s Ben Smith — think that Santorum has a point. Cohen argues:

“Google’s defense — that the behavior of its ever-improving algorithm should be considered independent of the results it produces in a particular controversial case — has a particularly patronizing air, especially when it comes to hurting living, breathing people.”

The Santorum/Savage melee would be little more than a titillating sidebar to Santorum’s presidential campaign were it not for the fact that Google is now defending itself in Washington against government officials, politicians, and competitors who say the tech giant is  unfairly manipulating its search results to promote its own products.

For a service that the majority of Internet users choose to enjoy, Google Search is currently the target of a surprising amount of criticism—from both the left and the right.

At a briefing today at The Heritage Foundation, Google spokesman Adam Kovacevich reminded a roomful of conservative and libertarian bloggers how Google’s search engine algorithm has evolved over the last ten years. On September 11, 2001, a Google search for “World Trade Center” ranked results in the same order it had the day before. Nearly a decade later, when Osama bin Laden was killed, a Google Search for “bid Laden” resulted in Google News results and real-time results that immediately informed users about the day’s events.

And the search engine is continuing to improve its algorithm. In 2010, Google tested 13,000 algorithm changes and implemented 500. Like Bing and Yahoo, they use human raters and user satisfaction signals to test changes.

Rick Santorum is an unlucky man: It turns out that the number of Internet users who think Dan Savage is funny may simply be greater (or more active) than the number who wish to learn more about the former senator’s presidential campaign. According to The Huffington Post, Savage’s site has thousands more inbound links than the former senator’s official website.

But that’s not really Google’s fault. (Nor is it the fault of Bing or Yahoo, both of whom list Savage’s prank-site in top results. )

When one considers the day-by-day process through which Google engineers slowly improve Google Search to better suit massive consumer demand, Rick Santorum’s suggestion that Google simply cross off an unseemly Google result at the top of their results for “santorum” seems — quite frankly — ridiculous.

Equally ridiculous is the idea that legislators and regulators in Washington are in any way qualified or in any way needed to oversee this complex process and make command decisions about how Google’s search results should appear.