ISPs Tell Two Lies: “This is Fair” and “This Will Work”

Intro: The Parable of the Watermelon Stand

Once upon a time, two folks (Alphonzet and Balantanoid) decided to sell watermelons at a roadside stand. The two-step business model was: 1) buy watermelons for $1 apiece from a farm, then 2) transport them in their pickup truck to the roadside stand, where they sold the watermelons at a retail price of $1 apiece. After some time, accountant Balantanoid informed business partner Alphonzet that, due to the price of gasoline and other incidental business costs, they were actually losing money. Alphonzet reviewed the numbers and pondered, and then ventured a solution:

“Do you think we need a bigger truck?”

Businesses looking to buy consumer information from ISPs are like the characters in this story considering using a bigger truck. More data isn’t what businesses need, and there is danger is believing otherwise. Furthermore, ISPs unjustly shirk responsibility that ought to come with the entitlement to the data they intend to sell.

I. Background.  Internet Service Providers Aren’t Satisfied With a de facto Monopoly

Internet service providers have no competitors and provide a borderline necessity. They can charge anything (and do) and provide a low quality product and service (as they do), and customers will still pay them (and they do). This isn’t enough for them. The telecommunications industry has successfully lobbied congress into repealing an FCC order that previously prevented the sale of tracked, identifiable consumer data to third parties.

Of course, ISPs are the only ones who can risk fighting their customers. Service providers operating on the internet can’t antagonize their customers because they are subject to fundamental concepts of free market capitalism: If they anger their customers, their customers will go elsewhere. ISPs don’t have “customers” in the traditional sense. They have “victims” or “hostages”- so it makes sense that ISPs wouldn’t worry about treating them like customers.

II. “This Will Work.” ISP’s Already Lie to Consumers and Government- Now They Get to Lie to Businesses

I don’t know how many lies the telecommunications industry had to tell congress to get the FCC’s rule repealed. Probably not many- after some generous donations, congress rarely asks very many questions, or cares about answers. But the lie that ISPs are relying on now is for 3rd party companies to believe that (in the context of the aforementioned parable) a bigger truck will turn their watermelon business profitable. There are two likely outcomes of this business arrangement: either advertising will get better, more efficient, more streamlined, more effective, and benefit both advertiser and consumer, OR advertising will become more obnoxious, more noisy, less useful, less relevant, more intrusive, and worse for consumers and advertisers.

In his NYT Op-Ed on this legislation, former FCC Chairman Tom Wheeler gives the example of ISPs selling data to car dealerships about which customers are visiting car websites, thus allowing car dealers to target more likely customers. One interpretation is that this will help car dealers only target relevant audiences, and customers will get better opportunities and information as customer-business connectivity is optimized. My experience is that this is supremely unlikely.

My most recent experience with targeted advertising is that the business model is not effective. I spent an evening looking for a new pair of shoes from online stores. The next day, ads for shoes show up on my Facebook feed. But I had already bought shoes. I was no longer a potential customer in that market. No amount of advertising is going to persuade me to make a purchase, because the purchase was already complete.

More data doesn’t mean you understand your customer better. You need the right data- and ISPs just can’t provide that. Data science simply isn’t good enough yet. The algorithms consistently fail to capture human thought, intent, and desire. The greater danger in the loss of this privacy isn’t in other parties knowing who you are- it’s in other parties THINKING they know who you are.

This example reveals two facts that render third party purchases of consumer data useless: a single data point or grouping of data points doesn’t tell you all of the important data about a consumer, and second, consumers move faster than companies. For the same reasons that cause all of us to receive junk mail addressed to people who haven’t lived at an address for years, (or even addressed to deceased persons), companies efforts to use consumer data are routinely ineffective. The myriad problems with the over-reliance on big data is its own subject, but one that informs this issue.

The effort to make money off of violating privacy won’t work because companies aren’t equipped to turn data into sales.

III. “This Is Fair.” Justice Requires That ISPs Pick A Single Classification: Common Carrier or Private Enterprise

There is a doctrine in tort law that common carrier services like buses and trains have reduced duties to customers. Private carriers have more discretion about how to run their business, but have increased liability. In the famous tort case Paslgraf v. Long Island Railroad, a railroad company was not held liable when a passenger’s explosive package accidentally detonated, causing injuries. Part of the reasoning relied on the notion that the railroad was a common carrier, and such service providers are not liable for some acts of their customers because they have less discretion regarding their customers than a private carrier has.

This reasoning ought to be applied to internet service providers: ISPs can be either a common carrier or a private carrier, but must accept the responsibilities and limitations of whichever classification they choose.

If ISPs want the benefits of being private enterprises, they need to take on the liability commensurate with those benefits. The concept of safe harbours in the DMCA is predicated on the notion that ISPs are a sort of public utility or common carrier. ISPs that want the benefits of private business need to be liable for crimes and damages that common carriers would not be liable for.

ISPs believe they have a right to the data of their individual customers, such as their browser histories and app usage rates. If they are so interested in the private information of their customers, they should take on criminal liability for crimes committed by their customers, from piracy to identity theft to terrorism or child pornography. This is the burden of responsibility. If an ISP is truly entitled to the content of a customer’s online activity, they are responsible for that content. There is no entitlement without responsibility. This is a fundamental precept of justice that permeates the law.

If the ISP does not want to be liable for the crimes committed using their services, they must opt for the common carrier approach to providing internet and information services. The idea of ISP access to consumer data without responsibility to the consumer is not just offensive to privacy or comfort- it is offensive to the very concept of justice and fairness. It is the ISP getting something extra from a consumer in return for nothing. Forcibly taking from someone in exchange for nothing is the clearest possibly understanding of theft.

Conclusion

The data that ISPs will sell to 3rd parties is unlikely to make advertising substantially better, due to the challenges in execution. The larger issue is settling the classification of ISPs in the context of telecommunications law. ISPs can be either private enterprises or common carriers. They cannot continually shift their classification from moment to moment to suit convenience, reaping rewards and rejecting responsibility.

Update: ISPs earn their place… And they really have a cultural status.

Popping Caps in CS:GO and Cable Cutters

The big selling point for capitalism is usually “innovation and progress.” When folks compete in a free market, they try to make the best product at the lowest cost, and thereby win the customers and the money. The market rewards those who can find new ways to make a product more efficiently, or who can simply provide a better overall service. The winner is the one who can do the best job, and when your society is full of the best possible products and services, everyone is a winner.

But economists never count on some of the alternative strategies available. Sure, you can try to win more customers by making a better product—or you can surround your competitor’s store with lava. That’s another way to win.

Cheese or Cheating?

In the CS:GO quarterfinals of DreamHack 2014, Fnatic was losing a match to LDLC. Fnatic stunned the audience—and even the shoutcasters—when they performed a previously unknown “boost” maneuver that allowed them to see most of the map. Using this vantage point, Fnatic went on to stage an amazing comeback and win the quarterfinals round. LDLC filed a complaint with DreamHack administrators, arguing that the specific “boost” performed was not legitimate. DreamHack administrators eventually agreed, and determined that the match should be replayed (Fnatic declined to replay the match and LDLC advanced to the semifinals round, eventually winning the tournament).

The legitimacy of the boost remains an extremely controversial topic. Some argue that players should be permitted to do anything that the game allows them to do, provided that they do not modify the actual code of the game. Others argue that the effect of this technique gave clear evidence that it was a game flaw (to those who are familiar with the game), and Fnatic should have known that its use would not be permitted by the tournament rules. (Specifically, the use of the boost made some wall textures transparent and the boost was considered “pixel walking.”) Along with a lot of implications for game developers and esport tournaments, a central question here is: what is the difference between cheese and cheating?

Cheese is the use of an unorthodox or surprising strategy or tactic to attempt to win a game in a way that avoids the standard methods of play. It is often considered bad manners or unsportsmanlike, but finds some level of tolerance in competitive game play. (Cheese strategies are prone to backfire badly, as they often require a very drastic “all-in” decision which leaves little room for recovery if not successful.) Cheating also avoids standard methods of play, but does so through a violation of established rules.

Data Capping or Kneecapping?

Comcast supplies cable as well as internet. Thanks to the smorgasbord of entertainment options available on the internet, people don’t need 17,000 cable channels when they want to engage in one of America’s most popular past-times: doing “nothin’.” Many Americans are cancelling their cable subscription services (“Cutting the Cord“) because they can get the entertainment the need from the internet. Comcast might have noticed the drop in their cable subscriptions, because they started imposing data caps on some cities. The effect is that people can’t watch unlimited Netflix if they only get 100GB/month, so they have to go back to cable if they want to watch shows and movies. Comcast is using its power as an ISP to “leverage” its revenues as a cable provider—not by making its own product better, but by interfering with its customer’s ability to access a competitor’s product.

So, is Comcast bending rules or breaking them? There is no law against ISPs imposing data caps on customers. Comcast’s merger with NBC-Universal was approved by the Department of Justice. Comcast’s market conditions are not like the capitalist’s ideal free market: Comcast has the incentive to interfere with entertainment-content providers, and they have very few competitors who would prevent them from doing so. The effect might not be the kind of innovation that capitalists hope to see from competition, but it’s still led to an innovative way to undermine competition.

I imagine that either the FCC or the DoJ will have to examine this behavior and decide whether this constitutes a violation of antitrust law or is unduly harmful to consumers. It seems easy to make the case that it undermines innovation and competition, but because these regulators have approved all of the conditions that caused this activity, it will require a lot of regulatory untangling to explain why the natural result of several legal decisions turns out to be illegal.

Explaining Myself Through Mini Metro: Making Lots of Connections

I’ve always been a fan of the minimalist art style. As an art style and a category of interior design, it gets a lot of adjectives like “clean,” “crisp,” “pure,” “uncluttered,” and “bright.” I’d have to agree that Mini Metro is a game with a minimalist art style. But the aesthetic isn’t the only thing that appeals to me. The game mechanic is about connecting: making a metro system that is as efficient as possible as a city places ever-increasing demands on the network.

I love the concept of connection. I love to connect ideas and words, and I have spent most of my life studying and forming such connections. Careful, structured explanations of connection and disconnection are at the heart of the practices of both philosophy and law. Like most humans, I also cherish my close connections with others. At every level, and in every sense, connection thrills and amazes me.
Mini Metro is a game that is a design model for making connections— So it’s fitting that I use it as a model to connect the areas of law in which I am interested.

The railway network itself is the telecommunications infrastructure. The people that travel on the network are the entertainment content of the digital age: text, pictures, audio, movies, games—almost all of it subject to copyright law. The signage around train stations tells people about the places: it helps people make choices based on comparative information. I admit this is the biggest stretch in the analogy, but I’m comparing that to trademarks because of the informative function that aims to dispel confusion. And of course, there are safety concerns around all public transportation. Cybersecurity, by and large, is the safety structure for the internet: it is the area of law that tries to get everyone to navigate the system without tragic injury. And just as trains are regulated, this digital structure enjoys some oversight by the FCC (in the form of general regulatory rules) and FTC (in the form of consumer protection enforcement).

One of my favourite moments in Mini Metro is when a station appears on a line I have already built. I don’t really know if this is just the RNG-gods smiling down upon me, or if there is a definite structure and these moments are signs that I have designed optimally. In the effort to connect law and technology, sometimes a new device or idea appears that can force a re-drawing of the legal lines. Part of me wants to think that a law can be created with the future in sight, but the speed and direction of technological developments are so amazing that I don’t know if policy design can do better than hope for luck.

Mini Metro can be used to explain how my areas of interest relate to one another. It can also explain why I love these things, too. In the abstract, the game is about making it possible for people to go places. It is about how large-scale design decisions affect humble individuals. Technology and law are connected to each other—and both are connected to individual lives and to society, generally. The magic of connection is that it makes each individual node matter to the other nodes with which it connects. A single idea, or law, or device, or person—nothing is all that interesting, meaningful, or exciting until it is connected to other things in the world. Then both the connector and the connected affect and transform one another as they interact. In this way, the relationship between law and technology is like a relationship between people. Whether they are friends or enemies, they will shape each other because they are connected.

 

I never said I was super good at the game. But it's still fun.

Just trying to help the Parisians get through the day.