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I don’t know how many lies the telecommunications industry had to tell congress to get the FCC’s rule repealed.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.

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[Part 4] StarCraft II in the World: How Korean E-Sports Power Makes Us “Foreigners”

All of these approaches are played out in answering the oft-asked question: “Why is South Korea so good at e-Sports?”
The answer begins with the Asian Economic Crisis of 1997. After a devastating economic collapse, governments like South Korea’s were faced with questions of rebuilding and moving forward. South Korea invested heavily in telecommunications infrastructure. As the economy steadily rebounded, one small business plan that grew around a strong telecommunications infrastructure was computer gaming cafes. These became so numerous and omnipresent that they became a major element in the culture of young people growing up in South Korea around 2000. As the culture integrated computer gaming as an important social medium, the quality of players grew. In the late 90s, there were not as many games that lent themselves to the kind of competitive, head-to-head, high-speed gameplay that fit the cultural need of young people gathered in a social setting, but StarCraft was a near-perfect fit. Just as Brazilian children gravitate towards soccer fields and so many American children hang out near basketball courts, sizable portions of Korean children spent free time at gaming cafes. It follows quite obviously that spending time practicing and learning leads to excellence. That excellence is so dramatic that it is even noted in the parlance of StarCraft II tournaments: competitors are either Korean or “Foreigners.”

[Of course, there are other factors that led to S. Korean unique dominance in e-sports—Japan’s anti-gambling laws undermined the growth of a competitive gaming scene, the US was sold on consoles like Xbox and PS2 over computer gaming, etc.]

There is a simple analysis of the story of South Korea’s success in e-Sports: Economics, legal possibility, and technological availability lead to the creation of a new infrastructure (Terran). This infrastructure was integrated into the culture, leading to the development of a specific kind of power (Zerg). The path of past events created a direction for power to be used (Protoss).

There is so much more to talk about in StarCraft II. Its rich story is filled with characters and ideas, and the storytelling and gameplay add depth and perspective to further enhance the potential subjects of discussion. For the considerations on power, there is a takeaway lesson about understanding and recognizing the inorganic structures and organic cultures that produce certain types of power, and realizing the direction that power wants to go. Whether it’s telecommunications, biotechnology, energy management, or sports and entertainment, these points are relevant and recognizable. Future outcomes will depend on how we make our systems and culture, and how we allow our creations to shape us.

How can we Adjudicate Events Smeared Across Jurisdictions?

Consider this hypothetical scenario: A US doctor monitors a high-tech medical device transmitting data from inside a person visiting the UK. The doctor provides a diagnosis based on the information sent by the device. Is the doctor practicing medicine in the UK? If there is a glitch in the transmission of the data, who is liable: the doctor, the programmer, the UK telecommunications corporation whose hardware carried the data? Furthermore, in which court should the lawsuit be filed? And to extend the issue into pre-emptive policy: should programmers be subject to licensing and regulations if they are writing code for medical devices, airplanes, train switching, or other situations where a programming error can get people killed?

The metaphysical puzzle is this: where do events happen when the event can be broken into segments that happen across jurisdictions? (e.g., If you shoot someone across the border, where does the murder occur?) How can we deal with smeared, liminal events that seem literally “neither here nor there”? This is why metaphysics matters in a world where previous notions of geography, communication, and being are challenged. The technology that forces these questions upon us will arrive sooner than any of us expect and the law, the philosophy underpinning the law, and even the language used to explain that philosophy, will be trying desperately to catch up to our daily life.