What “Game of Thrones” shows us about political communications and narrative

The Eye-Catcher: Bran Stark wins the narrative game …

Social media was losing its mind last night as faithful fans of HBO’s “Game of Thrones” tuned in for the show’s final episode. A significant number of viewers were miffed that Bran Stark, a cripple with a gift of knowing the past and the future, who engaged in no battles as a warrior, would win the Iron Throne, not via combat or birthright, by via a narrative created by a handful of elite landowners and military people.

I came away with two main takeaways including:

  • The willing audience?
  • What is the narrative?

The willing audience …

The audience yearns a good story; a narrative that will help them fall in line and find that comfort zone in which they can enjoy some certainty.  The person around which the narrative is spun need not be seen as someone who has done anything superhuman or fantastic.  All that is required is that the story be compelling so that the general or mass audience is assured that the person around which the story is spun deserves the pedestal they are placed on.

The most important audience is the immediate audience; the group of people closest to the decision-making; the decision-makers themselves, who first have to be convinced by the story teller that xyz person is deserving of a marketing push.  In the case of Bran Stark, it was Tyrion Lannister who made the sale, offering a compelling tale to the heads of the remaining households that the boy who was crippled after being pushed out of a window and later gained powers of clairvoyance, maintained clarity of vision, and stayed above the fray, should now be their leader as king.

We have seen this before in the case of Barack Obama. A slender, black male state senator from a mid-West state delivers a speech at the Democratic National Convention and a compelling narrative about the son of a white Kansas woman and a black man from East Africa is launched.  Arguably, Obama had done nothing of heroic note leading up to the moment of his speech. Why was his story any more compelling than say an Iraq war veteran or a single mother who went to school at night, got a law degree, and started an advocacy program for poor people?

What matters is that the real audience, the audience of initial decision makers determines which story can be sold to the widest audience possible.

What is the narrative?

I mentioned before that the narrative should create a comfort zone for the mass audience so that they proceed through life with less uncertainty.  The real goal of the narrative should be to muster up support for the leader that has already been chosen by an inner circle.  The choice still has to be sold to the masses, even though in the case of “Game of Thrones” the notion of democracy, that the masses would choose the new king, was laughed at.

So, how should the narrative sound or look?  It should be one that the masses find they can relate to.  In the case of Bran Stark, they saw a boy who was broken physically, but was able to transcend his disability.  A “rise from the ashes” story would be significant to the people of King’s Landing given the destruction of the city and the slaughter of the residents that they endured.  The goal for the ruler or potential ruler, however, is not to create a world of certainty from which his subjects can operate.  That’s merely the cost of achieving the real goal: to transfer and maintain power in the hands of a ruler or potential ruler.

This point was lost on the show’s viewers and is definitely lost on the American electorate.  Political narratives are about power.  Nothing more, nothing less. The narrative should not provide for a “happy ending” wrapped in a red bow for the masses or the electorate. There is only one end game for an effective narrative: the acquisition and maintenance of power.

Conclusion: The transition to a new narrative is always noisy …

In the end of last night’s episode, we saw governance returning to normal.  The ruling council discussed filling vacancies, ensuring clean water for the people, and paying off government debts. No matter who sat at on the ruling council, the business of public administration, public policy, and power remained the same.  Only the narrative regarding who held power and why had changed.  Everything else, the game, the battle, was and is merely noise.

 

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Nadler’s implication that the Congress is supreme to the Executive should wake black voters up

The eye-catcher …

The chairman of the U.S. House Committee on the Judiciary, Jerrold Nadler (D-NY), yesterday took the Trump Administration to task by threatening to find Attorney General William Barr in contempt of the House for failing to make available an unredacted copy of the Special Counsel Robert Mueller’s report which documents his findings on the issues of whether the Trump campaign coordinated with the Russian government to defeat Hillary Clinton in the November 2016 general elections and whether the Trump Administration obstructed justice during the investigation into collusion.

“We’ve talked for a long time about approaching a constitutional crisis.  We are now in it.”, Mr. Nadler told reporters yesterday.  He added that this is “a time of testing whether we can keep a republic or whether the republic is destined to change into a different, more tyrannical form of government as other republics have over the centuries.”

Mr. Nadler’s launch into the demise of the American republic was further aggravated by President Trump’s assertion of executive privilege in determining to not release an unredacted report.

This led me to ask myself whether Mr. Nadler was indeed forecasting an eminent downfall or merely creating optics for votes.  Can the holding back of documents based on a claim of executive privilege really lead to a “constitutional crisis”?

Just what is a republic?

Black’s Law Dictionary defines republic as:

“A commonwealth; that form of government in which the administration of affairs is open to all the citizens.  In another sense, it signifies the state, independently of its form of government.”

Again, according to Black’s Law Dictionary, republican government itself is a government “of the people; a government by representatives chosen by the people.” The U.S. Supreme Court in In re Duncan, 139 US 449 (1891), provides a robust explanation of republic, holding that:

“… a distinguishing feature of the republican form of government is the right of the people to choose their own officers for governmental administration, and pass their own laws in virtue of the legislative power reposed in representative bodies, whose legitimate acts may be said to be those of the people themselves; but while the people are thus the source of political power, their governments, national and state, have been limited by written constitutions, and they have themselves thereby set bounds to their own power as against the sudden impulses of mere majorities.”

In short, a republic is a state in which supreme power is held by the people and their elected representatives, and which has an elected or nominated president rather than a monarch.

In re Duncan goes on to explain how this supreme power is exercised by the people, again holding that:

” … the people are the source of all political power, but that, as the exercise of governmental powers immediately by the people themselves is impracticable, they must be exercised by representatives of the people …”

So are the branches unequal after all?

If Mr. Nadler’s statement on the the existential threat to the American constitutional framework is taken on face value, then one could argue that challenging Mr. Trump’s assertion of executive privilege is just as much or more about reasserting the supremacy of the Legislative branch as it is about simply removing Mr. Trump via impeachment.  The more senior members of the House have been making some attempt at tempering the calls for impeachment made from its newest members.

Asserting House supremacy by quashing the power of executive privilege may be considered a secure and longer term play than pursuing an impeachment process that will not go anywhere in the Senate, should the House pass any articles of impeachment.

The Framers of the American constitution, though wary of factionalism, might have been pleased at how the Democrats are pursuing House supremacy.  James Madison, in his essay, The Federalist No. 48, implies that the Legislative branch is the superior branch.  For example:

“As the legislative department alone has access to the pockets of the people, and has in some Constitutions full discretion, and in all, a prevailing influence over the pecuniary rewards of those who fill the other departments, a dependence is thus created in the latter, which gives still greater facility to encroachments of the former.”

On other words, power lies in the hands that hold the purse strings no matter how much the Congress needs the departments of the Executive to carry out policy.  No money. No policy.

Regarding Congress’ ability to encroach on the powers of the other two branches:

“The legislative department derives a superiority in our governments from other circumstances.  Its constitutional powers being at once more extensive and less susceptible of precise limits, it can with the greater facility, mask under complicated and indirect measures, the encroachments which it makes on the co-ordinate departments.”

Congress can mask its encroachments, according to Madison, although President Trump may be viewing Congress’ subpoena actions and threats of impeachment as obvious incursions into his White House.

Should Blacks in Congress focus less on Trump or any other president?

Right after the mid-term election in 2018, political analyst Greg Weiner wrote an article for The New York Times analyzing and commenting on the best approach the Democrats should take given their newly won majority in the House.  Mr. Weiner was concerned that the Democrats would focus too much on investigating Donald Trump and less on its primary duty which, in his opinion, is to legislate.  Congress, according to Mr. Weiner, should be focusing on reversing the trend of decades-long abrogation of power and focusing less on the president as “be-all and end-all of American politics.”

With over 50 voting members in Congress, Black American lawmakers appear to be in a position to assert some leadership in attempts to reinstate Congress’ position as the supreme branch of government. With over 40 votes in the House, Black lawmakers should, instead of giving the appearance as a ready block of Democratic voters, leverage their block to get support for bills that they have written or support bills written by non-Black congressman that generate some benefits for Black constituency.

Impeaching Donald Trump is not going to garner and distribute more public capital to Black businesses or fund re-education programs for individuals being forced out of jobs due to coming automation.  Yet, Black congressional leaders such as Representatives Elijah Cummings, Democrat of Maryland; Maxine Waters, Democrat of California; and Al Green, Democrat of Texas, seem to have getting the president as their primary goal.

Conclusion

In a representative republic where its constitution is designed to provide the Legislature with government supremacy, the focus of Congress’ Black members should be on legislation and policy making that benefits Black constituents.  Black lawmakers make up a considerable voting block that should be leveraged to this end.

 

Newt Gingrich, 5G, China, and Capital: Nationalist policy doesn’t contribute to long-run Black community sustainability in the long run.

The Eye Catcher …

In an opinion piece posted earlier today, former Speaker of the U.S. House of Representatives, Newt Gingrich (R-Georgia), proposed that the U.S. government provide for a national 5G wholesale network, constructed by a private party. The network would be “carrier-neutral”, according to Mr. Gingrich, and help the U.S. beat China in the race for 5G wireless dominance.

Mr. Gingrich and the Trump Administration are concerned that China through state-subsidized firms such as Huawei and ZTE will be able to continually extend their smartphone and telecommunications manufacturing ability globally.

Mr. Gingrich sees a number of benefits flowing to America as a result of a nationalized 5G network, including the spurring of microelectronics manufacturing; accelerated deployment of next-generation networks; and the demonstration that China’s dominance in 5G is not a foregone conclusion.

It amounts to a nationalism play … that benefits capital

Based on his article, Mr. Gingrich would like to see a national 5G network in place so that telecommunications device and hardware makers can test drive new offerings.  If Huawei, ZTE, or other Chinese firms can get their product to global markets first, the United States will be in a hard place competition wise, trying to put 5G technology in the markets of multiple countries that may not have a problem with ZTE’s relatively inexpensive Android phones, subsidized, in part, by the Chinese government.

The above point is made in an article by Vlad Savov in The Verge.  Citing data from Canalys, a market analysis firm, Mr. Savov describes Europe as a market ready for price competitive wireless products offered by Huawei and sister Chinese firms Oppo and Xiaomi.  The political antipathy held by the United States toward China is not apparent in Europe with roughly 32% of smartphone shipments to Europe coming from Chinese firms.

But let’s suppose that a nationalized 5G network was built in the U.S. Who would gain the most from Mr. Gingrich’s proposal? I believe the greatest benefit would go to the wealthy, primarily those holding shares in telecommunications companies, other internet core companies, and internet edge companies.  A significant number of Blacks would not see the spoils that would flow to shareholders.  The vast majority of Blacks do not own stocks directly.

According to 2002 data by the Social Security Administration, the percentage of Blacks owning stocks directly was approximately nine percent compared to 36% of whites.  By 2014, the percentage of Blacks owning stocks had fallen.  According to data collected by the United States Census Bureau, approximately 5.2% of Blacks owned stocks or mutual fund shares.

Reduced access to components means greater difficulty for Black communities to innovate …

Google Fiber has been in Atlanta for a few years now, but they never deployed in my neighborhood which has a high Black population. Atlanta has its share of Black engineers as well as a few Black entertainers, businessmen, and investors capable of developing and deploying innovative communications technology.  Ideally, Black communities like those in Atlanta should be designing their own technologies, especially given their access to local teaching and research universities.  But if a nationalist policy toward Chinese telecommunications manufacturers limits access to affordable devices and hardware, that would only put a strain on Black community capacity to be resilient, self-sufficient, and sustainable.

Conclusion …

With all the talk of the negative impact of the digital divide on the Black urban community, “telecommunications nationalism” does not serve Black people well. Telecommunications nationalism does not send more capital to Black communities and does not facilitate technological sustainability.  It is not a policy that Blacks should get on board with.

 

Gentrification is white nationalism that may be vanquished by monetary and fiscal policy

The Eye Catcher …

This morning I listened a bit to an interview conducted on C-SPAN’s Washington Journal with Kristen Clarke, president and executive director of Lawyers’ Committee for Civil Rights Under Law.  Ms. Clarke’s purpose for appearing on the show was to discuss the rise in white nationalism in the United States.  As I listened to the discussion I found no new foundation for Ms. Clarke’s concern.  The concerns regarding white nationalism, as expressed by Ms. Clarke and other civil rights advocates, have always come from a place of fear, pain, and suffering: the fear of physical violence perpetrated by a racial majority on a racial minority; the pain of past and perceived current wrongs; and the suffering endured as a result of discriminatory practices in housing, financial services, the labor markets, and the legal system.

Another eye catcher was the diverse group of constituents Ms. Clarke’s organization represents.  About 25 years ago, I visited a friend who worked for Lawyers’ Committee.  She proudly showed me around the office, sharing a little of the history of the organization’s founding; sharing with me that its roots stemmed back to a civil rights initiative by the late President John F. Kennedy to strengthen the legal protections for black people.  That initiative seems to have changed and all for the worse for blacks.

Today, the Committee’s agenda seems to have expanded.  Their agenda has broadened to include every group under the sun that claims to be marginalized: white women, the LGBTQ community, Asians, etc.  I would hazard an ironic guess that if you looked at the wealth accumulated by each of these groups in comparison to blacks that blacks would still be on the bottom of the totem poll.

When this expanded agenda combines with the factors of fear, pain, and suffering, they create a weak platform from which to launch any initiative toward black empowerment.  The platform is weak because of the limits it places on blacks. Fear does not embolden. It causes you to hesitate.  Worse, it may cause you to rely on others, particularly those others who claim that they, too, suffer from inequality, but whose agenda, history, and lineage differ from yours so drastically that when they, these other groups, see progress, they will quickly abandon you.

Most times I believe this “We are in the same boat” argument is nothing but a delay tactic, keeping the weaker group distracted long enough until the weaker group is not even left with crumbs.

Blacks are too easily distracted by emotional buzzwords ….

Groups like the Lawyers’ Committee, National Urban League, and the National Association for the Advancement of Colored People have played expertly on the fear, pain, and suffering of the black community.  They have defined “white nationalism” in emotion-invoking terms, where minorities are expected to shudder in the face of hateful language or crime.

It is expected that threats of physical harm would invoke fear, but what social justice organizations and white liberals fail to accept is that blacks can effectively defend themselves against white nationalism, and that the United States was founded on the principle of acquisition by discovery where European philosophy was deemed so superior that indigenous tribes in North America could be cleared away like so much brush.  White nationalism is global and has been handed down over the last 520 years from the original European settlers of North America to their descendants via various institutions that create the platform for this current political economy.

Yes, white nationalism is about members of the “white race” asserting their dominion over a particular political and geographical space.  But if this behavior is so offensive to blacks to where changes in that behavior is requested, then becoming emotional about whites yelling hateful words and expressing a desire for a “whites only” country won’t get blacks very far.  It is time for blacks to apply critical thinking and develop and promote legal and public policy frameworks for addressing white nationalism.

Gentrification is white nationalism …

One form of white nationalism that Blacks can cut their teeth on is the concept of gentrification.  Gentrification is more than just whites and other non-blacks moving into formerly black neighborhoods.  Gentrification is the result of favorable monetary policy that has driven down interest rates making cheap credit available while increasing the value assets such that these assets support the issue of new debt.  Rising home values and the increased down payments required for mortgages squeeze blacks out of home ownership.  The result is the creation of an environment where whites can leverage cheap capital to increase wealth through property ownership while blacks are forced, via higher property values, rents, and property taxes, to move out.

Toward a legal framework to battle poor monetary policy … 

Rather than having existing black members of Congress lead fruitless emotional belly-ache charges in the media about affordable housing, private citizens should explore and initiate where feasible the legal action necessary for modifying how the Federal Reserve, the Congress, and the Executive are regulating the economy.

For example, the Full Employment Act of 1946 as amended by the Humphrey Hawkins Act of 1978 places the responsibility of managing the American political economy in the hands of the Federal Reserve, the President, and the Congress.  Are these institutions meeting their goals pursuant to the Act? Have fiscal and monetary policy as implemented by the Federal Reserve, the President, and the Congress resulted in increased burden on black citizens?  Should there be remedies?

Conclusion: It will take bravery …

The current initiatives by so called civil rights groups are not aggressive enough.  They are driven by emotion and aim more for symbolism than substantive results.  A more robust legal approach to wealth creation is necessary if blacks are to carve out a sustainable economic niche in America.

 

 

Blacks need a new political law game

The political battle between the Executive and the Congress has been intense to say the least over the last twenty-seven months since Donald Trump took office.  With post-Mueller report hearings ramping up next week, the saga only promises to continue way into campaign season.

My friends and family have expressed varying degrees of interest, with a significant number of opinions fueled more by emotion and less by critical thinking.  For example, the constant reference to “collusion”, a term that has no legal meaning, is disconcerting because it provides an example of how people are ignoring the particulars (even when readily available for examination) and rolling with the globs of misinformation thrown onto the plate most times by the mainstream media.

Black congressional leadership wasting political power …

What should also be disturbing is how two of the highest ranking blacks in the Congress, Maxine Waters and Elijah Cummings, are spearheading the charge in the impeachment debate.  Their distaste for the sitting president is evident, but what is less evident is how the use of a potent political law instrument as impeachment is supposed to translate into any increase in political power, wealth, or capital for black people.

If anything, House Speaker Nancy Pelosi has expressed caution about pursuing impeachment, appreciating the argument from some inside her party that pursuing impeachment could have a negative impact on the Democrats’ ability to oust Donald Trump from the Oval Office in November 2020.  Mrs. Pelosi’s hesitancy on impeachment should have provided Ms. Waters and Mr. Cummings an opening to show leadership and go against the impeachment grain, not because it would be in line with Speaker Pelosi’s sentiment, but as a signal that the energy expenditure behind impeachment does nothing for their prime constituency: black people.

When you are marginalized, you agitate …

With at least 51 voting members in the U.S. House, blacks in the Congress are in a position to be the pivotal swing vote on a number of issues including impeachment. Numerically, black members of the House, where articles of impeachment would originate, could clog the wheel by holding back approximately 20% of the Democratic vote.  With this leverage, black congressmen could attempt concessions from either the House leadership or from President Trump, though it is less likely that the black caucus would try to negotiate with the President for fear of becoming a pariah in the Democratic Party.

Therein lies a telling dilemma. If the premier block of black congressmen cannot leverage numerical strength without fear of reprisal, what good is their strength?  Another irony is that for a group of congressman that represent a marginalized group, their fear of marginalization within Congress does not put them in a position to do more for their black constituents.

Maybe the answer is to stay outside the box …

On the other hand, maybe blacks, particularly those who embrace their status as marginalized, need an approach to political law that allows them to carve out their own independent niche; one that unapologetically finds the seams or openings in the political economy in order to access capital or create substantive platforms for constructing true communities. Current black leadership is too afraid to do that.

Congress hasn’t determined the artificial intelligence behavior it wants to regulate

Congress’ attempt at AI legislation

The 116th Congress has three bills or resolutions of note sitting in a number of committees that attempt to address the use of artificial intelligence in American society.  H.Res. 153 is intended to support the development of guidelines for the ethical development of artificial intelligence.

Meanwhile,  HR 2202 seeks to establish a coordinated Federal initiative to accelerate artificial intelligence research and development of the economic and national security of the United States, while H.R. 827 is concerned about training and retraining workers facing employment disruption by artificial intelligence.

The bills and resolution are more exploratory versus regulatory in nature.  They don’t expressly get at any behavior that needs to be regulated.  The nascent characteristic of artificial intelligence development along with government’s inability to keep regulation at the same pace as technology development may be in part the reason for the “let’s see what we have here” stance of early regulation.  In other words, Congress may just be getting a feel for what AI is while taking care not to interfere with the innovation needed to further develop the technology.

On the other hand, these bills could help Congress get ahead of the issue of labor disruption. Workers read about AI’s capacity to replace jobs that are more pedestrian or mundane; jobs currently occupied by lower income workers.  The prediction about labor disruption won’t leave certain higher-waged jobs untouched either as AI platforms, data mining, and machine learning threaten professions such as accounting or law.  By determining the data needed to thoroughly analyze the impact and growth of artificial intelligence; identifying the industries that will benefit most from or be harmed the most by AI; and comparing today’s existing job skills with the job skills that will be needed in order to work alongside AI, Congress contribute to alleviating labor force disruption.

The Human-Machine Relationship

Unlike a number of dire predictions of the emergence of “SkyNet” and terminator-like machines subjecting humans to slavery or worse, most analysts and commentators see AI as a tool that augments human capabilities, making humans better or more productive.  The emphasis will be on collaborative intelligence, with human and machine working together.  And how well that relationship works depends on how well humans program the machine.

Another consideration is artificial intelligence’s ability to self improve.  The goal of AI development is to build an artificial intelligent agent that can build another AI agent, preferably with even greater capabilities.  The vision is to move from AI’s narrow, single-task capabilities to a more general AI, a concept that sees AI exhibiting greater abilities across multiple tasks, much like humans.

Possible targets of legislation or regulation

If legislation or regulation is to target the machine-human relationship, elected officials and regulatory heads will have to consider their policy initiatives impact on:

  • the ability of humans to train machines;
  • the ability of humans to explain AI outcomes;
  • the ability of machines to amplify human cognitive skills;
  • the ability of machines to embody the the human skills necessary that lead to the extension of human physical capabilities;
  • the ability of artificial intelligence to self-improve;
  • the difference between “safe” AI (the ability to maintain consistency in AI outcomes) versus “ethical” AI (ensuring that AI platforms are not a threat to human life.

Conclusion

Just like the application of artificial intelligence, Congress’ foray into regulation of AI is nascent.  This is the time for AI’s stakeholders to either begin or maintain efforts to influence all levels of government on AI’s use in the commercial sector.

 

Could Trump’s request for less NIST funding be turned into another political football?

Overview

This morning the U.S. House Committee on Science, Space, and Technology Subcommittee on Research and Technology held a hearing to consider the Fiscal Year 2020 budget request of the National Institute of Standards and Technology. NIST’s published mission is “to promote U.S. innovation and competitiveness by advancing measurement science, standards and technology in ways that enhance economic security and improve our quality of life.”  The agency provides measurements, standards, and reference materials for the technology behind a range of products and services, including computers, GPS systems, cellphones, and automobiles.

Leading Democrats Didn’t Share Too Much Concern About Artificial Intelligence 

Based on the opening statement of the chairman of the House Committee on Science, Space, and Technology, Eddie Bernice Johnson, Democrat of Texas, the primary concern of the Democrats appears to be the impact last year’s shutdown had on NIST research and staffing and how the proposed reductions would compound the problem of reduced research output combined with a reduction in staff.

House Subcommittee on Research and Technology chairman Haley Stevens appeared to emphasize the defunding of programs that support the manufacturing sector and also expressed her concerns about the potential of 400 staffers being let go from the agency.

Both Chairman Johnson and Chairman Stevens provided more of a passing reference to artificial intelligence and advanced communication, observations that don’t appear commensurate with the proposed reductions the areas of advanced communications, networks, and data systems.

The Administration’s proposed cuts in advanced communications, networks, and data systems are severe.  The Administration wants to reduce spending in this area by 41.4%, from $68.6 million in FY 2018 and FY 2019 to $40.2 million in FY 2020.  While NIST director, Dr. Walter Copan, explained that there would be a $8 million increase in spending in the area artificial intelligence, he could not provide, during his testimony, the specific methodology leading to the Administration’s proposed overall reductions for artificial intelligence and advanced communications.

What Messages Are Being Sent?

From the Trump Administration’s end, the message appears to be the hope that NIST’s attempts to coordinate research initiatives between the private sector, public sector, and academia will make up for the reduced contribution by the federal government to research.

Congressional Democrats may see the Administration’s proposal as an opportunity to portray funding reductions as a threat to America’s economic growth. The President’s budget may give them the opportunity to make an argument that Mr Trump is continuing his shutdown of the government with this request and again risking the creation of a negative impact on the economy.

Congressional Republicans may have their bluff called on how dedicated they are to economic growth. Supporting the President’s proposed reductions may be seen as in direct conflict with their economic growth narrative. How can the Republicans support infrastructure development and investment while cutting of a conduit for development and investment?

On the other hand, Congressional Republicans could turn this into an opportunity to push back on their party’s leader, just enough to show a little independence from the White House.

In the end, Congress controls the purse strings and could present a budget in the fall that invests more in the NIST than the President is requesting.

Capital. The true digital divide

A couple early morning thoughts on the digital divide.  So far the digital divide narrative has occupied two schools of thought that are not necessarily opposed to each other.

Race and the Digital Divide

The first school of thought revolves around race.  Given that within the black American community there is a higher level of poor households, affordability is keeping blacks from accessing the internet via high-speed broadband infrastructure.  If blacks do not have the income to sustain a broadband business model, then internet access providers are less likely to deploy facilities in poor neighborhoods.  Lack of deployment in these neighborhoods may result in a barrier to valuable information that may lead to greater economic opportunities, according to advocates seeking to close this gap.

Rural Communities and the Digital Divide

The second school of thought revolves around rural communities.  The argument is that lower population density as compared to urban areas makes deploying broadband access facilities in rural areas more expensive.  In addition, terrain, such as that faced by internet access providers in mountain states, has traditionally added to the problem of higher costs to provide broadband access facilities.

An Overlooked Divide

There is another divide, one that is often overlooked and it has to go to what is known as “first-mover advantage.” The real value generated by the internet is the ability to extract, analyze, package, and distribute information, and have that information be available digitally forever.  The focus on a gap between facilities deployed in black neighborhoods versus facilities deployed in white neighborhoods or the gap between rural community deployment versus urban community deployment goes to seeking out new suppliers of information.  The civil right veneer that has been placed over the broadband racial divide hides this supply-side characteristic from the policy debate.  It has also created the opportunity for the political left to craft an electoral package that can be sold to voters.

It is the other side of the equation, the production side, that, in my opinion holds more value.  When we look at the history of the internet, particularly the period when the internet was commercialized, its players included white venture capitalists; Web 1.0 internet service providers, i.e. AOL, CompuServ, Mindspring, etc.; and dial-up access providers such as BellSouth.

Black Americans could always access information from analog sources, i.e. television; print media; or word of mouth, but the efficient extraction, cataloging,  indexing, aggregation, and distribution of information via the internet were the domain of companies invested in and managed by whites.  As whites continued to level their first-mover advantage, this gap between producer/owner of capital and consumer continued to grow.

Capital not only seeks a vacuum, it also seeks a return.  Returns from investing in black or even rural communities were not going to be as high as returns invested in affluent neighborhoods, neighborhoods whose residents probably owned shares in the very companies that commercialized the internet in the first place.  Closing the “digital divide” means first closing the capital divide.

What will Government Do Next?

Government will do nothing from a capital perspective to close the digital divide. The Federal Communications Commission has a number of universal service funding initiatives designed to encourage mobile and fixed broadband deployment in rural areas; to facilitate the delivery of health care via broadband; and to reduce the costs incurred by low-income consumers for accessing and maintaining high-speed broadband service.  By subsidizing the consumer demand for broadband services, the Commission hopes to encourage the delivery of broadband services.  But again, the focus is on consumer demand, not bridging the capital gap.

The philosophical underpinnings of the American economy, where capital is to flow freely to its best use may prohibit government from taking any concrete action for closing a capital gap.  If blacks or rural residents had sufficient capital to purchase, construct, or maintain broadband access facilities, using their intimate knowledge of their communities to distribute services, we might see a decrease in the gap.  We should expect that government will stay on a path of incentivizing capital investment in infrastructure development versus trying to repair capital discrepancies via a capital transfer.

Elizabeth Warren’s anti-trust approach to internet companies disregards the autonomy of making a market

Last March, U.S. Senator Elizabeth Warren, Democrat of Massachusetts, made an argument for dismantling three of the internet’s biggest portal companies: Amazon, Facebook, and Google. Ms. Warren asserts that these companies have too much power over the private lives of Americans as well as over the economy.  Through their economic and political behavior, Amazon, Facebook, and Google have, according to Ms. Warren, have stifled the ability of smaller players to enter and innovate in the internet markets.

Elizabeth Warren’s Argument

Ms. Warren asserts that Amazon, Facebook, and Google use two strategies to create dominance on the internet.  The first strategy is the use of mergers by large internet portals to effectively eliminate competition.  Under this strategy, Amazon, Facebook, and Google buy out their competition, at times, according to Ms. Warren, at a discounted price.

The second strategy used by internet portals is to create proprietary marketplaces to limit or eliminate competition.  Under this scenario, a portal like Amazon creates a competitive product for sale on its website and uses its scale to price out a competitive product that is also offered for sale on Amazon’s website.

Ms. Warren believes this dominance can be addressed by by taking two steps.  First, portals such as Amazon, Facebook, and Google would be designated as platform utilities.  This means that Facebook would have to divest itself of a service provider that competes with other service providers that use Facebook’s platform to connect to its consumers.

The Problem with Ms Warren’s Approach

Ms. Warren’s approach is similar to the regulatory approach used in the 1990s where local telephone companies that wanted to provide toll services beyond their local areas had to set up separate subsidiaries.  The two differences between the telecom scenario of the 1990s and Ms. Warren’s platform utility model is that telecoms didn’t have to divest these companies, but operated them separately.

More important, these telecom companies were still utilities exercising monopoly control of local service areas.  Until 1996, their local rates were still regulated and they still needed permission to add certain local services.  Their monopoly power resulted from the inefficiencies that would occur from multiple firms trying to provide the same telecommunications services in limited geographic space. Monopoly power granted by the state to these firms was the response by the State to the problems occurring from congestion.

The Open Internet Eliminates Monopoly Power

Amazon, Facebook, and Google, for all their dominance in the e-commerce space operate in the open internet.  In the open internet, any firm or other association of individuals with the right search algorithms, expert technical knowledge, and adequate capital, can set up servers almost anywhere in the world, and start a competing service or carve out a niche portal service.  The internet’s technical openness is rivaled only by its global nature.  Amazon, Facebook, Google may be dominant in the American e-commerce market, but constant regulatory threats by the European Union and hostility to them from China reduces their perceived dominance.  Ms. Warren has not shown how these firms can dominate a global network of 100,000 interconnected computers that operate on an open architecture.

Internet Portals are Not Utilities

It should also be mentioned that the internet itself is not a utility.  In 2015, Federal Communications Commission member Michael O’Rielly made this point during a speech.  Mr. O’Rielly said the following:

“It is important to note that Internet access is not a necessity in the day-to-day lives of Americans and doesn’t even come close to the threshold to be considered a basic human right. … People do a disservice by overstating its relevancy or stature in people’s lives. People can and do live without Internet access, and many lead very successful lives.  It is even more ludicrous to compare Internet access to a basic human right. In fact, it is quite demeaning to do so in my opinion.”

When we think of utilities, we think of monopolies that, due to their efficient delivery of vital services such as water and energy, are granted an exclusive market within which to provide those services.  As alluded to earlier, because of the open nature of the internet and its global reach, it is near impossible for one firm to have an exclusive market, unless a government decides to grant it, and that move would be irrational because government exclusivity would block the very cross-border data flows facilitated by an open internet.

Acquisition of Apps and Brick and Mortar Stores by an Internet Portal Does Not Create Monopolies

The second step Ms. Warren would take to squelch internet portal dominance would be to designate regulators that would prevent Amazon, Facebook, or Google from merging with other firms and thus eliminating competition.  She provides a couple examples: Facebook and WhatsApp; Google and Waze; Amazon and Whole Foods.  There are two problems with her examples and the conclusion that these “mergers” are not competitive.

First, these were not mergers but acquisitions. Two information portals, Facebook and Google, acquired two information assets.  Given the services these assets provide, Facebook and Google made the business judgment that adding these services to their portfolios made sense from a services and revenue perspective.  Amazon, first and foremost an online retailer, added a retail food service from which Amazon’s subscribers could purchase groceries at a discount.

Ms. Warren failed to argue how Facebook’s ownership of a messaging service keeps other firms from developing their own messaging service.  She failed to explain how Google’s acquisition of Waze keeps other technology firms from creating an app that provides drivers with directions. Ms. Warren also fails to show how Amazon is keeping, say Kroger, from creating its own grocery delivery service.

It would be one thing to say that these firms monopolized physical infrastructure to the point where other firms would see increasing costs of entry, but the internet’s openness, combined with access to technical talent and expertise and cheap capital means that the assets purchased by Amazon, Facebook, and Google are themselves subject to competition.

Conclusion: Internet Openness and its Global Nature Keeps Monopoly Power in Check

The open and global nature of the internet combined with access to expertise, talent, and cheap capital works to mitigate monopoly behavior.  As technology evolves and entrepreneurs innovate, the services rivaling WhatsApp, Waze, or even Facebook will emerge.  Given the current make-up of the Congress and the low probability of Elizabeth Warren winning the Democratic nomination, the likelihood of her proposals being enacted via law or administrative fiat is close to zero. This does not mean that internet portals concerned about this type of overreach should stay less than vigilant in preparing to push back against them.

As machines become self-aware, will they need privacy law?

As machines become self aware, will they need legal protection? Maybe the question is a bit too far ahead, but discussions regarding artificial intelligence and machine learning had me contemplating the relationship between man and machine thirty or fifty years from now. At this stage I have admittedly more questions than answers but that is what exploration is all about. Given my interest in what I term pure digital information trade where machines are collecting, analyzing, and trading data and information among themselves without human intervention, and the potential for machines to become sentient, I am considering what the legal relationship will be between man and machine. Will man consider the self aware machine an “equal” in terms of sentient rights or will the machine continue to be what it is today: a tool and a piece of property?

What do we mean by “sentient?”

Sentient, according to Webster’s New World Dictionary, is defined as “of or capable of perception; conscious. To be conscious is to have an awareness of oneself as a thinking being. As thinking beings we formulate ideas or thoughts and either act on them or exchange the ideas and thoughts with others through some communications medium. Can machines do this? No.

Machines are not aware of themselves. They can only take commands; follow their programming; respond to patterns. Their creator and programmer, man, does not even have a full understanding of the human brain, currently the only place where consciousness resides. Without an understanding of the brain and the consciousness it generates, replicating consciousness within a machine would be impossible.

But if machines became sentient ….

By 2020, futurist and inventor Ray Kurzweil believes that we will have computers that emulate the brain and by 2029 the brain will be “reversed engineered”; with all areas mapped and copied so that the “software” necessary for emulating all portions of the brain can be produced. In addition, Mr. Kurzweil believes that as information technology grows exponentially, machines will be able to improve on their own software design and that by 2045 the intelligence of machines will be so advanced that technology will have achieved a condition he calls “singularity.”

But if this singularity is achieved; if this state of self-recursive improvement is achieved, where a machine is able to examine itself and recognize ways to improve its design; to improve upon itself, then how should humans treat the machine at that point?

Since my interest is in pure digital data trade markets, I would like to know how humans will treat machines capable of interconnecting with each other over the internet and exchanging machine-generated information and value without human intervention? Will they receive the same level of privacy humans today seek regarding their personal data? Given the exponential growth Mr. Kurzweil references, will privacy law even matter to a sentient machine capable, probably, of outperforming the technology of the State? What type of regulatory scheme might government create in order to mitigate this scenario?

The year 2045 is only around the corner….