Facebook the Common Carrier

A couple weeks after Mark Zuckerberg made his appearance before Congress to describe the privacy practices and overall business model of Facebook, two media personalities, Lynette Hardaway and Rochelle Richardson, appeared before the House judiciary committee to describe the discriminatory treatment they were allegedly receiving from Facebook. The two women, known as “Diamond and Silk” to their fans, argued that Facebook intentionally changed their algorithms to keep their conservative political viewpoints from appearing in the news feeds of their followers on the social media platform.

The hearing provided heated exchanges between the two Trump-adoring personalities and congressmen sitting on the left of the political spectrum. Engagement between Diamond and Silk and two congressmen in particular, Barbara Jordan Lee, Democrat of Texas, and Hank Johnson, Democrat of Georgia, caught my attention for the heat it generated in the hearing room.

Mr Johnson took issue at first with the subject matter of the entire hearing, driving home his point that the committee would best spend its time focusing on the investigation into alleged Russian meddling in the November 2016 elections or Mr Trump’s purported attempts to remove Robert Mueller from the election tampering investigation.  He then proceeded to disparage the credibility of Diamond and Silk by asking repeatedly whether or not they were paid by the Trump campaign. After the second or third time Diamond and Silk answered “no”, the congressman should have moved on but he kept asking the same question and brought back the same taint of ridiculousness he managed to pour on himself when failing in 2010 to articulate a simple concept of overpopulation of the island of Guam by projecting that the island would “capsize” if additional American military personnel were stationed there.

Ms Lee didn’t much better in the get it together department when she gave up two minutes of her time to introduce two kids visiting congress during bring your offspring to work day and tried to get time back in order to keep up an attack using vague questions about the timing of communications between Diamond and Silk and Facebook. Ms Lee also repeatedly asked Diamond and Silk if they had received payment from the Trump campaign. After answering no at least three times, Ms Lee just kept asking the same question. By this time Louis Gohmert, Republican of Texas, dropped the gavel repeatedly letting his home girl know that question time was over.

The only saving grace during the questioning of Diamond and Silk came from Steve King, Republican of Iowa. In his questioning he alluded to similarity between Facebook and FedEx, where, like FedEx, Facebook promises to deliver a message from user to follower. If the company is preventing those messages from being received then they may be discriminating.

Facebook prefers to describe itself as a digital commune where the world connects over a bottle of Coke, a smile, and a blunt. As a user, I look at Facebook as an entertainment medium and a channel for my blog. But, over a Coke and a smile sans blunt I can also see why it could be called a common carrier.

Roger LeRoy Miller and Gaylord A. Jentz define a common carrier as a transportation service publicly licensed to provide transportation services to the general public. A common carrier must arrange carriage for all who apply, within certain limitations. The delivery of goods to a common carrier creates a bailment relationship between the shipper and the common carrier.

A bailment is a situation in which the personal property of one person (the bailor) is entrusted to another (the bailee), who is obligated to return the bailed property to the bailor or dispose of it as directed.

The common carrier’s standard of care over the received goods is based on strict liability. This means that the carrier is absolutely responsible for damage to the property in its possession with the exception of five common law exceptions:

  1. An act of God.
  2. An act of a public enemy.
  3. An order of a public authority.
  4. An act of the shipper.
  5. The inherent nature of the goods.

Calling Facebook a common carrier could raise the issue of lost profit. Diamond and Silk could claim lost profits from Facebook’s failure to deliver their messages to their followers. Diamond and Silk would have to provide evidence that the messages are being delivered for the purpose of making money and not just the expression of an opinion. Diamond and Silk would also have to provide evidence that a clear communication of profit motive was given to Facebook and that Facebook understood that communication.

Facebook’s net neutrality posse never had this scenario in mind when they pushed for more regulation of internet freedom via the imposition of net neutrality rules based on a telephone statute passed in 1934. Nor did they foresee the very openness on the internet they advocate for would lead to third-party abuses from violating user privacy to one nation-state upsetting the elections of another nation-state in cyberspace. Unfortunately, to keep Facebook in line with its commercial users’ expectations, common carrier treatment of Facebook may be an option.

 

Is broadband access less about connectivity and more about individuality?

My sister recently experimented with Whole Foods‘ delivery service. As an Amazon Prime member, she could take advantage of no cost delivery to her home in the West End. This is a smart move on the part of Whole Foods to deliver to the West End, an area where the median household income is lower than the rest of Atlanta’s sectors. My observation has nothing to do with the wishful thinking that Whole Foods is practicing altruism, but the probability that Whole Foods is betting on the continued gentrification of the area; that it makes sense to plant a flag in the area so that when higher-income, cheap rent seeking young white couples move into the area, Whole Foods will be there to greet them. And while increasing the area’s investment value may not have been on the top of Whole Foods’ agenda, current property holders can at least tell their friends living in other areas of the city that they have not been left out of high-end food delivery options.

Going online and ordering your groceries is an example of what the long-term purpose of broadband connectivity is all about, especially for those with capital. If we accept the Facebook model of broadband and the internet, then we support the argument that broadband and the internet are about connecting people for the sake of creating a larger global community that leads to more democracy, peace, and understanding. This is one of the premises underlying net neutrality; the creation and maintenance of an open internet.  Two billion people connecting on Facebook may be deemed evidence that the globe is demanding this type of connectivity and community development on the world wide web, but such a view fails to account for the “politico-economic physics” of broadband and the internet. I believe the true value of broadband access lies in the empowerment that broadband access creates in the individual. The universe revolves around her and not the other way around.

The internet, at least for those with capital, is about bending the four-dimensional characteristics of space time and enhancing her sovereignty; creating a self-sufficient lifestyle for her. High value individuals don’t see the platforms upon which they move through space and time as flat or linear. The platform is geodesic; a curved line that provides the shortest distance between two points. In this case, between capital and the products and services that capital can acquire. The closer broadband technology brings her to sources of goods and services, the tighter her enclosure around her. She is not creating inclusiveness, or a bigger tent. In actuality, her tent becomes tighter, filled with other high value resources including friends and business associates. Creating a sovereignty blocks out the noise that the internet is becoming increasingly known for.

I would argue further that as her capital and value grows the more space-time bends around her. She creates a gravitational pull attracting even more resources, income, and opportunities. Those who argue for equality and democracy on the internet overlook this important value element. High value, capital holding consumers on the internet bend space-time toward them and high value content and service deliverers will point their commercial starships in the direction of high value.

How should policy react? It can either acknowledge the individual’s use of broadband to create a sovereign individual while transmitting her consumer energy into her tight commercial space or it can regulate her relationship with the points of commercial light within her internet space and risk forcing her to engage with value deficient “black holes” that threaten to reduce her incentive to engage in e-commerce or change her engagement in such a way that the value she receives and transmits is reduced. Policy should opt for protecting her choice for engaging with the value providers of her choice.

Should the Caribbean brace for a Federal Reserve rate hike? #Caribbean #trade

The Federal Reserve is expected to raise rates on its federal funds rate, the rate at which its member banks lend each other money overnight, at least three times during 2018. I see this move as having a potential negative impact on Caribbean immigrants here in the U.S. given their lower incomes relative to other immigrants and the U.S. overall, and the level of poverty among Caribbean immigrants. I see the Federal Reserve’s expected rate hikes having an impact on remittances as well because rate hikes, designed to control inflation could very well discourage employing Caribbean born labor.

The Federal Reserve has an overall positive outlook on the American economy. While growth is expected to continue, the central bank views the growth as fragile.

The Trump tax cuts are expected to provide the economy with an additional boost. The pay increases Americans are receiving as a result of the temporary cuts are expected to re-enter the economy in some form. Unemployment is at 4.1%, the textbook case for full employment, a point at which additional hiring and the resulting spending may create increases in prices for goods and services.

There is a 78% chance the central bank will raise intra-bank lending rates and in theory when this happens, the rates you pay for revolving loans and mortgages are expected to follow suit. On the other hand, the even with low unemployment, wage increases are expected to be sluggish.

Caribbean immigrants may bear a higher burden stemming from price increases versus other immigrants and the overall U.S. population. According to data from the Migration Policy Institute, twenty percent of Caribbean immigrants live in poverty compared to 19% of overall foreign born U.S. residents and 15% of the overall U.S. economy. Caribbean immigrant median income ($41,000) falls well below the overall U.S. median income ($55,000) as well as the median income of all immigrants ($49,000). Assuming Caribbean immigrants, like the overall U.S. population, has the bulk of its wealth in a house, poorer Caribbean immigrants will have less of a buffer protecting them from a credit-shortage induced recession.

As prices increase and access to credit is reduced due to rate increases, there may be a negative impact on the ability of Caribbean immigrants to send money back home as household budgets are reduced. Take for example remittances sent to St.Kitts-Nevis. According to data from The World Bank, remittances increased to $36 million in 2007 from $29 million in 2002.  Remittances climbed to $51 million in 2012, but have remained flat into 2017 where the amount of remittances was $53 million. All things being equal, interest rate increases could start sending these numbers in the opposite direction.

Rate increases could make importing products such as food and machinery more expensive for residents of St Kitts-Nevis or other Eastern Caribbean islands. In theory, a rate increase should depreciate the value of the U.S. dollar, making American imports cheaper. Some analysts would argue, however, that higher interest rates would make the American currency more valuable as foreign nationals seek higher yields on their capital and drive up demand for American currency. If the dollar becomes more expensive, the cost of purchasing could go up as well.

According to the U.S. Central Intelligence Agency’s World Factbook, 56.8% of St Kitts-Nevis’ imports come from the United States. As American goods become more expensive, St Kitts and other Caribbean countries that are heavily tourist dependent, may have to look for alternative and less expensive sources of food, a search that involves increased transactions costs or bite the bullet of increasing costs of American goods.

The average American’s opinion on #immigration doesn’t matter

I just finished reading an article in The New York Times concerning the minority view toward illegal immigration in the United States. The article describes the overall opposing attitude held by 10% to 25% of the American population toward foreign nationals who enter the United States without proper documentation. Included in this group of opponents are immigrants who entered the United States in full compliance with American law.

For most Americans today pushing back against illegal immigration, the argument, in my opinion, comes from a fear of cultural dilution. Liberal elites, in their advocacy for the continuance of the Deferred Action in Childhood Arrivals (DACA) are standing up for the immigrants that look more like Sofia Vergara. Those pushing back against DACA are fearful that America will be overrun, for example, by the darker skinned Garifuna or K’iche; by the immigrants that they see working blue collar labor jobs and living on Buford Highway in Dekalb County Georgia.

Most of America’s immigration history has been less about cultural integrity and more about economic necessity. America could not actualize its manifest destiny, its push to the Pacific and beyond without human capital. European monarchs issued charters to barons, lords, dukes, soldiers, explorers, and stock companies to explore North America and take possession of land by any means necessary.

Labor, whether slave, indentured, or voluntary, was brought to the Americas for the purpose of extracting resources and organizing those resources into product for sale and export. The goal was to generate returns from the land with proceeds going to the monarchs and later the nation-states in the form of taxes and to the the private parties lending to the government, in the form of bond coupon payments. Immigration is, for the most part, about contributing to the returns on America’s capital.

A public ignorant to how the American economy works should be silent on immigration policy.   Rather, the American public, especially those who occupy the middle strata, should occupy themselves with questions of relevancy in an emerging political economy prepared to replace workers with artificial intelligence, machine learning, and robotics.  The immigration issue is just a distraction for the American middle class.

Over the next two to three decades, unless one is employed in a knowledge-intensive occupation or can add value to an automated process from a design or engineering perspective, the question won’t be whether an immigrant who doesn’t look like me now lives in “my country.” The issue will be, can I really function in a society where my skill set is so useless that I have no option but to be a ward of the state?

When the #internet was just for #academics….#broadband

Democrats are wary of Facebook, Google, and Twitter. Hillary Clinton’s loss in the November 2016 elections allegedly compounded by a misinformation game played by the Russians via social media has the Democrats in Congress asking themselves if a little more transparency i.e. regulation of social media practices is necessary in order to prevent any more shenanigans from Russia.

In the net neutrality debates, Democrats and grass roots progressives have taken the position that due to their gatekeeper position, internet access providers such as AT&T, Comcast, and Verizon are in a position to negatively impact the innovative internet portal and social media services that Facebook and Google provide. Democrats argue that we don’t want to discourage the creation of the next Facebook by allowing Comcast to throttle speeds from potential upstarts or block a consumer’s access to the new Twitter. Now these members of Congress appear a bit wary of the cat that they have been snuggling up to; being scraped by the FANGs (Facebook, Amazon, Netflix, Google) is not fun.

What I find ironic is that these congressmen were no where to be found as the FANGs were busy building a business model on acquiring consumer data from the droppings that consumers leave all over the internet. This data collection didn’t impact the politicians, who thrive on political intelligence so having a master information collector or two on their donor page didn’t hurt. It wasn’t until the FANGs messed with the source of a politician’s livelihood i.e. the vote, that the FANGs fell under deeper scrutiny.

It is up to the individual to choose whether to use FANG services. I have little to no use for Facebook myself. Amazon, Google, and Netflix deliver pretty much what they promise: logistics and content. What’s amusing is that highly educated, professionals in the Congress have yet to figure out the business model that social media relies on for its survival.

I think it is best that the internet go back to what it was meant to be: a way to connect information seekers with data. The irony is that internet service providers have been providing their networks as a part of the larger data transmission scheme for over two decades but seem to be catching the most heat from congressmen that support the companies providing the most abuse.

When Bitcoin becomes a transmitter of valuable information

Bitcoin is not for speculation. Bitcoin is about the transmission and exchange of valuable information attached to a digital currency that measures the value of the information. The volatility we are seeing in the market for Bitcoin is based on the fear of missing out on a pop in value.

I think in the near future what will eventually drive the value of Bitcoin is the underlying value of the information that the individual sovereign either possesses or can produce. It is likely that person A holding Bitcoin may look at person B who allegedly has some information, x, and determine that the person B’s information or ability to generate useful information has no value. Think of someone in London approached by someone from Somalia who wishes to trade in Somalian currency. The Londoner wouldn’t touch it.

You may argue that scenario already occurs in the real world, that trader A is not required to transact with trader B. In a centralized world, trader B would bring a discrimination grievance against trader A for refusing to trade. In a decentralized, voluntaryist cyber world, no matter how much cryptocurrency you hold, the value of your true currency, the information that you possess or can produce, will determine your digital currency’s value.

As for the speculators, the error they make is using valuation methods created in a centralized, coercive political economy to assess the value of a currency designed for a decentralized cyber society. A speculators are enjoying the upside of Bitcoin’s market appreciation, but as the currency becomes more expensive and reaches its 21 million digital currency cap, will these speculators be able to purchase any more of the currency? Or, will they be able to ride out the inflationary characteristic the coin takes on should it become a matter of two few Bitcoin chasing too many goods? Will lower income individuals who may have made their first purchases with their credit cards be able to recover the dollar value of the coin in order to pay off increasing interest rates?

Not to mention the competing currencies that will eventually knock off Bitcoin from its perch. As technology improves such that “information rich” individuals create their own cryptocurrency, individual sovereignty will be complete. Just like western nations trade with each other based primarily on similar values and culture, the information rich will do the same. As the value of their currency increases so to will the demand from vendors who will likely prefer hold in reserve the currency of the information rich versus the “information poor.”

I believe that the information poor or “information losers” who were lucky to get a few pieces of a coin in the early days will not be able to participate on either side of a cyber trade in the future. Their focus should be on building their information gathering tools versus pursuing a quick fix, get rich path.

Cyber space will remain decentralized by the silos created by the information rich will prove daunting for the information poor.

ISPs, not edge providers, reflect the reality of communications and connectivity

Within the Communications Act of 1934, Congress created the Federal Communications Commission for the purpose of regulating interstate and foreign commerce in communications. Congress intended the Commission to make available a rapid,efficient, nation-wide, and world-wide wire and radio communications network and provide that network at reasonable rates for the nation-state’s consumers. Congress wanted a nation-state, barely a hundred years into its industrial revolution and in the middle of its worst recession, to have the ability to connect all of its citizens.

The episodes of connection via a phone call were not expected to take up the 135 minutes a day that the average person spent on social media in 2017. Earlier today in an op-ed on Axios.com, Evan Spiegel wrote about the difference between social media and his communications app, Snapchat. In his words:

“The personalized newsfeed revolutionized the way people share and consume content. But let’s be honest: this came at a huge cost to facts, our minds and the entire media industry.

This is a challenging problem to solve because the obvious benefits that have driven the growth of social media – more friends! more likes! more free content! – are also the things that will undermine it in the long run.

  • New alternatives for self-expression, including services like text messaging, WhatsApp, and Snapchat are part of a shift towards using communication applications to express yourself rather than posting on social media, because communication apps are oriented around talking with your close friends, free from judgment.
  • Social media fueled “fake news” because content designed to be shared by friends is not necessarily content designed to deliver accurate information. After all, how many times have you shared something you’ve never bothered to read?”

Social media is a bulletin board that you placed on the front of your dorm room, open to a myriad of Post-It notes left by dorm mates and easily read by everyone else, is my summation of Mr Spiegel’s distinction between his service and Facebook. Snapchat; another form of private communication similar to texting or voice calls versus the barroom brawl that is social media.

As concerned as progressive congressional Democrats appear to be about Russia’s ability to use the permeability of Facebook, Twitter, and Google to allegedly upend an election, they do not appear to be in any rush to apply onerous privacy rules to social media, a business model designed for fake news.

Social media was a “god send” for the State. Social media aggregates people into groups that can be operationalized and manipulated. A lot less expensive than tapping phone lines in order to get the pulse of society. Facebook, Twitter, and Google are media outlets and as such are in a position to create messaging and target it toward certain groups. Facebook doesn’t ask “What’s on your mind” for no reason.

Some consumers want balance. They are using the ear buds to create space in the real world and don’t mind connecting where there is value in social media exchange, but they want the option of withdrawing to a position where their smartphone, at the end of the day, is merely for texting and sending/receiving voice calls.

Congress and the Commission should keeps their focus on the infrastructure aspect of communications and leave the bulletin board behavior to the kids.