A reining in of the political media should be expected under a nation-state model

Forbes reported today about a statement of work issued by the U.S. Department of Homeland Security on 3 April 2018.  The statement of work seeks prospective vendors capable of providing the Department’s National Protection and Programs Acquisition Division with the capabilities to monitor traditional and social media. The specific objective of the services is:

“Services shall enable NPPD/OUS to monitor traditional news sources as well as social media, identify any and all media coverage related to the Department of Homeland Security or a particular event. Services shall provide media comparison tools, design and rebranding tools, communication tools, and the ability to identify top media influencers.”

The statement of work does not get into any specifics as to why the Department would need such a program. It could be one of three reasons. One reason could be a push back by the Trump Administration on what it calls “fake news.” Mr Trump has shown a disdain for what he terms as unfair reporting typically from media perceived to be left leaning. He has no love for CNN, a lack of love expressed with so much disdain that he came out against the Time Warner-AT&T merger, one that is now being challenged by the Trump Justice Department.

The second reason for the proposed statement of work may be to create another tool for dealing with the media attacks a Russian troll service has been accused of. By monitoring media influencers, the United States could make a preemptive strike against journalists, bloggers, broadcasters, etc., that spread fake news and set the stage for divisiveness in American politics.

The third reason I see is that the political media has to be reined in by the nation-state. Part of the nation-state’s political ordering of and for society should include keeping the collective in order by controlling the messaging. While some spin is allowed in order for news organizations to establish some type of brand differentiation, i.e., MSNBC leans liberally forward while FOX is conservatively fair and questionably balanced, the general messages issued by the nation-state via the political media must be uniform enough to keep the masses in line or distracted. Too much spin to the left or to the right creates chaos in the collective, a disturbance in the force that the nation-state cannot afford.

I believe reason three is the purpose for the Department’s statement of work. Some Americans may see the proposal as an attack on a free press, but has the press ever really been free? Except for the occasional “breaking news” (which amounts to a press secretary given their favorite reporter or a reporter they can use the first shot at a story), most political news is initiated by a state actor with the media being tasked for commercial and political reasons for distributing it.

Probably over the weekend we may see some discussion on the meaning of a “free press.” Given that this story is not even trending on Twitter anymore has me wondering how seriously the media is taking the Department’s action.

Will Congress regulate.@facebook like a public utility? Given its potential benefit to partisan politics, probably not. #socialmedia

The Wall Street Journal’s Holman Jenkins, Jr. posted an article last Friday about Facebook’s apparent maturity as a business given its focus on regulatory issues such as the potential of Congress to regulate the social media company like a public utility. Mr Jenkins points out that Facebook’s fear of regulation, a fear shared by other “tech” companies, comes from the attention that large companies draw to themselves as the result of centralization of power. In this case, Facebook is perceived as one of the few central nodes of power in the digital space (along with fellow FANGs; Amazon, Netflix, and Google). Issue is, does Facebook have a monopoly status that justifies “public utility” regulation. My answer is no.

The classic argument for regulating a firm as a public utility is that the public has an interest in benefiting from the use of the public’s rights-of-way including the efficiencies that flow from making such uses exclusive to one firm in a given territory. Electric and water utilities quickly come to mind when we discuss public utilities and rights-of-way. Would you rather see your streets and driveways dug up to provide multiple pipes from multiple water or electricity suppliers or would you rather one supplier who is forced to comply with a pricing model that creates a competitive price and rate of return on the assets used by the utility to produce a good? For the most part, society has settled for the latter. We don’t like the idea of having an excess number of utility lines running overhead or into our residences for aesthetic or safety reasons.

Does Facebook fall into this public utility model? No, it does not. According to Facebook, the company makes almost all of its revenue from the sale of advertisement. Facebook uses its algorithms to identify potential viewers of content or purchasers of services for its advertisers and display ads these ads to content viewers and services purchasers in exchange for an advertising fee. Ad services, including the delivery of advertisements to consumers, by Facebook’s admission is a competitive business. Unlike electricity transmission and distribution, ad delivery is not a monopolized industry. As Mr Jenkins points out in his piece, ads are ads, digital or otherwise, and Facebook is no where near dominating a $540 billion advertising industry.

Even if Facebook had a monopoly on the delivery of advertisements or advertisement services, would a regulator risk creating a state action by regulating Facebook’s advertising services? Bearing in mind that the latest buzz around Facebook ads was spawned by the delivery of advertisement messaging produced by Russian nationals allegedly designed to disrupt and defraud the American electorate, would Congress require that Facebook vet the firm generating advertisement content? Would Congress risk the overturn of legislation requiring Facebook vet advertisers if found violating the First Amendment?

I think that even advertisers confident that their messaging does not violate the public interest would think twice about placing advertisements on Facebook’s platform. More important, from the perspective of the regulator, an administrative agency would not to create the risk of creating First Amendment violations and having to defend those violations in court. As the U.S. Supreme Court held in Edenfield v. Fane:

“The commercial market place, like other spheres of our social and cultural life, provides a forum where ideas and information flourish. Some of the ideas and information are vital, some of slight worth. But the general rule is that the speaker and the audience, not the government, assess the value of the information presented. Thus, even a communication that does no more than propose a commercial transaction is entitled to the coverage of the First Amendment.” 113 S.Ct. 1792, 1798 (1993)

Finally, political parties may not want to impede the returns to electioneering that social media has been providing for the past decade. According to the Brookings Institution, since the 2008 national elections, political parties have been determining how best to convert the amplification and engagement created by social media during a campaign season into two-year and four-year governance.  Political parties have been encouraged to use social media in a number of ways including the following:

  • Acknowledging that the electorate is using social media as a “trust filter” of political news and information;
  • Realizing that politicians have decreasing control over debate topics and that control is shifting to social networks;
  • Making continued use of social media platforms to directly engage constituents;
  • Using social media platforms as “virtual surveys” of constituent sentiment and gauging feedback from the surveys; and
  • Leveraging ordinary citizens’ use of social media to persuade the electorate.

It is 2018 and Congress should view social media that has greater benefits as an electioneering tool if it is not regulated. From a regulatory perspective, there is no economic or legal justification for regulating social media as a public utility.

ISPs got there first. Let it go …

People and associations protesting against the Federal Communications Commission’s reversal of its network neutrality rules are really railing against the fact that current large broadband access providers entrenched themselves between the consumers of communications services and global networks in some before anyone else could. AT&T, Comcast, Charter, and Verizon used private capital and government charters and licenses to carve out territory within which they deployed the networks that connect consumers to that near invisible cloud of interconnected computers that we call the internet. I can’t hate on them for being first.

Net neutrality rules proponents want to dampen this advantage by preventing broadband access providers from blocking traffic from particular content providers; preventing broadband providers from slowing down the speed at which data flows from particular content providers; prohibiting content providers from entering agreements with broadband providers that allow a higher priority be placed on a particular content provider’s traffic; and making transparent to consumers the management practices of broadband providers including pricing, terms, and conditions of service.

The irony of these rules as proposed by allegedly freedom loving advocates is that they are designed to restrict how broadband access providers are to ascertain the value of the traffic that they are requested to transmit across their networks. Businesses assess the value of product, services, goods, information coming across property for determining how much of that value they can extract for themselves. The value extracted hopefully covers the cost of doing business plus profit. Broadband access providers do the same thing, assessing the value of the digital traffic coming across its networks and extracting value in the form of compensation. The greater the value, the greater the compensation.

On the consumer side, how she evaluates value is subject to her personal marginal utility of benefits, to coin the standard economic phrase and accompanying argument. To her, watching African American women twerk at a party on Instagram brings value, but should a doctor consuming video traffic that documents surgery have to risk her video running at a slower speed than a twerker’s in order to comply with a faulty notion of equality of content?

My bias is toward information that actually results in societal improvement, and while I have no problem enjoying the female form, society as a whole gets more mileage where information that helps us better manage our capital and health takes a priority to a cat video or gyrating ass.

Society also gets more mileage where producers and consumers are free to determine what communications they exchange and the terms and conditions of that exchange. This is the problem when we don’t separate content, which is designed to keep people momentarily contented, with information, which should be designed to continuously inform. We have a lot of content floating across our global interconnected networks, and network neutrality rules proponents use the freedom of expression argument to ensure this content gets equal treatment. Prioritizing content on the internet should not be looked at as an attack on freedom of expression, not when there are other outlets available for expression.

What the network neutrality rules proponents always leave out of their argument is the value of the expressions being shared. If they are that serious about their voices being heard over a particular medium such as the internet, then maybe they should put together the capital and construct the technology that ensures their equal access or expression.