A misinterpreted federalism narrative fuels more misinterpretation of net neutrality

A number of state legislatures are ramping up for their legislative sessions where they will pass bills addressing various matters from funding their governments to other state government operational issues to civil rights to fighting crime. I have been giving some thought to the sovereignty of states, to these so-called laboratories of democracy and I am starting to question just how sovereign states are? As I read between the four corners of the U.S. Constitution, I am at a point where I don’t believe states were meant to be sovereign. Instead, states are merely administrative lordships existing to better manage the population, manage the extraction of resources, and convert citizens into tax coin. The U.S. Constitution makes clear that the extent of their powers is set by the federal government, not the other way around, and the regulations of state powers, in my mind, eliminates any claims to sovereignty.

The Tenth Amendment of the U.S. Constitution is usually referred to when describing the extent of state sovereignty. It reads:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

The Tenth Amendment reads like a “shifting screen”, where the federal government via legislation passed by the Congress or changes in how the administrative states interprets its rules, can determine the amount of power it will either delegate or take back. We have seen over the last 85 years how the federal government has used the U.S. Constitution’s commerce clause to support laws and extend regulations into social and commercial relationships that on the surface seem confined to a particular state, bakery, or bedroom. With changes in presidential administrations or U.S. Supreme Court membership, we also expect to see changes in this shifting screen as public policy, regulations, or court rulings redefine federal and state powers.

Besides, how sovereign can a state be if, as spelled out in Article I, Section 10 of the U.S. Constitution, it is not allowed to enter into any treaties or alliances with other national governments? How sovereign can a state be if it cannot mint and issue its own coin? How sovereign can a state be if it cannot, without the consent of Congress, assess duties on imports and exports? How sovereign can a state be if it cannot even maintain troops and ships in time of peace?

In the net neutrality debate where a number of states, either through legislation or executive orders issued by their governors, states have made the assumption that promoting how an advanced communications network is to be managed is a power reserved to the states under the U.S. Constitution. The internet, as an advanced communications network, is a platform responsible for moving an increased amount of commerce across state and international borders. As a channel for commerce, its regulation falls under the jurisdiction of the Congress, as determined by Article I, Section 8 of the U.S. Constitution. This alone, in my opinion, invalidates any attempts on the part of the states to use the net neutrality narrative to regulate the internet.

I would go one step further. Net neutrality is a management philosophy stemming from the business judgment of network managers and designers. It would not benefit a network manager to provide the public access to an interconnected global network of computers if that manager blocked its subscriber’s access to certain websites.

Nor would it make good business sense to degrade a subscriber’s experience by slowing down the speed of traffic from a subscriber’s chosen content provider. And given the level of competition between network providers, being transparent about prices and charges that a network manager’s subscribers face not only increases the level of faith subscribers have in a network, but also gives the network manager an edge over other competitors. She would be seen as being considerate to her subscriber’s consumer protection interest, a position a network manager can ill afford to ignore in these days of privacy violations.

Because of the interstate nature of the internet, the responsibility lies with the federal government to ensure the above net neutrality principles are met. State governments, as administrative lords over certain populations and territory, should focus on aligning their state advanced communications policy with national policy, including properly administering any national funds allocated for encouraging the deployment of advanced communications. To interpret “state sovereignty” as permission to go one’s way would disrupt the interstate nature of commerce and its regulation by a central government.

Rather than regurgitating the standard rhetoric of “states’ rights”, policymakers need to take a fresh look at federalism and adjust its meaning to the proper interpretation under the four corners of the Constitution.

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Government’s role in regulating access to personal data

Yuval Noah Harari recent wrote an article for The Atlantic where he posed the question, “How do you regulate the ownership of data?” Professor Harari argues in the article that data is the most important asset today, moving ahead of land and machinery.  “Politics will be a struggle to control the data’s flow”, says Professor Harari.

Last spring saw the United States Congress’ struggle to at least map out a course through the turbulent waters of data privacy as members of the House of Representatives and Senate took the opportunity to grill Facebook CEO Mark Zuckerberg about his company’s handling of personal data obtained from the social media giant by a consultancy.

Part of this struggle may be due in part to the popularity of social media network platforms. Facebook has climbed from a digital bulletin board developed in the early 2000s in an Ivy League college dorm room to a global subscribership of over two billion people.  Former president Barack Obama’s Twitter following is in the millions while the current president, Donald Trump, is not shy or slow to taking to Twitter to either connect with and inform his base of supporters or attack the traditional media for what he perceives as unfair coverage of his administration.

Professor Harari notes that users of social media network platforms have not reached the point where they are ready to stop feeding the “attention merchants.”  Speaking on the difficulty subscribers may have in exchanging personal data for “free” services, Professor Harari points out that:

“But it, later on, ordinary people decide to block the flow of data, they are likely to have trouble doing so, especially as they may have come to rely on the network to help them make decisions, and even for their health and physical survival.”

Professor Harari offered up one solution, nationalization of data, to stem the abuses that corporations may impart on addicted social media and internet consumers, but admits that just because an asset is in the hands of government doesn’t mean things will necessarily go well.  Hence the question, how should the ownership of data be regulated?

The question will require public policymakers and politicians go through the exercise of defining “personal data.”  Would personal data be any characteristic about you? Would it be about any marker, no matter how temporary or permanent, that can be attached to you?  Must the “data” be something that the consumer actually produced?

Politically, attention merchants would want a narrow reading of the definition of personal data.  A narrower reading of personal data means being able to obtain more information pursuant to fewer restrictions. While this outcome would be ideal for corporate entities in the business of brokering data, I don’t see Republicans, even with their mantra of promoting business, enthusiastically endorsing less restrictive collection of personal data given the public’s concern for privacy.

Verizon moves ahead with 5G

Verizon yesterday announced the rollout of Verizon 5G Home internet service. Verizon claims in its press release that it is the first company to introduce 5G commercially in the United States with service to be provided in parts of Houston, Indianapolis, Los Angeles, and Sacramento.

Given the lack of uniform industry standards, being first to provide 5G service means moving ahead with the service based on its own proprietary 5G standards.  According to Hans Vestberg, Verizon’s chief executive officer,  “To be first, we encouraged others in the ecosystem to move more quickly at every step. We appreciate the partnership of network equipment makers, device manufacturers, software developers and chip makers in reaching this critical milestone. The entire wireless industry gets to celebrate.”

Verizon will start taking consumer orders for the service on 13 September 2018 with the service taking effect on 1 October 2018.

SDx Central, a technology content provider and research firm, estimates that the first phase of 5G standards will probably not materialize until late 2018 when industry can base concrete standards on high profile cases. However, Verizon sees no concerns with moving forward with its own proprietary standards.  Rather, it sees itself as a leader on moving the industry further along the journey to rolling out 5G. According to company spokesman John O’Malley:

“The 3GTF standard we developed actually accelerated the adoption of the international standard last December — two years earlier than most people thought it would happen. And now, device, infrastructure and other technology leaders are developing products that will run on that standard. And when those products and technologies are available, we’ll evolve our offerings as well. The entire industry is working together on this.”

Although Verizon did not mention the impact of its 5G rollout on global trade, broadband communications has been described as an important platform for international commerce, particularly for small and medium enterprises.

In 2013, the World Economic Forum determined that 95% of businesses located in countries that are part of the Organisation for Economic Co-operation and Development has an online presence. The internet in general and social media in particular allowed these businesses to market products globally and reach customers outside of their regions.

Joshua Meltzer of the Brookings Institution in a paper addressing the internet as a platform for international trade said the following:

“Significantly, the Internet is creating new opportunities for small and medium-sized enterprises (SMEs) and for businesses in developing countries to engage in international trade and become part of the global economy. By providing opportunities to access business inputs such as cheaper telecommunications, strategic information on overseas markets, legal and consulting services, and cloud computing, SMEs and developing country firms are now more than ever able to become globally competitive. With a website, these firms can now engage internationally, reaching customers and communicating with suppliers all across the world.”

Could we see further integration of the aforementioned cities into global trade as a result of this rollout?