Justice Oliver Wendell Holmes famously wrote that the best test of truth “is the power of the thought to get itself accepted in the competition of the market…” But today many are turning away from this theory, calling for greater government intervention in media ownership and the perceived lack of fairness in the press.

Senator Byron Dorgan (D-ND), a vocal critic of the free market for ideas, recently stated, “We really do literally have five or six major corporations in this country that determine for the most part what Americans see, hear and read every day.”

Unfortunately for the Senator, we really don’t. According to Ben Compaine, author of Who Owns the Media?, from 1985 to 1995 the top ten media companies went from raking in 38 percent of media revenue to 41 percent—not exactly the kind of mass consolidation the pundits would have you fear.

But revenues — the traditional means for measuring media market diversity—are not the best way to gauge the diversity of opinions in the American marketplace of ideas. With the advent of the Internet and the new national pastime, blogging, media revenue models are being completely redrawn.

Arianna Huffington’s aptly named Huffington Post claims to draw in 4.7 million unique users a month (Nielson estimates show about 1.5 million). Fortune has quoted an unnamed source estimating that Huffington can expect her team of less than 50 staffers to haul in $7.5 million this year.

Compare that to the other post—the Washington Post. The Washington Post Company reported that in 2007 the Post took in a comparatively whopping $496.2 million in advertising revenue. Yet its average daily circulation totaled 649,700, half of Nielson’s conservative estimate of Huffington’s reach.

Lean, web-based companies—which have much lower operating costs and use far fewer dead trees to disseminate their ideas—are left underrepresented in current media market measurement for no other reason than their relative efficiency. If we substituted eyeballs reached for dollars spent the already robust picture of the media market would show even less evidence for concern.

STILL, MANY BELIEVE there is need for regulation because Americans still receive the bulk of their news over the airwaves. Senate Majority Whip Dick Durbin has said that broadcasters should be required to give both sides of political issues to listeners, while Senator Dianne Feinstein (D-Calif.) has said she plans to look into reviving the “Fairness Doctrine.”

The doctrine, abandoned in 1985, placed political speech by broadcasters under the scrutiny of the Federal Communications Commission. FCC regulators mandated broadcasters “make reasonable judgments in good faith” on how best to present all sides of controversial issues.

Conservatives on Capitol Hill have banded together to oppose such a revival of the doctrine while pundits and free speech advocates have railed against the reinstatement of rule, citing the 1984 Supreme Court decision that noted that the Fairness Doctrine had a “chilling effect” on speech.

While it’s true that the Fairness Doctrine did result in many broadcasters shying away from political speech altogether, few have been quick to point out the obvious flaw in Durbin and Feinstein’s thinking. Replacing the marketplace of ideas with a board of overseers doesn’t do anything to rid the world of bias. It only empowers the bias of the overseers.

Economist James Buchanan clinched the Nobel Prize in 1986 for his keen observation that human beings don’t check their self-interested ways at the door when entering the halls of Congress or the offices of any of Washington’s many bureaucracies. Instead, commissioners and congressman alike act to advance their position, accrue more power, and expand the mission of their respective offices.

This is especially true of the FCC. The commission, created 80 years ago to regulate the fledgling radio industry, now regulates nearly all electronically disseminated media to some degree. But the recent explosion of choice in the media marketplace has left the commission grasping at straw men.

Worse yet, its most recent round of regulations seek to solve its own bad rules with additional layers of rules. Rather than freeing the airwaves from restriction after restriction, and thereby increasing broadcast competition, it seeks to dictate what can be said and who can say it. Instead of opening up the Internet to more service providers, it seeks micromanage the global network.

Most recently it has attacked cable providers’ ability to make private contracts and now seeks to make termination fees for violating any communication service contract illegal. The commission isn’t just seeking to regulate wireless and wired transmissions, but the fundamentals of the marketplace itself.

Were the FCC given the power to police political speech for any lack of fairness, it’s safe to assume that violations would be found in droves, because that’s the whole point of the agency.

WITH A DEMOCRATICALLY controlled Senate and potential Democratic White House in 2009, current commissioner Michael Copps may soon hold the title of chairman, giving the FCC a 3-2 Democratic majority.

This should be pleasant news for Senator Dorgan, whom Copps said has, “Struck a blow for localism and diversity in a media environment crying out for more of both.”

Copps is right—in at least one sense. Consumers are crying out for diversity and local content are getting more of both in spite of government regulations.

A Chairman Copps is the last thing the American media market needs. Instead, it needs an Alfred Kahn for the digital age. Kahn dismantled the corrupt and anti-consumer Civil Aeronautics Board, earning him a coveted place in history as the final chairman of an unnecessary agency.

Channeling Justice Holmes, Kahn once remarked when speaking about his victories at the CAB that “The key point is that the market decides, not a bunch of know-it-alls in Washington.” That’s true for airlines and doubly true for free speech.

This article originally appeared at the American Spectator.

The Comcast Center, Pennsylvania’s tallest skyscraper, is a monument to the success of one of Philadelphia’s largest companies. Comcast employs nearly two thousand Philadelphians and its foundation has given over $30 million to charities in Philadelphia and across the country. Despite Comcast’s ascendancy, the cable provider remains vulnerable – yet its greatest threat is not from Baby-Bell competitors but from lawmakers in Washington, D.C.

Comcast has come into politicians’ crosshairs because of its efforts to slow customers’ peer-to-peer file sharing. On Jan. 8, FCC Chairman Kevin Martin announced Comcast is under federal investigation, facing millions of dollars in fines.

“Network neutrality” supporters are in a frenzy, calling for congressional action. Rep. Ed Markey (D-Mass.) is on the verge of introducing legislation imposing neutrality on all Internet service providers. But net neutrality laws threaten to hobble the Internet as we know it.

Net neutrality would make Comcast’s actions illegal – but non-neutral practices, like slowing down peer-to-peer traffic, are perfectly reasonable ways to manage networks. Comcast targets the popular file sharing program Bittorrent, speeding up overall traffic by making networks smarter and more efficient.

Though Bittorrent is a hotbed for swapping pirated media, it’s beginning to be used for legitimate commercial purposes. But that doesn’t mean every Internet Service Provider should be required to give customers all-you-can-eat Bittorrent access. Besides, Comcast’s user contract expressly bans file sharing. Why should Congress force companies to let customers break voluntary agreements?

Upgrades are desperately needed to expand broadband pipelines, and Comcast is investing hundreds of millions of dollars to do just that. Until the overhaul is completed, curbing some transfers helps relieve congestion so customers can browse the Web smoothly.

Still, many broadband customers are angry that Comcast is limiting Bittorrent and refusing to explain its techniques. But revealing these details would fuel the arms race with pirates, who have already taken to encryption and other techniques to get around file sharing restrictions.

Instead of more regulation, Congress should give us genuine Internet choice. Disgruntled Comcast customers could simply switch providers, but Americans have too few ISP choices thanks to laws protecting existing providers and FCC regulations blocking new wireless technologies.

Adding neutrality proposals to this already skewed market makes for a one-two punch to consumers. While existing regulations bar new information “pipes” from reaching homes and businesses, neutrality regulations ignore that the existing pipes are only so big and can’t always feed the file sharers’ appetite. When peer-to-peer programs cause Web surfing to crawl during peak hours, network management lets ISPs make sure customers don’t have to face slowdowns. Without smart management, today’s occasional Internet hiccups will swell into full-blown traffic jams – the online equivalent of a rush-hour pileup.

Speaking of traffic, asking ISPs to treat all data the same is akin to forcing ambulances to wait in traffic during emergencies. Life-saving technologies like remote surgery must communicate using network “expressways” so information gets to its destination swiftly and reliably. Likewise, digital voice and online gaming traffic needs to traverse networks rapidly.

Net neutrality is a death sentence for these popular Internet activities. It prevents ISPs from letting time-sensitive information jump ahead of Web surfing, where an extra millisecond goes unnoticed.

In coming years, gigabytes will give way to terabytes, and then exabytes of data. Providers will have to spend billions preparing for this “bandwidth crunch.” But consumers don’t have to foot the whole bill; video services like YouTube or iTunes could share the cost. These media-rich Web sites push lots of data through the tubes, earning lots of money from ad revenues and fees. Such sites have good reason to work out priority pipelines with Internet providers so viewers can watch their videos without jitters or long load times.

Under net neutrality, however, such creative arrangements would be illegal, and the cost of new upgrades would fall squarely on customers’ shoulders. Neutrality proponents purport to care about consumers, but higher Internet bills benefit no one.

In a free market, consumers choose their online provider, and businesses select which services to offer. Americans want faster Internet access, but Internet providers will shun investment if they can’t even control their own networks.

Global interconnectivity has been a boon for economic growth and free expression – but if net neutrality is legislated, technological progress will slow, undermining these tremendous benefits. The Internet’s future should rest in the hands of innovators, not Washington bureaucrats.

Originally Published in the Philadelphia Bulletin, written with Ryan Radia

It’s been ten years since then-First Lady Hillary Rodham Clinton published a book on government policy and children with a title that soon became her catch phrase: “It Takes a Village.” When she used this saying in the book and related speeches, it was clear that by “village,” she meant a plethora of government programs and mandates to make sure parents were raising their kids correctly.

Today, Clinton’s political title has changed, and she doesn’t use the phrase much anymore. But one of her recent big-government crusades shows that her fundamental distrust of both parents and the private sector remains the same.

Over the past two years, Clinton has become a sort of “cultural warrior” against video games she deems too violent. While barely saying a critical word about the politically powerful sectors of movies, television and music, she has blamed violence in video games for a host of society’s ills and supported legislation cracking down on video game makers and retailers.“We know that violent video games have an impact on children,” Clinton said in an interview with CBSNews.com. She added that “a 7 year old should not be able to walk into Wal-Mart and buy” a violent video game.

The distrust of both parents and the private sector in these statements is breathtaking, and also displays the ignorance of Clinton and other politicos of how video games and American families work. What family do you know that lets their seven-year-old go shopping at Wal-Mart alone?

And many parents utilize a private ratings system developed by the video game industry called the Entertainment Software Ratings Board (ESRB) to determine what is appropriate for their children. According to a survey by the Hart Research polling firm, 85 percent of parents whose children play video games use the ESRB regularly to monitor their children’s games. And 90 percent are satisfied with the ratings system.

But unfortunately, Clinton isn’t the only politician who wants to substitute her judgment for that of American parents. Some on the right have joined the New York Senator in her “it takes a village” approach to families and video games. In November, GOP Sen. Sam Brownback of Kansas and Rep. Frank Wolf of Virginia joined Clinton and Democrat Sen. Evan Bayh of Indiana in a letter to the ESRB griping about “ultra-violent” games and implicitly threatening government action.

Clinton and others have supported new legislation — on top of general anti-obscenity laws already on the books — that would single out video game retailers for punishment and result in government control over the ratings system.

To be sure, there are some games that feature gratuitous violence, and the video game ratings aren’t foolproof. Just as there are some “PG” movies that arguably should be rated “R”, there are some games with mature elements that may get a lesser rating than “M” — the rating that means that games have mature elements and may not be appropriate for children under 17. Parents should monitor their kids’ video game selections just as they should scrutinize all media their children are exposed to.

And conservatives — who are rightly skeptical of government’s ability to make things better — should be wary of increased government intervention in this area, particularly the involvement of the federal government. Many of the video game bills range from impractical to counterproductive. Moreover, depending on who is in charge of Congress or the presidency, government intervention in the private ratings system could result in the blackballing of games deemed to be “politically incorrect.”

A bill sponsored by Clinton and Bayh, for instance, would subject retailers of video games to big fines for selling M-rated games to children younger than 17, even if an employee made an honest mistake. Meanwhile, other venues that make inappropriate material available to minors, such as movie theaters that let kids into R-rated movies, would not be subject to these fines.

Under bills like these, the word “violence” could be defined so broadly that it could hinder the development of the growing number of video games celebrating the heroic deeds of the American military. In fact, the very vagueness of terms like “graphic violence” has caused federal judges to strike down several state and city laws similar to Clinton’s bill as infringements of the First Amendment’s right to free speech.

A recent campaign by liberals against games based on a popular Christian adventure series should serve as a cautionary tale about increased government involvement. Based on the best-selling Left Behind series of novels co-authored by social conservative activist Tim LaHaye, Left Behind: Eternal Forces has players join a paramilitary Christian organization to fight the Global Community Peacekeepers and convert bystanders along the way.

The game’s plot line inspired howls of protest from liberal groups. They demanded that stores like Wal-Mart not carry the game, and also pushed for an M rating because of what they claimed was excessive violence motivated by religion. “It pushes a message of religious intolerance,” said one critic leading the campaign against the game.

The game was eventually rated “T” for “teen,” a less severe rating than M, by the ESRB. But imagine if the government interfered with the ratings system and critics of the game were ultimately in charge.

Even among the M-rated games, there are selections that parents might think would be suitable and even valuable for older kids. The World War II-themed Company of Heroes and World War II Combat: Road to Berlin are violent and bloody, because war itself is violent and bloody. But just as parents might take their teenagers to see the R-rated “Saving Private Ryan,” they might let their kids play these M-rated games for the same reason: to teach them about the bravery of their grandfathers and great-grandfathers serving in the U.S. military, and that sometimes freedom has to be fought for.

Reagan-appointed federal appeals court judge Richard A Posner had some words to chew on in striking down an Indianapolis ordinance restricting youth access to games that contained “graphic violence.” Writing for a unanimous three-judge panel, Posner declared, “To shield children right up to the age of 18 from exposure to violent descriptions and images would not only be quixotic, but deforming; it would leave them unequipped to cope with the world as we know it.”

But if Hillary Clinton and other politicians get involved –and somehow the laws are upheld as constitutional — we could see history cleansed of violence by a new bureaucracy enforcing a code of political correctness. The sacrifices of average American men and women would be replaced by political elites “negotiating” wars — a virtual Yalta conference.

And with video games as a precedent, other forms of “politically incorrect” media could be next. Instead of reviving the “Fairness Doctrine,” opponents of conservative talk radio could conceivably say a program should be banned because “violent” topics are sometimes covered, and it is broadcast at times when children can listen.

That’s why we should oppose proposals creating a federal “village” to control video games, and realize that to guide children through all forms of media, it ultimately takes a family.

This Op-Ed originally appeared in Human Events.

California resident Timothy Smith has sued Apple and AT&T over the iPhone, accusing them of illegal monopolistic behavior. The iPhone is locked to the AT&T cell network and Apple is accused of writing software rendering hacked iPhones inoperable. If we want innovators to create the next revolutionary device, frivolous lawsuits like this must be stopped in their tracks.

Usually, companies accused of monopolistic behavior have a high market share, like Microsoft or Google. But AT&T has less than a third of the U.S. mobile market, and the iPhone marks Apple’s first attempt at manufacturing a phone.

The suit claims that locking phones to networks is a monopolistic business practice. But how is designing a phone to work with a network monopolistic? Apple chose AT&T as its carrier partner, so iPhone software is coded to operate with the AT&T network. Some phone manufacturers sell an unlocked version of their cell phones, but Apple elected to keep the iPhone connected to AT&T. Just as it would be unreasonable to demand that Windows software run on a Mac, it is equally unreasonable to demand a universal iPhone.

If providers are not allowed to customize phones to networks, consumers lose. Visual voice-mail, one of the iPhone’s most innovative features is exclusive to the AT&T network—an example of “unique collaboration” between AT&T and Apple.

Mandating unlocked phones and hoping they will benefit consumers is a pipe dream. In theory, consumers benefit; but in practice, the hindrance of creativity and the suppression of pioneers far outweigh the positive aspects of open standards. For companies to take big risks, there must be equally big rewards. Developing the iPhone took a huge team of programmers and engineers and hundreds of millions of dollars in research and development costs.

Many iPhone users have used unofficial hacks to unlock their phone to work with compatible networks. A recent software update from Apple resulted in many hacked iPhones being “bricked,” making them unusable unless the device is reset. The lawsuit claims Apple intentionally released the software upgrade to disable modified phones in retaliation for unlocking.

Regardless of Apple’s intent, people who modified their phones deserve no legal recourse. People entered into a voluntary contract by purchasing the iPhone and accepted the user agreement prohibiting modification of the “software in any manner or form.” Consumers who violate an agreement and void the warranty do so at their own risk. Apple’s only obligation to iPhone owners is fulfilling the terms of its license agreement—and its software updates work fine with unaltered iPhones.

Owners of the iPhone can do whatever they want to the iPhone, with the caveat that certain actions may void the warranty. The 1998 Digital Millennium Copyright Act carves out an exemption for phone unlocking, even when reverse engineering is involved. So while the iPhone can be unlocked legally, Apple doesn’t have to support phones running modified software. This is one area where copyright laws have succeeded in striking a balance between the rights of consumers and businesses.

If Apple intentionally disabled iPhones to punish unlockers, shame on them. But if so, the market, not government, should punish Apple. Heavy-handed tactics cause an exodus of customers, which sends a stronger message than any civil fine.

In a free market economy, companies can decide the terms of the products they sell, just as consumers can decide which products they buy. Companies should not be subject to civil penalties if they place limitations on warranty support. Businesses cannot anticipate what sort of other uses or alterations consumers will make—so they do not provide support for these modifications. Should Apple be required to employ hundreds of developers to test every third-party modification to make sure every software update is compatible?

If these lawsuits succeed—or worse yet, a law is passed by Congress to the same effect—an unreasonable burden will be placed on companies, chilling innovation and increasing costs for consumers. When companies are forced to foresee the unforeseeable, they are likely to stand still.

This article originally appeared at TCS Daily

Back when Saturday Night Live was still funny, Lily Tomlin’s character Ernestine, the ill-mannered telephone operator, deftly parodied all that was wrong with the old phone system when she proclaimed the phone company’s motto: “We don’t care. We don’t have to. We’re the Phone Company.” Today, Ernestine may seem like a relic from the days of Ma Bell’s monopoly. But if some Wi-Fi companies have their way, they soon won’t care either because they won’t have to.

Consider Google and Earthlink’s plans to create city-wide Wi-Fi for San Francisco. As the city prepares to put the issue to a vote in a referendum, Earthlink CEO Rolla Huff is acting as though the future of the project is a foregone conclusion, adopting a new strategy for dealing with critics: the silent treatment. But Huff isn’t just miffed; his company is facing a serious financial meltdown in San Francisco and potentially many other wireless projects. But wasn’t municipal Wi-Fi the wave of the future?

Whatever happened to the dream of editing Wikipedia in the car or live-blogging people watching at the neighborhood park? It turns out that few people actually share those dreams. As Business Week recently pointed out, initial forecasts for municipal Wi-Fi subscriptions were exceedingly high, predicting 15 to 30 percent of the population of cities signing up. Actual subscriber rates are far below this level—a mere one to two percent—making investors interested in ROI sadly SOL.

We’ve gone from the dominance of dial-up to deep market penetration by cable, DSL, wireless, cellular, and satellite. Does a market as varied and competitive as this really need municipal Wi-Fi?

In an attempt to stave off disaster, Huff has put the heat on cities involved in municipal Wi-Fi rollouts. In a recent interview with Dow Jones, he declared, “We’re going to look for municipal governments to step up and become a meaningful anchor tenant.” Translation: Cities need to sign long-term contracts so that vendors like EarthLink are guaranteed at least a minimum return.

Not all cities are facing difficulties in their municipal Wi-Fi projects—dozens of cities around the country are moving forward with similar partnerships. But even if these ventures are financially viable, are they good for the marketplace?

That’s worth asking because in recent years broadband has spread across America at a rapid pace. A recent Pew Internet & American Life Project study found that DSL rates have dropped by 15 percent in the last two years, while the consultancy JupiterResearch estimates that falling broadband prices will result in 80 percent of the country logging on at high speeds by 2010. In a little less than a decade, we’ve gone from the dominance of dial-up to deep market penetration by cable and DSL carriers, with wireless, cellular, satellite, and even broadband over power line joining the mix. Does a market as rich, varied, and competitive as this really need municipal Wi-Fi?

More competition is generally a good thing for the marketplace. But that doesn’t necessarily apply to hybrid public-private partnerships, since these arrangements tend to take on the anti-competitive traits of government without the dynamism of business. The result can be a poison pill for the connectivity marketplace.

Companies that enter into public-private partnerships enjoy favorable treatment. Special access to city or county rights of way, shelter from liability, and the backing of a public partner with the power to tax makes Wi-Fi firms that enter into municipal deals formidable foes. Potential competitors may find these advantages too much to overcome, thus driving them out of the marketplace. With potential competitive rivals driven out, we are soon left with an ossifying public utility disguised as a private enterprise.

As municipal Wi-Fi companies become entrenched, we can expect them to not only demand that cities be anchor tenants, but that they help make up for the shortfalls that will inevitably result when new technologies supplant Wi-Fi. Worse, seeking to put off that day of reckoning, they may well ask for regulations stacking the deck in their favor, slowing the spread of the latest and greatest tech.

Limited access rules and special privileges are what brought us Ernestine in the first place. Technological solutions have opened up markets to more players recently, but government can truly open the competition floodgates by liberalizing markets, which would help lower prices and bring broadband to the masses. It’s time to stop playing favorites and give Ernestine the pink slip.

This op-ed originally appeared at American.com

The Recording Industry Association of America has sent out waves of letters telling college administrators that some of their students are pirates. No, not the kind played by Johnny Depp, but the kind who visit the seedy back alleys of the Internet to traffic in illegally copied music, movies and software.

The “pre-litigation letters” identify students not by their names, but by their IP addresses, numbers associated with their Internet activity. It is up to the universities, which own the networks, to match the IP addresses with students’ names and forward the letters on to the students. The letters offer settlements, reportedly around $3,000, for students to pay along with agreeing to ditch their pirated tracks and live life free of illegal downloading.

In the past, the Recording Industry Association of America has had similar encounters with campuses, but it has sent subpoenas, not letters. While some universities believe that the association is attempting to turn them into copyright cops, this is really just a case of voluntary, private enforcement of intellectual property rights.

Granted, the association cannot enforce its property rights without information from the universities, but this doesn’t turn the universities into de facto enforcers for the music industry.

The Recording Industry Association’s piracy investigations aren’t the only example of private enforcement. Many retail stores employ “secret shoppers,” and private investigators are more than just fixtures on cheesy television shows.

Unlike “Magnum, P.I.,” however, the Recording Industry Association goes in for a hamfisted approach. A notorious example involves the Penn State University Astronomy Department, which received a letter demanding it remove songs by the hip-hop artist Usher from its server.

The server contained no Usher tracks, but it did reference professor emeritus Peter Usher, and it contained MP3s, which attracted the Recording Industry Association’s Internet searchbot crew. The MP3s in question were recordings of an a cappella performance by astronomers about a gamma ray satellite.

The Recording Industry Association later apologized for the threatening letter, but this is not the only case of a threat based on automation and incomplete evidence. It’s likely that many who receive the latest letters from the association will have downloaded MP3s (audio files) illegally, but that charge might not be supported by the association’s “evidence.”

Using threats and offering out-of-court settlements to make up for a lack of evidence may seem like good strategy on “Law & Order,” but in the real world, these tactics resemble an extortion racket. Private enforcement relies on the goodwill of many individuals and organizations. Unfortunately for the Recording Industry Association, its tactics have only antagonized and alienated people.

But universities shouldn’t be too quick to spurn the association’s request. Forwarding letters demanding thousands of dollars from students may put universities in a public relations pickle. But a California bill banning pretexting, the practice of posing as someone you are not to collect information, may prove to be a larger threat to universities.

In most cases, we do not want individuals posing as people they’re not. But it is already illegal to pose as an institution, such as a bank, to snag private data. The new law won’t stop these imposters, who are already breaking state and federal laws, but it would stop the Recording Industry Association from exercising its main anti-piracy tactic: posing as pirates.

Association investigators frequently masquerade as criminals to collect evidence against the real bandits of the Internet. Some critics charge that this could ensnare some innocent people, but people who aren’t pirating aren’t going to be out there to offer up information.

Innovative technologies from entrepreneurs have helped overcome much of the difficulty in protecting the huge volume of copyrighted material on the Internet.

Universities, as purveyors of mounds of copyrighted material and troves of patents, have an interest in protecting intellectual property and should be concerned about this erosion of the ability to privately protect their copyrights. State law enforcement alone, with its already stretched-thin budgets, will make for shoddy intellectual-property-rights enforcement.

So, while universities may not want to stand hand-in-hand with the Recording Industry Association, they should respect its right to defend its members’ intellectual property. Now if only the association could work on being a bit nicer.

This Op-Ed Originally Appeared in The Press-Enterprise (Riverside, CA)