A Regulatory Framework for the Internet (with Thanks to Ben Thompson)

Summarizing Ben Thompson of Stratechery, plus my own targeted proposals

"A Regulatory Framework for the Internet," Ben Thompson's masterly framework, should be required reading for all regulators, as well as anyone concerned about tech and society. (Stratechery is one of the best tech newsletters, well worth the subscription price, but this article is freely accessible.)

I hope you will read Ben's full article, but here are some points that I find especially important, followed by the suggestions I posted on his forum (which is not publicly accessible).

Part I -- Highlights from Ben's Framework (emphasis added)

Opening with the UK government White Paper calling for increased regulation of tech companies, Ben quotes MIT Tech Review about the alarm it raised among privacy campaigners, who "fear that the way it is implemented could easily lead to censorship for users of social networks rather than curbing the excesses of the networks themselves."

Ben identifies three clear questions that make regulation problematic:

First, what content should be regulated, if any, and by whom?
Second, what is a viable way to monitor the content generated on these platforms?
Third, how can privacy, competition, and free expression be preserved?

Exploring the viral spread of the Christchurch hate crime video, he gets to a key issue:

What is critical to note, though, is that it is not a direct leap from “pre-Internet” to the Internet as we experience it today. The terrorist in Christchurch didn’t set up a server to livestream video from his phone; rather, he used Facebook’s built-in functionality. And, when it came to the video’s spread, the culprit was not email or message boards, but social media generally. To put it another way, to have spread that video on the Internet would be possible but difficult; to spread it on social media was trivial.

The core issue is business models: to set up a live video streaming server is somewhat challenging, particularly if you are not technically inclined, and it costs money. More expensive still are the bandwidth costs of actually reaching a significant number of people. Large social media sites like Facebook or YouTube, though, are happy to bear those costs in service of a larger goal: building their advertising businesses.

Expanding on business models, he describes the ad-based platforms as "Super Aggregators:"

The key differentiator of Super Aggregators is that they have three-sided markets: users, content providers (which may include users!), and advertisers. Both content providers and advertisers want the user’s attention, and the latter are willing to pay for it. This leads to a beautiful business model from the perspective of a Super Aggregator:

Content providers provide content for free, facilitated by the Super Aggregator
Users view that content, and provide their own content, facilitated by the Super Aggregator
Advertisers can reach the exact users they want, paying the Super Aggregator 

...Moreover, this arrangement allows Super Aggregators to be relatively unconcerned with what exactly flows across their network: advertisers simply want eyeballs, and the revenue from serving them pays for the infrastructure to not only accommodate users but also give content suppliers the tools to provide whatever sort of content those users may want.

...while they would surely like to avoid PR black-eyes, what they like even more is the limitless supply of attention and content that comes from making it easier for anyone anywhere to upload and view content of any type.

...Note how much different this is than a traditional customer-supplier relationship, even one mediated by a market-maker... When users pay they have power; when users and those who pay are distinct, as is the case with these advertising-supported Super Aggregators, the power of persuasion — that is, the power of the market — is absent.

He then distinguishes the three types of "free" relevant to the Internet, and how they differ:

“Free as in speech” means the freedom or right to do something
“Free as in beer” means that you get something for free without any additional responsibility
“Free as in puppy” means that you get something for free, but the longterm costs are substantial

...The question that should be asked, though, is if preserving “free as in speech” should also mean preserving “free as in beer.”

Platforms that are paid for by their users are "regulated" by the operation of market forces, but those that are ad-supported are not, and so need external regulation.

Ben concludes that:

...platform providers that primarily monetize through advertising should be in their own category: as I noted above, because these platform providers separate monetization from content supply and consumption, there is no price or payment mechanism to incentivize them to be concerned with problematic content; in fact, the incentives of an advertising business drive them to focus on engagement, i.e. giving users what they want, no matter how noxious.

 This distinct categorization is critical to developing regulation that actually addresses problems without adverse side effects

...from a theoretical perspective, the appropriate place for regulation is where there is market failure; constraining the application to that failure is what is so difficult.

That leads to Ben's figure that brings these ideas together, and delineates critical distinctions:

I agree completely, and build on that with my two proposals for highly targeted regulation...

Part II -- My proposals, as commented on in the Statechery Forum 
(including some minor edits and portions that were abridged to meet character limits):

Elegant model, beautifully explained! Should be required reading for all regulators.

FIRST:  Fix the business model! I suggest taking this model farther, and mandating that the "free beer" ad-based model be ratcheted away once a service reaches some critical level of scale. That would solve the problem -- and address your concerns about competition.

Why don't we regulate to fix the root cause? The root cause of Facebook's abuse of trust is its business model, and until we change that, its motivations will always be opposed to consumer and public trust.

Here is a simple way to force change, without over-engineering the details of the remedy. Requiring a growing percentage of revenue from users is the simplest way to drive a fundamental shift toward better corporate behavior. Others have suggested paying for data, and I suggest this is most readily done in the form of credits against a user service fee. Mandating that a target level of revenue (above a certain level) come from users could drive Facebook to offer such data credits, as a way to meet their user revenue target (even if most users pay nothing beyond that credit). We will not motivate trust until the user becomes the customer, and not the product.

There is a regulatory method that has already proven its success with a similarly challenging problem – forcing automakers to increase the fuel efficiency of the cars they make. The US government has for years mandated staged multi-year increases in Average Fuel Efficiency. This does not mandate how to fix things. It mandates a limit on the systems that have been shown to cause harm. Facebook and YouTube can determine how best to achieve that. Require that X% of the revenue come from users rather than advertisers. Government can monitor progress, with a timetable for ratcheting up the percentage. (This should apply only above some amount of revenues, to facilitate competition.)

With that motivation, Facebook and YouTube can be driven to shift from advertising revenue to customer revenue. That may seem difficult, but only for lack of trying. Credits for attention and data are a just a start. If we move in that direction, we can be less dependent on other, more problematic, kinds of regulation.

This regulatory strategy is outlined in To Regulate Facebook and Google, Turn Users Into Customers (in Techonomy). More on why that is important in Reverse the Biz Model! -- Undo the Faustian Bargain for Ads and Data. (And some suggestions on more effective ways to obtain user revenue:  Information Wants to be Free; Consumers May Want to Pay, (also in Techonomy.)

SECOND: Downrank dissemination, don't censor speech! Your points about limiting user expression, and that the real issue is harmful spreading on social media, are also vitally important.

I say the real issue is:

1.  Not: rules for what can and cannot be said – speech is a protected right
2.  But rather: rules for what statements are seen by who – distribution (how feeds are filtered and presented) is not a protected right.

The value of a social media service should be to disseminate the good, not the bad. (That is why we talk about “filter bubbles” – failures of value-based filtering.)

I suggest Facebook and YouTube should have little role in deciding what can be said (other than to enforce government standards of free speech and clearly prohibited speech to whatever extent practical).  What matters is who that speech is distributed to, and the network has full control of that.  Strong downranking is a sensible and practical alternative to removal -- far more effective and nuanced, and far less problematic.

I have written about new ways to use PageRank-like algorithms to determine what to downrank or uprank – “rate the raters and weight the ratings.”

• Facebook can have a fairly free hand in downranking objectionable speech
• They can apply community standards to what they promote -- to any number of communities, each with varying standards.
• They could also enable open filtering, so users/communities can chose someone else’s algorithm (or set their preferences in any algorithm). 
• With smart filtering, the spread of harmful speech can be throttled before it does much harm.
• The “augmented wisdom of the crowd” can do that very effectively, on Internet scale, in real time.
• No pre-emptive, exclusionary, censorship technique is as effective at scale -- nor as protective of free speech rights or community standards.

That approach is addressed at some length in these posts (where “fake news” is meant to include anything objectionable to some community):

• The Augmented Wisdom of Crowds: Rate the Raters and Weight the Ratings
• A Cognitive Immune System for Social Media -- Developing Systemic Resistance to Fake News

…and some further discussion on that:

• Architecting Our Platforms to Better Serve Us -- Augmenting and Modularizing the Algorithm
• The Tao of Fake News
• In the War on Fake News, All of Us are Soldiers, Already!)

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More of my thinking on these issues is summarized in this Open Letter to Influencers Concerned About Facebook and Other Platforms

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See the Selected Items tab for more on this theme.

"As We Will Think" -- The Legacy of Ted Nelson, Original Visionary of the Web

From Nelson, As We Will Think (1972 version)

The vision of the Web in 1945

From a recent email from the Editor of The Atlantic:

In July 1945, Vannevar Bush, then the director of the U.S. Office of Scientific Research and Development—the military’s R&D lab, the predecessor to DARPA—published an essay in The Atlantic that would become one of the seminal pieces of technology literature of the 20th century.

Entitled “As We May Think,” the essay laid out a vision for a new kind of relationship between human and machine. Bush introduced an idea he called the memex: a sprawling, shared store of humankind’s knowledge that could be used for social good, not destruction. In the following years, preeminent technologists—including Doug Engelbart, whose work eventually led to the invention of the mouse, the word processor, and hyperlinks; and Sir Tim Berners-Lee, inventor of the World Wide Web—cited “As We May Think” as inspiration for their work.

The seminal re-visioning in the 1960's

It seems ironic that even the Atlantic seems to be neglecting Ted Nelson's role as an equally seminal visionary of the Web -- especially given that one of his early works was an explicit call to re-center on and realize Bush's vision, a work that plays off Bush's title as "As We Will Think."

I tweeted back to the Atlantic:

@JeffreyGoldberg Your email on "As We May Think" omitted a key link: Ted Nelson (who coined the term hypertext), wrote "As We Will Think" in 1968, bringing Bush to the attention of those you name. (I have a copy if you would like one.)

— Richard Reisman (@rreisman) November 8, 2018

Some further tweets raised the question whether that was online somewhere, and it seems to be only in The Wayback Machine (archive.org), as a 1972 version -- and a poor copy at that, missing the original figures.

It happens that I have a better copy of the 1972 version, as well as another version that is labelled as being from 1968. So I am posting scans of both versions online (links below). I include some comments on provenance and on my recent email interchange with Nelson below (both of which lead me to believe the 1968 date is correct). But first...

Why Nelson matters 

A fuller explanation of  why Nelson matters is in my post from a few years ago, Digital Camelot - The Once and Future Web of Engelbart and Nelson, but here I caption its core message:

If you care about modern culture and how technology is shaping it, this is worth thinking about -- A powerful eulogy for where the Web might have gone, and still may someday, and the friendship of the two people most responsible for envisioning the Web*  --  Ted Nelson's eulogy for his friend Doug Engelbart, as reported by John Markoff in The Times -- with Nelson's inimitable flair.

As Markoff says:

Theodor Holm Nelson, who coined the term hypertext, has been a thorn in the side of the computing establishment for more than a half century. Last week, in an encomium to his friend Douglas Engelbart, he took his critique to Shakespearean levels. It deserves a wider audience. 

Dr. Engelbart and Ted Nelson became acquaintances at the dawn of the modern computing era. They had envisioned and invented the computing that we have come to take for granted.

I first encountered both of them in 1969, and what I saw set the direction for my life's work.  Engelbart gave "The Mother of All Demos" in 1968 (and I first saw him give a follow-up the next year, and read most of his work).  Nelson dreamed of hypertext and hypermedia, and wrote papers on what he called "hypertext" in the 'mid-60s and the highly influential Whole Earth Catalog of "Computer Lib / Dream Machines" in 1974.

As Nelson laments, both received a degree of recognition, but both were marginalized. Powerful as it may be, expediency took the Web in more limiting directions.

Their ideas remain profound and forward looking. Anyone who really cares about the future of media, intellect, and culture, and how information technology can augment that, should consider their work. Just because the Web took a turn to expediency in the past does not mean it will not realize its richer potential in the future. (One hint of that is noted in the next section [of that post].) ...

Nelson's insight

Ted's iconoclastic and visionary style is apparent from the opening of his "As We Will Think" (1968 version):

Bush was right, His famous article is, however, generally misinterpreted, for it has little to do with "information retrieval" as prosecuted today, Bush rejected indexing and discussed instead new forms of interwoven documents. 

It is possible that Bush's vision will be fulfilled substantially as he saw it, and that information retrieval systems of the kinds now popular will see less use than anticipated.

As the technological base has changed, we must recast his thesis slightly, and regard Bush's "memex" as three things: the personal presentation, editing and file console; a digital feeder network for the delivery of documents in full-text digital form; and new types of documents, or hypertexts, which are especially worth receiving and sending in this manner.

In addition, we also consider a likely design for specialist hypertexts, and discuss problems of their publication. 

BEATING AROUND THE BUSH

Twenty-three years ago, in a widely acclaimed article, Vannevar Bush made certain predictions about the way we of the future would handle written information (1). We are not yet doing so. Yet the Bush article is often cited as the historical beginning, or as a technological watershed, of the field of information retrieval. It is frequently cited without interpretation (2,3). Although some commentators have said its predictions were improbable (4), in general its precepts have been ignored by acclamation...

In hindsight, it is obvious that Ted was right about Bush's vision. The memex pre-saged wonders far beyond the mundane notion of "information retrieval" as generally understood in the 1960s (even if not all of Bush, Engelbart and Nelson's visions have been embodied in the Web).

For an interesting update that theme, see this 2016 Quartz article and its reference to Werner Herzog's interview of Ted for his film Lo and Behold, and a short video of Ted expanding on what he spoke of. Both provide a nice live demos of the "parallel textface," much as shown in the above image from Ted's 1972 article. This also explains Ted's ideas of "transclusion" of elements from one work into another, as a rich kind of mashup that retains the identity of the original elements.  He explains how that can support creator rights to what is linked in, and micropayment-based payment/compensation models.* I have often heard people speculate about some of these exciting ideas, thinking they were new (and sometimes that they invented them). Few realize that Ted described all this in the '60s and '70s,

Those trying to invent this "deeply intertwingled" future might want to stand on Ted's shoulders. Ted may not have had the entrepreneurial genius of Steve Jobs, but his inventive vision is second to none.

The Atlantic might want to talk to him...

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1968? really? -- it seems yes

Nelson actually wrote previously about his ideas for hypertext (in the mid 1960s), so the exact date of this particular paper may not be of great importance, but its earliest provenance is a be a bit of a puzzle.

I recently corresponded with Ted by email, and he was intrigued by these finds -- happy to have the full 1972 version and puzzled by the "1968" version. He said he did not recall a formal publication from that date, but that he might have provided a version at the ACS Annual Meeting then.

Both papers are from my hard copy file, just as they appear in the scans now posted (with the hand annotations apparently being mine, from when I first read them). I believe I had ordered them from my company library and that the label "ACS Annual Meeting 1968" was the citation information with which I ordered that copy. (I presumed that referred to the American Chemical Society, which seemed a bit far afield, but Ted did have a wide range.) So it seemed to remain a puzzle.

However as I was drafting this post, I noticed that the 1968 version says "Twenty-three years ago..." while the 1972 version says "Twenty-seven years ago..." That would seem to be compelling evidence that my "1968" version actually was from that year.

To add more personal history, I had the pleasure of meeting with Ted in 1970 to explore assisting in an experimental hypertext implementation under Claude Kagan's direction, as part of my masters degree fellowship work at the AT&T Western Electric Research Center. That project did not materialize, but chatting with Ted about hypertext was one of the most memorable hours of my career.

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Early works by Ted Nelson from my collection

The following are items by Ted that may not to be generally available online. I collected these from 1969 onward, and plan to post scans of all them as I get time (after checking whether comparable copies are already accessible elsewhere).

• As We Will Think ("ACS Annual Meeting 1968" version
  (unable to confirm citation and date)
• As We Will Think ("Online 72 Conference Proceedings" version 
  (fuller than the scan at archive.org, includes original figures/photos)
• “Hypertext Editing System,” published by Brown University on 5/6/69 for the Spring Joint Computer Conference, 5/14-16/69
  (My first exposure to hypertext. I clicked a link and saw the future. It was at the IBM booth running on a "mid-sized" IBM 360/50 mainframe with a 2250 vector graphics workstation equipped with a light-pen. Coincidentally, I knew Andy van Dam and some of the developers from my time at Brown the years just before.)
• Short Computer Lib “$5 First Edition” ©’73, on typewriter paper hand-duplexed, 12 pages including Dream Machines flip-side.
• A File Structure for the Changing and the Indeterminate, ACM National Conference 1965
• Xanadu Draft Brochure, 27 November 1969
• Computer Decisions 9/70  -- No More Teacher’s Dirty Looks
• Hypertext Note 0-9, various dates in ‘67
• Decision/Creativity Systems dated 19 July 1970
• Hypertexts 20 Mar 70
• Getting it out of our system, in Schechter, ‘67
• A 14 December 1970 PDP10 teletype printout of Ted's “final report” for Claude Kagan of Western Electric (maybe incomplete with related fragments) -- as noted above, I met with Ted around that time to discuss assisting in this project while in my master's degree fellowship program. (I suspect this was not distributed beyond Ted, Claude, and me.)

(Copies will also be placed on Google Drive.)

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*An innovation of my own is relevant to this use of micropayments. Micropayments have a long history of enthusiasm and failure. The problem is that micropayments add up to macropayments, resulting in the shock of a nasty surprise when the bill is presented, or the fear of such a surprise. My short answer to how to fix that is to make the micro-payments variable, including some form of volume discounts and price caps, and to provide forgiveness when the value received is not satisfactory. Details of how do that are in this recent post on my other blog: "The Case Against Micropayments" -- From Fear and Surprise to The Comfy Chair.

Historical Clarification:  I should note that my original tweet, above was imprecise in saying "bringing Bush to the attention of those you name." I gather that Engelbart arrived at the basic idea of hypertext independently, and only later became aware of Ted's work. However my understanding is the Tim Berner-Lee was influenced by Ted, as referenced in his proposal for the WWW.