December 2013

[Commentary] A coalition of Internet firms -- including AOL, Apple, Facebook, Google, LinkedIn, Microsoft, Twitter and Yahoo -- issued a powerful but thoughtful call for reform of government online spying activities. The five principles they put forward are: 1) Limiting Governments’ authority to collect users’ information; 2) Oversight and accountability; 3) Transparency about Government demands; 4) Respecting the free flow of information; and 5) Avoiding conflicts among governments.

Three points are worth making.

• First, the principles laid out by the coalition are hardly radical ones, but rather common sense expressions of rights most Americans surely thought, until recently, they already had. If folks in the national security establishment have problems with any of these, they ought to explain what and why.
• Second, based on what we know, it seems clear that many governments, including our own, have been violating at least some of these principles. The political problem facing the US -- as is so often the case in privacy matters -- is the violation of expectations, which is another way of saying that the US national security establishment appears to have been operating in a political vacuum, either imagining that its surveillance activities (e.g., the NSA’s 1.5 million square foot Utah data storage facility) would never be publicly revealed (Really?), or completely clueless to, and unprepared for, the reaction once they were.
• Third, it would be interesting to assess the list of companies joining the coalition based on two variables: (1) Government contracts as a percentage of revenues; and, (2) Extent of operations in heavily regulated markets.

From Twitter and Facebook to Amazon and Google, the biggest names of the Internet are blasting a federal judge's decision allowing an Arizona-based gossip website to be sued for defamation by a former Cincinnati Bengals cheerleader convicted of having sex with a teenager.

In court briefs recently filed in the 6th U.S. Circuit Court of Appeals in Cincinnati, the Internet giants warn that if upheld, the northern Kentucky judge's ruling to let the former cheerleader's lawsuit proceed has the potential to "significantly chill online speech" and undermine a law passed by Congress in 1996 that provides broad immunity to websites. "If websites are subject to liability for failing to remove third-party content whenever someone objects, they will be subject to the `heckler's veto,' giving anyone who complains unfettered power to censor speech," according to briefs filed Nov. 19 by lawyers for Facebook, Google, Microsoft, Twitter, Amazon, Gawker and BuzzFeed, among others. Those heavy hitters "really tell you how major of an issue this is," said David Gingras, attorney for Scottsdale (AZ)-based thedirty.com and its owner, Nik Richie, who lives in Orange Count (CA)

[Commentary] What’s more dangerous to consumer well-being, sponsored content or the intervention of the Federal Trade Commission?

The agency held a conference, “Blurred Lines: Advertising or Content,” to “discuss native advertising,” as the New York Times put it. When convening a conference to “discuss” something or other, the FTC (or other regulatory entities) is almost never in pursuit of discussion -- any more than a police officer who says he just wants to talk. Such conversational assemblies usually become venues in which the agency can issue a veiled threat, either directly or indirectly, to its targets, instructing them sotto voce that unless they change their ways they’ll suffer the agency’s wrath. The regulatory playbook usually dictates that the agency promise targets that unless they start observing “voluntary” restrictions, the agency will have to request legislative authority to make restrictions mandatory. Nothing can be “voluntary” if somebody is threatening to make it mandatory, but the gambit works nine times out of ten.

Given the power of the First Amendment, the FTC will have to step more lightly in its legal thrusts against news and information websites than it does against advertisers, whose rights to commercial speech are huge but do not include a right to deceive. Would FTC action encourage advertisers to switch to their own sites rather than fight the regulators, preventing publishers from finding a way serve the mutual benefit of both reader and advertiser? The publication-reader-advertising symbiosis that worked so well for so many decades has obviously broken down, and the flight to sponsored content marks a failure of publishers and advertisers to build something of its equal.

The Centers for Medicare & Medicaid Services (CMS) is giving providers another year to show they've met the Stage 2 criteria of the federal government's incentive program to encourage the adoption and meaningful use of electronic health records. That means the start of the next phase will be pushed back a year.

Stage 2 will be extended through 2016 and Stage 3 won't begin until at least fiscal year 2017 for hospitals and calendar year 2017 for physicians and other eligible professionals that have by then completed at least two years at Stage 2, the CMS said. The latest extension parallels what the feds did with Stage 1, which was originally set to last two years but was lengthened by a year when it appeared the industry would be overstretched to build and get acclimated to systems capable of meeting the federal payment program's more stringent Stage 2 criteria. “The goal of this change is two-fold,” according to a CMS statement from Robert Tagalicod, director of the Office for E-Health Standards and Services at the CMS, and Dr. Jacob Reider, acting head of the ONC, the Office of the National Coordinator for Health Information Technology at HHS. The delay, they said, is intended to allow the CMS and ONC to focus on helping providers meet Stage 2's demands for patient engagement, interoperability and information exchange, as well as use data collected during that phase to inform policy decisions for Stage 3. The proposed rules are expected to be released in the fall of 2014 for the requirements providers must meet for Stage 3, as well as the 2017 Edition of standards health IT developers must build and test their systems to match.