METANOMICS: THE AGE OF OBAMA:

VIRTUAL WORLDS, OPEN GOVERNMENT AND POLICY - JUNE 24, 2009

ANNOUNCER: Metanomics is brought to you by Remedy Communications and Dusan Writer’s Metaverse.

ROBERT BLOOMFIELD: Hi. I’m Robert Bloomfield, professor at Cornell University’s Johnson Graduate School of management. Each week I have the honor of hosting a discussion with the most insightful and the most influential people who are taking Virtual Worlds seriously. We talk with the developers who are creating these fascinating new platforms, the executives, entrepreneurs, educators, artists, government officials who are putting these platforms to use. We talk with the researchers who are watching the whole process unfold. And we talk with the government officials and policymakers who are taking a very close look on how what happens in the Virtual World can affect our Real World society.

And naturally, we hold our discussions about Virtual Worlds in Virtual Worlds. How else could we find a very real place where our global community can convene, collaborate and connect with one another. So our discussion is about to start. You can join us in any of our live Virtual World studio audiences. You can join us live on the web. Welcome, because this is Metanomics.

ANNOUNCER: Metanomics is filmed today in front of a live audience at our studios in Second Life.

ROBERT BLOOMFIELD: Hello, and welcome again to Metanomics.

Today we take a look at the national internet policy of the United States, well, not exactly. According to today’s guest, Kevin Werbach, the U.S. currently has no national internet policy, but the Obama Administration is looking to change that and, as a leader of Obama’s transition team for the Federal Communications Commission, Kevin is in a good position to talk about what that policy might look like. So stay tuned for what should be a fascinating discussion.

Thanks to all of you who are attending Metanomics today, including those viewing live on the web. Please do join in with you comments and your questions.

ANNOUNCER: We are pleased to broadcast weekly to our event partners and to welcome discussion. We use ChatBridge technology to allow viewers to comment during the show. Metanomics is sponsored by the Johnson Graduate School of Management at Cornell University and Immersive Workspaces. Welcome. This is Metanomics.

ROBERT BLOOMFIELD: Today we turn immediately to our guest, Kevin Werbach, in the main event. Kevin Werbach is an assistant professor of legal studies and business ethics at the Wharton School at the University of Pennsylvania. He’s the founder of Supernova Group, a technology analysis and consulting firm. He advises companies rights about communication trends, information technology and, as we’ll see today, he writes a number of articles for law journals.

He was co-leader of the Federal Communications Commission, or FCC, transition team for the Obama Administration and currently serves as an expert advisor to the National Telecommunications and Information Administration of the Department of Commerce. Kevin, welcome to Metanomics. Kevin, welcome to Metanomics.

KEVIN WERBACH: Thanks, Rob. Glad to be here.

ROBERT BLOOMFIELD: Yeah, glad to have you, and I hope we’ll be able to keep you around. Now you headed Obama’s transition team with Susan Crawford for the FCC. So for starters you co-headed Obama’s FCC transition team. What does that involve?

KEVIN WERBACH: Having no life basically.

ROBERT BLOOMFIELD: Well, all in service to your country.

KEVIN WERBACH: Absolutely in service to the country.

The transition team is the group that operates between the presidential election in November and the inauguration in January. And basically it’s a small group of people responsible for identifying issues, reviewing what’s happening in the Agencies and advising the people that are selecting the senior members of the Administration: the Cabinet Secretaries and the other leadership and so forth.

So Susan and I, and we had a third person Dale Hatfield on our team, were responsible for looking at the FCC and trying to understand what was going on there and to be able to provide options and information for both the people selecting the new FCC Commissioners, and then for those people and their team, to understand how to develop their agenda and what sorts of things they would need to do in office.

ROBERT BLOOMFIELD: Kevin Martin headed up the FCC before, and I understand he came into a fair bit of criticism. Could you just sort of characterize what the issues were and how that that affected the search for someone new?

KEVIN WERBACH: Well, so Kevin Martin was the Chairman of the FCC in the latter half of the Bush Administration. There was a great deal of criticism that his leadership at the FCC wasn’t transparent, that it was biased and so forth. There were several reports that came out of the Government Accountability Office, the GAO, as well as an investigative report from the House of Representatives. There were definitely concerns that were raised about the way he ran the Agency. But the FCC Chairman is something that’s designated by the President so we knew that President Obama, coming in, would have an opportunity to name his own FCC Chairman. And our job was not really to look back and criticize; it was to get a deep understanding of what the issues were and help the new team coming in to really bring the FCC back to the level of excellence that it should be able to achieve.

ROBERT BLOOMFIELD: And now part of that attempt, I guess, resulted in getting Julius Genachowski as the person who’s now been nominated to take on the chairmanship. How

would you characterize his positions on internet policy?

KEVIN WERBACH: Well, Julius is a very distinguished both public servant entrepreneur as well as a business executive. He was at the FCC along with me in the mid 1990s, during the Clinton Administration, and then before that he was a Supreme Court Clerk, and had a very distinguished career even before then. Julius then went on to become an executive at IAC, which is Barry Diller’s internet ecommerce company and subsequently a venture capitalist. So he’s deeply familiar with technology and innovation and business, as well as the kinds of communications issues that the FCC oversees. I was at his confirmation hearing last week.

His confirmation has been held up by the Senate for the past few months. They finally scheduled a hearing, and one of the members of the Committee said, “Well, if this guy isn’t qualified to be the FCC Chairman, I don’t know who would be.” So he’s not yet in a position to be articulating specific policies, but I think, if you look to what President Obama said about technology and communications during the campaign, it should give some indications of direction the FCC is likely to go because Julius was one of the key people on the Technology Advisory Committee that I also served on during the campaign for President Obama.

ROBERT BLOOMFIELD: What I’d like to do, really, in exploring the directions that policy is likely to go is actually take a somewhat more legal view. You’re a law professor, and you’ve written a number of interesting articles that are all like hot off the presses. I think they’re all still forthcoming or have just been put into print. So I want to walk through those in a minute, but, before we get there, I have another question, which is: You are probably one of the very few members working with the Obama Administration, who are active World of Warcraft players. And so I’m wondering how that experience has affected your outlook on internet policy.

KEVIN WERBACH: Well, I’ll say I think I’m one of the few people active with the Obama Administration, who is “publicly” an active World of Warcraft player.

ROBERT BLOOMFIELD: Okay, Fair enough.

KEVIN WERBACH: It’s hard to know. That’s something that someone found on my blog, I think, during the transition period, and it was no great secret, but people were interested in that. Warcraft is something I do for fun. I’ve played fairly actively off and on for three or four years, and I found it both tremendously enjoyable as an entertainment experience, but also tremendously enlightening about the potential of Virtual Worlds and online communities. And just an extraordinary challenge and a really rewarding social experience.

I’ve gotten a lot out of Warcraft both personally and professionally. But I do it for fun because it’s a game. I don’t do it as a policy activity. But I think seeing what the experience is like of interacting with a community, with a guild and people beyond that in a Virtual World, I think is instructive. It’s really hard to explain to someone what that’s like if they don’t do it. Same as it’s hard to explain Second Life to someone if they don’t do it, and, of course, there’s significant differences between an MMOG, like Warcraft, and a user-created World, like Second Life.

But the notion of interacting through an avatar and the notion of using multiple streams of information, voice and text chat and video and so forth is an experience that I think is going to be increasingly central to the way people do business and the way people interact over the coming decade. So having that familiarity I found was helpful to me in thinking about where the internet is going and where society is going, frankly, which is important to understand if you’re helping advise on technology policy.

ROBERT BLOOMFIELD: We’ve seen not just the Obama Administration but a lot of mainstream media and politicians embrace some social media. Twitter, of course, is all the rage over the last couple weeks. Facebook also. YouTube has been sort of integrated seamlessly into a lot of TV news now. Do you see Virtual Worlds also making that step, or do we have a lot longer to wait?

KEVIN WERBACH: That’s a good question. Second Life, of course, was very hot about two or three years ago. I mean it was in terms of the publicity level almost similar to what Twitter has been over the past several months, although it never quite got to that usage level. I mean Twitter is still, I like to tell people, it’s still roughly one percent of internet users worldwide are on Twitter, so it’s not totally pervasive, but it’s 30 or 40 million people, which is more substantial than any Virtual World today. I think it depends how you define a Virtual World.

I was at the State of Play Conference last weekend in New York, which is the main academic and research conference on Virtual Worlds. And Raph Koster, the CEO of Metaplace, was one of the keynotes, and he was talking about thinking about Twitter as a Virtual World for example and the idea that we assume that immersion and the kind of visual experience that, for example, we have in Second Life is at the core of a Virtual World, but it doesn’t necessarily have to be. That we’re seeing some of the same kinds of interactions that were first developed in Virtual Worlds coming out through social media.

ROBERT BLOOMFIELD: Kevin, I’ve spent some time over the last few weeks reading some of your newest legal writings, which are forthcoming in Harvard Journal of Law and Technology, Journal of Telecommunications in Higher Technology Law, University of California Davis Law Review and, best of all of course, the Cornell Law Review. I know you’re doing a lot more than writing papers, but you raise some really interesting issues. I think going through some of these topics will provide some great background for understanding your other activities.

One of the key threads running through all of these papers is that the U.S. doesn’t have a national policy guiding internet regulation and clearly you would like to see one. I guess, before we talk about possible solutions and legal issues, let’s just talk about the substantive problems. In your paper Beyond Universal Service in the Digital Age, that’s in Telecommunications in Higher Technology Law Journal, you say that broadband penetration is already a yardstick for competitiveness among nations and that we aren’t doing so well. What concerns you about the state of U.S. broadband connectivity?

KEVIN WERBACH: First, let me just make two general comments. One is, as you said, these are some of my legal scholarship as a professor, not necessarily a view that’s representative of the Obama Administration or the FCC. I wear different hats, and most of these are things that I wrote prior to serving on the transition team or afterwards. And [AUDIO GLITCH] is again timing-wise the other comments about the U.S. not having an internet policy or broadband policy were

predominantly in 2008, referring to the time before the Obama Administration came into office. So in terms of that, I don’t think it requires a lot of justification vis a vis that broadband is something important in terms of global competitiveness.

It’s something that not just President Obama but the leaders of [AUDIO GLITCH] Asia frequently talk about in terms of highlighting their country’s ability to compete and educate its citizens and create jobs and innovate in the digital age that we live in. All of those things require good connectivity, and, again, it’s not a particularly novel story. I think it’s fairly well established that the United States was a real leader in the growth of the internet in the 1990s, but then, when it comes to the broadband internet, you can get much faster connectivity much more cheaply in most of the developed world than you can in the U.S.

And also even beyond just the facts on the ground, the Bush Administration just didn’t seem to care that much. It rarely talked about the internet and broadband. It didn’t have very many high-level people who were focused on those issues. It just seemed to think that this was something that they could just let go, and it would just happen. And that’s, I think, really not the way to look at this critical piece of national infrastructure. This is critical resource for the information platform of the twenty-first century.

So I think if you look at what the Obama Administration has said, again going back to during the campaign, President Obama made quite clear that this is important to him, that he understands the value of technology in so many ways, and he’s put into place a tremendous team across different parts of the federal government to really drive forward technology, and broadband in particular, as a platform for many of the major initiatives of the Administration.

ROBERT BLOOMFIELD: You make a distinction between what you call the floor and the ceiling of connectivity. What do you mean by those two terms, and which of those should we be caring about, from a regulatory perspective?

KEVIN WERBACH: Well, in that particular paper you’re referring to, I was addressing the issue of what’s called universal service, and universal service is a policy that we’ve had for a long time in the United States, that initially meant everyone should have the ability to affordably access the telephone network. It was originally about telephone service, but obviously today, people think about how that might apply to internet connectivity and broadband because that’s the access to the global information network the same way as the telephone was 30 or 50 or 100 years ago.

And so the question that I was looking at in this paper is: How do we evolve our universal service policies to promote universal broadband. The system that we have in place for universal service is outmoded; it’s broken. It has all sorts of inefficient cross-subsidies that really don’t go to either fundamentally providing what they should, in terms of affordable telephone service, but certainly don’t get us to where we need to be on broadband. And, again, this is not a novel idea; this is something that’s broadly recognized within both the Academy and industry.

So the question is: What should we do about broadband? And the distinction that I was making, that you referred to, is in thinking about what universal broadband means, there are two dimensions. One is: What’s the baseline that everyone should have? Broadband is a fundamental element of citizenship, I think, in the twenty-first century, to get access to government services, to get access to news and information, to get access to educational materials and health care and so forth. You’re at a disadvantage if you don’t have access to some level of broadband connectivity

today, and that’ll increasingly be true.

So the first question is: What does it take? What’s the table stakes? What level of connectivity? What speed? What level of pervasiveness? And what other equipment and training and so forth does it take to be a basic participant in information age digital polity, if you will? The ceiling says what’s the level of connectivity that should be widely available. So that’ll be something much faster.

In Japan, pretty much everyone, at least in the major cities, in Tokyo, can get access to fiber-optic-based broadband that’s typically 50 or 100 megabits per second; whereas, in the United States, hardly anyone has access to that level of speed, and most so-called broadband, even in big cities, is a couple of megabits per second.

So the ceiling idea is what aspirationally should policy push for with the recognition that it may not be feasible or cost-effective to give everyone, in all rural areas and so forth, that level of connectivity right away, but the policymakers should think in terms of those two levels. That was the argument I was making in that paper.

ROBERT BLOOMFIELD: It sounds a little bit like some of the things I’m hearing with the health-care debate, that we want to make sure everyone gets some level of health care. We can’t necessarily afford to provide everyone with the absolute best in all cases, just because of the cost.

You make another distinction when you talk about universal service. You talk about ubiquitous access versus unitary access. What’s the difference?

KEVIN WERBACH: Those are my terms, again, that I used in that paper. Again, this is thinking about what does universal service really mean. And I think when you unpack it, one thing it means is ubiquity, i.e., everyone should have access to broadband. That’s usually what gets talked about, but a further dimension is, everyone should have access to the same network. We take it for granted that everyone accesses the same internet when that’s not necessarily the case. So the point there was just that government should ensure that the kind of broadband that people have access to is part of an interconnected network of networks. That it’s not something that becomes narrow and proprietary where people can’t benefit from network effects and the ability to access the same applications and content and so forth.

ROBERT BLOOMFIELD: So let’s push that idea a little further, which you do in a paper called The Centripetal Network, how the internet holds itself together and the forces tearing it apart, and you just alluded to the fact that the internet is a lot of different parts that work together, and you’re concerned that there are forces of essentially fragmentation, balkanization. And so I thought we could talk about those for a minute. You mentioned three issues: internet addressing, applications and content. I guess if you could just sort of walk us through what you worry about with this fragmentation.

KEVIN WERBACH: I worry about the internet splitting up. What I do in that paper is start from the premise that the internet’s a network. That should be obvious, but what’s a network? And it turns out there’s an entire emerging academic field, an interdisciplinary field of network science that

studies the properties of networks. There have been some tremendous advances ranging from physics to biology and economics, studying the properties and modeling the properties of networks. The internet is the greatest network of networks that’s ever been constructed in human history. It’s something that many of these network scientists study, but I think the lessons that they’ve developed can inform some of the policy decisions about the internet.

One of the findings of one branch of network science, what’s called network formation theory, is that there’s a fundamental tension as networks grow, between what’s called stability and efficiency. I’ll spare you all of the math and the technical details, but the basic point is that the most stable networks, the networks that are likely to stay in place and not break up tend to not be the most efficient networks, i.e., the networks that provide the greatest benefits, in terms of connecting everyone and delivering value to all users of the network. But conversely, the efficient network.

ROBERT BLOOMFIELD: Let me actually get to a specific fragmentation issue that I thought seemed very interesting, which is that you’re suggesting that a lot of what makes the internet seem so unitary to us is the fact that content is shared so freely and that legal pressures may actually turn that around. So for example, I’m thinking in particular of the fact that you suggest search engines may actually be infringing on the rights of web-page owners and that, if they wanted to, they could keep search engines from getting their content, which would essentially make the internet seem a lot less unitary.

KEVIN WERBACH: Content that you put on the web is subject to copyright law, like anything else, so how is that Google can take all the content on the web and stick it in its search index? Google actually caches a copy of every page on the web that it can find, and this is how search works and how basically the internet works effectively because so much is dependent on search. And the legal answer is really not all that clear. There are a bunch of theories about why this should be okay. And, as a practical matter, sites want to be found so they don’t go and sue Google for making them searchable. And, if they want to tell Google not to index their page, they can do so, and Google will respect that.

But the point is, given where things are going with copyright law and given some of the developments like, for example, Google’s book search case, which was still live at the time I wrote that article, it’s now subject to a settlement, although that’s being reviewed by the Justice Department, I was concerned that this kind of permissiveness that let’s content be shared online could break down. And, if you had to get a license for any piece of content you wanted to use from anywhere on the web, even to do something like search, the internet wouldn’t work very well, as we’re used to it. So that’s the concern in that part of that paper.

ROBERT BLOOMFIELD: Okay. We’ve laid out some of these problem. We’d like to see the country have better broadband penetration, more unitary and ubiquitous at both the floor and ceiling levels. We want to make sure it doesn’t fragment. And we also want to make sure we’re not giving too much power to a small group of players. That takes us to a discussion of the policy of net neutrality, which you discuss at some length in a paper called Higher Standards: Regulation in the Network Age. What do you mean when you say “net neutrality,” and what problems would that solve?

KEVIN WERBACH: Network neutrality or net neutrality is basically the idea that network operators,

the phone and cable companies and so forth, that provide broadband access shouldn’t become gatekeepers, that they shouldn’t discriminate against certain content or applications running on their broadband networks. This has been a very significant rallying cry in recent years on telecommunications policy. The Bush Administration, again, largely said this is something that should be left to the marketplace. So at the very tail end of Kevin Martin’s time there took some action there in a case involving Comcast, which one of the other papers, the one in the Journal of that school up in New York somewhere refers to.

But, by and large, the Bush Administration said that we didn’t need government to address this issue. President Obama, going back to the campaign, made a very strong statement in his technology plan, saying that the open internet was something that should be protected and that network operators shouldn’t become gatekeepers in this way and that they shouldn’t discriminate against content and application. So that’s something that the President has gone on record in support of and will likely be an issue that the FCC and other parts of government will take a look at.

ROBERT BLOOMFIELD: Now I’m assuming this is just coincidence, but, as soon as you start talking about net neutrality and people are mentioning Comcast in the chat, your sound quality falls apart, and you’re clearly being throttled on your bandwidth. It’s possible you just need to wiggle a cable for your microphone.

KEVIN WERBACH: I have no idea. Yeah. I’ve got at the 20 megabit Comcast power-boost service which normally works fine.

ROBERT BLOOMFIELD: I’d like to ask you--we have only a few minutes left I know. We’re running up against our hard break here. You proposed that the FCC should be the division that regulates the internet, but then in your paper on technology standards, you also suggest that the FCC right now is not only--and this is a quote, “... not only structurally ill-suited to tackle the challenges it faces, it has deliberately ignored the very skills it needs to cultivate. The FCC today has limited technical capacity and is not even using the capabilities it has.” What would you suggest as a solution to that?

KEVIN WERBACH: Well, let’s see. Two things to start with. First, I suggest we elect Barack Obama as President, and I suggest that he nominate Julius Genachowski as the Chairman of the FCC. So again, those are comments about the FCC at the tail end of the Bush Administration, and I think the FCC needs to be dramatically overhauled. It has some very hardworking, very talented people there, but they’ve not been given the leeway to generate ideas and to really go out and do the job that they want to do for the country. And they need a lot of help. They need more technical expertise, and they need more economic expertise. They need more familiarity with new technologies. I’m very optimistic that that’s going to happen under this Administration.

ROBERT BLOOMFIELD: Well, normally I’d say something along the lines of, “from your mouth to God’s ear,” but when you hear yourself being replayed back, you’ll think maybe God shouldn’t have to hear a voice quite like that. But this has really been a fascinating discussion, and I’m really glad that you could join us on Metanomics. I have one last question, and this actually comes from a variety of people, but specifically there is an employee I believe of NOAA, National Oceanic and Atmospheric Association, who is saying, “I heard a reference to the Department of Commerce, but,

from personal experience,” he says, “I know the Hoover Building in D.C. where the Department of Commerce is blocks not only Second Life, but YouTube, Facebook, SlideShare, Flickr and other social media.” Do you see anything likely being done about that? Because I know we’ve had people from the government talking about the security concerns. But, on the other hand, if we can’t use the social media through the government, a lot of these arguments that we need more broadband access look a little self-contradictory.

KEVIN WERBACH: Right. Well, I was amused that the last time I was in the Commerce Department Building--I work there about one day a week right now as an advisor to NTIA, the telecom group there. I clicked on a link to go to a Facebook page, and it was blocked, and it said, “Reason for being blocked: social engineering.” Which kind of took me aback because the social engineering, if you know, is a kind a of [cracking?] where you sort of gain people’s trust and get into systems by tricking them into, for example, telling you their password or something like that, which, you know, one can make an argument for blocking Facebook in a workplace, but it’s certainly not that it’s social engineering. So that’s true of the Department of Commerce, and that’s a policy that was put into place by their IT department.

One of the things that the Obama Administration is doing is, alongside, trying to transform government technology policy externally. It’s trying to transform the way government uses technology internally. So that’s why President Obama put into place both a Chief Technology Officer, Aneesh Chopra, in the White House, responsible for overall technology strategy, as well as a Chief Information Officer, Vivek Kundra, who’s responsible more for overseeing the government’s use of technology. The government spends something like $70 billion a year on just internal IT. It’s like any big company only just much, much bigger. So government needs to use technology efficiently, as much as any business, if not more so. I think it’s critical, too, that Agencies think about what their policies are internally.

We joke at the FCC that when I was a staff attorney there, in the mid 1990s, I set up basically the FCC’s website because it was the early 1990s, and there weren’t a lot of websites, and there weren’t other people, in the Agency, who know how to write html code. They’ve changed some of the graphics, but it’s still structurally the same website that I built more than 12 years ago. It was pretty cool in 1996, but it’s, frankly, not where it should be for 2009. So that’s something that, clearly, I think the team, the leadership in the FCC is going to want to change. I think you’re going to see that across the government some real inspirational leadership in terms of seeing technology not just as something that the government needs to do from a policy standpoint, but really driving Web 2.0 and crowd computing and crowd sourcing and open platforms and Open Source deeply into the government, I think, is going to be one of the long-standing legacies of this Administration.

ROBERT BLOOMFIELD: Great! Okay. I know it’s 5:00 now, and you have, no doubt, another important event that you need to be at so, Kevin Werbach, thank you very much for joining us today on Metanomics.

KEVIN WERBACH: Oh, my pleasure. I’m sorry that the sound has been such a challenge, but I hope you got enough of that. I was going to make a joke that, as a result of this, we were going to shut down Second Life, but someone might take it seriously, and, as I said, I have no authority over anything like that. [CROSSTALK]

ROBERT BLOOMFIELD: It does end up sounding a little bit like, “We’re the government, and we’re here to help,” except you’re saying it in a Darth Vader voice.

KEVIN WERBACH: That’s perfect.

ROBERT BLOOMFIELD: But now is the time to promise that you’d be glad to come back on another time. Thank you very much, Kevin Werbach.

So we’re going to change gears a little bit. This has been a singular week for social media, with Twitter stealing the headlines for its role in the civil unrest roiling Iran after some controversial election results. We are going to turn now to Mitch Wagner, of Information Week, who is going to help us understand the implications for social media, politics and journalism, as we put the Twitter revolution in the spotlight.

ROBERT BLOOMFIELD: Mitch, welcome to Metanomics.

MITCH WAGNER: Thank you for having me, Rob. This has been interesting to listen to the technology issues.

ROBERT BLOOMFIELD: Yes, every day in a Virtual World is a new experience. Mitch, just a few weeks ago I feel like political journalists, all over the U.S. certainly, were having a field day making fun of Twitter and making fun of all of these celebrities, politicians, news people who were using it, and now Iranian demonstrations are being heralded as a Twitter revolution. What lessons do you draw from this?

MITCH WAGNER: Yeah, it’s very interesting to watch. I’ve witnessed the hype and backlash cycle in technology a few times, most recently with Second Life, of course, and it’s really interesting to see how the cynics manage to get to the backlash portion on Twitter. Because any time they start saying it’s over-hyped, you can say, “Well, I guess overthrowing one of the most brutal theocracies in the world is not so important.” I think we can get several lessons from what’s going on over there. Lessons are still coming out, and anything we attempt to put down as a conclusion is very tentative. But I think there are a few interesting things going on.

First of all, Twitters is, you could say, it’s very primitive. We’ve seen a lot of rich applications, Second Life certainly being one of them. Web video. A lot of interesting graphics. Macromedia Flash. Html 5. Twitter is very, very primitive compared with all that. It’s just text. It’s just 140 characters. But its very primitiveness is what gives it so much power because it goes through both the web and SMS. For instance, it’s been able to slip through the very, very fine holes in the censorship nets that Iran has been attempting to put up.

Another lesson that we can get from Twitter, from what’s going on in Iran, is that LoL Cats are not only entertaining, but they are also a great force for good and fighting against evil. This is something that a researcher named Ethan Zuckerman at Berkman Center in Harvard first put forward. He called it “the cute cat theory of internet censorship.” People get familiarity with these

web tools just by having fun and using it in their day-to-day lives and sharing sports scores and LoL Cats and telling jokes and telling each other about breakfast on Twitter. And then when they need the tool for something important, like political demonstrations or a national emergency, they are very familiar with those tools, and they come easily hand to hand. If you’re going to use a tool during a riot, when the bullets and teargas are flying around, you need to be really, really familiar with that tool. You’re not going to sit there and try to remember Twitter codes while you’re getting shot at.

ROBERT BLOOMFIELD: That actually sounds--oh boy, I guess it was maybe a year and a half ago or so we had Benn Konsynski, an IT professor, on Metanomics, talking about technological progress. He emphasized that toys become tools. So it sounds like this LoL Cats’ on to demonstration organizing. It sounds exactly like that.

MITCH WAGNER: Yeah. Another thing we see out of Iran is that social media is mobilizing world opinion. I can really see a scenario pre-social media, where Iran would have been able to shut down the walls effectively and really keep this off the front pages and the TV news in the U.S. and around the world. But now we see everything. I think perhaps the biggest example of social media currently is the video of the Iranian woman being shot. I don’t recall her last name, but her first name is Neda, and that’s already becoming sort of a code word or hash tag, and she’s becoming a symbol in the face of the revolution over there.

ROBERT BLOOMFIELD: Now at the same time that Twitter has made it harder for the Iranian government to control the news, it also just seems part and parcel of this steady devolution in journalism that we’ve seen. First it was broadcast TV and news print challenged by upstart young bloggers, who now seem to be driving news and opinion. And then this week, anonymous Tweeters are our eyes and ears. I think Andrew Sullivan at The Atlantic has dedicated much of his blogging to what he calls “alive tweeting the revolution.” Are we really ready to turn our reporting over to anonymous and unverifiable reports of 140 characters or less?

MITCH WAGNER: Yeah. There’s a saying that--Ron Nessen, I think, was Press Secretary under Jerry Ford or Jimmy Carter--I think it was Jerry Ford--he said, “Nobody believes the official spokesman, but everybody trusts the unidentified source.”

ROBERT BLOOMFIELD: Yeah. Right.

MITCH WAGNER: And the corollary for then the Twitter age is that nobody believes the New York Times, but everybody believes girlyboy853 on Twitter. But I think that’s changing. I think we’re seeing a sense that it’s great to get the things that appear to be firsthand reports on Twitter and Facebook and YouTube, but you don’t really know where those came from. You don’t really know if they were intentionally planted disinformation from one side or another or just somebody who’s plain wrong. I think this highlights the role of trusted sources to sift through the information and tell people what’s actually going on and what’s real and separate out the truth from the rumors. We have a name for those sort of people: we call them journalists, no matter what medium they’re in, whether they’re writing on paper or for a website or just bloggers.

ROBERT BLOOMFIELD: Let’s turn to another issue. What implications do you think this week’s

events have for Twitter itself? Is this going to help them develop a revenue model?

MITCH WAGNER: Well, I, for one, don’t see a revenue model in overthrowing governments, unless you actually run a mercenary army, which I don’t think Twitter is thinking of diversifying into. But, as they look for sources of outside revenue and just additional sources of funding, it’s going to certainly enhance their case that they are a serious medium and not just a frivolous plaything to be tossed aside. Of course, the flip side of that is, they still could be just a step or even just a fad. Somebody else could take the lessons and apply it, and they could become the Friendster of micro blogging.

ROBERT BLOOMFIELD: Who?

MITCH WAGNER: Yeah, exactly. For anyone who is actually not ironically saying “new,” they were kind of a social network that got replaced by MySpace, and MySpace is now looking to maybe be taken over by Facebook. So it’s possible that somebody else could be doing the same thing as Twitter a year from now and stealing a lot of Twitter’s business.

ROBERT BLOOMFIELD: I know Friendster the same way I know Betamax video tapes that I’ve never actually dealt with it, held it in my hand. I know it is an object lesson that just because you have a good technology doesn’t mean you’re going to win, and someone else can do effectively the same thing.

With our few remaining minutes, I’d like to change subjects a little and get your updated thoughts on one aspect of Linden Lab’s business strategy. Over a year ago, you were on Metanomics with Gartner analyst Steve Prentice, and we had a very interesting discussion of Second Life’s target demographics. Let’s take a listen to what you and Steve Prentice had to say. Wiz, can you roll the tape?

[VIDEO]

STEVE PRENTICE: If you want a Virtual World to be successful, I think you've got to know who you're targeting to, where the focus is. And the question, and I always hesitate to give it out in this sort of forum is: Where is the focus for Linden? Who is the audience, the community, if you like, that Second Life is focused at and targeted to? Sure, there's a community of users and residents today, but, as Mitch has said, that's kind of flattened off a little bit, and what's the next stage of development there. ROBERT BLOOMFIELD: Mitch, you want to take a stab on behalf of Linden Lab answering that question Steve just asked. Who is the target demographic for Second Life? MITCH WAGNER: People who live on planet Earth. And this is only until extraterrestrial life is discovered, then it's going to be everybody in the universe.

Linden Lab has a very messianic vision of the future of virtual worlds and Second Life's role in that. I don't think they've really--I don't like speaking for Linden Lab, but I'm pretty sure they haven't got any kind of vision of constraint at this point.

[END OF VIDEO]

ROBERT BLOOMFIELD: So Mitch, over a year later, do you think Linden Lab is recognizing its constraints and restricting its target market to a subset of the people who live on planet earth?

MITCH WAGNER: Well, that is a very interesting question, and I don’t have a yes or a no answer for you. I think, first of all, there is something to be said for what has been termed “big, hairy, audacious goals.” Yes, it sounds ridiculous sitting here today, to think that everyone in the world will be using Second Life or a Virtual World, but a lot of the most successful tech companies out there had goals that were equally ridiculous at the time of their founding. Microsoft just started up by a college dropout and a few other techy hippies from Seattle, and their goal was to put a computer on every desk top, and that certainly seemed crazy in the late ’70s, but, by gosh, they did it. And you could say similar things for Google and similar things for other companies that started up with these big, hairy, audacious goals.

I also think that, when you’re judging a company’s goals, you have to look at the company’s success. At the time I ridiculed them last year, Second Life wasn’t really doing that well. The technology was unstable. The growth was flat. Now Second Life is growing again, and, despite the problems we’ve had in the past hour, the technology is much more stable. We’ve got a new CEO who, I think, brings some business basics to the company, so I think the company is doing well. That goal seems to be doing pretty well.

That said, I think there are a lot of obstacles to making it a universal service. One of them that it still requires midrange or high-end personal computers, and a lot of the action is going on in cell phones and NetBooks and other computers with a lot less computing power than can run Second Life. So it’ll be interesting; I’d love to find whether Linden Lab sees that as a threat and, if so, how they plan to address it. But as far as I can see, they’re still as ambitious as they ever were. If you look at some of the comments that Philip Rosedale’s been making in public appearances over the past couple of weeks, he’s still talking about Virtual Worlds taking over the Real World.

ROBERT BLOOMFIELD: Well, thanks so much for coming on and sharing your thoughts. I know people, who want to hear more about what you have to say on social media and Virtual Worlds, can see you on your own Virtual World interview show Copper Robot. Can you tell us what’s coming up?

MITCH WAGNER: Yeah. I just want to quarrel with you on one point there. We actually don’t do a lot of talk about social media in Virtual Worlds there. To the extent that I do talk about social media, I do it on Information Week. And Virtual Worlds is a subject I don’t talk about so much as do. That said, the Copper Robot interview program, in Second Life, it’s alternate Sundays at 6:00 P.M., also available on web video and as an audio downloadable podcast, which you can subscribe to in iTunes.

Past guests have included people ranging from the Lindens themselves to P.W. Singer, who wrote a really excellent book about robots on the battlefield, called Wired for War. We’ve had actress Felicia Day and a cast of the web sitcom, The Guild. Coming up this Sunday, we’re having a writer named Robert Charles Wilson, who is author of a number of excellent science fiction novels, and I’m reading his latest now, which we’re going to talk about on Sunday. It’s called Julian Comstock: A Story of 22nd Century America. So hoping you all can join us for that.

ROBERT BLOOMFIELD: Sounds very interesting. So thanks for letting us know about that. Thanks for joining us on Metanomics. I hope I’ll see you back here.

MITCH WAGNER: I hope to be back.

ROBERT BLOOMFIELD: Now it’s time for our regular closing comment, Connecting The Dots. A few weeks ago, we had author Thomas Mallaby talking about Linden Lab as what he called a “technoliberal post-bureaucratic firm.” What does that mean? When I asked Thomas to explain that technoliberal management is, and this is a quote, “the idea that we don’t need, we should even give up on the project of running our organization in some kind of intentional top-down fashion. We should instead trust the crowd, trust the collective wisdom of letting a lot of people decide, letting a lot of people choose what they want to do and what they think is important.”

While Mallaby traced technoliberalism to the Whole Earth Catalogue founder, Stuart Brand, I would actually go back to the economist Friedrich Hayek. Hayek argued for decentralization in decision making rather than having a hierarchy, with a few at the top making decisions bearing on everyone. Hayek points out that large numbers of people will collectively have far more information than a few individuals, even if those individuals are incredibly smart and well-informed. So financial markets are the most fundamental technology that provides a way for the masses to aggregate their information resulting, in theory, in a market price that impounds incredible amounts of information. It isn’t hard to see why Hayek is viewed tongue-in-cheek as the patron saint of libertarians.

Now when I look at the clearest statement of what might pass for a national policy on the internet, I think we can see some of the flavor of technoliberalism. From Section 230(b) of the Communications Act, I am going to quote, “It is the policy of the United States to promote the continued development of the internet and other interactive computer services and other interactive media; to preserve the vibrant and competitive free market that presently exists for the internet and other interactive computer services; to encourage the development of technologies which maximize user control over what information is received by individuals, families and schools who use the internet.”

So I don’t think I’m claiming too much to say that this is a technoliberal policy goal, maintaining an open, competitive and leaderless internet that will place power in the hands of individuals, families and schools. So my question today is this: Is a technoliberal method the best way of achieving a technoliberal goal? That is, should government be stepping in to lead the way to an open, competitive and empowering internet? Or should we just allow an open, competitive and empowering market process to achieve that policy for us?

Now I think there’s a role for the visible hand, the commanding hand of government, and here’s

why: Markets aggregate information effectively only when they are competitive. Competition requires a large number of players who are each very small so that, individually, each one has a negligible effect on the market. When we consider the players who will shape internet policy in the marketplace, they tend to be a relatively small number of very large players. That doesn’t bode well for an effective technoliberal method for developing internet policy.

Second, markets aggregate information effectively only when individual decisions are sincere. What I mean by sincere is that the market decision isn’t driven by some hidden ulterior motive. So for example, investing in a certain asset or a certain type of technology needs to be driven by a belief that that asset or technology is going to maximize profits directly. It can’t be a backroom deal, in which firm A invests in firm B’s technology because they expect a favor from B down the road. So that’s hardly a way to harness the wisdom of crowds.

So let me say very clearly I am happy to support decentralization, deregulation and the use of the invisible hand instead of the visible commanding hand of the government, when market conditions warrant. But my reading of the current state of the internet: I don’t think that’s going to work particularly well.

Now we know that the hand of the government has its own problems, so I’d like to close by wishing the Obama Administration good luck. I think they’re going to need it as they try to achieve an internet policy goal that most liberals and libertarians will support, but they’re going to be forced to use methods that these constituents are not going to care for much at all.

So that’s all we have for this week. Join us next week at Metanomics, same time, 4:00 P.M. Eastern, 1:00 P.M. Pacific time, Wednesday, July 1st. See you then. This is Rob Bloomfield signing off.

Document: cor1063.doc

Transcribed by: http://www.hiredhand.com

Second Life Avatar: Transcriptionist Writer