March 29, 2024

Abandoning the Envelope Analogy (What Your Mailman Knows Part 2)

Last time, I commented on NPR’s story about a mail carrier named Andrea in Seattle who can tell us something about the economic downturn by revealing private facts about the people she serves on her mail route. By critiquing the decision to run the story, I drew a few lessons about the way people value and weigh privacy. In Part 2 of this series, I want to tie this to NebuAd and Phorm.

It’s probably a sign of the deep level of monomania to which I’ve descended that as I listened to the story, I immediately started drawing connections between Andrea and NebuAd/Phorm. Technology policy almost always boils down to a battle over analogies, and many in the ISP surveillance/deep packet inspection debate embrace the so-called envelope analogy. (See, e.g., the comments of David Reed to Congress about DPI, and see the FCC’s Comcast/BitTorrent order.) Just as mail carriers are prohibited from opening closed envelopes, so a typical argument goes, so too should packet carriers be prohibited from looking “inside” the packets they deliver.

As I explain in my article, I’m not a fan of the envelope analogy. The NPR story gives me one more reason to dislike it: envelopes–the physical kind–don’t mark as clear a line of privacy as we may have thought. Although Andrea is restricted by law from peeking inside envelopes, every day her mail route is awash in “metadata” that reveal much more than the mere words scribbled on the envelopes themselves. By analyzing all of this metadata, Andrea has many ways of inferring what is inside the envelopes she delivers, and she feels pretty confident about her guesses.

There are metadata gleaned from the envelopes themselves: certified letters usually mean bad economic news; utility bills turn from white to yellow to red as a person slides toward insolvency. She also engages in traffic analysis–fewer credit card offers might herald the credit crunch. She picks up cues from the surroundings, too: more names on a mailbox might mean that a young man who can no longer make rent has moved in with grandma. Perhaps most importantly, she interacts with the human recipients of these envelopes, reporting in the story about a guy who runs a cafe who jokes about needing credit card offers in order to pay the bill, or describing the people who watch her approach with “a real desperation in their eyes; when they see me their face falls; what am I going to bring today?”

So let’s stop using the envelope analogy, because it makes a comparison that doesn’t really fit well. But I have a deeper objection to the use of the envelope analogy in the DPI/ISP surveillance debate: It states a problem rather than proposes a solution, and it assumes away all of the hard questions. Saying that there is an “inside” and an “outside” to a packet is the same thing as saying that we need to draw a line between permissible and impermissible scrutiny, but it offers no guidance about how or where to draw that line. The promise of the envelope analogy is that it is clear and easy to apply, but the solutions proposed to implement the analogy are rarely so clear.

What Your Mailman Knows (Part 1 of 2)

A few days ago, National Public Radio (NPR) tried to offer some lighter fare to break up the death march of gloomier stories about economic calamity. You can listen to the story online. The story’s reporter, Chana Joffe-Walt, followed a mail carrier named Andrea on her route around the streets of Seattle. The premise of the story is that Andrea can measure economic suffering along her mail route–and therefore in that mythical place, “Main Street”–by keeping tabs on the type of mail she delivered. I have two technology policy thoughts about this story, but because I have a lot to say, I will break this into two posts. In this post, I will share some general thoughts about privacy, and in the next post, I will tie this story to NebuAd and Phorm.

I was troubled by Andrea’s and Joffe-Walt’s cavalier approaches to privacy. In the course of the five minute story, Andrea reveals a lot of private, personal information about the people on her route. Only once does Joffe-Walt even hint at the creepiness of peering into people’s private lives in this way, embracing a form of McNealy’s “you have no privacy, get over it” declaration. In the first line of the story, Joffe-Walt says, “Okay before we can do this, I need to clear up one question: Yes, your mailman reads your postcards; she notices what magazines you get, which catalogs; she knows everything about you.” The last line of the story is simply, “The government is just starting on its $700 billion plan. As it moves forward, Wall Street economists will be watching Wall Street; Fed economists will be watching Wall Street; Andrea will be watching the mail.”

There are many privacy lessons I can draw from this: First, did the Postal Service approve Andrea’s participation in the interview? If it did, did it weigh the privacy impact? If not, why not?

More broadly speaking, I bet all of the people who produced or authorized this story, from Andrea and Joffe-Walt to the Postal Service and NPR, if they thought about privacy at all, engaged in a cost-benefits balancing, and they evidently made the same types of mistakes on both sides of that balancing that people often make when they think about privacy.

First, what are the costs to privacy from this story? At first blush, they seem to be slight to non-existent because the reporter anonymized the data. Although most of the activity in the story appears to center on one city block in Seattle, we aren’t told which city block. This is a lot like AOL arguing that it had anonymized its search queries by replacing IP addresses with unique identifiers or like Phorm arguing that it protects privacy by forgetting that you visited Orbitz.com and remembering instead only that you visited a travel-related website.

The NPR story exposes the flaw in this type of argument. Although a casual listener won’t be able to place the street toured by Andrea, it probably wouldn’t be very hard to pierce this cloak of privacy. In the story, we are told that the street is “three-quarters of a mile [north] of” Main Street. The particular block is “a wide residential block where section 8 housing butts against glassy, snazzy new chic condos that cost half-a-million dollars.” Across the block are a couple businesses including a cafe “across the way.” Does this describe more than a few possible locations in Seattle? [Insert joke about the number of cafes in Seattle here.]

It’s probably even easier for someone who lives in Seattle to pinpoint the location, particularly if it is near where they live or work. For these people, thanks to NPR, they now know that in the Section 8 building lives “a single mom with an affinity for black leather is getting an overdraft notice” and a “minister . . . getting more late payment bills.” The owner of the cafe has been outed as somebody who pays his bills only by applying for new credit cards. If you lived or worked on this particular block, wouldn’t you have at least a hunch about the identities of the people tied to these potentially embarrassing facts?

Laboring under the mistaken belief that anonymization negated any costs to privacy, the creators of the story probably thought the costs were outweighed by the potential benefits. But these benefits seem to pale in comparison to the privacy risks, accurately understood. What does the listener gain by listening to this story? A small bit of anecdotal knowledge about the economic crisis? A reason to fear his mailman? The small thrill of voyeurism? A chance to think about the economic crisis while not seized by fear and dread? I’m not saying that these benefits are valueless, but I don’t think they were justified when held against the costs.

Will cherry picking undermine the market for ad-supported television?

Want to watch a popular television show without all the ads? Your options are increasing. There’s the iTunes store, moving toward HD video formats, in which a growing range of shows can be bought on a per-episode or per-season basis, to be watched without advertisements on a growing range of devices at a time of your chooing. Or you could buy a Netflix subscription and Roku streaming box on top of your existing media expenditures, and stream many TV episodes directly over the web. Thirdly, there’s the growing market for DVDs or Blu-ray discs themselves, which are higher definition and particularly rewarding for those who are able to shell out for top-end home theater systems that can make the most of the added information in a disc as opposed to a  broadcast. I’m sure there are yet more options for turning a willingness to pay into an ad-free viewing experience — video-on-demand over the pricey but by most accounts great FiOS service, perhaps? Finally, TiVo and other options like it reward those who can afford DVRs, and further reward those savvy enough to bother programming their remotes with the 30-second skip feature.

In any case, the growing popularity of these options and others like them pose a challenge, or at least a subtle shift in pricing incentives, for the makers of television content. Traditionally, content has been monetized by ads, where advertisers could be confident that the whole viewership of a given show would be tuned in for whatever was placed in the midst of an episode. Now, the wealthiest, best educated, most consumer electronics hungry segments of the television audience–among the most valuable viewers to advertisers–is able to absent itself from the ad viewing public.

This problem is worse than just losing some fraction of the audience: it’s about losing a particular fraction of the audience. If x percent of the audience skips the ads for the reasons mentioned in the first paragraph, then the remaining 100-x percent of the audience is the least tech-savvy, least consumer electronics acquistive part of the audience, by and large a much less attractive demographic for advertisers. (A converse version of this effect may be true for the online advertising market, where every viewer is in front of a web browser or relatively fancy phone, but I’m less confident of that because of the active interest in ad-blocking technologies. Maybe online ad viewers will be a middle slice, savvy enough to be online but not to block ads?)

What will this mean for TV? Here’s one scenario: Television bifurcates. Ad-supported TV goes after the audience that still watches ads, those toward the lower part of the socioeconomic spectrum. Ads for Walmart replace those for designer brands. The content of ad-supported TV itself trends toward options that cater to the ad-watching demographic. Meanwhile, high end TV emerges as an always ad-free medium supported by more direct revenue channels, with more and more of it coming along something like the HBO route. These shows are underwritten by, and ultimately directed to, the ad-skipping but high-income crowd. So there won’t be advertisers clamoring to attract the higher income viewers, as such, but those who invest in creating the shows in the first place will learn over time to cater to the interests and viewing habits of the elite.

Another scenario, that could play out in tandem with the first, is that there may be a strong appetite for a truly universal advertising medium, either because of the ease this creates for certain advertisers or because of the increasing revenue premium as such broad audiences become rarer and are bid up in value. In this case, you could imagine a Truman Show-esque effort to integrate advertising with the TV content. The ads would be unskippable because they wouldn’t exist or, put another way, would be the only thing on (some parts of) television.

Is the New York Times a Confused Company?

Over lunch I did something old-fashioned—I picked up and read a print copy of the New York Times. I was startled to find, on the front of the business section, a large, colorfully decorated feature headlined “Is Google a Media Company?” The graphic accompanying the story shows a newspaper masthead titled “Google Today,” followed by a list of current and imagined future offerings, from Google Maps and Google Earth to Google Drink and Google Pancake. Citing the new, wikipedia-esque service Knol, and using the example of that service’s wonderful entry on buttermilk pancakes, the Times story argues that Knol’s launch has “rekindled fears among some media companies that Google is increasingly becoming a competitor. They foresee Google’s becoming a powerful rival that not only owns a growing number of content properties, including YouTube, the top online video site, and Blogger, a leading blogging service, but also holds the keys to directing users around the Web.”

I hope the Times’s internal business staff is better grounded than its reporters and editors appear to be—otherwise, the Times is in even deeper trouble than its flagging performance suggests. Google isn’t becoming a media company—it is one now and always has been. From the beginning, it has sold the same thing that the Times and other media outlets do: Audiences. Unlike the traditional media outlets, though, online media firms like Google and Yahoo have decoupled content production from audience sales. Whether selling ads alongside search results, or alongside user-generated content on Knol or YouTube, or displaying ads on a third party blog or even a traditional media web site, Google acts as a broker, selling audiences that others have worked to attract. In so doing, they’ve thrown the competition for ad dollars wide open, allowing any blog to sap revenue (proportionately to audience share) from the big guys. The whole infrastructure is self-service and scales down to be economical for any publisher, no matter how small. It’s a far cry from an advertising marketplace that relies, as the newspaper business traditionally has, on human add sales. In the new environment, it’s a buyer’s market for audiences, and nobody is likely to make the kinds of killings that newspapers once did. As I’ve argued before, the worrying and plausible future for high-cost outlets like the Times is a death of a thousand cuts as revenues get fractured among content sources.

One might argue that sites like Knol or Blogger are a competitive threat to established media outlets because they draw users away from those outlets. But Google’s decision to add these sites hurts its media partners only to the (small) extent that the new sites increase the total amount of competing ad inventory on the web—that is, the supply of people-reading-things to whom advertisements can be displayed. To top it all off, Knol lets authors, including any participating old-media producers, capture revenue from the eyeballs they draw. The revenues in settings like these are slimmer because they are shared with Google, as opposed to being sold directly by NYTimes.com or some other establishment media outlet. But it’s hard to judge whether the Knol reimbursement would be higher or lower than the equivalent payment if an ad were displayed on the established outlet’s site, since Google does not disclose the fraction of ad revenue in shares with publishers in either case. But the addition of one more user-generated content site, whether from Google or anyone else, is at most a footnote to the media industry trend: Google’s revenues come from ads, and that makes it a media company, pure and simple.

The Decline of Localist Broadcasting Policies

Public policy, in the U.S. at least, has favored localism in broadcasting: programming on TV and radio stations is supposed to be aimed, at least in part, at the local community. Two recent events call this policy into question.

The first event is the debut of the Pandora application on the iPhone. Pandora is a personalized “music radio” service delivered over the Internet. You tell it which artists and songs you like, and it plays you the requested songs, plus other songs it thinks are similar. You can rate the songs it plays, thereby giving it more information about what you like. It’s not a jukebox – you can’t find out in advance what it’s going to play, and there are limits on how often it can play songs from the same artist or album – but it’s more personalized than broadcast radio. (Last.fm offers a similar service, also available now on the iPhone.)

Now you can get Pandora on your iPhone, so you can listen to Pandora on a battery-powered portable device that fits in your pocket – like a twenty-first century version of the old transistor radios, only this one plays a station designed especially for you. Why listen to music on broadcast radio when you can listen to this? Or to put it another way: why listen to music targeted at people who live near you, when you can listen to music targeted at people with tastes like yours?

The second event I’ll point to is a statement from a group of Christian broadcasters, opposing a proposed FCC rule that would require radio stations to have local advisory boards that tell them how to tailor programming to the local community. [hat tip: Ars Technica] The Christian stations say, essentially, that their community is defined by a common interest rather than by geography.

Many people are like the Pandora or Christian radio listeners, in wanting to hear content aimed at their interests rather than just their location. Public policy ought to recognize this and give broadcasters more latitude to find their own communities rather than defining communities only by geography.

Now I’m not saying that there shouldn’t be local programming, or that people shouldn’t care what is happening in their neighborhoods. Most people care a lot about local issues and want some local programming. The local community is one of their communities of interest, but it’s not the only one. Let some stations serve local communities while others serve non-local communities. As long as there is demand for local programming – as there surely will be – the market will provide it, and new technologies will help people get it.

Indeed, one of the benefits of new technologies is that they let people stay in touch with far-away localities. When we were living in Palo Alto during my sabbatical, we wanted to stay in touch with events in the town of Princeton because we were planning to move back after a year. Thanks to the Web, we could stay in touch with both Palo Alto and Princeton. The one exception was that we couldn’t get New Jersey TV stations. We had satellite TV, so the nearby New York and Philadelphia stations were literally being transmitted to our Palo Alto house; but the satellite TV company said the FCC wouldn’t let us have the station because localist policy wanted us to watch San Francisco stations instead. Localist policy, perversely, pushed us away from local programming and kept us out of touch.

New technologies undermine the rationale for localist policies. It’s easier to get far-away content now – indeed the whole notion that content is bound to a place is fading away. With access to more content sources, there are more possible venues for local programming, making it less likely that local programming will be unavailable because of the whims or blind spots of a few station owners. It’s getting easier and cheaper to gather and distribute information, so more people have the means to produce local programming. In short, we’re looking at a future with more non-local programming and more local programming.