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A Summer Reading Wish List

posted by Danielle Citron

You, like me, probably have a fantasy list of books that you hope to read over the summer. The books may be related to your summer scholarship plans, but likely they aren’t. They sit on your night table or will arrive soon (once Amazon gets those pre-ordered titles in stock). A number of books appear on my list and, amidst writing a piece with co-blogger Frank Pasquale and another with guest blogger Helen Norton, I hope to have a chance to read them: William Nelson’s The Roots of American Bureaucracy (read his glorious Americanization of the Common Law if you haven’t done so already), Martha Nussbaum’s From Disgust to Humanity: Sexual Orientation and Constitutional Law, Clay Shirkey’s Cognitive Surplus, Cory Doctorow’s Makers, Rodney Smolla’s Free Speech in an Open Society (that’s a necessary re-read for me), Barbara van Schewick’s Internet Architecture and Innovation, and Sotirios Barber and James Fleming’s Constitutional Interpretation: The Basic Questions. What’s on your list? The problem with hearing from you is that my pile will no doubt grow!

May 26, 2010 at 6:45 am Posted in: Culture 7 Comments Print This Post

Law Profs Letter Supporting SAFE Banking Act

posted by Lawrence Cunningham

Many law professors support legislation capping the size of US banks, though the Senate voted a version of the proposal down yesterday, 61-33.

Supporters include the following scholars, who joined me overnight in signing the open letter appearing below, urging Congress to support this proposal (despite the initial vote against it).

Other law professors who’d like to express support are welcome to do so in comments to this post or by email to me.

Shawn Bayern, Assistant Professor of Law, Florida State University

Lawrence A. Cunningham, Henry St. George Tucker III Research Professor of Law, The George Washington University

David Singh Grewal, Society of Fellows, Harvard University*

Lawrence Lessig, Professor of Law, Harvard University

Frank Pasquale, Loftus Professor of Law, Seton Hall University

Lawrence E. Mitchell, Theodore Rinehart Professor of Business Law, The George Washington University

Jedediah Purdy, Professor of Law, Duke University

Heidi Mandanis Schooner, Professor of Law, The Catholic University of America

Zephyr Teachout, Associate Professor of Law, Fordham University

Arthur E. Wilmarth, Jr., Professor of Law, The George Washington University

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May 7, 2010 at 11:20 am Posted in: Current Events 5 Comments Print This Post

Introducing Symposium on Deborah Hellman’s “Money Talks, But It Isn’t Speech”

posted by Frank Pasquale

It’s an honor to introduce Deborah Hellman and the participants in this cyber-symposium. In the wake of the sweeping Citizens United decision, Hellman has returned to first principles in her article “Money Talks, But It Isn’t Speech.” Justice Kennedy based the majority opinion in Citizens United on the assumption that spending and speech are interchangeable. But what if this equivalence does not hold? Might a future Court declare Citizens United “not well reasoned” because it “puts us on a course that is sure error” (to borrow Kennedy’s characterizations of the precedents that Citizens United overruled)?

A vibrant conservative legal movement has seized the mantle of “popular constitutionalism” to demand that courts reinterpret key constitutional provisions in order to reflect popular opposition to some provisions in the recently passed health reform legislation. But Citizens’ United has proven far less popular than health reform; “the court’s ruling is opposed, respectively, by 76, 81 and 85 percent of Republicans, independents and Democrats,” and by 80% of the nation as a whole. Though I was ready to give up on campaign finance regulation three years ago, numbers like these convince me that the Court needs to listen to scholarship like Hellman’s now more than ever.

At least some justices have shown remorse for deregulatory dogmatism. Might the Court back down from its current war on campaign regulation? If it is so inclined, will arguments like Hellman’s help it “see the light” and reclaim the egalitarian roots of democratic governance? To consider these and other issues raised by Hellman’s rigorous and illuminating paper, we’ve invited an all-star cast of legal thinkers:

Erwin Chemerinsky
Louis Michael Seidman
Lawrence Solum
Zephyr Teachout

Some of our regular crew of perma-bloggers & guests will likely have some contributions, as well. Whatever you think of campaign finance reform, I’m confident you’ll find both Hellman’s article and our guests’ commentaries to be bold and invigorating contributions to legal theory.

Photo Credit: Rob Lee/Flickr, Money Shirt.

May 2, 2010 at 11:41 pm Posted in: Constitutional Law, Current Events, First Amendment, Jurisprudence, Law and Inequality, Legal Theory, Media Law, Politics, Uncategorized 5 Comments Print This Post

Strange (Leiter) Poll on Best Law Blogs

posted by Lawrence Cunningham

As Dan Solove notes below, a law professor at the University of Chicago, named Brian Leiter, who appears to be an avid blogger, early Monday morning posted a poll. He invited anyone who cared to rank their favorite law bloggers. Strangely, and without detailing why, the blogster cancelled the poll in the early evening that same day, after 86 votes had been cast.

The blogster’s explanation said, in all capital letters, “some have resorted to using Facebook to stack the voting, specifically against someone else.” He added: “Pretty pathetic, but what can one do.” There were no details concerning who the “some” or “someone else” were. Some bloggers and others were moderately curious. Theories run wild.

In the original poll, the blogster declared he chose the candidates on his list according to those “I find myself reading regularly” or who “colleagues mention as ones they read regularly.” He added: “To even make the list is, of course, a great honor.”

That must be a joke, of course. Humor aside, since the blogster aborted the poll after a day, and 86 votes, it seems worth wondering what the poll looked like then.

The results are posted on the Internet for public view here. Following is a simplier version, for those curious about results when the poll was aborted. Notably, they do not include the blogster. They do include several fellow bloggers here at Co-Op. Read the rest of this post »

March 9, 2010 at 8:39 pm Posted in: Humor 4 Comments Print This Post

Information overload and “connecting the dots”

posted by Viva Moffat

This short piece by David Dalrymple (an 18 year-old PhD student at MIT — wow, that’s enough to make one feel inadequate and over the hill!), emphasizes both the problems and opportunities created by the vast sea of information now available on the Internet. Dalrymple writes: ”. . . the majority of this information is worthless to the majority of people. Yet anything we care to know . . . is out there somewhere.” Just as Frank Pasquale (here and here, for a couple of examples) (and others) have discussed, the difficulty is figuring out how to wade through this information. This is no small concern. The national security failure to “connect the dots” concerning the Christmas Day “underwear bomber” seems to have arisen in part from information overload. The administration has admitted that “the government had sufficient information to uncover the plot” but that it failed to “connect those dots.” The New York Times asserts “that there were far more warning signs than the administration has acknowledged.” While Dalrymple focuses on the individual, arguing that “filtering, not remembering, is the most important skill for those who use the Internet,” filtering may also be the most important skill for our national security organizations.

January 18, 2010 at 7:24 pm Posted in: Current Events, Politics No Comments Print This Post

The Limits of Competition and the Rebirth of the Public Option

posted by Frank Pasquale

It’s now official—even Senate leaders are attaching a public option (albeit one with an opt-out) to their proposed health reform bill. Dan Balz of the WaPo asks “What brought the public option back to life?” While Balz focuses on the chess game of Washington politics to explain the public option’s resurgence, I detect deliberative democracy at work.

As Congressional committees have begun to specify exactly how “competition” among insurers would lower costs, they’ve realized that we need to do a lot more than increase regulatory scrutiny and add insurers to the mix. Rather, just as Medicare took care of elderly persons unlikely ever to be profitably covered by private insurers, a new option is needed to address the needs of impoverished or sick citizens unlikely ever to pay profitable premiums to Aetna, Cigna, and their ilk.

Why wasn’t this apparent earlier? I think that closer scrutiny for a proposal to repeal the “antitrust exemption” for insurers has led to more serious consideration of what competition can and cannot do in the health care industry. As antitrust expert Tim Greaney explains, “the Supreme Court has narrowly interpreted McCarran-Ferguson requirement that only the ‘business of insurance’ is exempt; hence insurers’ actions vis a vis providers are not exempt.” Lack of antitrust enforcement—and the market competition it’s supposed to bring—can’t fully explain insurers’ failures here. Some commentators believe that application of antitrust laws to physicians and hospitals in the mid-1970s may even have spurred the development of a “medical-industrial complex” capable of displacing professional norms with profit-driven practices.

Mere promotion of competition, without more, also creates other dangers. Enforcing antitrust laws aggressively against insurers, while failing to balance that effort with similar scrutiny of providers, could lead to even higher health care costs. Do we really expect piecemeal antitrust enforcement, played out in fragmented and uncoordinated courts, to manage such balance? It is often the case that both providers and insurers are concentrated, powerful, and earning supracompetitive profits (whatever “supracompetitive” means in a realm so thoroughly marbled with regulation, subsidy, and barriers to entry).

Insurers are competing in many markets—they’re just frequently doing so in ways that are socially unproductive. As I have noted before, there are effective competitive strategies for insurers that reduce social welfare overall. Given that the average insured stays in a plan for less than three years, the marketplace rewards insurers who put hurdles in front of expensive preventive care, or scramble to drop those with extensive medical needs. It also exacerbates the coverage crisis that necessitates health reform in the first place.

Genuine health reform will provide incentives for insurers to do things that actually improve individual and public health—programs such as transparent physician rating, preventive and chronic care programs, and intensive data analysis to promote evidence-based medicine. Like the V.A., a public option can be ordered to do such things. Moreover, it can be required to cover the costly or unprofitable individuals that private insurers won’t touch. The government might “require” private health insurers to do the same, but I would not count on overwhelmed regulators to enforce such laws adequately.
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October 26, 2009 at 8:22 pm Posted in: Health Law 2 Comments Print This Post

Who Is Elizabeth Nowicki?

posted by Elizabeth Nowicki

My name is Elizabeth Nowicki, and I am currently a visiting faculty member at Boston University School of Law. I teach law school for a living, I am a lawyer (admitted to practice in New York), I opine on matters related to law and business, and I write lawyerly articles and blog posts.

I am not on Twitter, I am not on Myspace, and I do not dabble in fiction or poetry or haiku or similar literary efforts.

I am telling you this because there is more than one Elizabeth Nowicki in the world, and I was recently confused with another Elizabeth Nowicki. Indeed, at least one of the other women named Elizabeth Nowicki has the exact same middle initial (“A.”), and another one is a faculty member elsewhere (education professor). Go figure.

To avoid a situation like Frank Pasquale’s, or, worse, like Tim Wood’s, I thought I would post this disclaimer: If you get a Twitter message from Elizabeth Nowicki, it is not from me. If you find an “Elizabeth Nowicki” Myspace page, it is not mine. If you read a poem or short story penned by Elizabeth Nowicki, I am not the author. Instead, you can find me on SSRN, Linkedin, and various other law-related sites. (Please feel free to add me to your Linkedin contacts.)

And, so, with that cleared up, I am done here at Concurring Opinions, as this is the final day of my stint. I am grateful to Dan Solove and his colleagues at Concurring Opinions for allowing me the honor of blogging here. This blog has a huge readership, and it is known for good blogging. Many thanks to the gracious readers for humoring me. Special thanks to A.J. Sutter.

As happened last time I blogged here, I did not blog about every topic I had intended to discuss, so I will return to my normal blog home, at truthonthemarket.com, and hopefully finish my blogging “to do” list there.

Again, many thanks to Dan Solove and the Concurring Opinions team.

Ahoy hoy,
Elizabeth Nowicki
P.S. I appreciate the fact that Ahoy hoy is normally used as a greeting.

August 31, 2009 at 6:21 pm Posted in: Uncategorized One Comment Print This Post

Paging Dr. Gawande: Health Reform Matters.

posted by Frank Pasquale

Atul Gawande’s article “The Cost Conundrum” has become a cause celebre in policy circles. The Obama White House is reading it, leading journal Health Affairs has sponsored a roundtable on it, and pundits across the political spectrum are invoking it.

There are good reasons for all the attention in health reform circles. But there’s a paradox here, too, because Gawande doesn’t believe that changes to health care finance and regulation can deter the wasteful and uncoordinated provider behavior which he sees at the root of the present crisis. I respectfully disagree. Law may not be doing a good job at this now—largely because health care regulators over the past 20 years vastly overestimated the degree to which the market would improve quality and access. But we have a rare window of opportunity to correct for those assumptions. Moreover, without real reform, the profit-obsessed providers who are the villains of Gawande’s piece will systematically outcompete the integrated delivery systems he champions. Gresham’s Law applies in health care, too.

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June 24, 2009 at 6:51 am Posted in: Economic Analysis of Law, Health Law One Comment Print This Post

Public Option as Private Benchmark

posted by Frank Pasquale

Ezra Klein has given a nice explanation of the advantages of public options in our health insurance ecosystem. He summarizes three different types of options that could develop, including a “trigger plan” (which be “triggered into existence [where] the private insurance market” failed), a “weak public plan” (which “couldn’t use the low rates that Medicare sets” and would just act as another insurer) and a “strong public plan” (which would basically be modeled on Medicare). Klein argues that, whatever public plan were adopted, “The existence of another option changes the market. Individuals will have access to private insurers, but they’ll no longer be stuck with them.”

I agree with Klein that a public option can help us achieve the trifecta of health reform–increasing access, reducing costs, and improving quality. Tyler Cowen challenged Klein today, and I’ll try to answer Cowen.

First, Cowen argues that the public plan will be very expensive, for if “public and private plans are to coexist, the public plan must be attracting the higher-cost customers, namely the higher medical risks.” Even if that’s the case, other industrialized nations have used prospective and retrospective risk adjustment to level the playing field between plans. As I noted yesterday, even private health insurance lobbies have conceded that “spread[ing] costs for the highest-risk individuals” is necessary to guarantee coverage for all. Risk-adjustment should not be seen as a subsidy—rather, it’s a way to keep a level playing field between the public and private plans.

Private insurers’ apparent acceptance of risk-adjustment may seem irrational if you think that they are only in the business of trying to gain the healthiest customers and shed the sickest. Tempting as it is, that cream-skimming is only one part of the broad range of things that insurers do. Many large insurers make substantial “administrative services only” revenue–for example, by administering self-insured employers’ plans. (In that way they avoid financial risk from sick insures–that risk is assumed by the employer funding the plan). Risk adjustment would further reduce their incentives to avoid people with pre-existing conditions. In terms of quality, private insurers can compete with the public plan on several dimensions, including identifying good providers, incentivizing best practices, and fairly determining access to treatment and payments for providers.

It’s that last function—coverage and payment determinations—where the public plan really has a chance at improving insurance for everyone. Today’s default for private insurers is secrecy in pricing, and opaque “gotchas” buried in thick plan documents. As Uwe Reinhardt has noted,
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June 9, 2009 at 5:50 pm Posted in: Economic Analysis of Law, Health Law 10 Comments Print This Post

At the Heart of the Health Reform Debate: What Do Insurers Do?

posted by Frank Pasquale

As health reform moves to the top of the Congressional agenda, we will be hearing a great deal about the need to include a “public option” in the plan. Earlier this Spring I began thinking about whether a public option was absolutely necessary to a successful reform. I started out hoping that it wasn’t, because Republican leaders despise it, and Democrats have often let the “perfect be the enemy of the good” in health reform. But I’m now convinced that it’s necessary to reform, and I hope to spend a few posts explaining why.

To begin with, we should think about what it is that health insurers do. I have tried to summarize it in a one page chart, linked to here. You can’t get everything down in a one page chart, but you can at least begin to break down what it is that insurers do—and how governments can respond to their actions

The right column focuses on the purely positive role of insurers. I recently heard a speech by the Chief Medical Officer of Wellpoint which was one of the best summaries of the good work insurers can do. New technology can lead to better processing of claims. With massive amounts of data at their disposal, they can identify best and worst providers, good and bad treatments, and even spot dangerous side effects in drugs and devices. To the extent that they retain long-term relationships with customers, they have an incentive to reduce costs by keeping those patients healthy.

But the structure of the US health insurance market makes it difficult for most insurers to have that incentive. About 21% of insurance policyholders cancel their plans in any given year, meaning that the average customer’s commitment to a plan lasts for just about three years. That’s just not enough time for an insurer to gain very much from investing in improving the health of its members.* There are many more profitable strategies—which lead me to the left column, bad insurer practices.

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June 8, 2009 at 9:24 am Posted in: Health Law 4 Comments Print This Post

Exploring Commons Institutions

posted by Michael Madison

Thanks to Deven for the generous introduction and to Dan and the Co-Op team for inviting me to spend some time here this month. The introduction intentionally saves space by not including a couple of things that I’ll talk about during my stay: My other blogs, and my appointment as Research Dean at Pitt. Both have something to do with my current work on commons institutions. Over the course of this guest stint I hope to explain some of the connections and to generate suggestions and feedback that might help me see others.

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May 6, 2009 at 8:08 am Posted in: Blogging, Intellectual Property, Law School (Scholarship), Property Law, Sociology of Law, Technology One Comment Print This Post

CCR: Coda

posted by Danielle Citron

In writing Cyber Civil Rights, I hoped to begin a conversation about the relationship between cyber civil rights and cyber civil liberties, including the ways in which safeguarding civil rights online reinforces free speech values. Thanks to distinguished participants Ann Bartow, Daithí Mac Síthigh, David Fagundes, Michael Froomkin, Nathaniel Gleicher, James Grimmelmann, Orin Kerr, Nancy Kim, Helen Norton, David Robinson, Dan Solove, and Kaimi Wenger and my co-bloggers Dave Hoffman, Frank Pasquale, and Deven Desai (who came up with the idea for the symposium, wrote superb posts, and organized the event) that conversation happened in a rich and thought-provoking way, one that will have a lasting impact on my work on the protection of civil rights online.

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April 17, 2009 at 3:25 pm Posted in: Cyber Civil Rights 14 Comments Print This Post

CCR Symposium: Maybe we can’t make Cyberspace better than meet space, but why allow it to be worse?

posted by Ann Bartow

Way back when I was in law school, I worked on litigation aimed at protesters who tried to prevent women from entering health facilities where abortions were made available. The judges involved had to balance the protesters’ speech rights against the rights of women to travel where they wanted to go, and as I remember it, convincing courts that is was a civil rights issue was tricky. Danielle Citron needed to make a very strong case for why online actions can compromise civil rights, and as both Frank Pasquale and James Grimmelmann have observed in their symposium posts here, she succeeds brilliantly, but see Orin Kerr’s skepticism.

Many participatory sectors of the Internet are dominated by aggressive bullies, nasty haters and monetizing opportunists. It’s hard to tell whether they constitute a numeric majority, but the geography of the Internet allows a small number of people to scorch vast swaths of earth with surprisingly little effort. There is currently no such thing as the “safe spaces on the web where those with unpopular views can exchange ideas without fear of retribution” that Frank Pasquale calls for. Not even here. The folks running this symposium decided not to facilitate comments on CCR related posts here at Concurring Opinions, but they have no control over the conversations that take place other places, which may be intractably linked to this blog via hyperlinks and search engine results. I’m doubtful that the architecture of the Internet can be changed to provide the benefits of connectivity without simultaneously facilitating engagement or intervention by bad actors.

To segue back to reproductive freedom, one of the most trenchant things I’ve seen written about the right to abortion is that most women who oppose it believe there should be three classes of exceptions: 1. The life of the mother; 2. Cases of rape and incest; and 3. Them. Seriously, I’ve listened to people explain that abortion is murder unless the 15 year old asking for one is their daughter, and then it is perfectly justified. In the course of doing legal work for reproductive services providers I’ve seen a number of cases where women who literally stood outside of clinics picketing and shouting at people later asked for abortions for themselves or their children. As you might imagine, reproductive rights clinics fear that these women want to set them up for something bad down the road, such as a lawsuit, or to gain entry to their offices to do violence to the people inside, so these situations receive a fair amount of scrutiny. The egregious level of hypocrisy is stunning.

So it is with some civil libertarians and the Internet. Anonymity and unfettered speech are terrific up until they are the ones being challenged or attacked. See also. For another classic example, go here and note that the ACLU has a locked Wikipedia page because apparently too many editors were writing things the ACLU didn’t like, so the civil rights organization found a way to silence its wikicritics. See also. Wikipedia is far less solicitous of (for example) feminists who are public intellectuals. Pornography proselytizers constantly edit and re-edit their entries, filling them with misinformation. When the feminists request locked pages, they are not only denied, but mocked and criticized just for asking. It isn’t just marginalized groups that are victimized online, but they are disproportionately targeted, and may have fewer options or resources to minimize the harms or fight back.

As to whether the law can effectively address online civil rights violations, Citron is appropriately cautious. The culture of the Internet simply replicates a lot of real space phenomena that plague subordinated groups. Read the e-mail contained in Orin’s post here. Try to think of the last time you saw a virulent expression of anger, online or off, that didn’t feminize or homosexualize the target. Using gendered insults is one of the many ways that gender binaries are culturally enforced everywhere, but the situation worsens dramatically on the Internet, for reasons Citron explains.

April 14, 2009 at 3:22 pm Posted in: Cyber Civil Rights No Comments Print This Post

Visiting Yale, Balkinization, and Law & Tech Theory

posted by Frank Pasquale

I just wanted to make a note that I’ll be posting less frequently than normal this month, for a few reasons. First, as many of our law prof readers know, the dreaded “March publishing cycle” is upon us. Second, I’m visiting at Yale this term, and it’s always a bit hard to “find your feet” at a new place. Finally, I’m posting at Balkinization and Law & Technology Theory this month.

I hope that SourceHub will add these posts to its apparent aggregation of my blogging at their site. (According to their metrics, I am a “highly opinionated, somewhat negative” writer–leading me to renewed skepticism of number-crunching!)

For those interested, my Balkinization posts have mainly followed up on these reflections on Google; I talk about the book settlement here, and conservative complaints that Google favors Obama here. The theme of Law & Tech Theory this year is technology and human autonomy; I’m concerned with performance-enhancing drugs, revising and updating some posts that first appeared here on Concurring Opinions.

February 10, 2009 at 10:00 am Posted in: Administrative Announcements, Blogging 2 Comments Print This Post

Neurocosmetics as Faulty Data

posted by Frank Pasquale

Edge, a fascinating online salon/magazine, asked 151 luminaries “What Will Change Everything“? I’ve picked through the 107,000 words of responses over the past few weeks; many are thought-provoking.

For example, Marcel Kinsborne predicts a growing market for “neurocosmetics” which translate the benefits of cosmetic surgery to the social world:

[D]eep brain stimulation will be used to modify personality so as to optimize professional and social opportunity, within my lifetime. Ethicists will deplore this, and so they should. But it will happen nonetheless, and it will change how humans experience the world and how they relate to each other in as yet unimagined ways. . . . We read so much into a face — but what if it is not the person’s “real” face? Does anyone care, or even remember the previous appearance? So it will be with neurocosmetics.

Consider an arms race in affability, a competition based not on concealing real feelings, but on feelings engineered to be real. Consider a society of homogenized good will, making regular visits to [a] provider who advertises superior electrode placement? Switching a personality on and then off, when it becomes boring? . . .

We take ourselves to be durable minds in stable bodies. But this reassuring self-concept will turn out to be yet another of our so human egocentric delusions. Do we, strictly speaking, own stable identities? When it sinks in that the continuity of our experience of the world and our self is at the whim of an electrical current, then our fantasies of permanence will have yielded to the reality of our fragile and ephemeral identities.

It’s one thing to read these imaginings in the fiction of a Houllebecq, Franzen, or Foster Wallace; it’s quite another to see them predicted by a Professor of Psychology at the New School for Social Research. I have also predicted an arms race in the use of personality optimizing drugs, but I believe such an arms race would defeat, rather than reveal, humanity’s true nature. My difference with Kinsborne suggests a technophilic bias at the heart of Edge’s inquiry: an implicit belief that certain technologies will inevitably change us, rather than being changed or stopped by us.

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January 24, 2009 at 11:03 pm Posted in: Bioethics 2 Comments Print This Post

When Words Regain Their Meaning

posted by Frank Pasquale

I was moved beyond words by the inaugural today: in my lifetime I’ve never had as much hope (or need for hope) in a political figure as I have in Barack Obama. Even though I’ve not been very happy with his economic team, I have some faith that figures like Rubin, Geithner, and Summers have learned the error of their ways. More importantly, I think this is a president who takes his words seriously, and whose oratory deserves attention for its deep substance.

Consider lines like these in Obama’s speech today:

[T]he market can spin out of control – and . . . a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart . . . .

With the aid of a few Gersons and Noonans, Bush could deliver the same words. But they’d be immediately undermined by his tax policies, his SCHIP obstructionism, and Katrina’s aftermath. In a very real sense words lost their meaning during Bush’s time in office; torture became “enhanced interrogation techniques” and policy permitting more pollution became the “clean skies initiative.” James Boyd White, an eloquent critic of this process, gave a historical precedent in his book When Words Lose Their Meaning:

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January 20, 2009 at 5:08 pm Posted in: Current Events One Comment Print This Post

Frontiers of Net Neutrality: Recognizing the Bottlenecks

posted by Frank Pasquale

Today’s WSJ article on Google’s alleged backsliding on net neutrality has spawned a lot of controversy on the web. Google has articulately defended the practices at issue in the article. But the piece does focus internet policymakers on some basic truths: there are many potential bottlenecks on the internet, and antitrust law alone cannot adequately regulate the power they confer.

To set the stage for my case, here is some background from the article:

In August 2005, amid a deregulatory environment, the FCC weakened network neutrality to a set of four “guiding principles.” The step had the effect of making the FCC’s power to enforce network neutrality subject to interpretation, emboldening those looking for ways around it. Stirring the waters further, major phone companies including AT&T and Verizon announced they intended to create new fast lanes on the Internet — and would charge content companies a toll to use it. They claimed Internet companies had been getting a free ride.

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December 15, 2008 at 11:03 pm Posted in: Cyberlaw 2 Comments Print This Post

Fraud, Everywhere

posted by Danielle Citron

Recent investor pressure to liquidate investments has exposed fraud of massive proportions. On Thursday, federal investigators arrested trader and hedge fund manager Bernard L. Madoff, a former chairman of the Nasdaq Stock Market, for allegedly defrauding investors of $50 billion. According to the accompanying civil complaint filed by the SEC in federal district court, Madoff ran Bernard Madoff Investment Securities (BMIS), a broker dealer and investment firm, where he also maintained a lucrative investment adviser business. Madoff apparently kept that business on a separate floor of the firm under “lock and key” from BMIS employees. There, Madoff managed money for hight net-worth individuals, hedge funds, and other institutions, a business whose steady returns had long provoked skepticism from traders. Early this month, investors sought $7 billion in redemptions from the business. Unable to pay these returns, Madoff allegedly confessed to two senior employees (his sons, according to the Wall Street Journal’s sources) that his investment advisory business was a fraud. Madoff allegedly admitted: “it’s all just one big lie,” a “giant Ponzi scheme” that for years had paid returns to investors out of the principal received from other investors and had nothing left. Madoff apparently told those employees that the business had been insolvent for years and the fraud was worth billions.

This recalls 1987, the “Den of Thieves” period of insider trading, risky takeover stocks, and manipulations of the junk-bond market. As Time reported that year, maintaining integrity was a “difficult challenge in the deregulated, hurly-burly Wall Street of the 1980s, where traders have been tempted to use insider tips to maintain their competitive edge.” Now, as then, fraud has blossomed in the face of loose regulatory controls and oversight as well as a lack of transparency in a complex financial market. One might suppose that our current task is to figure out how to strike the balance between tougher regulation and a productive and unencumbered market. But there are no doubt other important questions, and hopefully our insightful corporate/law and economics gurus Dave, Frank, Lawrence, and Nate will help us explore them.

December 13, 2008 at 9:44 am Posted in: Criminal Law, Culture, Current Events, Securities 4 Comments Print This Post

Shiller’s Subprime Solution

posted by Danielle Citron

In his 2005 book Irrational Exuberance, Yale economist Robert Shiller predicted the once unthinkable, and now unfortunate present: the boom and bust in real estate that would have grave consequences both in the U.S. and globally. In his newest book The Subprime Solution, Shiller calls for sweeping reform to address the current crisis. Part of his answer is greater transparency through financial databases and disclosures. He also argues for a Financial Product Safety Commission to protect consumers of financial products and services, much in the same way that the Consumer Products Safety Commission sheds light on, and removes, unsafe consumer products. This transparency-enhancing argument recalls the important proposal for a Federal Search Commission made by Frank Pasquale and Oren Bracha in the most recent issue of the Cornell Law Review. Whatever the merits of Shiller’s numerous suggestions, one thing is certain: heightened transparency of financial products and services would provide significant benefits to consumer confidence and the industry itself.

September 20, 2008 at 4:17 pm Posted in: Corporate Law No Comments Print This Post