Bitcoin and the No-Arbitrage Condition

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One of my favorite aspects of the Bitcoin phenomenon is that it has people talking about monetary economics and finance. Just as recessions tend to produce advances in academic macroeconomics, Bitcoin is forcing a wide cast of characters, from libertarian nerds to economic journalists, to think more deeply than they otherwise would about money and monetary institutions.

Nevertheless, monetary economics can be difficult, and there is a lot of confusion out there. It seems that most of the confusion is due to two errors. The first is that Bitcoin appreciation is deflationary, and therefore, recessionary. A variant is that Bitcoin volatility will create massive booms and busts in the Bitcoin economy. I think that this point has been decisively refuted by Jerry Brito. The macroeconomic effects of a currency have to do with its unit-of-account status, not with its medium-of-exchange status. Consequently, unless people begin (foolishly) denominating their long-term contracts in Bitcoin, the cryptocurrency won’t have any macroeconomic drawbacks.

As Bitcoin skeptics have come to terms with Jerry’s point, they have resorted to a second error, that Bitcoin’s long-run fixed supply would generate persistent, long-run deflation, which will cause hoarding of the currency. This would make it unsuitable as a medium of exchange, because no one would be willing to exchange it. Transactional demand for Bitcoin would be zero. Matt Yglesias and Matt O’Brien make versions of this argument.

I think that Tim Lee has done a good job of refuting this line of thinking both on Twitter and in two posts at Forbes. But his arguments haven’t satisfied everyone. O’Brien in particular seems to be doubling down on Twitter.

The problem is that in Yglesias’s and O’Brien’s posts on Bitcoin, I have not come across the word “arbitrage.” This is a pretty good sign that their claims about the long-run equilibrium are not rigorous. The long-run equilibrium must be defined by a “no arbitrage” condition—if arbitrage between currencies is possible, then we are not in equilibrium.

Let’s try to write down an equation that describes a first approximation of this condition:

1 + i_\$ = \dfrac{E_t(S_{t+k})}{S_t} - \pi_\sigma - \pi_l

At a high level, this equation says that the expected return to holding dollars has to equal the risk- and liquidity-adjusted expected return to holding bitcoins. On the left side of the equation is the return to holding dollars, which is given by the nominal interest rate on dollars, i_\$ . On the right side of the equation, \frac{E_t(S_{t+k})}{S_t} represents the expected appreciation in bitcoins from time t to time t + k, while \pi_\sigma is the risk premium and \pi_l is the liquidity premium. I am assuming for now that it is not possible to have a bitcoin-denominated loan, and therefore no interest rate on bitcoins, although I could imagine that there might be an overnight rate of some sort. But for now, assume that the equalization of returns has to happen via appreciation.

What this equation makes clear is that there is no free lunch from hoarding bitcoins. Bitcoin hoarders will be compensated for the risk they are bearing, for the illiquidity of the Bitcoin market, and for the opportunity cost of holding bitcoins, but for nothing else.

The fact that bitcoins are expected to appreciate in value does not increase the incentive to hoard bitcoins at the margin. Instead, all of the change in the value of bitcoins happens in the spot rate, S_t . The price of bitcoins adjusts now to accommodate any future expected increase in the value of bitcoins, and there are no further gains from hoarding bitcoins. There is therefore no disincentive to transactional use of bitcoins.

I expect further that in the future, forward contracts on the Bitcoin-dollar exchange rate will reduce or eliminate the risk premium, and more sophisticated entrants (read: hedge funds) into the Bitcoin market will supply additional liquidity, making even the nominal return to holding bitcoins about the same as that of holding other currencies. The model above is not meant to be a complete account of the market for bitcoins. But I think it serves as a good baseline for thinking about what claims about an incentive to hoard entail.

Finally, I’ll note that even if almost all of the eventual 21 million bitcoins are “hoarded,” a mere 1000 bitcoins would be more than adequate to supply the transactional needs of an economy as large as the United States. Each bitcoin is divisible into 10^8 “satoshis,” and there are only around 10^9 dollars, or 10^11 cents, in circulation. One thousand bitcoins would be 10^11 satoshis. If each satoshi equalled one cent, the market capitalization of bitcoin would have to rise to 2.1 quadrillion dollars. When the market capitalization exceeds that figure, I will concede that bitcoins have been over-hoarded.

The Myth of the Myth of the Market

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Matt Yglesias argues that there is no such thing as a “market distribution” of wealth, because most wealth would not exist without the state. He lists “a few minor exceptions” to the maxim that market solutions are efficient:

— The air pollution impacts of modern electrical power generation, industrial activity, and transportation can’t be efficiently bargained away because the transaction costs are way too high.

— So-called “public goods” like basic scientific research or musical recordings will be underproduced absent some combination of state subsidy and state-created intellectual property monopolies.

— Basic infrastructure (roads, electrical lines, sewers) won’t be provided properly without some eminent domain and they won’t be priced correctly due to the monopolistic nature of the market.

— Absent deposit insurance and regulation, banks will be subject to runs and economically destructive panics.

— Without a central bank minding the store properly, the entire macroeconomy will fall into periodic recessions lasting months or years.

Since these five factors color all market activity, Matt says, there is no such thing as pure market activity, and therefore no distribution of wealth that would result if there were no government provision of pollution abatement, public goods, and so on.

In my view, Matt’s argument is not compelling. Take first his list of “minor exceptions” to the general rule that markets work best. Do we need state intervention to keep air pollution down to acceptable levels? There has never been a completely laissez-faire society that has had dirty air, so it is difficult to say. What we do know from the work of Elinor Ostrom is that we don’t need state intervention in all cases to solve problems associated with water usage or overfishing, which are structurally similar to that of air pollution (i.e., they have high transaction costs). It turns out that the threat of state-sanctioned violence is not the only solution to repeated prisoner’s dilemmas, even when transaction costs are high, either in theory or in practice.

What about other public goods? It is strange to me that Matt chose copyright protections for musical recordings as an example, because I might favor eliminating such protections even as a matter of marginal policy reform. If musicians could no longer make money from selling recordings, they would still produce recordings as advertisements for their live performances. Musicians would tour more, and the live music scene might become more vibrant. It’s not at all clear to me that it would be worse than the status quo. I don’t favor eliminating government funding for basic research, and indeed, at the margin, I would favor more such funding. But similarly, without government subsidies, research would still occur, philanthropists would still donate to universities, and so on. While the result may be some modest “underproduction” of basic research, it still seems unlikely that but for government funding of basic research, we would be living in caves.

I’ve never understood the argument about roads, since as best I can tell, roads have always existed, even in cases in which governments did not have transportation policy. The common law, which itself originated without the state, seems to have made adequate allowance for solving the anticommons problem via various kinds of easements and property rules. Matt also argues that private infrastructure would be monopolistically priced, but I think he fails to consider the possibility of customer-owned mutuals as an alternative to both government and for-profit firms.

Without deposit insurance, would banks face constant runs and panics? This is at best controversial among monetary historians. Modern economists tend to blame bank failures during the Great Depression more on restrictions on interstate banking and the concomitant lack of geographic diversification than on the lack of deposit insurance. New Zealand does not today have deposit insurance; it is not a financial hellscape. If deposit insurance were eliminated, banks would become more sober, prudent institutions than they are today, which may not be such a bad outcome. I favor the elimination of federal deposit insurance, and I don’t think I am very alone. Certainly, it is not one of my most out-of-the-mainstream policy views.

I confess to chortling a little at Matt’s line about central banks. Months or years of recession?! Unimaginable. With central banks in charge, the US is experiencing a years-long slump, Japan is experiencing a decades-long stagnation, and Europe is…fucked. Central banks were also at the helm during the Great Depression. My monetary policy views are conventional, but the central banking track record is not something I would try to draw attention to were I taking Matt’s side of this argument.

None of this is to say that we would all be immensely wealthy in a world without government intervention. The way Matt structures his argument, I don’t have to make that claim. All I need to show is that but for government intervention, we would not be dramatically worse off than we are now, which I think I have done. It seems worth mentioning, in addition, that government sometimes makes us worse off as well as better off. For example, government regulation of pollutants can and often does exceed anything resembling the welfare-maximizing amount. Governments produce public bads as well as goods, such as war, genocide, the new Jim Crow (to say nothing of the original), and immigration restrictions. Transport policy is often counterproductive, and infrastructure resources such as spectrum and airspace are often misallocated or otherwise mismanaged, relative to a common law approach. Financial regulation seems to do more to enrich Wall Street than protect the public. And as I said above, government policy caused the Great Depression and the Euro crisis, as well as innumerable other financial disasters. These costs are significant. Immigration restrictions alone cut global output in half. On top of all this is the deadweight loss of taxation, which is substantial.

What is most unfortunate about Matt’s list is how widely accepted it is. He says you can find it in “a really banal mainstream neoclassical economics textbook,” and he is right. Textbook economics presents a simple model of the world and draws conclusions from that model that are frequently at odds with reality. Most textbooks try to convince the reader of the benefits of economic analysis, not to educate the reader about the limits of the models they present. Real world institutional analysis is much more complicated, messy, and context-dependent than Matt’s textbook allows. We can and should use the tools in the textbook to illuminate our work, but applying them as Matt does to create a universal theory of the (non)existence of a market distribution of wealth seems misguided.

WCITLeaks is Ready for WTPF-13

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When Jerry and I started WCITLeaks, we didn’t know if our idea would gain traction. But it did. We made dozens of WCIT-related documents available to civil society and the general public—and in some cases, even to WCIT delegates themselves. We are happy to have played a constructive role, by fostering improved access to the information necessary for the media and global civil society to form opinions on such a vital issue as the future of the Internet. You can read my full retrospective account of WCITLeaks and the WCIT over at Ars Technica.

But now it’s time to look beyond the WCIT. The WCIT revealed substantial international disagreement over the future direction of Internet governance, particularly on the issues of whether the ITU is an appropriate forum to resolve Internet issues and whether Internet companies such as Google and Twitter should be subject to the provisions of ITU treaties. This disagreement led to a split in which 55 countries opted not to sign the revised ITRs, the treaty under negotiation.

Where does this divisive ITR revision leave us? It means that the next two years or so of ITU meetings have the potential to be extremely interesting. In particular, the World Telecommunication/Information and Communication Technology Policy Forum (WTPF) in May 2013 in Geneva and the ITU Plenipotentiary Conference (known as “Plenipot”) in October-November 2014 in Busan, South Korea, are worth watching closely.

Unlike the WCIT, the WTPF is not a treaty conference. It is a meeting that produces opinions and reports. Also unlike the WCIT, at WTPF the Internet is explicitly on the table in an up-front, honest way. The opinions and reports produced at WTPF about the Internet will be used as input documents into Plenipot, which is a full treaty conference. At Plenipot, the entire Constitution and Convention of the ITU is subject to revision, so it is extremely likely that the Internet will be considered. One contact of mine has called Plenipot “WCIT 2.”

There is some good news. So far, all WTPF preparatory documents have been 100% open to the public. WCITLeaks applauds the ITU for this policy. Transparency provided directly by the ITU is better than the transparency we have provided in the past, because the ITU’s public documents are often available in multiple languages, something that WCITLeaks does not have the resources to offer. For example, here is the fourth draft of the SG’s report from the Informal Experts Group for WTPF. Note that it is available in English, Arabic, Chinese, Spanish, French, and Russian. The multilingual availability of this document ensures that an even broader array of global civil society will be able to more closely follow WTPF preparations.

The bad news is that we do not yet know if WTPF documents beyond the preparatory phase will be publicly available. When those documents appear, they will be listed here, but it is possible that users who are not affiliated with Member States or Sector Members won’t have access. In addition, we do not yet know what the policy will be toward access to documents relating to Plenipot.

We hope that the ITU will continue to take these important steps toward greater transparency. At the same time, we are ready to reprise our WCIT role if necessary. To that end, we have reoriented the WCITLeaks site to focus on WTPF and future conferences. WCIT-related documents will continue to be available at wcitleaks.org/wcit. As always, you can stay up to date by following @WCITLeaks on Twitter. Happy leaking!

The Brookings Patent Report is Bogus

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Brookings has a new report out by Jonathan Rothwell, José Lobo, Deborah Strumsky, and Mark Muro that “examines the importance of patents as a measure of invention to economic growth and explores why some areas are more inventive than others.” (p. 4) Since I doubt that non-molecule patents have a substantial effect on growth, I was curious to examine the paper’s methodology. So I skimmed through the study, which referred me to a technical appendix, which referred me to the authors’ working paper on SSRN.

The authors are basically regressing log output per worker on 10-year-lagged measures of patenting in a fixed effects model using metropolitan areas in the United States.

\ln y_{i,t} = c + \beta_{1} \ln ( patenting_{i,t-10}) + \beta_{2} \ln ( Population_{i,t-10}) + \beta_{3} \ln ( y_{i,t-10}) + \beta_{4} \ln ( \text{predicted productivity}_{i,t-10}) + \beta_{5} \ln ( \text{educational attainment}_{i,t-10}) + \text{place and dummy variables} + \varepsilon_{i,t}

The model is structured in this relatively standard way to reduce endogeneity—there might be more patents filed where labor productivity is highest, rather than higher labor productivity where the most patents are filed. And if the only concern were reverse causality, then it would be a good way to study the question of patents and innovation.

The authors find positive coefficients on the patenting variables and conclude that patents drive economic growth both in local areas and in general.

This report documents how a strong national innovation system plays out across a dispersed array of U.S. metropolitan areas, contributing to economic growth in both local places and across a large and diverse country.

Clear in these pages is the continued vibrancy of the U.S. innovation as well as the general utility of the nation’s patenting system. (p. 28, emphasis added)

These conclusions are unwarranted given the model and findings expressed in the paper. To see that this is the case, assume temporarily that patents do nothing to incentivize real innovation, and that they merely transfer wealth from consumers at large to the patent holder through firm profits. If this were the case, then we would find that measured output per worker was higher in metropolitan areas with more patents—exactly what the authors found!—because they are gaining profits at the expense of consumers in metropolitan areas with fewer patents. In other words, the authors could be laboring under a fallacy of composition. Just because patents enrich the MSAs that generate them doesn’t mean that they are a source of prosperity for the nation as a whole or that they increase social welfare.

Alternatively, assume temporarily that patents do nothing to incentivize real innovation, but that firms that produce valuable innovations must defensively patent them to avoid being taken to court for using their own inventions. If this were the case, then patents would correlate with real innovation, and therefore with output per worker, but they would not cause an increase in productivity. In addition, at least some of the measured increase in output would come from an influx of highly-paid intellectual property attorneys, which by assumption does not represent real added productivity. Note that the top-patenting MSA in the study is Silicon Valley, the part of the country where people are most concerned about defensive patenting. But the word “defensive” does not appear even one time in the report, the appendix, or the working paper.

The authors have done nothing to identify the effect of patents on productivity, which is to say, nothing to rule out either of the possible assumptions above. They are simply relying on the assumption that more patents means more innovation.

This flaw in the paper makes all of their policy conclusions suspect. For example, if patents represent a mere transfer, then encouraging patent-generating institutions is socially destructive. It might nevertheless be rational for a single MSA to encourage such institutions, because residents of the MSA would enrich themselves at the expense of other MSAs. In this case, we should adopt federal policies to discourage patent-generating institutions. If patents merely correlate with innovation due to defensive patenting in some domains, then the U.S. patent system is not working as intended, which is again the opposite of what the authors conclude.

On point, the Winter 2013 Journal of Economic Perspectives is out this week, featuring a four-paper symposium on patents. The lead article is by Boldrin and Levine, entitled “The Case Against Patents.” Here is the first paragraph:

The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity. This disconnect is at the root of what is called the “patent puzzle”: in spite of the enormous increase in the number of patents and in the strength of their legal protection, the US economy has seen neither a dramatic acceleration in the rate of technological progress nor a major increase in the levels of research and development expenditure.

Petra Moser’s article does a historical comparison of countries with strong and weak patent laws and concludes:

Overall, the weight of the existing historical evidence suggests that patent policies, which grant strong intellectual property rights to early generations of inventors, may discourage innovation. On the contrary, policies that encourage the diffusion of ideas and modify patent laws to facilitate entry and encourage competition may be an effective mechanism to encourage innovation. (emphasis in original)

I hope that policymakers don’t rely on Brookings’s strong reputation and infer that our patent system is the strong engine of economic growth that Rothwell et al. suggest it is.

Copyright Reform and the Incentive to Create

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Mercatus has a new book out on copyright, edited by Jerry Brito, called Copyright Unbalanced: From Incentive to Excess. I am pleased to be one of an otherwise-illustrious group of contributors.

I expect that the book will create some controversy in policy circles. In this post, I want to address what is likely to be a knee-jerk response from our critics, that copyright reform will substantially decrease the incentive to produce creative works.

Content creators anticipate that their products will generate some amount of revenue each year after they are released. The expectation is generally that the creative work will generate the highest revenue in the first year, and less revenue in each subsequent year. To model this revenue stream, I’m going to assume exponential decay. Exponential decay lets us pick a half-life, h, and assume that h years after the work was released, it will generate revenue at half the initial rate. After 2h years, it will generate revenue at one-fourth the rate, and so on.

In year t, the revenue that the content creator will receive if there is copyright is e^{\frac{-t \ln2}{h}} times the initial revenue. Consequently, the total revenue that a copyright holder will receive over the life of a 95-year copyright term is

\sum\limits_{t=0}^{94} e^{\frac{-t \ln 2}{h}}

times the initial revenue.

However, content creators prefer revenue now to revenue 90 years from now. In order to calculate the present value of this revenue stream, we need to apply a discount rate r. The ex ante value of the revenue stream generated by the 95-year copyright term is therefore

\sum\limits_{t=0}^{94} \dfrac{e^{\frac{-t \ln 2}{h}}}{(1+r)^t}

times the initial revenue.

And of course, this calculation generalizes to different copyright terms. If we returned to a 28-year term, as Tom Bell advocates in his chapter of our book, the ex ante revenue stream would be valued at

\sum\limits_{t=0}^{27} \dfrac{e^{\frac{-t \ln 2}{h}}}{(1+r)^t}

times the initial revenue.

We’re now at a point where we can start to run some numerical calculations based on plausible values for h and r. What is a reasonable ex ante expectation about the half-life of the revenue stream of a new creative work? I expect that for our book, the half-life will be something like 1 year or less; we will probably sell less than half as many books in the second year the book is out as in the first. But let’s not use h=1. Let’s estimate that h=10 to be extremely conservative and generous to our critics.

What about r? Again, how about if we are conservative and give r a low value, like r=0.02?

Now we can run some calculations. Using the values above, the ex ante present value of a 95-year copyright is around 11.726 times the initial revenue. The ex ante present value of a 28-year copyright is around 10.761 times the initial revenue. Consequently, shortening the copyright term from 95 years to 28 years (less than 30% of the current term!) retains about 91.8 percent of the incentive effect of the current copyright term.

It is unlikely that such a small decrease in the present-value of the revenue stream would reduce the amount of content production by much. To the extent that content producers cannot or do not substitute easily into other fields, they would simply take the 8.2 percent decline in compensation per project as a decrease in wages (not the end of the world), and there would be no decline in content production. To the extent that content producers can substitute into other fields, we would get less content, but we would also get more of other stuff—the welfare effects of less content are ambiguous, since there is a knowledge problem regarding the optimal amount of content.

If you want to do the calculation with different half-lives and interest rates, be my guest. I am confident that for all plausible values of h and r, you will find that shortening the copyright term will have at most a modest effect on the incentive to create.

How about the value of the public domain? This is a little harder to model, because we care about the ex post value of works, not just the ex ante expectation that content creators have. In practice, there turn out to be works with much longer half-lives than others. This fact complicates any back-of-the-envelope calculation. We also don’t know exactly by how much content creation would fall.

But let’s abstract from this and model the value of the public domain as the revenue stream for a given project that otherwise would have gone to copyright holders above. One difference for the public domain is that it no longer makes sense to discount the stream of value—future generations aren’t sitting around, waiting to be born so that they can watch Star Wars for the first time. Therefore, normalized to our original, first-year revenue stream, an estimate of the value of the public domain under a 95-year term is

\sum\limits_{t=95}^{\infty} e^{\frac{-t \ln 2}{h}}.

Under a 28-year term, the value is

\sum\limits_{t=28}^{\infty} e^{\frac{-t \ln 2}{h}}.

Plugging in the value we selected earlier for h, 10, the former expression yields around 0.021 and the latter about 2.144. In other words, the value of the public domain would be around 100 times higher per creative work if we shortened the term to 28 years. Again, this value is highly dependent on our selection of h, but the reason I am doing these calculations is so that my critics can repeat them with values they find more plausible, if they so choose.

This analysis has been highly stylized, but it is also extremely conservative. The half-life of most creative works is probably much shorter than 10 years, and when valuing an uncertain revenue stream, most artists—and even content corporations—probably discount at a rate of higher than 2 percent. The value of the public domain has been understated in this analysis, because there are many works that turn out ex post to have longer half-lives (but it is still the ex ante estimate of value that matters for investment). I have also not factored in the gains from those derivative works that are impossible under the current regime due to transaction costs, or the savings in enforcement costs from having a shorter time during which enforcement is necessary, or indeed, many of the other issues discussed in our book.

I would be interested in reading further analyses like the one above from anyone who supports the current copyright term or a longer one. How do you justify such a long term? You don’t have to use my assumptions, just make your own explicit so that people can see what they are and quarrel with them. How many fewer works do you really think would be created if we shortened the term from 95 years to 28 years? Would we really be worse off? Please show your work.

The Republican Party is Like a Fast Food Chain that Lets its Restaurants Locally Source Meat

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McDonald’s is a national brand, but most McDonald’s brand restaurants are locally owned and operated. One interesting fact about McDonald’s franchise arrangements is that each restaurant is required to purchase its meat from the company. Individual restaurants are not allowed to locally source their meat.

Why not? The answer is surely not because McDonald’s is the best at sourcing meat. It seems likely that from time to time, local operators would be able to find higher quality meat at lower prices than the company. And the answer is not that the sourcing of meat provides a profit to the company at the expense of the restaurants. Such a transfer would be capitalized via the other terms of the franchise agreement, so there is no incentive to adopt these terms unless they are efficient.

The real answer is that there is a brand externality. Let’s suppose that one local McDonald’s tries to increase its profit by purchasing extremely low-grade beef. If you stop at this McDonald’s on a road trip and get sick, you might punish all McDonald’s restaurants by refusing to eat at them in the future.

This problem does not plague standalone restaurants. We don’t worry about them locally sourcing their meat—and often, we prefer it. But this is because they have only their own reputation to harm. If they shirk on quality, they bear all of the reputational costs themselves.

The brand externality would also not be a problem if everyone only ever ate at their local McDonald’s. If your local McDonald’s used rotten beef, you wouldn’t go there, and neither would anyone else. Other McDonald’s restaurants would be unaffected. But the fact is, people travel and indeed, that is often when they go to McDonald’s, so the brand externality is an important issue, and the company deals with it by standardizing quality across all McDonald’s restaurants by contract. This contractual arrangement between the central company and the individual restaurants is called a “vertical restraint.”

When I think about why the Republicans lost ground in the 2012 election, I think about beef that is well past its sell-by date. Individual Republican politicians have an incentive to cater to the values of their local electorates, but this can come at the expense of the national Republican brand. Tip O’Neill famously said that all politics is local, but this is no longer true—the advent of cable news and the Internet means that some politics is national, as does the fact that more policy is now decided at the federal level. It’s like we have gone from a situation in which everyone eats only at their local McDonald’s to one where people travel and eat at restaurants around the country: a brand externality has emerged.

Given that national media is not going away, party leaders need to be able to impose vertical restraints on its candidates. They need to be able to ensure that local races boost the national Republican brand, even at the expense of losing local races from time to time. Local politicians may be able to get a local boost in turnout by playing to the prejudices of their bases, but if such activity harms the party on a national level, that is inefficient, and the central party needs to find a way to stop it if it wishes to succeed.

The admittedly oversimplified median voter theorem says that both parties should converge on the preferences of the median voter. To the extent that one party suffers more from brand externalities, the other party will be able to take advantage by converging more rapidly to that position, or by making more effective use of the slack generated by the ineffective party. Democrats are arguably more nationally-minded, and this means that in the age of political brand externalities, they have an advantage. If Republicans want to be an effective party in the 21st century, they need to find a way to impose vertical restraints on those who would abuse their brand.

Event Next Week: Previewing the World Conference on International Telecommunication

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As some of you know, I’ve been closely following the World Conference on International Telecommunication, an international treaty conference in December that will revise rules, for example, on how billing for international phone calls is handled. Some participants are interested in broadening the scope of the current treaty to include rules about the Internet and services provided over the Internet.

I haven’t written much publicly about the WCIT lately because I am now officially a participant—I have joined the US delegation to the conference. My role is to help prepare the US government for the conference, and to travel to Dubai to advise the government on the issues that arise during negotiations.

To help the general public better understand what we can expect to happen at WCIT, Mercatus has organized an event next week that should be informative. Ambassador Terry Kramer, the head of the US delegation, will give a keynote address and take questions from the audience. This will be followed by what should be a lively panel discussion between me, Paul Brigner from the Internet Society, Milton Mueller from Syracuse University, and Gary Fowlie from the ITU, the UN agency organizing the conference. The event will be on Wednesday, November 14, at 2 pm at the W hotel in Washington.

If you’re in the DC area and are interested in getting a preview of the WCIT, I hope to see you at the event on Wednesday. Be sure to register now since we are expecting a large turnout.