Connect with us

Expert Opinion

Trevor Wagener: State Regulation of Content Moderation Would Create Enormous Legal Costs for Platforms

Published

on

The author of this Expert Opinion is Trevor Wagener, director of research and economics at CCIA

Dozens of bills regulating internet content moderation have been proposed in at least 30 state legislatures, and one in Utah currently sits on the governor’s desk awaiting his veto or signature. If enacted, many of the bills would impose prescriptive state regulations governing internet content moderation practices, with requirements differing significantly from state to state.

Many of the bills would also create private rights of action or state enforcement action powers. This could lead to enormous legal costs for platforms. If several of these bills are enacted into law, the resulting patchwork of regulatory requirements and legal risks could create daunting compliance challenges, astronomical costs, and unpredictable legal liability, which only the largest of platforms might be able to manage.

At present, each American internet platform can choose to moderate user-generated content using a variety of approaches depending on the nature of the platform and the desired user experience. A common approach is to utilize automated content moderation to perform triage on specific categories of prohibited content that can be categorized easily. For some, databases already exist. Human moderators are then used to judge a small fraction of hard-to-categorize content.

Automation is the primary tool in content moderation because of efficiency

Using automation as the primary tool in content moderation is common because of cost-efficiency—for example, Microsoft and Alibaba both offer third-party automated content moderation services for about $0.40 per 1,000 images or posts at scale. This implies an automated content review cost of about $0.0004 per image or post. When a human moderator must review content, by contrast, it takes an average of 150 seconds for them to review a post on even the most efficient platforms.

This work requires skill and judgment: Moderators often must quickly make complex decisions with limited context. Even assuming services could retain personnel to do this challenging work at $15/hour, the cost would be at least $0.625 per reviewed post, or 1,500 times the cost of automated moderation.

Some state bills, including Florida’s H.B. 7013 and Utah’s S.B. 228 require platforms to send a written notice to the user and/or the state government every time a post is moderated. This could require a human moderator for most or all user-generated content in those states, increasing moderation costs by a factor of 1,500. In cases where moderation would affect users from multiple states, the process could require two human moderators’ time, duplicating costs.

Florida’s moderation bill also mandates that users be able to request detailed information about the moderation of their posts, while Utah’s mandates that users be allowed to appeal moderation decisions, have appeals reviewed by a human moderator, and even have that moderator explain their decision to the user.

State bills will exponentially increase the cost of content moderation

Depending on the post, the requests for information, the appeal process, and the specific requirements of each bill, that could take anywhere from 5 minutes to half an hour of a human moderator’s time for each instance. At $15/hour, that would cost between $1.25 to $7.50 on top of the $0.625 for initial review. For each request, the process could cost 3,000 to 18,000 times as much as the present baseline.

Not every moderated post would be appealed. However, with current appeal rates of one in 40 to one in 10, the costs would add up. With content moderation rates ranging from one per 20 users annually on some platforms to almost twice per user annually on others, we can establish a range of incremental compliance costs for a hypothetical startup with 20 million users.

These compliance costs multiply with the number of distinct state content moderation bills enacted. If users from multiple states engage with a post, that could require duplicative reviews of the same content based on distinctive state requirements. If only two out of fifty states enact such bills, duplicated reviews might be required for 4 percent of moderated posts; if thirty out of fifty states enact such bills, duplicated reviews might be required for 60 percent of moderated posts.

In the low case, where one in 20 users has a post moderated, one in 40 moderations are appealed, each appeal takes about 5 minutes, and only 4 percent of moderations involve duplicated review of content from users from multiple covered states, that adds up to about $0.68 million in aggregate annually, or $0.034 per user annually.

In the high case, where two posts per user are moderated, one in ten moderations are appealed, each appeal takes about half an hour, and 60 percent of moderations involve duplicated review of content from users from multiple covered states, that adds up to $70 million in aggregate annually, or $3.50 per user annually.

Even in the best case, a ‘low-cost’ compliance total could be ruinous

For a startup, even the low-case total compliance cost of about $0.68 million annually could be ruinous. The high-case total cost of $3.50 per user annually would be an enormous financial hit for platforms of all sizes, since leading platforms only have global average revenue per user of about $10 annually. Therefore, a patchwork of state content moderation bills could unwittingly create a significant barrier to entry, discouraging tech startups from operating in certain states. This would reduce competition, inhibit job creation and curtail the range of online services available in those states.

In addition, some state content moderation bills, such as Oklahomas S.B. 383, Iowas S.F. 580, and North Dakotas H.B. 1144, create legal risks for online platforms. Purported failures to follow state-specific content moderation rules could subject platforms to both government enforcement actions or private rights of action. Even in clear-cut cases with all facts in the platform’s favor, litigation could cost $80,000 through a Motion to Dismiss or $150,000 through a Motion for Summary Judgment, in addition to possible statutory and/or punitive damages. This would be on top of compliance costs.

It is difficult to forecast legal costs under a patchwork of distinct state regulations, as they scale with the number of affected users and the number of states with such bills enacted. Some of the bills would grant rights of action to the user posting content, while others would grant rights of action to users prevented from seeing content. Some would grant private rights of action to both. Many create enforcement powers for state governments in addition to private rights of action. In principle, the moderation of a single post with comments from residents of multiple states could result in a number of enforcement actions and private lawsuits greater than the total number of affected users times the number of states they reside in.

Spiraling legal costs associated with even a single post by a user in a covered state

The moderation of a single hypothetical post by a user in one covered state with comments by users in 29 other covered states would result in 30 affected users in 30 jurisdictions. This could mean more than 900 lawsuits, each plausibly costing the platform $80,000 for a Motion to Dismiss. If each were litigated, that would cost the platform at least $72 million for a single content moderation decision even if one assumes the success of every Motion to Dismiss. These legal liabilities would be capable of bankrupting a startup or midsize platform. If even one in a thousand moderated posts were fully litigated, platforms would have to account for this enormous tail risk as a recurring phenomenon, as many platforms moderate thousands of posts per day.

Startups with limited initial capital are reluctant to operate in jurisdictions with higher legal risk. They may not only avoid locating offices and jobs in high-risk states but also bar state residents from using their platforms altogether. Platforms that continue operating or offering services in such states may dramatically curtail content moderation to manage risk, resulting in a dramatic increase in financial scams, lewd content, and all-around abusive and unpleasant content. This would likely reduce use of such platforms, decreasing both consumer welfare and platform revenue.

In addition to deleterious impacts on platforms, users, and competition, a patchwork of state content moderation bills would burden taxpayers with administrative costs, enforcement costs, and possible litigation damages.

Administrative costs for most state content moderation bills would likely be in excess of Utah’s estimate of $90,000 annually for each such state. In addition, enforcement costs would likely surpass Iowa’s estimate of $700,000 annually for each such state. Given constitutional concerns around such bills and potential legal challenges to governments that force private businesses to host content to which they object, each such state could easily find itself paying damages and fees.

Trevor Wagener is the director of research and economics at the Computer & Communications Industry Association.  Wagener previously served as deputy chief economist of the U.S. Department of State. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Expert Opinion

Leo Matysine: The Impact of C-Band on Advancements in Mobile and Fixed Broadband

As technology is more advanced and connected to everything, the need for higher capacity networks will continue to grow exponentially.

Published

on

The Author of this Expert Opinion is Leo Matysine, Co-Founder of MatSing

When consumers think of 5G, often their minds automatically think mobile connectivity. The official C-Band launch this past January brought the idea of increased spectrum connectivity into the limelight. While this had been something anticipated by the telecommunications industry for years, finally seeing it come to fruition allowed the mainstream media to become invested in the benefits this 5G spectrum could offer.

When 5G was first introduced five years ago, it caught the attention of many who soon learned the challenge in speedy implementation due to strict infrastructure requirements. The introduction of C-Band provides a solution, enabling 5G upgrades while simultaneously addressing the coverage and capacity needs.

This heightened implementation will allow users to start seeing improvements across the board, but not just in the form of mobile connection. Outside of the benefits for mobile carriers, the advancements C-Band provides will enter in a new era for fixed broadband access especially in rural communities.

The need for fixed broadband was magnified during the pandemic as users need for internet access from home drastically increased. This exposed the digital divide rural communities are facing, causing it to gain traction with the White House. As a result, a new infrastructure bill aimed at improving the underlying network infrastructures was developed as fiber-to-the-home and fiber-to-the-premise in rural settings have proven to be too expensive and impractical for wide implementation.

C-Band provides an alternative option allowing for wireless fixed broadband access through antennas. The mid-band frequency spectrum (1GHz to 6GHz) can provide rural users, both businesses and households, with options in providers and services they’ve been unable to experience previously.

C-Band also allows for higher speed and capacity

On top of the fixed broadband perspective where C-Band frequency spectrums are enabling rural connectivity, it allows for higher speed and capacity. The spectrums being utilized in the past while generating mobile coverage, had disadvantages in capacity and experience.

The mmWave spectrum (24GHz +) can transmit data at hyper speeds but only from limited distances, requiring line-of-site installations, whereas sub-1GHz offers the opposite. The mid-band spectrum C-Band falls under acts as a perfect balance, transmitting data at high speeds and capacities while providing the coverage needed to cover vast areas. Deployed with lens antenna technology, the additional capacity can be enabled with fewer antenna locations as compared to other antenna types, leading to financial advantages.

From a more localized vantage point, C-Band is now being integrated into marquee venues and stadiums. Within these smaller spaces, improved bandwidth and superior performance is essential given the concentrated number of users seeking connection and the inherent need for more content sharing. In order to support the mobile experience fans now expect from these venues, carriers and venue owners have turned to C-Band deployments.

Deployed atop the 4G/LTE foundation, the C-Band antenna builds off this functionality while adding the increased speed and capacity accustomed to the mid-band spectrum. Several venues will see increased results with these implementations allowing fans to experience a more reliable and overall better experience at their game days or concerts in the upcoming months.

Looking ahead, these milestones only mark the beginning of where C-Band implementation will take the telecommunications industry. As technology continues to become more advanced and connected to everyone and everything, the need for higher capacity networks will continue to grow exponentially.

Leo Matysine is the Co-Founder and Executive Vice President of company MatSing, the worlds leading manufacturer of large size, light weight RF lenses. MatSing introduces a new age of antenna design for the Telecommunications industry. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

Continue Reading

Expert Opinion

Patrice Williams: Reimagining the Future of Work With Digital Plus Human Efforts

‘Digital workers can help in the end-to-end automation of business processes by mimicking human behavior.’

Published

on

The Author of this Expert Opinion is Patrice Williams, Business Development Representative at Vuram.

Organizations across geographies are fast-embracing the hybrid and remote working models as they are embracing their digital transformation journeys to navigate the new normal. Adopting a digital workforce is essential to overcome a series of challenges, while it cannot replace humans. The future of work will witness humans operating side-by-side with software robots to pursue business goals and tackle future challenges.

The inclusion of a digital workforce allows organizations to function seamlessly around the clock while addressing labor shortages, learning gaps, upskilling requirements, workforce flexibility, effective crisis management, and profitability.

Who are digital workers?

The digital workforce is a variety of robotic and automated solutions that work in tandem with humans to accomplish tasks that are complex, time-consuming, repetitive, and mundane. They perform complex tasks end to end so that humans can focus on creative, critical, and high-value-added activities. The digital workforce comprises technologies like robotic process automation, cognitive computing, artificial intelligence, machine learning, and more.

Adopting digital workforce

Globally, when businesses started operating remotely, adopting digital workforce technologies helped organizations to continue operations uninterrupted by functioning seamlessly round the clock and achieving speed and efficiency.

Aided by hyperautomation technologies, the digital workers can help in the end-to-end automation of business processes by mimicking human behavior to perform actions that were previously, typically done only by humans. Following are some of the use cases:

Chatbots are increasingly being used across industries, including healthcare and banking. They can streamline customer support by handling volumes of simple customer queries around the clock, bringing down the costs, and adding efficiency. Interestingly, chatbots are predicted to save $8 billion by 2022 and save 2.5 billion hours by 2023, according to a study by Juniper Research.

Chatbots add efficiency to the new normal set up when people are working in different locations and are reimagining roles focusing on quality and cognitive skills. When integrated with the IT helpdesk, the bots can empower employees to resolve simple issues on their own, thus removing the burden on human employees.

With AI and natural language processing capabilities, these bots can understand the simple language of the users and help them with the right answers. They can help a new joiner complete the onboarding formalities, like filling out forms and helping them with instant answers to common questions about company policies, roles, responsibilities, etc.

The process of onboarding customers is different across industries, be it retail, corporate, banking, or healthcare. Irrespective of the industry, it is one of the most important and complex tasks with compliance checks, stringent regulations, documentation, security, and much more.

For instance, let’s take the bank. It involves several key steps like evaluating the customer’s profiles, recording customer data, performing background checks, fulfilling legal obligations, opening the account, interacting with the customer for any support, and finally, the account becomes operational.

AI can transform business experiences in a post-COVID world

In a post-COVID world where social distancing and other hygienic protocols are at the forefront, AI can transform the banking experience for customers. Digital onboarding can reduce time and costs while addressing the prominent challenges and ensuring compliance. In a digital environment, form fillings can be done automatically with OCR, conversational AI and a virtual assistant can support customers at any time and machine learning can be used to verify customer data across all the documents.

Fighting fraud by detection across stages is a critical part of financial institutions that handle volumes of unstructured data. Manual efforts in identifying, analyzing data, user profiling involves more effort, time, and prone to errors. RPA bot infused with AI and machine learning capabilities can curb financial frauds by monitoring every activity in the process loop and immediately notifying any concerns.

For example, credit scoring can be monitored effectively in the insurance claims process with the bots reviewing customer claims, matching them with the existing data, and monitoring the customer behavior to raise any abnormal behavior patterns. When trained, the bot can prevent money laundering by raising alerts of potentially fraudulent transactions.

Intelligent document processing helps organizations that process or handles several types of documents daily to reap the benefits of intelligent document processing. The process automatically reads, extracts, and analyzes from structured and unstructured data like online forms, resumes, email messages, invoices, text files, audio files, video files, and a lot more.

Functions like opening emails, downloading and reading attachments, filling forms, copying/pasting documents, extracting data from social media channels or other forums, reading/writing databases, and collecting and recording data, can be carried out with the help of intelligent document processing. Organizations can effortlessly search, extract, and analyze data for decision-making.

As the future of work is exploring ways to support the human workforce to perform at their highest potential while creating a happy working environment, the digital workforce can benefit the process in numerous ways.

Contrary to the popular myth that robots will replace human roles, the technologies will complement human efforts by adding quality, efficiency, and job satisfaction to perform better in the new digital workplace. Further, technology will enable businesses to overcome human limitations to maximize human potential nurturing a supportive working environment with more inclusive work culture.

Patrice Williams is the Business Development Representative at Vuram, a hyperautomation services company. Vuram has received several prominent recognitions, including the Inc 5000 list of fastest-growing private companies in the United States, HFS hot vendor in 2020, and Rising Star- Product Challenger in Australia by ISG in ISG Provider Lens 2021 report. Williams has more than 20 years of experience as an operational manager and working in a multinational working environment, and has led Vuram’s hiring activities and people management. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

Continue Reading

Digital Inclusion

Samantha Schartman-Cycyk: Three Keys to Building Transformative Broadband Plans

‘While the federal government’s infrastructure funding creates unique opportunities, it also exposes challenges that states and tribes must get in front of to ensure that funding is sustainable and implementation is effective.’

Published

on

The author of this Expert Opinion is Samantha Schartman-Cycyk, President of the Marconi Society

This week, I am thrilled to join state, local and tribal leaders from across the U.S. as we convene in Cleveland, Ohio, for the Broadband Access Summit. As a local and long-time advocate for digital inclusion, I am proud that the Pew Charitable Trusts and Next Century Cities selected Cleveland, one of the least connected cities in the country, as the site for a timely conversation about how we can effectively spend the unprecedented levels of federal funding for broadband infrastructure.

While the federal government’s infrastructure funding creates unique opportunities, it also exposes challenges that states and tribes must get in front of to ensure that funding is sustainable and implementation is effective.

The good news is that digital equity is finally front and center—where it belongs—and it has taken nearly twenty years of advocacy and practice to get us to this point.

Following are three key lessons I have learned to ensure efforts to expand connectivity are community oriented and sustainable.

1. Bring in local leadership—now

Across the country, areas that have a dedicated local leadership responsible solely for digital equity and inclusion are outpacing their counterparts. Someone, or ideally a team, needs to wake up every day thinking about what digital equity means in their community, how to make a reality in a way that supports key priorities, and where the true needs are. We have seen benefits in cities such as Detroit and Seattle, who have taken this approach.

We must support these leaders with accurate data. At the Marconi Society, a nonprofit that champions digital equity, I helped launch the National Broadband Mapping Coalition to help leaders from rural communities and urban ‘digital deserts’ identify broadband gaps. The NBMC has developed a no-cost mapping toolkit to help educate and guide communities.

2. Plan for sustainability while you have strong funding

We need to anchor digital inclusion efforts to long-term state programs to solidify funding and reinforce the intersectional impact of digital inclusion. Typically, digital inclusion programs blossom within the period of investment but falter when funding runs out, only to peak again when new grants or federal money become available.

This process wastes resources, relationships, and time, resulting in stop-and-start programs that aren’t able to address residents’ needs nor build momentum.

For example, a state like Maine with an older rural population is likely to prioritize services that allow for aging in place and telemedicine care for seniors. States like Utah or Texas, with relatively young populations, might place a higher priority on education and K–12 STEM pipelines. This alignment will allow state leaders to prioritize and bake sustainability into their broadband plans, create digital equity programs that support their priorities, and incorporate data collection into their work.

3. Create the workforce your state will need

In order to implement strong broadband plans that create true digital equity, state and local governments need a pipeline of people who understand the unique intersection of technology, policy, and grassroots digital inclusion work needed to bridge the digital divide. As of last year, nearly 20 states did not even have a dedicated broadband office to begin this work. With funding already being dispersed to states, we are at a critical moment.

To help create this workforce, the Marconi Society conceptualized and is developing the first-ever “Digital Inclusion Leadership” professional certificate with Arizona State University. The program will launch in Fall 2022 and will include top-ranked professors and leading industry experts as teachers and advisors.

I believe that this interdisciplinary workforce will continue to be in high demand as states integrate digital equity into their long-term priorities.

After years of helping to lay the groundwork for the current burst of funding and activity around digital equity, I can say that our work has only just begun. We have the gift of beginning with knowledge and funding that can be truly transformative. The digitally equitable future we are fighting for is closer than it has ever been before—let’s make sure we get this right.

Samantha Schartman-Cycyk is President of the Marconi Society, a nonprofit organization dedicated to advancing digitally equitable communities by empowering change agents across sectors. Over her 20-year career, she has built forward-thinking programs and tools to drive impact on digital inclusion at the local and national levels, through projects with the National Telecommunications and Information Administration (NTIA), community training, and data collecting efforts. The Marconi Society celebrates and supports visionaries building tomorrow’s technologies upon the foundation of a connected world we helped create. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

Continue Reading

Recent

Signup for Broadband Breakfast

Get twice-weekly Breakfast Media news alerts.
* = required field

Trending