Monday, January 27, 2020

Profiting from Nonprofits? The Sale of Dot-Org

You're probably familiar with websites that end in .org, which is one of the original domain names that the Internet started out with back in the 1980s.  Historically, it was used to distinguish nonprofit organizations from those whose URL ends with .com, which presumably were in it for the money.  That distinction is no longer observed, as anyone with enough money and an idea for a .org domain name that nobody's thought of yet can get one, profit or no profit. 

Nonprofits that got in early and want to keep their .org domains thought they had something to worry about when an Associated Press report came out this week regarding the sale of the Public Interest Registry (PIR), the nonprofit organization that oversees .org.  The buyer is a for-profit entity called Ethos Capital, and they are reportedly paying over $1 billion for the PIR and its rights to receive registration and renewal fees for .org domains.  There were even some protesters with signs outside the Los Angeles offices of the Internet Corporation for Assigned Names and Numbers (ICANN), the umbrella organization that turned over .org to the PIR in the first place and presumably must approve the sale of PIR to Ethos. 

As protests go, this one was small potatoes—about 20 people.  On Friday, Jan. 24, by contrast, a whole lot more folks than that showed up in Washington, DC, for the annual March for Life protesting the 1973 U. S. Supreme Court decision Roe v. Wade legalizing abortion.  The fact that these events got roughly the same coverage says something about media priorities, but that's a discussion for another day.

What's interesting about the protests surrounding the sale of the .org domain operation to Ethos is the concern that Ethos will jack up prices and fees to the point that nonprofits will be unable to keep their domain names.  Theoretically, that is a possibility.  But the point I would like to make is that just as anybody nowadays can buy a .org domain name with enough cash, anybody can organize as a nonprofit and do almost anything a profit-making entity can.  And that's not right.

The phrase "non-profit" itself, as modifying "organization" or "corporation" dates back only to the 1920s.  Before that you might have called them charitable organizations, or charities.  But as life got more complicated, outfits arose that were not strictly motivated by compassion or mercy (the root meanings of "charity"), but nevertheless were not founded simply to make money.  And as corporate tax laws cast an increasingly greedy eye on profits, it became advantageous to operate under the label of a nonprofit, and so more organizations did so.  The only taxes nonprofits pay are typically employee taxes such as Social Security and Medicare, but otherwise they are exempt.

Back when I was young and innocent (now I'm old and not quite so innocent), the word "nonprofit" conjured up in my mind the image of a small, storefront place where the roof leaked and the people there all ate beans out of a can for lunch, because any money they got went into the Cause, whatever the Cause was, and not their own pockets.  The Sisters of Charity founded by Mother Teresa still hews to this model pretty much, I am told, but it's now the exception rather than the rule. 

Some nonprofits are huge multinational corporations with multimillion-dollar budgets.  And, to be fair, many of them still have the nonprofit spirit of keeping as their highest priority a goal other than making money:  relieving poverty, encouraging education or spiritual growth, or any number of other worthy goals that are not monetary profit. 

But just because you have "nonprofit" in your charter doesn't mean you can't pay some extremely remunerative salaries.  A few years ago, the American Red Cross was in the news for the poor accounting it made of donations given to Hurricane Harvey relief, and it was pointed out that their CEO makes $500,000 a year, which they said was in the mid-level of CEO pay for large nonprofits.  Cecile Richards, the former head of another large nonprofit called Planned Parenthood, reportedly was paid over $1 million in the fiscal year 2017-2018.  Clearly, these folks are not eating canned beans for lunch.

Such organizations might reply that one of the main functions of their CEOs and high-level officials is fundraising, and the person asking for money has to be able to hold up their head in a moneyed environment, which you can't do on a $20,000-a-year salary.  And while executives of nonprofits don't expect to be paid at a rate competitive with the for-profit world, they will put up with only so much of a pay cut before they will decide it's not worth it and go somewhere that pays more.  There's competition for executive talent among nonprofits too.

All these are valid arguments in the current environment.  But in view of the almost vanishing distinction between some nonprofits and profit-making entities, I would tell those who have .org domain names to cool your jets.  Obviously Ethos Capital isn't paying a billion dollars for the .org domain system out of the kindness of their hearts.  But these days, nonprofits can be just as rapacious and exploitive as profit-making companies can be.  It appears that some former ICANN members are also involved in Ethos Capital, so the most likely outcome will be that things will roll along more or less as they've always gone, perhaps with even better service regarding domain-name registration and renewal.  After all, the market does work well in most cases, and profit-making outfits in a competitive environment often outperform nonprofits that are not competitive.  The domain-name business is not competitive in that sense—if you don't like the service you get from Ethos in trying to obtain a .org domain name, you will be out of luck—but they may come up with other profitable activities that will synergistically make their services better.

So for now, I don't expect any big changes in this area.  And I also don't expect the CEOs of big nonprofits are going to start eating beans for lunch any time soon either, as the phrase "nonprofit" is just a label now, not a guarantee that its people have taken a vow of poverty. 

Sources:   The Associated Press story about the purchase of the Public Interest Registry by Ethos Capital was carried by a number of newspapers, including the Sacramento Bee on Jan. 25, 2020 at  I also consulted the website regarding the ancestry of "non-profit" and the Wikipedia websites on ICANN, Ethos Capital,, and regarding the CEO salaries at the American Red Cross and Planned Parenthood, respectively. 

Monday, January 20, 2020

The Value of Personal Data

In some countries, all mineral rights are owned by the government.  In these countries, your family may have owned a plot of ground for generations.  But if the government thinks there's oil under it, they can come in, drill a well in your back yard, and make millions off the oil they find—and not give you a cent.  And it's all legal.

Other countries with different traditions regarding property rights view this situation as unjust.  In the U. S., for example, mineral rights usually vest in the property owner, which is how many otherwise dirt-poor Texans got rich when oil was discovered on their previously worthless land.

What goes for land that you buy should also go for things that you do.  If your actions lead to the creation of something that is of value, it would seem only fair that you should receive the properly evaluated equivalent for that value—in money or other valuable and exchangeable form. 

In Don't Be Evil, journalist Rana Foroohar describes how large tech companies such as Facebook, Amazon, and Google, as well as many smaller ones, collect data from us that is estimated to be worth nearly $200 billion.  When you click on a link, or lately even talk about certain things in the hearing of your personal assistant or your mobile phone, that information is noted, logged, and used to sell advertising and other things that the giant tech companies get real money for.  And as the Internet of Things grows with its ability to track our movements and other actions, this data stream will only get bigger. 

What do you get in exchange for providing the lifeblood of commerce for these firms?  They would say that you receive lots of free stuff in return—free web searches, a free personal Facebook page, free ads for things you may want to buy, and so on.  And this is true.  But it is far from the ideal free-market exchange of value, in which both parties come on a more or less even footing to an agreement after sharing essential information and comparing the potential exchange with any others that they might make with other parties.  

To put this situation in perspective, Faroohar points out that $200 billion is more than the total value of the annual U. S. agricultural output.  In other words, it's as if the large food companies (ConAgra, Tyson Foods, etc.) took everything that U. S. farmers grow, but paid them nothing for it.  Nobody would put up with that, and nobody would keep farming for very long either.

But just living an ordinary life these days means that you constantly do things that produce little bits of valuable data for the likes of Facebook, Google, and Amazon, whether you really mean to or not.  And in a technical sense, it is perfectly legal.  The cadres of tech-company lawyers who write the incomprehensible boilerplate on every software agreement that you lie about reading before being able to use the software make sure of that. 

One of the good outcomes of the otherwise horrific Nuremberg Trials of Nazi war criminals was the development of the Nuremberg Code, which has since been adopted to govern experiments involving human subjects.  One of the core principles of the code is that participants must give informed voluntary consent to being experimented on.  In other words, they must clearly understand the possible consequences of participating in the experiment and be able to say yes or no freely after making an informed decision.

If we regard the entire data-mining exploits of the big tech companies as a large-scale long-term experiment on the public, it is easy to see that we as individuals are at a vast disadvantage compared to the firms that profit from the data we generate.  Withholding our data would be difficult or impossible, especially when we don't even know that we're providing it (e. g. when Alexa or your mobile phone eavesdrops on your conversations).  And we have no idea what consequences will result from our actions.  And I include among these consequences the fact that the rich monopolies represented by the above-named firms get even richer, while in exchange I receive certain services that are convenient, true, but have value that I would be hard put to estimate in dollar terms.  Even if I did, it's doubtful that the value I perceive as getting from these firms would come anywhere close to the money they make off me by mining it.

The fact that I have to go through mental contortions even to think this way shows how deeply disguised the process is.  As an engineer, I'm trained to think of worst-case scenarios, and if I let my imagination wander in that direction with regard to the situation of data mining, I might come up with something like this:  The U. S. economy becomes even more two-tiered, with a very small number of very wealthy people working for or associated with the largest monopolistic tech firms, and everybody else on some kind of government-paid dole to keep them from starving, because most other jobs have vanished.  Research and development dries up here and moves to China, where most future technology developments happen under the firm control of the government there. 

I could go on, but I think I have made sufficiently clear the point that every day, with every click on a site associated with the largest tech firms, we allow them to obtain data that we make, but that they profit from. 

I do not pretend to have a good solution to this problem.  When similar situations arose in the past, such as during the "robber-baron" period of the 1800s when railroads monopolized essential transportation and commodities, the government had to intervene with countervailing forces embodied in things like the Interstate Commerce Commission and antitrust laws.  If the economy, the job market, and society in general is not to be further hollowed out by the activities of the large online tech firms, which are now indisputably having a negative effect on the political viability of our democracy, something needs to be done.  But I'm not sure what. 

Sources:  Rana Faroohar's book Don't Be Evil was published by Random House in 2019. The statistic about the value of data mined from the public being worth an estimated $197.7 billion by 2022 is on p. 25

Monday, January 13, 2020

Death Rode the Rails, Indeed

The prospect of dying in a railroad accident is not something that too many Americans worry about these days.  But it was not ever thus.  In an excellent but little-known book entitled Death Rode the Rails:  American Railroad Accidents and Safety 1828-1965, economic historian Mark Aldrich reveals that in the earliest days of rail travel in the 1840s, passengers were sometimes surprised to see a thin strip of iron thrusting up through the floor of the carriage, threatening to impale them like bits of beef on a barbecue skewer.  Called "snakeheads" by the antebellum press, relatively few people were killed by these accidents, which occurred because some of the earliest railroads used a thin iron strap fastened to a wooden rail to save money, instead of a solid iron rail, and the strap would sometimes come loose from the wood, snaking its way up into the cars.  But the combination of surprise and powerlessness to avoid the accident made it particularly horrifying, and the novelty of rail travel was tarnished in the public mind by this vivid addition it made to the list of ways one could depart this earth.

While Aldrich has plenty of stories about the different ways that passengers, railroad employees, and trespassers on railroad property were injured and killed, his emphasis is on the economics of railroad safety and how economic considerations played a vital role.  He points out that even after wood-and-strap-iron rails were replaced with all-metal rails and many other safety improvements were made, traveling by U. S. rail in 1907 was still 110 times as dangerous as flying in a modern (2006) airliner.  Still, 22 fatalities per billion passenger miles did not mean that you were taking your life in your hands every time you climbed onto a train.

From the railroad companies' point of view, safety was an expense, and like every other expense, they wanted it to pay a return on investment.  Railroads were virtually unregulated by the federal government until the establishment of the Interstate Commerce Commission (ICC) in 1887, and for many years the ICC restricted itself to setting freight rates for interstate commerce.  Some safety ideas, such as the "block signal" system of controlling train movements, rather than sending out paper orders and hoping everyone would synchronize their watches and keep to the schedule, not only reduced accidents but increased traffic flow, leading to greater utilization of existing plant and higher profits.  The railroads liked this kind of safety measure.

On the other hand, in 1922 the ICC ordered all carriers (rail lines) with revenues over $25 million to install automatic train control on at least one passenger line.  The idea of automatic train control, which dates back to the 1800s, is that instead of relying on the engine driver to see a visual block signal and stop the train, the automatic system would directly receive the signal's command and apply the brakes.  The rail companies reluctantly complied, and by 1930 had spent $26 million to install the system on over 15,000 miles of track. 

But as Aldrich shows, automatic train control made essentially no difference in the rail safety record, did not improve productivity, and cost a great deal of money.  During the Great Depression, many carriers asked for and received permission to cut back or remove automatic train control, and the ICC relented.  However, the same technology turned out to be useful for activating signals in the driver's cab (so-called "cab signals"), which have since become a standard safety feature of great help in fog or rain where visibility of the track-side signals is obscured. 

I was unaware of all this when I blogged a few years ago about a "cornfield meet" (head-on collision) between two freight trains in Texas that killed three employees and did millions of dollars of damage.  At the time, the railroads were installing something called Positive Train Control (PTC), which is nothing but an updated electronic form of automatic train control.  So the idea has been around for more than a century, it turns out, and is just now being implemented.  But as Aldrich points out, the accidents in which PTC would have made a difference are a small percentage of all mishaps.

While Aldrich makes a great case that economics was a huge factor in railroad safety, he gives less emphasis to something that continues to drive debates about all kinds of transportation safety today:  public perception.  He does point out that the average citizen has an exaggerated horror of types of death that are grisly and out of one's control, such as the snakehead accidents.  All the statistics in the world will not comfort the lizard part of one's brain that is primally terrified by the prospect of a fiery or gory death inside some machine that you cannot influence.  But other factors, such as speed and convenience, can overcome such fears.  For example, early automobile travel (say around 1920 to 1940) was demonstrably many times as dangerous as rail travel, yet the rail lines lost most of their short-range passenger business to the automobile in that period.  Ah, but the driver of a car has at least the illusion of control, thinking that while accidents may happen to other drivers, his superior skills will enable him to avoid a crash.  Well, maybe, but the statistics said otherwise.

As you would expect, engineers come in for starring roles in Aldrich's saga.  The technical press, including editors of such publications as Railway Age, brought constructive criticism to egregious safety problems and coordinated cooperation among carriers, government institutions, and private and university researchers to bring about notable improvements in safety systems, devices, and training.  This included issues such as the quality of bridge construction.  Early U. S. railroad bridges were built with the "link-and-pin" method, and the failure of even one joint in the structure would make the whole thing fall down, which it often did.  Complex failure modes in steel rails baffled engineers and scientists for decades until a concerted effort involving inventor Elmer Sperry's electrical track inspection system and advances in metallurgy discovered how to prevent them. 

An old friend of mine summed up the goal of engineering ethics with the two-word phrase, "No headlines."  While U. S. railroads are doing pretty well today by that measure, it is the end result of many decades of improvements and safety efforts.  And Mark Aldrich has given us that history in a rewarding and highly readable volume.

Sources:  Death Rode the Rails (Johns Hopkins Univ. Press, 2006), by Mark Aldrich, is the source for most of my material.  I also drew on the following website for additional details about "snakeheads":  My blog about the head-on collision in Texas is at

Monday, January 06, 2020

Are Self-Driving Cars More Dangerous?

Around midnight Sunday, Dec. 29, 2019, the driver of a Honda Civic headed northbound on Vermont Avenue in Gardena, California was making a left turn from Vermont onto Artesia Boulevard.  The traffic light at the intersection was red for westbound traffic on Artesia, and the intersection happened to be the western end of the Gardena Freeway, where it becomes a surface road.  At that moment, a Tesla Model S zoomed off the freeway westbound through the red light and crashed into the Honda, killing its two occupants.  The Tesla driver and his passenger were not seriously injured.  Early news reports failed to indicate whether the Tesla was on autopilot, but National Highway Traffic Safety Administration (NHTSA) officials are investigating the crash to determine whether the autopilot was engaged.

This latest fatality involving an autopilot-equipped Tesla inspired an Associated Press review of recent fatalities involving Tesla cars in which the autopilot was engaged.  The curious reader can view the website, where someone has attempted to compile a complete list of worldwide statistics for fatal crashes involving Tesla cars.  As of the end of 2019, the list totaled 110 deaths, of which only 4 are in the category of "verified Tesla autopilot death."  As well over 200,000 Teslas have been sold, these statistics are not particularly remarkable, except for the fact that Tesla purports to be the leading edge of the automotive future.  As such, it deserves closer scrutiny, and that is what it's getting.

The problem in answering the question of our headline is, "more dangerous than what?"  Not only is Tesla the world's best-selling plug-in passenger car, it offers what many regard as the most sophisticated commercially available autopilot system as well.  And in contrast to the more conservative approach many automakers have taken in adding self-driving features such as lane following and automatic braking, the Tesla driver can turn on autopilot and let go of the wheel.  Such behavior is not advised by Tesla, but since when have instruction manuals been 100% effective in keeping people from doing stupid things?

The Associated Press article quotes Jason Levine, head of the nonprofit Center for Auto Safety in Washington, as saying, “At some point, the question becomes: How much evidence is needed to determine that the way this technology is being used is unsafe?”  Levine criticized the NHTSA for dragging its feet instead of issuing regulations as to how Tesla's autopilot feature can be used.  Simply warning the driver that he or she should be alert at all times when the autopilot is working doesn't make it happen.  At least two fatal U. S. crashes (one in Florida and one in Ohio) happened when the autopilot's sensors became confused and failed to recognize a large truck blocking the roadway.  Presumably, if the drivers had been paying attention, they might have seen the truck and stopped.

Promoters of the autonomous-vehicle future face two distinct but interrelated obstacles that could delay or even prevent widespread adoption of self-driving cars.

The first obstacle is technology.  The Society of Automotive Engineers (SAE) has defined five levels of automated driving.  Level 0 is a 1955 Plymouth—completely manual operation—and Level 5 would be the equivalent of an electronic chauffeur—the passenger can watch TV, sleep, or do anything else you would do if you knew a trusted and competent human driver was in charge.  No automaker currently offers a Level 5 vehicle for sale, but Elon Musk is claiming that early this year, Tesla will start to sell fully self-driving cars, which sounds like Level 5 to me.  Of course, this may be nothing but vaporware.  But unless some pretty radical improvements are made in autopilot technology, it's inevitable that some fatal crashes will happen in which the autopilot was engaged.

And here's where we run into the second obstacle:  public perception, including the perception of government regulators, lawmakers, and their constituents.  I don't know about you, but I would feel a lot worse thinking about dying in a car wreck in which my car was driving itself, rather than dying in one where I was actively at the wheel.  True, I'd be just as dead in either case, but there's something about the hope that one can make a difference if one is trying to control the situation.  This is not a completely rational state of mind, but carmakers learned decades ago to appeal to the sub-rational "lizard brain" of the consumer.  Why else do pickup ads show their products bounding over rugged mountains and doing extreme feats that 99% of drivers will never have to do? 

The budding autonomous-car industry is still treading on very shaky ground, at least in the U. S., where the majority of fatal accidents involving Teslas have occurred.  As the statistics show, less than 10% of fatal crashes involving Teslas are associated with the use of the autopilot.  But statistics do not count for much in public perception, and Elon Musk's cowboy-style reputation lends credibility to the accusation that he and his company are playing games with the safety of their customers, and by implication, with the safety of anyone within collision range of a Tesla.

If properly designed and deployed, I concede that autonomous vehicles could lower the rate of traffic fatalities while lessening traffic congestion and doing other good things such as reducing carbon emissions as well.  But there is a world of challenges in that "if."  There may be unknown factors that no one will discover until there is a certain critical mass of autonomous vehicles on the road already.

In statistical mechanics involving solutions of, say, salt in water, you can apply simple rules to very dilute solutions, so dilute that each salt molecule or atom can be treated like it is the only one in the solution.  So far, autonomous vehicles are so rare that each one is surrounded by a sea of non-autonomous vehicles, and the software probably operates under that assumption.

But when you put enough salt in the water so that each salt atom gets within shouting distance of another salt atom, things get complicated.  New effects such as saturation and crystallization occur, and your analysis has to be more sophisticated in order to deal with these effects. 

If autonomous vehicles, especially those made by different manufacturers, ever become common enough so that one vehicle can "see" another one in a typical driving situation, it is very likely that novel and perhaps hazardous effects will occur that even the designers may not have anticipated.  But that will never happen if the public gets so fearful of accidents involving autopiloted cars that they are regulated out of existence.  I hope that doesn't happen either, but if Musk and Tesla get too careless, they might end up triggering just such a reaction.

Sources:  The Associated Press article I referred to appeared in many locations, among which was the San Jose Mercury-News website at  I also referred to the same site for information on the Gardena crash at  The Tesla fatal-crash statistics website is, and I also referred to the Wikipedia article on Tesla, Inc.