The Funding Challenge

Karl Denninger reminds us that what appears to be a financial battle of rival capitalists is, in fact, absolutely nothing of the sort:

I do not believe for a second that, should Elon succeed, he will publish who decided what and on what basis; not algorithmically nor on a personal basis along with naming each and every person with a finger on the button. That data, by the way, I’m very certain Twitter has stored in their systems since every firm and organization that touches anything related to a customer always has an audit trail on it so you can fix errors — legitimate errors. In addition said audit trail is necessary for accountability because rogue employees do exist and its not at all uncommon to have to find out who did a given thing and take care of said person’s insolence.

Plenty of people point to Section 230 in this regard, but that’s not really the issue at all. Section 230 only addresses liability, not activity. I warned back when it was debated (and I was an Internet CEO at the time, thus knew damn well how this all intermeshed) that Section 230 was extraordinarily-poor in its crafting and would be abused for that reason. Bad laws are always abused. It was simply a matter of how, not what.

The real argument, as I pointed out back in the 1990s and have maintained (including in my filings to the FCC on net neutrality and in this column) is that there are multiple types of Internet services and they are not the same. We used to look at the character of services provided to determine if there was a common public interest in some sort of regulation. That all went down the toilet with the post-2000 craze of “social media”, along with the abuse of Section 230 which was in fact used to shield bad actors doing things that were blatantly illegal (such as promoting sex trafficking.)

The problem we have today is a function of the evolution of abuse enabled by that bad law. It is no longer possible to set up anything other than your own infrastructure to create a potential Twitter competitor, for example, because the existing firms control the infrastructure and will ban you. AWS and other “cloud” providers have proved this repeatedly.

Then, and this is the kicker, having spent money to build it you have to fund its operation somehow. Twitter, Facesucker, Google and similar do not set their policies in a vacuum; they set them based on how they fund their business. You can spend billions building infrastructure but if you can’t come up with a funding model that works you’re ultimately headed for bankruptcy. The real problem lies there and I’m reasonably certain Musk knows it.

I, too, am aware of this being the primary issue, which is why UATV, Castalia, and Arktoons are all built around a subscription model that relies upon their subscribers and prioritizes the interests of those subscribers over everything else. In a world that is fake, stupid, and gay, in which centralized financial giants propped up by governments and central banks determine the winners and the losers, going direct to the clients/customers/users and providing them with the goods and services they actually want is the only viable path for business anymore.

The contract economy is done. The advertising economy is done. The corpocracy cannot be trusted to live up to even the simplest and most basic of its obligations. Go local and/or go direct, or go under.