Archives for September 2004
Wi-Fi as a Public Utility: What are the Costs?
In a blog ealier this month, I mentioned how uneasy I was about municipal governments turning broadband or wi-fi into the next public utility, like local sewer or water service. There are many risks associated with such schemes, not the least of which is the potential for taxpayer bailouts when things go wrong.
Anyway, I just read a fine piece on this issue in MIT’s Technology Review entitled “Who Pays for Wireless Cities?” In particular, I would draw your attention to the excellent comments by Bill Frezza at the end of the story, with which I totally agree:
“The scenario is similar to that of the late 1980s, when municipalities considered offering cable TV services, recalls William Frezza, a general partner with Adams Capital Management in Cambridge, MA. Cable couldn’t survive as a low-cost public service, he says, and he finds public Wi-Fi equally misguided. He has read several dozen business plans from entrepreneurs looking to make money from public Wi-Fi. No model can succeed because the annual maintenance costs are likely to be exorbitant, he says. Moreover, he argues, performance will degrade as more users log on, which won’t necessarily stop municipalities from casting themselves as Wi-Fi service providers. “A town can make any argument it wants,” says Frezza. “It has as much money as it can pull out of its taxpayers.”"
FTC Authentication Summit - Industry Gathering or First Step Towards Government Regulation?
CEI filed comments today in response to a Federal Trade Commission request for comment about email authentication. The FTC will be holding a summit on November 9-10 about what authentication schemes will help the spam problem. The FTC, in its Federal Register notice, characterizes the summit as a “first step” towards “an active role in spurring the market’s development, testing, evaluation, and deployment” of authentication systems. Of course, what the FTC is really saying is that industry better play a card or else the government will force its hand.
I’m worried about the FTC role here. This summit is a foray into the technical standards setting process, which to me seems like it goes beyond the FTC’s consumer protection and antitrust mission.
The “Rathergate” Incident: Remembering Why Separation of Press and State Is Vital
Attached is the text of a new Cato Institute newsletter I released today on the possibility of a congressional investigation into the “Rathergate” controversy. Fellow TLF blogger James Gattuso has also been sounding off on this in recent blogs. My take on it follows…
New Heritage Study on Bush and Regulation
Just a heads up on a new Heritage Foundation study on the Bush Administration’s record on regulation. The study covers regulatory policy broadly–including, but not limited to, tech. The bottom line: Bush as done relatively well in limiting adoption of new regulations, but needs to do more to reduce the burden of existing regulations.
Interestingly, the study finds that the FCC is one of the few agencies that has had more decisions that reduced burdens than decisions that increased burdens in recent years. That doesn’t, however, mean that dereg has gone as far as it should: in fact the study scores the Administration for not giving enough support to dereg initiatives at the FCC. Among the final recommendations: having the FCC submit regulatory impact analyses to OMB before actions are taken.
Locking the Door Against Internet Trespass: New Heritage Article on Spyware
A new article on the spyware issue, just released by Heritage. I argue that while spyware is a real problem, the answer will be found in private-sector innovation, not new legislation…
Tech News of the Weird: Drink While You Vote!
AP is reporting that Diebold touchscreen voting machines similar to those used in Maryland were found abandoned recently on a street and in a bar in Baltimore.
I’ve long had some doubts about the wisdom of electronic voting but hey, if I can use them while sitting on a barstool and downing a beer then I’m all for it!
Birth of “Silicon Square” is Bad News
Today’s National Journal Technology Daily (subscriber-only website) contains a very interesting People Section column by Sarah Lai Stirland entitled “Washington’s Silicon Square.” Stirland notes that, “California has its Silicon Valley, Boston has its Silicon Corridor and Scotland has its Silicon Glen. Now some lobbyists in Washington, D.C., are starting to refer to the downtown area around Franklin Square as Silicon Square.” Hewlett-Packard recently moved their government affairs office to that area and other tech giants like Dell, IBM and Microsoft also have offices in the area. Apparently, therefore, people have started to refer to the area as “Silicon Square.”
No offense to these fine companies, and the many talented people who work in these offices, but I regard this as an absolutely dreadful development. Is it really a sign of progress when the technology community now has such a substantial presence inside the Beltway that there is a small region named “Silicon Square”? After all, what exactly (besides a lot of legal paperwork) is being produced in and around “Silicon Square”?
Senate hearing / testimony on media ownership
The Senate Commerce Committee held a hearing today on media ownership regulation and I was invited to testify. Here’s the link to my testimony.
All the charts and tables you will see in the appendix of my testimony will appear in my forthcoming book “Media Myths: Making Sense of the Debate over Media Ownership.” I strongly encourage you to take a look at Ben Compaine’s excellent remarks when they are posted, as well as everything else he’s done on the issue. No one knows more about this issue than Ben.
Nada to ADA on ‘Net?
Need something to celebrate? The web just fended off another attempt at regulatory choking, this time by activists trying to impose on websites the “reasonable accommodation” requirements of the Americans with Disabilities Act (ADA). You can thank Access Now v. Southwest Airlines, 2004 U.S. App. LEXIS 20060 (11th Cir., Sept. 24, 2004) [PDF format], for that win. Take it easy on the champagne, though; another assault looms.
Money for Nothin’ and your Cell Phone for Free - I want my PUC
Pricing goods and services that are rapidly becoming commoditized presents a challenge to sellers. How to differentiate your product vis a vis competitors? Often this involves bundling, but can take on many different forms of price differentiation schemes enforceable by contract law. Most people, including most regulators, have no clue about how hard it is to price a product and get it right. The California Public Utilities Commission ruled last week that Cingular’s pricing decision was wrong, not as a matter of market preference, but as matter of law. It imposed a $12.14M fine on Cingular for unfairly slapping customers with “early termination” fees. Here’s a Washington Post article on it.
These termination fees are actually quite consumer friendly. They are the customer’s acknowledgement of the fact that a large portion of a carrier’s costs are upfront at the beginning of the contractual relationship. The “free phone,” setting up the user’s billing account, assigning the phone number - a mobile carrier could charge for each individually, then we’d hear the consumer complaints! Otherwise, it’s a reasonable bargain for a consumer to limit his or her freedom for a year or two in exchange for the benefits of a bundled product arrangement.
Hazlett on Oracle: “The Antitrust Debacle”
Good article by Tom Hazlett on the Oracle-PeopleSoft case (from the Financial Times):
The US government’s antitrust enforcers have been rebuked. In a stinging rejection of the Department of Justice’s lawsuit to block the acquisition of PeopleSoft by Oracle, federal judge Vaughn Walker handed the antitrust division its collective head. While the DOJ alleged that the merger would substantially reduce competition in enterprise software applications for high-end corporate users, Oracle is now free to pursue its hostile tender for PeopleSoft shares…
Will Rathergate Spur More Media Regulation?
Interesting article by Robert Robb of the Arizona Republic, who argues that the Rathergate affair will (unfortunately) lead us to more regulation of of the media.
Sometimes you can just sense the machinery of the regulatory state shifting into gear.I sense it in what would seem an unlikely event: CBS’ use of forged documents in a story attempting to discredit President Bush’s National Guard service. Paradoxically, this journalistic blunder is likely to stimulate efforts to muzzle the conservative media, which few would accuse CBS of being part of.
He makes a good point–this is a real concern. I’d go farther, however. I fear many conservatives as well as liberals, will use this an a reason to push for more regulation. The real lesson, of course, is that the whole affair is evidence that the media is more competitive–and less in need of regulation–than ever before.
Monti Soft? EU May Clear Oracle-PeopleSoft Takeover
Well, just when you think nothing good can come from the other side of the Atlantic, there’s news like this. It looks like Mario Monti, the EU’s outgoing competition commissioner is set to give a “si” to Oracle’s takeover of PeopleSoft. The legal arguments against the merger were always screwy, on either side of the Atlantic. But given the EU’s history of blocking mergers that could hurt European firms (Germany’s SAP is a big competitor to both Oracle and PeopleSoft), many of us were bracing for the worst. The decision, however, may tell us little about the future direction of EU policy, however, as Monti is leaving Brussels next month, to make way for a new commissioner.
Allen Calls for “Hobnail Boots” Strategy on Spyware
No one really likes spyware. My own view is that it would be perfectly legitimate for government to ban it. The problem though, is that any legislation would likely inadvertantly hit legitimate activities and–most importantly–private-sector anti-spyware programs will in any case solve the problem far better than government. (Compare my relatively mushy position to that of fellow TLFer Jim Harper, who is trying to keep me in line on the subject.) That all said, I was a bit taken aback by Sen. George Allen’s statement (as quoted in Congress Daily) after the Senate Commerce Committee adopted spyware legislation yesterday. Congress, he declared “must come down with hobnail boots on the people who create this [spyware]“. Umm, I’m all for stopping spyware, but “hobnail boots” seems a bit too much, no? Let’s protect property rights here (and that includes cyber-property), but let’s be careful about issuing those hobnailers to regulators.
New Acronym Report: Here Comes SPIT (Spam Over Internet Telephony)
Just when you thought you had enough to fret about, here’s comes yet another Internet worry: Spam Over Internet Telephony, appealingly acronymed “SPIT.” As reported in MIT’s Technology Review, SPIT is the potential use of VOiP telephone services to send spam via voice mail, rather than via e-mail. Just imagine having hundreds of Viagra ads and confidential requests from Nigerian ex-strongman in your voice mail each morning. As TR says “it’s a nightmare that few of us want to imagine.”
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