September 2004

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.”"

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.

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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…

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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.

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…

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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!

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”?

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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?

by on September 28, 2004 · 4 comments

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.

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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.

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