October 2007

In an editorial in yesterday’s Washington Post, Roberta Combs, president of the Christian Coalition of America, joins Nancy Keenan, president of NARAL Pro-Choice America, in calling for congressional investigation of purported censorship by wireless operators. Combs, who has vociferously argued for net-neutrality regulation for communications and Internet companies, is now stepping up those calls, claiming that private companies want to squelch speech over wired or wireless networks. “We’re asking Congress to convene hearings on whether existing law is sufficient to guarantee the free flow of information and to protect against corporate censorship,” Combs and Keenan write.

Prompting this latest call for regulation was an incident two weeks ago in which Verizon Wireless blocked text messages from NARAL. Verizon admitted that it had made a mistake and immediately changed its policy. But net-neutrality fans like NARAL and Christian Coalition say that the incident shows why a Fairness Doctrine for the communications and online sector is essential. In reality, as I point out in my latest City Journal column, the incident proved the opposite: the message got out, and this episode is hardly an excuse for imposing Net neutrality mandates on the Internet. Read on…

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I’d like to invite TLF readers to a lunch panel discussion next Tuesday at noon on copyright law and space shifting – and for the geek in you, live demonstrations of the Slingbox, Apple TV, and a Windows Media Center tied to the XBox 360.

Space shifting
includes such activities as copying music from a CD to an MP3 file for use on a
portable player or watching your local television broadcast on a computer
located outside your home. Essentially it’s using digital content on a device other than
the one for which it was originally intended.
We’ll discuss space
shifting, its legal implications (including how/if litigation between wary parties can be avoided) and suggestions for continued success in
bringing consumers cool stuff. 

The
lunch discussion will feature Morgan Reed and
Debbie Rose of ACT (Debbie was on last week’s TLF podcast about file sharing), Gigi
Sohn of Public Knowledge, and Patrick Ross of the Copyright Alliance.

Details: 12:00 noon, Tuesday, October 23,
2007,
B340 House Rayburn. email or RSVP to
mmoskal at actonline dot org

Me on Eminent Domain Abuse

by on October 18, 2007 · 0 comments

This isn’t about tech policy, but since it’s something I’ve spent a ton of time on in recent months, I thought some TLF readers might be interested in my new study on eminent domain abuse in Missouri. Also be sure to check out my spin-off article in the American that focuses on the ways that urban redevelopment projects harm small businesses and poor people.

I’ve documented a couple of times my frustration with organizations that try to collect a Social Security Number for payments that don’t require it. The IRS does not require reporting of expense reimbursements, which are not income, and income of under $600 (total in a year) is also not subject to reporting. Small payments and reimbursements do not require an SSN.

I’m happy to report that a multinational media conglomerate that initially refused to reimburse my travel expenses for a conference at which I spoke has relented. They reimbursed my travel expenses without collecting my SSN.

It took a lot of patience. I had to speak to three or four different people in the organization, each of whom believed that their corporate policy should naturally trump my personal policy. But I suspect that my persistence and courtesy caused someone to pick up the phone to someone else and say, “Oh, just pay him, will ya’?”

This kind of thing is a good exercise because the next person will have an easier time of it. Do yourself and your neighbor a favor and refuse sharing your SSN when it’s not needed, mkay?

In a previous essay, I critiqued Andrew Keen’s thesis that our culture was better off in the age of scarcity than it is in today’s world of media and cultural abundance. In this essay, I want to make a few comments about his latest anti-Web 2.0 rant regarding how, in addition to destroying art and culture, the age of abundance and “amateur” content creation is going to result in the death of advertising.

In an AdWeek guest editorial this week, Keen argues that:

Web 2.0 is, in truth, the very worst piece of news for the advertising industry since the birth of mass media. In the short term, the Web 2.0 hysteria marks the end of the golden age of advertising; in the long term, it might even mark the end of advertising itself.

[…]

[F]or the advertiser, media content is indeed losing its value, a value historically derived from its scarcity. This devaluation of media isn’t hard to quantify: It can be measured everywhere, in falling CPM and the failure of social networks to develop viable business models. No new technology—neither the false dawn of mobile, nor the holy grail of personalized, targeted advertising—is going to save the advertising business now. No, the truth is that advertising can only be saved if we can re-create media scarcity. That means less user-generated content and more professionally created information and entertainment, less technology and more creativity. The advertising community desperately needs more gatekeepers, more professional creative authorities, more so-called media “elites” who will curate, filter and organize content. That’s the way to re-establish the value of the message. It’s the one commercial antidote to Web 2.0’s radically destructive cultural democracy.

Oh my, where to begin…

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To continue my long-running series of essays about media DE-consolidation…

One of the America’s oldest media operations, the E.W. Scripps Company, announced a major plan to split up its operations yesterday. With a loan from his brothers in 1878, E.W. Scripps went on to establish a successful penny press newspaper business that later blossomed into a nationwide media empire with newspapers, syndicated features, cable networks and Internet / interactive properties.

But now the Scripps media empire will be dividing into two different companies. One, which will still be called “E.W. Scripps,” will cover “old media” print properties and stick to covering local markets. The other company, which will be called “Scripps Network Interactive,” will focus on “new media” efforts of an interactive nature and with national scope. This is somewhat along the lines of the Viacom-CBS split a few years ago, which I wrote about here.

It’s all just more proof that the modern media marketplace is far more dynamic than the pro-regulation media critics ever want to admit. These stories about media breakups get relegated to the backpages of newspapers and buried on websites, if they get reported at all. By contrast, whenever there is a merger, it’s always front-page news full of Chicken Little quotes about the coming media apocalypse. It’s all quite silly.

It may be a strange combination, but Rep. Anna Eshoo (D-CA), Rob Atkinson of the centrist Internet and Technology and Innovation Foundation and myself teamed up today on a piece in The Hill to denounce taxation of the Internet. Our conclusion: Congress should make the ban permanent. You can read the full text here.

The House, by the way, has already ignored our advice, and voted instead yesterday for a four-year extension. The action now moves to the Senate.

Stay tuned, of course.

Some recent reporting by the Washington Post reveals some of the hardball tactics that the federal government may have used in support of mass surveillance programs, even preceding the attacks of September 11, 2001. In an article published last Saturday, Ellen Nakashima and Dan Eggen report that Qwest’s Joe Nacchio sought to have the cancellation of government contracts introduced in his trial on insider trading charges. He alleges that he fully expected the contracts to make up for losses the company would otherwise suffer, which would contradict the allegation that he sold his shares knowing of an imminent drop in price. The contracts were canceled in retribution for Qwest refusing to go along with the government’s surveillance demands, he says.

Because so much is cloaked in secrecy, one must speculate about where those machinations are today, but a Statement of Administration Policy (veto threat) issued yesterday laid down a notable marker: Congress must retroactively immunize telecom firms for past law violations in any FISA amendment or the President will veto it.

The common rap on this is that the Bush Administration wants to help out its buddies in the telecom industry. But Joe Nacchio was a buddy – he was chairman of the president’s National Security Telecommunications Advisory Committee – and the administration threw him right under the bus. There is probably more than the standard corruptions of government involved.

My guess is that the telecoms have the Bush administration by the short hairs because they have information about yet more egregious surveillance activities. They’ve probably signaled that if they don’t get immunity in a FISA amendment, they’ll spill the beans and really bring it down on the administration.

This, again, is speculation, but it best explains the administration’s excessive commitment to immunizing the telecom firms that violated the law.

Its been clear for some time that unbundling regulation discourages investment by potential competitors in their own facilities. Now comes a new study providing some hard numbers on just how much is discouraged. The study, released last month by London’s LECG consulting group, and commissioned by European telcos, looks at the connection between “access regulation” and investment in competing broadband platforms. Based on data from 12 European countries, the authors conclude that a 10 percent reduction in the prices for mandated access causes an 18 percent fall in market share for alternative platforms. For Europe as a whole, this could mean E10 billion in lost long-term investment, and E30 billion in GDP loss.

Worthwhile reading for policymakers here in America, as well as their European counterparts.

A reader points me to another example of the administration’s bogus talking points on FISA. The usual contention is that these wiretapping powers are needed in the heightened post-9/11 security environment. I didn’t exactly buy that rationale in the first place, but now a Qwest executive is claiming that he was approached way back in February 2001 with a request to participate in a legally dubious wiretapping scheme. Evidently, the NSA’s cavalier attitude toward judicial oversight predates the September 11 attack.

Also, the Qwest exec in question claims that the government dangled government contracts in front of telecom companies to entice them to cooperate. I think this is one of the most crucial reasons not to give telecom companies blanket immunity for their actions. Qwest did the right thing and took a financial hit as a result. It would be extremely unfair to allow AT&T and Verizon walk away unscathed, with extra money from those government contracts in its pockets. Even if you don’t think telecom companies should be punished for breaking the law, they certainly shouldn’t be financially rewarded.