The Senate Commerce Committee’s hearing Wednesday on the Internet tax moratorium demonstrates the necessity of making the ban on state and local taxation of Internet access services permanent. Another temporary extension simply guarantees opponents another chance to overturn it down the road, and creates the possibility they can win new concessions in the meantime.
The hearing showed than opponents are still determined to gut the moratorium. Harley Duncan, the Washington representative of state and local tax administrators, rehashed the old argument that the moratorium is unnecessary, because “the economic evidence is that state taxation of Internet access charges has little or nothing to do with the adoption of Internet services by consumers or the deployment of services by industry.” And he cites a new Government Accountability Office conclusion that taxing Internet access is “not a statistically significant factor influencing the adoption of broadband service at the 5 percent level. It was statistically significant at the 10 percent level.” Even assuming this conclusion is valid, it still doesn’t mean anything. Because once states and localities are allowed to impose taxes on Internet access, they won’t hold the line at 5 percent.
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Tech Policy Weekly from the Technology Liberation Front is a weekly podcast about technology policy from TLF’s learned band of contributors. The shows’s panelists this week are Tim Lee of the Cato Institute, James Gattuso of the Heritage Foundation, and Joe Weisenthal of Techdirt. Topics include,
- Dennis Kucinich wants to bring back the fairness doctrine,
- Tim Wu wants to attach Carterphone-style regulations to the winners next year’s spectrum auction, and
- Nicholas Negroponte, head of the One Laptop Per Child program, wants to be the only one distributing cheap laptops to third-world children.
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“We suck less,” said Sirius CEO Mel Karmazin to shareholders yesterday at the firm’s annual meeting, comparing the firms dismal performance to that of XM Radio. While perhaps better than sucking more, the statement could not have cheered investors.
Satellite radio investors looking for optimism, would have been better off reading a letter from Senate antitrust subcommittee chairman Herb Kohl, sent Wednesday to the FCC and to the Justice Department. The proposed XM-Sirius merger, he said should be rejected, since there aren’t any competitors to the two. Old-fashioned terrestrial radio, he wrote, just can’t compete with satellite’s “tremendous variety” of formats, “far superior sound quality” all provided on a commercial-free basis. Kohl similarly dismisses Internet radio and MP3 players, finding they also provide no alternatives for consumers.
It must have come as a surprise to satellite investors — who have never seen a profit — that they hold such a stranglehold on the market. It would no doubt be a surprise to consumers as well – hundreds of millions of whom do not subscribe to either satellite service, along with countless others who use iPods instead of radio. These consumers have no alternative to satellite radio service — according to Kohl — they just don’t know it yet.
Unfortunately for any shareholders hoping to start raking in monopoly profits, Kohl is wrong. There is no satellite stranglehold on radio, and no lack of competitors. And that competition will continue — or even increase — if the proposed merger takes place. For U.S. consumers, that doesn’t suck at all.
The North Carolina social networking bill, S 132, passed the Senate yesterday and is on its way to the House. This bill should concern all e-commerce companies, not just sites like MySpace. The definition of a "commercial social networking site" could still encompass many different websites — and the trend is for including more social networking components to all sorts of sites. And as I said in a previous post, age verification just won’t work.
Last week, Nancy Pelosi reportedly put the Fairness Doctrine in play in Congress — stating that the House leadership would aggressively pursue its restoration. At this point it’s unclear how serious she is about it — will there be a real effort to reimpose this relic of the 1940s, or is this just a bone for the Rupert-and-Rush-Need-to-Be-Stopped Left?
One thing is clear — serious or not, its a bad idea. I explain why is this just-released Heritage paper.
Mine is a simple – dumb, even – adaptation of Metcalfe’s Law.
“The security and privacy risks increase proportionally to the square of the number of users of the data.” – first quoted in this eWeek article about the electronic employment verification system included in the current immigration bill.
I actually suspect that Briscoe’s et al’s refinement of Metcalfe’s law is more accurate, but that’s just so complicated.
I’ve got a new article on e-voting up at the American. The basic argument will be familiar to regular TLF readers:
The fundamental problem with computerized voting machines is their lack of transparency. In order to ensure that elections are conducted fairly and accurately, it is important that election officials, candidates, and members of the general public be able to observe and verify every stage of the election process. Computerized voting machines make independent verification of election procedures extremely difficult because important steps of the election process, including recording, tallying, and reporting votes, occur unseen inside a computer chip.
That’s not the only reason e-voting is dangerous. One of the important safeguards in the traditional election process is that it is extremely labor-intensive. Thousands of people are involved in the process of collecting and counting votes. As a result, stealing an election almost always requires a large, organized conspiracy that would be hard to keep secret. In contrast, e-voting can allow a single, well-placed individual to tamper with the software of numerous voting machines at once, potentially altering the outcome of an election in an entire congressional district or state. Indeed, this is more than a hypothetical scenario. Last fall, Princeton computer science professor Ed Felten obtained a widely-used e-voting machine and created a virus that could be used to steal an election. The virus would spread from machine to machine through the memory cards that install software upgrades…
The safest course of action is to return to a tried and true technology: paper ballots. There are a variety of ways to mark and tally paper ballots, but probably the best choice is optical-scan machines. These have a proven track record, and many state election officials have decades of experience with them.
I go on to discuss the Holt bill, which is certainly less than ideal, but which in my judgment would be a big improvement over the status quo.
My buddy Julian is miffed that the Apple store told him his iPod was a glorified paper weight when, in fact, it took him all of half an hour to fix it:
Well, I was futzing around this evening and pulled it out of that drawer. And I figured: “What the hell, it’s bricked and out of warranty, I’ve got nothing to lose by tinkering with it.” So I grabbed a tiny screwdriver, pried it open, and started sniffing at the innards. It took all of a minute to notice that there was a tiny piece of ribbon circuitry at the base of the thing that had come unmoored from its connector, so I grabbed a tweezer and wedged it back in, then snapped the casing closed again. Voila, good as new!
Once I got over my pleasure at having a working iPod back with so little effort, though, I got a bit annoyed. It had been obvious when the problem first appeared (after I tried resets and other such things) that it was basically sound, but that there was some sort of hardware issue with the clickwheel. I almost just popped it open to check for loose connections back then, but I figured it was better to go ask the experts, on the off chance I could make it worse by poking about. And I suppose, like an ass, I assumed that it couldn’t possibly be that simple, because the experts were talking about sending it back to the plant for costly repairs. But now I find myself thinking: If these guys were remotely competent or informed about their gadgets, surely they must have known that there was a high probability this was a simple loose connection that could be solved with the five-minute surgery I just performed, and would have done for myself a while ago if I hadn’t deferred to the local Genius. So I want to register a minor WTF here: Have they decided that once it’s out of warranty, there’s no reason suggesting incredibly simple and obvious procedures that might fix an expensive piece of gadgetry if you look as though you might be willing to buy another, newer expensive piece of gadgetry?
This is obviously a borderline case, where the Genius probably could have done what Julian did and fixed the problem. But as a matter of general policy (remember that Apple runs dozens of stores and has to try to treat everyone equally), it’s not obvious that what Julian is suggesting is feasible. Labor is relatively expensive, and in the grand scheme of things, an iPod really isn’t.
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Yglesias notes the heated battle in the 1960s over jukebox piracy. According to his commenters, Congress eventually closed the jukebox loophole so that music publishers would be fairly compensated.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.