FCC No Free Market Ally

by on December 6, 2007 · 0 comments

Two commentators tried to argue that FCC Chairman Kevin J. Martin has held true to conservative principles nowithstanding recent attempts to re-regulate the cable industry. Cesar V. Conda and Lawrence J. Spiwak posited that a “pro-entry/pro-consumer-welfare mandate” is the very “hallmark of economic conservatism.” This is a bizarre statement.

“Pro-entry” is a euphemism for competitor welfare, the antithesis of consumer welfare. Competitor welfare used to be the guiding principle of antitrust law – a legacy of the populist movement. The idea was that more competitors equaled stronger competition. It’s intuitively appealing, but it confuses quantity with quality and is wrong if the competitors are inefficient. Protection of inefficient competitors is a form of subsidy.

For example, the Clinton FCC tried to jumpstart competition in telecom with a “pro-entry” policy which allowed startups to lease facilities and services below cost from incumbent providers like AT&T and Verizon. You might think that’s no big deal, AT&T and Verizon can probably afford it. But the truth is they don’t absorb such losses, they pass them on to their remaining customers.

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Though I haven’t studied the company’s involvement in REAL ID promotion, my sense is that identification technology provider Digimarc has staked a lot on the national ID law. So it is with some pleasure that I note the announcement by their Chairman and CEO, Bruce Davis, that the company will fail to turn a profit this year.

Davis said the 2008 outlook is also clouded by the uncertainty over federal regulations for an identification system known as Real ID. The CEO said the revenue effects from the completion of regulations may not occur until late 2008 or 2009.

Actually, Bruce, the revenue affects from the completion of the regulations may not occur at all.

When I talk about identification issues, I often go to my wallet and show the “fake” ID that I carry with me. Several people have asked me over time where to get one.

I use this card whenever I get “bogus” ID requests – requests at hotels, office buildings, and such where they have no business seeing my ID and they don’t get anything from doing so.

The card has only been refused twice – once at the Sears Tower in Chicago, and once when I tried to use it at airport security. (Regulations there specify government-issued ID. I went through secondary search because I told them I didn’t have one.) Everywhere else, they are just checking to see that you are carrying a card. I haven’t tried to use the card for proof of age – most jursidictions require government-issued ID for this purpose.

The card I use has accurate information on it (except for my weight . . .), but it reflects my own assertions about myself, rather than any government’s or other card issuer’s. It’s very exciting to use this card the first few times. You really feel like you’re getting away with something. In fact, you’re just proving to yourself that “identity checks” are empty ritual.

More people should do this, so why don’t you join in the fun?

YouFinishIt.com is where I got mine. They have a nice array of cards that appear quite fancy and official looking. I got the “Standard Identification” card.

To my knowledge, none of their cards are knock-offs of any other issuers’ cards, and I don’t recommend using cards like this for any fraudulent purpose. I don’t think presenting an ID with inaccurate identifiers is fraudulent when the recipient does not rely on that information. It’s like tipping your hat to someone whom you don’t really mean to wish well. So, go for it!

Dear Reader,

Hello from 2027! The future has been going great. I really enjoy it, and I think you’ll like it here, too.

Things have improved a lot since 2007. We’ve generally grown more healthy, wealthy, free, and (I daresay) happy. There remain rough spots, of course: Climate regulation, zombie flu, the still-unfinished meteorite prevention belt . . . and the future didn’t work out too well for everyone. Some wonderful people didn’t make it, sad to say, while others remain in suspension. As they say in aircar ads, “your mileage may vary. ” All in all, though, the future remains very bright.

I remember back when I lived in 2007. I looked forward to the future, and foresaw pretty good stuff. That prediction turned out ok, but I have to admit that I missed a lot of details! Who would have guessed the 2015 Constitutional Convention? That one really caught me by surprise.

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I don’t know the ins and outs of Wikipedian politics, but according to The Register, trouble is brewing at Jimmy Wales’s social knowledge project. The controversy surrounds the recently exposed mailing list of high-level wikipedians–the uber-editors of the encyclopedia–who have supposedly exercised their powers for the dark side.

To quell the outcry of any critics, I want to specify that I’m not one of the many wikipedia skeptics out there, but that may only be because I use Wikipedia in a very limited way. Typically, I use the wiki as a resource to refresh my knowledge of esoteric scientific terms when I run across them in articles. Just recently I looked up Apsis and Sidereal time when reading something about the recent downgrade of Pluto. But these entries are precisely the kind of thing that Wikipedia is best at. Most folks realize this and understand that the the more controversial the topic, the less reliable the Wikipedia entry.

But should we be concerned about the over-lords of wikipedia? In the short-term maybe, but in the long-term the mercurial market for web readership will render the ultimate verdict. Larry Sanger, a co-founder turned critic of wikipedia has founded Citizendium, a site that openly admits to expert editing of entries, in hopes to compete with the Wiki-wonder. Other wiki-challengers have cropped up including Helium, which also uses editors and uses an un-anonymous author model. Of course there’s the obviously conservative Conservapedia, for those who like their knowledge pre-biased. And we can’t forget about the old main-stays of the knowledge market like Britannica.com and Encarta.com, which serve up expert-written entries for free.

Competition will keep Wales’s Wiki honest, or it will fail to attract traffic and donations–left to slowly fade away in prominence and PageRank. But, since Wikipedia has only gained popularity in recent years, it’s safe to say that the public still finds wiki-wonderland useful, even if it’s not the democratic knowledge-workers paradise it was once made out to be.

Greenpeace has released the latest edition of its quarterly Guide to Greener Electronics. While I haven’t read the study in full and I don’t know exactly what goes in to determining the one through ten ranking that Greenpeace assigns to various famous tech companies, I did find their graph (see below) a little odd. Look how close together one to three are! Then look at the space between seven and ten–it’s half the graph! By making three numbers take up half the graph, a greening tech company can move quite a way across the “dial o’ green” if it moves from a seven to an eight, but a move from three to our doesn’t result in such a pronounced leap.

Adopting cleaner technology standards and practices is important, don’t get me wrong. But such a blatantly misleading graph makes me question the legitimacy of this entire quarterly report. Can we get some unbiased research into this area of tech please?

NOTE: Some comments have shown me that I wasn’t clear in the original post just how manipulative these graphs are with the data. It’s important to note that past graphs show a rank of 5 as the midpoint of the graph. The most recent graph shows a rank of 7 as the midpoint. This way, companies that have actually gotten greener appear to be back-sliding.

From Music Row Law, a review of two studies now supporting the view that P2P downloading actually increases sales of physical media; the downturn in CD sales through music stores is thus a result of other factors (such as the rise of Walmart).

I remain skeptical. In analyzing this data, assumptions are key. Many other studies show harm.

The earlier study, by Strumpf, professor of business economics at the University of Kansas Business School and Felix Oberholzer, seemed to operate on some peculiar assumptions (one being that downloads of popular tunes have the same impact on sales as downloads of more obscure ones). However, their data is not available for re-analysis.

Stan Leibowitz has a concise critique of the Canadian study as well as a paper in the Journal of Law & Econ. His use of data is extremely careful.

Among other things, he concludes:

All the papers that I have seen by other economists, except for one notable exception, find some degree of harm (to record producers) caused by file-sharing. These include papers by Blackburn, Hong, Michel, Peitz and Waelbroeck, Rob and Waldfogel and Zentner. The lone exception, but the most heavily publicized, is a paper by Oberholzer-Gee and Strumpf, which I believe is littered with errors and disingenuousness as discussed in greater detail below.

His critique of the Canadian study notes:

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One of the very few positive things in the Telecommunication Act of 1996 is Section 401 (codified as Sec. 10 of the Communications Act of 1934, as amended), which requires the Federal Communications Commission to forbear from applying unnecessary regulation to telecommunications carriers or services.

Congress tucked the provision into the 1996 act to improve the chances that pro-competition regulation would be eliminated once fully implemented and no longer necessary to ensure competition.

On Friday the FCC issued a notice of proposed rulemaking requesting public comment on whether the forbearance procedure needs more procedure. Commissioner Michael J. Copps issued a statement indicating dissatisfaction with the whole forbearance concept:

Too often forbearance has resulted in industry driving the FCC’s agenda rather than the reverse being true. Decisions are based upon records lacking in data and the Commission faces a statutory deadline that requires a decision with or without such data. Perhaps most egregious is the fact that if the Commission fails to act, forbearance petitions may go into effect based upon the industry’s reasoning rather than the Commission’s own determination. All of this is to say that I do not believe that forbearance is being used today in the manner intended by Congress.

I admire Commissioner Copps’ confidence that he knows what Congress intended, but I actually sat on the Senate floor when the Telecommunications Act of 1996 was debated and the forbearance provision (which originated in the Senate) wasn’t debated at all. It was included in the committee mark, which was supported by Commissioner Copps’ old boss, the committee’s ranking member and former chairman, Senator Ernest Hollings (D-SC).

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Heard of ACAP Yet?

by on December 3, 2007 · 0 comments

Lauren Weinstein has a good run-down and warning about a thing called Automated Content Access Protocol and why it might not be a good idea. Indeed, it might be better titled the Automated Content Restriction/Access Protocol. Do the acronym yourselves.

Copyright law regulates expression. Through it, copyright holders win the privilege of invoking state power to control how and what we communicate. The Copyright Act limits our freedom to reproduce, rework, publicly distribute, publicly perform, or publicly display protected works of authorship. In many cases, even when the Act does not utterly prohibit an expression, the Copyright Office sets its price. Copyright flows top-down, out of Washington, D.C., in detailed and non-negotiable terms.

Common law operates on very different principles. It grows bottom up, out of the decisions of manifold state courts, without relying on federal lawmakers, statutes, or administrative agencies. It follows a few simple principles, leaving details to particular cases, customary practices, and mutual consent. Common law thus offers a deregulatory alternative to copyright.

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