February 2008


After a long hiatus, we’re back with our first show of the year, but this latest episode touches on issues we have debated on previous shows. Namely, does America need a national broadband policy, and should so-called net neutrality principles be part of such a plan? Related to that, we once again discuss what sort of business models broadband providers should be able to use when trying to balance consumer demands and efficient network management policies, since that issue has been at the heart of ongoing debates about Net neutrality policy. This is currently the subject of great debate at the Federal Communications Commission, where comments are due next week on the issue.

Two networking / IT experts join us for the podcast this week to discuss the ramifications of potential government regulation of broadband network engineering issues. The experts are Matt Sherman, a San Francisco Bay Area web developer and a technology policy blogger who blogs at RichVsReach.com, and George Ou who is the Technical Director of ZDNet, and is a former IT consultant specializing in Internet engineering and IT infrastructure and architecture issues. Also on the show are Adam Thierer of the Progress and Freedom Foundation, Jerry Brito of the Mercatus Center at George Mason University, and Tim Lee of the Cato Institute.

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I’ve covered this before as part of my ongoing media DE-consolidiation series, which aims to show how media markets are far more dynamic that critics care to admit, but Time Warner has finally made the split off of its AOL division official. Again, to appreciate the significance of this shakeup, one must recall that when this marriage was struck back in 2000, media critics where in full-blown Chicken Little mode over the deal. Critics claimed the AOL-Time Warner deal represented “Big Brother,” “the end of the independent press,” and a harbinger of a “new totalitarianism.”

It was all complete nonsense, of course, but it was all too typical of the sort of irrational emotionalism that characterizes debates over media policy in this country. I’ve been doing my best to deflate some of that hot air with my ongoing “Media Metrics” series of essays, which illustrate exactly how much better off citizens are today than ever before in terms of the media options at their disposal. [1, 2, 3, 4, 5] And this ongoing “Media DE-Consolidation series” has shown that there are just as many major media marketplace crack-ups as their are build-ups. It’s a very dynamic marketplace regardless of what the critics say.

Whatever one thinks of the merits of the Microsoft-Yahoo merger and Google’s immediate and vociferous opposition to it, Ed Felten is 100% right when he says of Google’s actions:

“Complaining has downsides for Google too — a government skeptical of acquisitions by dominant high-tech companies could easily boomerang and cause Google its own antitrust headaches down the road.”

That’s a drum we beat a lot around here at the TLF, but no one in the corporate world seems to listen. On the days their own butts are on the line, they tell us the antitrust authorities are villainous scum that must be defeated at all cost! The next day–when their competitors are in the crosshairs–the antitrust officials are regarded as benevolent knights possessing Solomonic wisdom, and we’re told that we should trust them to guide us to an economic promised land called “perfect competition.”

It’s all a big political game that does nothing more that make a lot of lawyers and consultants very rich.

Though not yet complete, the 110th session of Congress has already witnessed an explosion of legislative proposals dealing with online child safety, or which seek to regulate media content or Internet communications in some fashion. More than 30 of these legislative proposals are cataloged in a new joint legislative index that was released today by the Center for Democracy and Technology (CDT) and the Progress & Freedom Foundation (PFF).

John Morris, Senior Counsel at CDT, and I compiled this index to help ourselves and others keep track of the growing volume of legislative activity on these fronts. Each bill is indexed according to title and topic, the chamber in which it was introduced, and the agency or organization that the measure affects or empowers. The entry for each bill includes: a concise summary of the legislative proposal, a link to the legislation, and links to relevant analysis by CDT or PFF. The compendium will be placed on both the CDT and PFF websites and updated as needed. The index will hopefully make it easier for the public and the press to analyze ongoing legislative developments pertaining to online child safety or free speech.

Although an exact count of related legislative activity in previous sessions of Congress is not available, there is little doubt that lawmakers have been more active on this front during this session of Congress than ever before. That, in and of itself, is probably cause for some concern since it means the Internet, media operators, and other speakers run the risk of being subjected to greater regulatory burdens.

In addition our joint index, John and I have also separately released papers today outlining what we each felt were some of the most problematic bills introduced so far in this session. John’s report is here, my paper is here. After the fold, I will summarize some of the bills I am concerned about.

Continue reading →

Copyright and Football

by on February 5, 2008 · 0 comments

Apropos (or not) of Tim’s post, take a look at this bill.

Copyright law is a political football. Rent-seekers on both sides would pick it up and run with it.

Fair Use?

by on February 5, 2008 · 14 comments

Really, most of my posts about fair use are excuses to post funny videos:

Is this fair use? My feeling is that a straight-forward reading of the four factors would probably suggest a “no” answer, but a sympathetic judge might find it to be sufficiently creative as to be transformative. Certainly, this clip doesn’t reduce demand for the work it’s based on.

I found this article by Ernesto over at TorrentFreak (“Decluttering The Tubes, Solutions to the BitTorrent “Problem”?“) to be very interesting and open-minded, but his readers are really taking him to task for it. In the piece, Ernesto outlines the upsides and downsides of 6 possible ISP responses to the “BitTorrent Problem,” which has been in the news a great deal lately. (These models were apparently suggested to Ernesto by Art Reisman, who is chief technical officer at APConnections):

1) Ask for voluntary cooperation.
2) Keep connections within the providers network.
3) Usage based quotas.
4) Limit the total connections allowed at one time per user.
5) Build out networks to handle the increased load and pass the cost onto the consumer.
6) Cancel the service of users who abuse their privileges. There have been reports of providers doing this already.

[Again, see full article for explanation of strengths and weaknesses of each.]

I think many of these solutions sound quite constructive and could possibly be used in some combination to alleviate network congestions problems. But the reader response over at TorrentFreak, which obvious skews towards the heavy BitTorrent user, is perhaps all too predictable: Just give us more capacity!

Continue reading →

Big Business vs. Regulation

by on February 4, 2008 · 6 comments

Quote of the Day:

Charles Francis Adams, Jr., then director, and soon to become president of the Union Pacific… revealed to Long on March 1 why railroads were soon [in 1884] to bring all their weight behind the commission form of regulation. Indeed, he suggested the whole course of subsequent big business attitudes toward federal regulation: “If you only get an efficient Board of Commissioners, they could work out of it whatever was necessary. No matter what sort of bill you have, everything depends upon the men who, so to speak, are inside of it, and who are to make it work. In the hands of the right men, any bill would produce the desired results.”

Three years later, Congress created the Interstate Commerce Commission, which just as Adams had hoped, gradually transformed the railroad industry into a government-run cartel, reversing the rapidly-falling rates of the pre-regulation period.

My poorly updated privacy Web site Privacilla is controlled by a non-profit corporation called Privacilla.org, Inc. The corporation has been more hassle than it’s worth to maintain, so I may just dissolve it at some point here. But in the meantime, I recently received this letter from the IRS instructing little Privacilla to file a new information return.

It’s an electronic return for non-profits with gross receipts of $25,000 or less, and it’s called Form 990-N. Failing to file for three years would result in the corporation’s non-profit status being revoked. Apparently, some 650,000 small non-profits are subject to this new requirement.

Many years’ accretions of regulations, filing requirements, and fees (both federal and state) are part of why it is too much hassle to maintain Privacilla as a non-profit. But this one is special. As far as I can tell, there is no Form 990-N. Everything I can find on the IRS Web site talks about it in the future tense.

This is mostly bemusing to me. I have until May 15th to file this form. But it will be less funny if May 15th rolls around and the form still doesn’t exist. It’s also less funny for people who aren’t technically competent attorneys, and who approach the world of law and government with less confidence. To them, this can be scary, and it’s idiocy. Typical IRS idiocy – to require submission of a form that doesn’t exist.

Bleg: Do correct me if I’m wrong! For my claims to sophistication, I may be some kind of rube for looking on the IRS Web site for an IRS electronic filing system.

Whenever I hear some politician or political pundit lament the supposedly dismal state of political discourse in modern America, I always laugh. Anyone who has ever read a lick of history knows that politics has always been a dirty business full of plenty of under-handed antics and distasteful rhetoric.

I was reminded of this again this morning as I was reading through The Washington Post and saw various people complaining about the tone and tactics on display in this year’s presidential primaries. Then, I flipped to the editorial page and saw an interesting essay entitled “Lincoln-Douglas: The Real Thing,” by civil war era historian Allen C. Guelzo of Gettysburg College. It included the following gem of passage about the heated 1858 Senate campaign battle between Lincoln and Douglas:

A month into the campaign, lagging in visibility and short of funds, Lincoln challenged Douglas to a series of debates — outdoors, unrehearsed — in seven locations around the state. At a time when popular community entertainments included mano-a-mano encounters such as wrestling, horse racing and knife fighting, one-on-one debating seemed a perfectly natural forum for political contests, too. And the Lincoln-Douglas debates certainly had their share of entertaining features. Brass bands hired by Republicans and Democrats struggled to drown each other out. Banners with raw sexual innuendoes and crude racial insults billowed over the heads of the crowds. At one debate, someone shied a melon at Douglas and struck him on the shoulder.

Like I was saying, the more things change, the more things stay the same.