Articles by James Gattuso 
James Gattuso is a Senior Research Fellow in Regulatory Policy in the Roe Institute for Economic Policy Studies at The Heritage Foundation. Gattuso also leads the Enterprise and Free Markets Initiative at Heritage, with responsiblity for a range of regulatory and market issues. Prior to joining Heritage, he served as Vice President for Policy at the Competitive Enterprise Institute and also as Vice President for Policy Development with Citizens for a Sound Economy (CSE). From 1990 to 1993, he was Deputy Chief of the Office of Plans and Policy at the Federal Communications Commission. From May 1991 to June 1992, he was detailed from the FCC to the office of Vice President Dan Quayle, where he served as Associate Director of the President's Council on Competitiveness. He lives in Alexandria, Virginia with his wife Dana, 8 year-old son, Peter (whom he relies upon to operate his VCR), and his four year-old daughter Lindsey (who does the DVD player.) He has no known hobbies, but is not nearly as boring as he seems.
Forget blogs and podcasts. The Free State Foundation and the Institute for Policy Innovation are hosting a good old-fashioned teraspace policy conference this Tuesday, October 30 in Washington D.C. Titled the “Federal Unbundling Commission?” (you can do the acronym on your own), the theme of the half-day event is the FCC’s penchant for unbundling communications services — from broadband to telephony to television. With Sen. Jim DeMint, Rep. Marsha Blackburn and FCC Commissioner Deborah Tate on the agenda, it promises to be an interesting and informative morning. (I’m also on the agenda, but try not to let that deter you.)
Hope to see you there. Click here to RSVP.
One question that has been repeatedly raised in regards the the Comcast-BitTorrent affair is why wasn’t Comcast more open about what it was doing? Comcast’s response — supported by Richard Bennett in our recent podcast — is that more transparency would make it too easy to bypass the system. They say this is a cat-and-mouse game with bandwidth hogs (to mix zoological metaphors), and announcing what techniques are being used would simply give away the game.
That got me thinking. Since the Associated Press broke the story last week, the proverbial feline is pretty clearly out of the bag. Is word spreading on a bypass? A quick search on Google, with the phrase “how to bypass Comcast” indicates the answer is a resounding “yes,” with no less than 34,700 results. I’m not a technical expert, so I can’t say the bypasses work (and I freely admit I didn’t read all 34,700), but that’s still a lot of mice.
Of course, this doesn’t necessarily mean Comcast was right to keep its practices so hush-hush. Even if Comcast wasn’t under legal duties to reveal more, more transparency would certainly have precluded much of this week’s consumer outrage. Still, if the Google results are any gauge, the cat-and-mouse game does seem very real.
Remember Bill 602b? That legislation, which you probably heard about in a message forwarded to you by a well-meaning relative or friend, would have placed a five-cent tax on e-mails.
It was a hoax, of course. No such bill ever existed. But now comes word that the Internet tax bill passed by the House last week actually would allow such taxes to be imposed.
According to a Congressional Research Service memo sent Wednesday to Sen. Ron Wyden, D-Ore., the bill’s definition of “Internet access” would allow taxation of “many more products and services” than the existing moratorium. Including, CRS said, taxes on e-mails.
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Is Comcast a monopolist? You’d think so, given the tone of much of the coverage of the firm’s BitTorrent affair. And supporters of neutrality regulation often scoff at the idea that competition, not regulation, is the best way to prevent market abuses. But competition may be livelier than most people assume. This was evidenced by the “other” Comcast story in the news today — the release of its third quarter financials. The results, which were — according to most reports — disappointing. Of particular note was the drop in new subscribers for high-speed Internet access, coming in at 450,000, down from 538,000 a year ago.
The reason: competition.
“So what’s going on here?” ZDNet asks, and then answers: “Two words, Verizon and AT&T.”
In an article posted today, ” ZDNet’s Larry Dignon indicates that Comcast has been losing ground as its rivals have been gaining subscribers.
Yes, as argued by the Washington Post’s Rob Pegoraro, more competition is always needed. But the competition that exists now is more than a kerfluffle.
The WP’s Rob Pegoraro has a pretty good take on the Comcast-BitTorrent situation in an online article posted today. Comcast, he says, “would like to be seen as a crossing guard who sometimes must step into a busy intersection to keep pedestrians (customers who just want to get their e-mail) from being mowed down by jerks in speeding SUVs (a few intensive peer-to-peer users).” And that shouldn’t necessarily bother anyone, except that the firm should have been upfront about what it was doing.
The bottom line, according the Pegoraro: “Customers ought to have a simple remedy in these cases. When a telecom company has a problem communicating with them, they should take their business elsewhere,” adding a caveat that there should be a lot more competition.
All in all, a fairly reasonable — and clearly-written — explanation of the whole kerfuffle.
One never knows what to expect from the Consumer Electronics Association’s Gary Shapiro. Last spring, he was caught pointing out that the digital TV emperor wasn’t wearing much (“not everyone really wants free over-the-air broadcasting in their home.”)
Now comes word that he’s challenging a news emperor, CNN’s Lou Dobbs, to a debate on protectionism. “The facts are indisputable—without international trade, our nation would not have the greatest economy in the world,” said Shapiro in a CEA news release. “If we accept messages of fear without acknowledging the facts, we will adopt a defeatist approach that will only hurt our economy and the innovative businesses and talented workers that would otherwise bring more jobs and opportunities to Americans than ever before.”
It’s a publicity stunt of course, but a good one. CEA — which earlier this month launched a new free-trade initiative — has fixed its sights on an important issue. And a Shapiro-Dobbs face-off would be great entertainment to boot. Perhaps not Joe Frazier-Muhammad Ali, but — for policy wonks — pretty close.
No word on whether the debate would be on CNN or ESPN.
Stay tuned.
As the days tick down to Halloween — and the formal expiration of the Internet tax moratorium — there’s a strong feeling of deja vu in Washington. It’s like we’ve all been through this before.
We have. In 2004. And 2001. The periodic last-minute extension of the moratorium has become a regular feature of Washington’s political life. Which leads many to wonder: Why not just make the tax ban permanent?
The arguments for restrictions on state and local taxes are strong (they are summarized in a new Heritage Foundation paper just released this week). But still, policymakers seem reluctant to take the plunge toward permanence, with the House voting last week for yet another temporary extension.
Opponents — such as Tennessee’s Lamar Alexander — have argued strenuously against anything more long-lasting. With the Internet changing so quickly, it doesn’t make sense to write Internet tax policy into stone, they argue.
But it’s hard to believe that many are actually convinced by this. After all, with nine years’ experience with the moratorium, this is hardly an experimental policy. And Congress always keeps the option of changing things if the needs arise. Just look at the amount of tinkering that goes on with the rest of the tax code.
So why so much support for yet another temporary suspension? It’s certainly not because Internet taxation is popular — there just aren’t a lot of voters out there demanding more fees on their DSL lines.
Strangely, the problem may be the opposite: The idea of taxing the Internet is unpopular, and members get a boost from voting to ban it. And temporary extensions let them vote to ban it again and again and again. A permanent ban would stop the fun.
Continue reading →
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.
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.
It’s long been conventional wisdom that a Hillary Clinton presidential administration would quickly move to adopt net neutrality regulation. Now that conventional wisdom has been cast into doubt. Although Sen. Clinton has supported net neutrality legislation in Congress, the idea was noticeably absent from the “innovation agenda” she announced in late August. The absence has caused some — perhaps belated — consternation on the net neutrality Left — with a post last week by Matt Stoller on Open Left asking “Where’s Your Net Neutrality Proposal Senator Clinton?” Stoller warns: “If anyone has illusions about how horrific Clinton will be as a President, disabuse yourself now.”
Strong words. Maybe its just election-season hyperbole. And maybe a Clinton neutrality proposal is still in the cards (Clinton did after all label the innovation agenda “version 1.0”.)
Still, one can’t help but sense a bit of panic on the left as the neutrality army continues to fray.
One more thing to which you should stay tuned.
(Thanks to Scott Cleland for the heads up.)
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.