Articles by Steven Titch

Steven Titch (@stevetitch) is an independent telecom and IT policy analyst. His policy analysis has been published by the Reason Foundation and the Heartland Institute and covers topics such as municipal broadband, network neutrality, universal service, telecom taxes and online gambling. Titch holds a dual Bachelor of Arts degree in journalism and English from Syracuse University. He lives in Sugar Land, Texas. He burns off energy running 5K races, is an avid poker player, and likes to mellow out in cellar jazz bars.


Can Any T-Mobile Buyer Pass an Antitrust Test?

by on September 12, 2011 · 2 comments

[Cross-posted at Reason.org]

In the wake of the Department of Justice’s lawsuit to stop the merger of AT&T and T-Mobile USA, there has been some discussion about where T-Mobile would end up if the government effort proved successful.

While debate continues whether a merged AT&T-T-Mobile would harm consumers, there is no disputing that T-Mobile itself is mired in business problems. For all the DoJ’s concern that T-Mobile remain in the market as a low-priced alternative for consumers, the company is short of the cash necessary to expand infrastructure at a pace to remain technologically competitive. Blocking the AT&T deal would not necessarily keep Deutsche Telekom, T-Mobile’s German parent, from seeking other buyers. Last week, Dave Goldman of CNN Money summed the situation up in “Without AT&T, T-Mobile is a White Elephant.” The facts he lays out are among the reasons the merger makes sense.

Yet let’s assume for a minute that the DoJ is successful in stopping the merger. A number of pundits both from both the business and the policy side have suggested other potential buyers could rescue T-Mobile. Sascha Segan at PC Magazine provided a good summary here.

Segan was just one of many analysts who pointed to Google, Apple and Comcast (or a cable company consortium) as potential T-Mobile buyers. There are numerous reasons as to why these companies might or might not make a bid. Yet what I find interesting the way several critics of the AT&T deal are almost giddy with the idea that one of these companies might jump at T-Mobile, noting that the entry of a deep-pocketed non-carrier might be a good development for the consolidating wireless industry.

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Right Now, the Law’s on Amazon’s Side

by on August 9, 2011 · 2 comments

States are ratcheting up legislation in order to capture sales taxes from on-line retailers, even as companies like Amazon.com aggressively push back.

A closely-watched bill in the Texas legislature that defines Amazon’s distribution center in Ft. Worth as a physical nexus, thereby obligating the on-line retailing giant to collect taxes on sales to residents of the Lone Star State, passed on a second go-through of this year’s session, overcoming an initial veto by Gov. Rick Perry.

The next move is up to Amazon. Its distribution center is essentially a warehouse that fulfills online orders and employs 200. Amazon previously said it would close the center if the bill passed, but has yet to make good on the threat. However, it is dangerous to dismiss it as a bluff. When South Carolina passed a similar bill, the company closed a distribution center there; only to return once the legislation was reversed.

The collection of taxes from on-line sales has become touchy among even the free-market-minded. Brick-and-mortar store owners have become increasingly vocal as to what they see as a purposeful scheme of “tax avoidance” that puts them at an unfair disadvantage against on-line retailers. Research, such as an April paper from the University of Tennessee’s Center for Business and E-Commerce Research, stoke the flames by calling the current sales tax rules a tax subsidy for online merchants.

The heart of the Texas dispute is whether a distribution center counts as a nexus. The case law is Quill Corp. v. North Dakota and National Bellas Hess v. Illinois Department of Revenue, which, as broadly understood, stipulate that a business must have a nexus, that is, brick-and-mortar store, in the state in order to be liable for tax collection. If there is a viable court test to either or both of these decisions, the contention that a distribution center constitutes a nexus may have the most potential.

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Local Government Meets the New Media

by on June 24, 2011 · 0 comments

If you’ve been following Reason.com or Reason.tv for the past 48 hours you will know that Jim Epstein, a Reason TV reporter, was one of two journalists arrested Wednesday for videotaping a meeting of the Washington D.C. Taxi Commission.

Epstein and Pete Tucker, who blogs for TheFightBack.org, a site that spotlights local D.C. issues that affect minorities and low-income residents, were reporting from what was expected to be contentious meeting as the Taxi Commission was set to address a plan to introduce a medallion system for the District. The proposal had generated considerable opposition from the city’s large base of cab drivers, many of whom attended the meeting to voice their opposition. They essentially believe a medallion system will concentrate cab ownership among a handful of large fleet operators and likely result in the loss of their livelihood.

The arrests were regrettable all around. Epstein’s video, which shows Tucker, dressed neatly in a white shirt and tie, being handcuffed and led away, captures a deeply uncomfortable “it-can’t-happen-here” moment. Epstein was arrested next. Epstein’s video and statement can be found here.

Aside from the fact Epstein and Tucker were released a few hours later, the best thing that can be said is that the arrests were ordered by someone who can charitably be described as a low-level local government functionary, namely Dena Reed, interim chairman of the Taxi Commission. But that doesn’t excuse it. Reed emerges from this affair looking like a third-grade hall monitor who’s allowed that modicum of authority to go to her head.

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Data in the “Cloud” Needs Fourth Amendment Protection

by on May 27, 2011 · 4 comments

“Cloud computing” is the term for applications that are handled by third-party software and storage on the Internet, like Google Docs and QuickBooks Online, as opposed to programs like Microsoft Word and Quicken, which you load and access from your PC.

Gmail and Hotmail were early examples of cloud computing. The cloud computing concept has since expanded to include popular applications like photo editing and sharing, money management and social networking. It also takes in the increasing number of cloud-based storage services, like Dropbox, which allows you to port documents from client to client, and Carbonite, which performs near real-time back-up of data and documents on your PC.

What most Americans don’t realize is that data stored in the cloud is not protected by the Fourth Amendment the way that same data is if stored on a PC, CD or detachable hard drive in the home. My op-ed in the Washington Times today outlines this problem, and points to a new bill in Congress, S.1011, introduced last week by Sen. Patrick Leahy (D-VT), as a big step toward closing this loophole. S.1011, also cited by Berin here, extends the due process provisions against illegal wiretapping in the existing Electronic Communications Privacy Act (ECPA) to personal data stored in data centers owned and operated by third parties.

As online services and applications evolve, it is critical that these due process protections extend to cloud services. Public cloud infrastructure, applications and platforms are growing at 25 percent per year, according to International Data Corp., a market research firm specializing in high-tech. IDC found that, as of year-end 2010, 56 percent of Internet users use webmail services, 34 percent store personal pictures online, 7 percent store personal videos, 5 percent pay to store files and 5 percent back up their hard drive to a website. These numbers are all expected to grow rapidly.

But this is about more than convenience or personal preference for data storage. Internet applications are becoming geared for the “cloud.” Cloud computing will be the easiest, cheapest and most efficient way users can access personal data on any device, in any location, at any time. It’s not simply an option in the way one chooses to manage data. Cloud computing is becoming necessary to go about one’s daily business. Legal protections need to be there.

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Citing “Wrong Door” Cases, Judge Denies Use of IP Addresses to Identify Individuals

by on May 3, 2011 · 620 comments

A federal judge in Illinois has refused to allow a plaintiff to match IP addresses to individual names in a piracy case, indicating that use of IP addresses without any other evidence is too unreliable in identifying actual perpetrators, and as such, violates the rights of those caught in what he termed a “fishing expedition.”

In his decision, Judge Harold Baker pointed to one of several recent cases where paramilitary-type police raids on the residences of persons suspected of downloading child pornography that turned up nothing. What had happened was that real culprit had used that household’s unsecured wireless Internet connection.

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White House Takes Wrong Side on Police GPS Tracking

by on April 25, 2011 · 2 comments

It is disappointing that the Obama administration, which campaigned against George W. Bush’s poor record on civil liberties protection, is pursuing a course that aims to limit Fourth Amendment rights when it comes to the use of location tracking technology.

The Washington Post reported yesterday that the Obama administration has petitioned the U.S. Supreme Court to overturn a ruling last year by the U.S. Court of Appeals for the D.C. Circuit that forces police to obtain a warrant before tracking the movements of a suspect using a global positioning device.

The motion is significant because various state laws conflict over procedure and the Supreme Court, if it takes the case, could establish long-term procedure going forward. In the case at hand, United States vs. Antoine Jones, the D.C. court sided with the defendant, overturning the conviction against Jones, who was accused of being a major cocaine dealer, ruling that D.C. police violated due process by using a GPS device to track Jones’ movements for one month without a warrant. Appellate courts in New York and California, on the other hand, have ruled in favor of police in similar cases.

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For The Last Time: The Bell System Monopoly Is Not Being Rebuilt

by on April 22, 2011 · 6 comments

Believe it or not, this argument is being trotted out as part of the pressure from consumer activist groups against AT&T’s proposed acquisition of T-Mobile. The subject of a Senate Judiciary Hearing on the merger, scheduled for May 11, even asks, “Is Humpty Dumpty Being Put Back Together Again?”

It seems because the deal would leave AT&T and Verizon as the country’s two leading wireless service providers, the blogosphere is aflutter with worries that we are returning to the bad old days when AT&T pretty much owned all of the country’s telecom infrastructure.

It is true that AT&T and Verizon trace their history back to the six-year antitrust case brought by the Nixon Justice Department, which ended in the 1984 divestiture of then-AT&T’s 22 local telephone operating companies, which were regrouped into seven regional holding companies.

Over the last 28 years, there has been gradual consolidation, each time accompanied by an uproar that the Bell monopoly days were returning. But those claims miss the essential goal of the Bell break-up, and why, even though those seven “Baby Bell” companies have been integrated into three, there’s no going back to the pre-divestiture AT&T.

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Free the Toll-Free Numbers

by on March 2, 2011 · 0 comments

Toll-free number allocation remains one of the last vestiges of telecom’s monopoly era. Unlike Internet domain names, there is no organized way of requesting, registering, reserving, purchasing 800, 888, 877, 866, or the newly available 855  numbers, the five prefixes that currently designate toll-free service. If you’re lucky or creative enough, you can visit any number of sites (just Google “855 toll free code”) and the number you request might be available. If not, you’re SOL.

That’s because the toll-free number regulation regime is cumbersome, opaque and bureaucratic. And while the FCC technically prohibits the warehousing, hoarding, transfer and sale of toll-free numbers, enforcement is difficult and inconsistent.

The North American Numbering Council, a federal advisory committee that was created to advise the FCC on numbering issues will be meeting in Washington March 9. On the agenda will be discussion on whether to go forward with exploring market mechanisms that can be applied to toll-free number assignment.

It’s an idea worth pursuing. It is clear that some toll-free numbers have equity value, especially when they can bolster a brand identity or be easily remembered. 1-800-SOUTHWEST, 1-800-FLOWERS are two examples.

Yet right now, the toll-free numbering pool is a vast and unruly commons that recognizes no difference in value between a desirable mnemonic and a generic sequence of digits. Numbers are assigned on a first-come, first-served basis. End users can request a specific number, but they can get it only if it is available from the pool. Under the current rules, they cannot offer to buy the number from its current user. Nor can the user of 1-800-555-2665, which alphanumerically translates to both 1-800-555-BOOK and 1-800-555-COOK, put the number up for auction to see who will pay more, the bookstore or cooking school.

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Some Sense on Sexting

by on February 10, 2011 · 10 comments

Bucking a trend seen in other states, Texas lawmakers are taking steps to separate teen “sexting,” the sending and receiving sexually explicit photos via cell phone or email, from child pornography.

A bill proposed by State Sen. Kirk Watson of Austin, and backed by Texas State Attorney General Greg Abbott, would classify sexting as a Class C misdemeanor for first time violators under 18. Under current law, sexting is a Class C felony carrying penalties of two to 10 years in prison, a fine up to $10,000 and lifelong registration as a sex offender.

The Lone Star State deserves credit for taking a sensible approach to addressing what is without doubt stupid behavior that comes with serious consequences, but is far from the predation that child pornography laws are intended to target.

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The Regulated Internet: How We Got Here

by on February 10, 2011 · 1 comment

In the March issue of Reason, Peter Suderman takes us on a tour of the recent telecom and Internet regulatory scene as he looks at the Federal Communications Commission Chairman and Obama hoops buddy Julius Genachowski and his push to regulate the Web.

The article, which recaps the five-year network neutrality battle that reached a watershed moment this December when Genachowski all but rammed through the new rules as the rest of D.C. was heading out for the holidays, punctures many of the myths of the network neutrality rationale–including the notion that it is a small site-vs.-large-site issue and that large ISPs were exploiting their bottlenck position.

Suderman succintly shows how Genachowski, following the lead of groups like Free Press, framed what is essentially a geeky tug-of-war about network engineering concepts as wholesale market failure that demanded regulation, with himself as top Intenet cop.

But the net neutrality debate doesn’t really pit the Goliaths against the Davids. It’s a battle between the edge of the Internet and the center, with application and content providers (the edge) fighting for control against infrastructure owners (the center). Large business interests dominate both sides of the debate. Google, for example, has long favored some form of net neutrality, as have Facebook, Amazon, Twitter, and a smattering of other big content providers, who prefer a Web in which the network acts essentially as a “dumb pipe” to carry their content. Mom-and-pop sites aren’t the issue.

Google makes its support sound as simple and earnest as its corporate motto of “don’t be evil.” Much like Genachowski, it defines net neutrality as “the concept that the Internet should remain free and open to all comers.” But the freedom and openness that Google claims to prize bear a distinct resemblance to regulatory protection. An Internet in which ISPs can freely discriminate between services, prioritizing some data in order to offer enhanced services to more customers, is an Internet in which content providers may have to pay more to reach their customers. Under Google and Genachowski’s net neutrality regime, ISPs may own the network, but the FCC will have a say in how those networks are run, with a bias toward restrictions that favor content providers.

The entire article can be found here,

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