No doubt I won’t be the only one to point out how funny it is that today’s New York Times front page exposé on the excesses of the Renewable Fuel Standard puts the blame on Wall Street firms trading in the market for ethanol credits. But I also want to make a comparison to intellectual property.
As the headline puts it, “Wall St. Exploits Ethanol Credits, and Prices Spike,” Yet ethanol credits are a thing that affect the price of gasoline only because the government created them out of thin air and mandated their use. Having created a new commodity–and a mandatory one for many refiners–it’s no surprise speculators entered the market. Yet this is how the NYT describes it:
The banks say they have far less influence in the market than others are suggesting, and are doing nothing wrong. But the activities, while legal, could have consequences for consumers.
See that? It’s the perfectly legal activities of the banks that will have consequences for consumers. I’d say it’s the entire program itself, created out of thin air by the government, that allows for these activities in the first place.
Because Congress and the EPA didn’t accurately predict future gasoline consumption (shocker that) they set the amount of ethanol that refiners must blend into gasoline too high. Refiners are on the hook to use more ethanol than possible, which forces them to buy ethanol credits instead. So of course commodity speculators are going to play in this made-up market, but it’s not the players we should be hating, it’s the game.
And for the record, I don’t mean to excuse the banks. I don’t know enough about this issue, but it wouldn’t surprise me if the banks had a hand in getting the government to create this market. If they did, then that’s par for the crony capitalist course.
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Yesterday, Time Warner Cable and CBS reached a deal to end the weeks-long impasse that had resulted in CBS being blacked out in over 3 million U.S. households.
I predicted the two companies would resolve their differences before the start of the NFL season in a RealClearPolicy op-ed published last week:
From Los Angeles to New York, 3 million Americans in eight U.S. cities haven’t been able to watch CBS on cable for weeks, because of a business dispute between the network and Time Warner Cable (TWC). The two companies can’t agree on how much TWC should pay to carry CBS, so the network has blacked out TWC subscribers since August 1. With the NFL season kicking off on September 5, the timing couldn’t be worse for football fans.
Regulators at the Federal Communications Commission (FCC) face growing pressure to force the feuding companies to reach an agreement. But despite viewers’ frustrations with this standoff, government intervention isn’t the answer. If bureaucrats begin “overseeing” disputes between network owners and video providers, television viewers will face higher prices or lower-quality shows.
TWC and CBS are playing hardball over serious cash. CBS reportedly seeks to double its fee to $2 per subscriber each month, which TWC claims is an outrageous price increase. But CBS argues it costs more and more to develop hit new shows like Under the Dome, so it’s only fair viewers pay a bit more.
Both sides have a point. TWC is looking out for its millions of subscribers—and its bottom line—by keeping programming costs down. CBS, on the other hand, needs cash to develop creative new content, and hopes it can make some money doing so.
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There are few things more likely to get constituents to call their representative than TV programming blackouts, and the increase in broadcasting disruptions arising from licensing disputes in recent years means Congress may be forced to once again fix television and copyright laws. As Jerry Brito explains at Reason, the current standoff between CBS and Time Warner Cable is the result of bad regulations, which contribute to more frequent broadcaster blackouts. While each type of TV distributor (cable, satellite, broadcasters, telcos) is both disadvantaged and advantaged through regulation, broadcasters are particularly favored. As the US Copyright Office has said, the rule at issue in CBS-TWC is “part of a thicket of communications law requirements aimed at protecting and supporting the broadcast industry.”
But as we approach a damaging tipping point of rising programming costs and blackouts, Congress’ potential rescuer–Aereo–appears on the horizon, possibly buying more time before a major regulatory rewrite. Aereo, for the uninitiated, is a small online company that sets up tiny antennas in certain cities to capture broadcast television station signals–like CBS, NBC, ABC, Fox, the CW, and Univision–and streams those signals online to paying customers, who can watch live or record the local signals captured by their own “rented” Aereo antenna. Broadcasters hate this because the service deprives them of lucrative retransmission fees and unsuccessfully sued to get Aereo to cease operations. Continue reading →
Sherwin Siy, Vice President of Legal Affairs at Public Knowledge, discusses emerging issues in digital copyright policy. He addresses the Department of Commerce’s recent green paper on digital copyright, including the need to reform copyright laws in light of new technologies. This podcast also covers the DMCA, online streaming, piracy, cell phone unlocking, fair use recognition, digital ownership, and what we’ve learned about copyright policy from the SOPA debate.
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Patrick Ruffini, political strategist, author, and President of Engage, a digital agency in Washington, DC, discusses his latest book with coauthors David Segal and David Moon: Hacking Politics: How Geeks, Progressives, the Tea Party, Gamers, Anarchists, and Suits Teamed Up to Defeat SOPA and Save the Internet. Ruffini covers the history behind SOPA, its implications for Internet freedom, the “Internet blackout” in January of 2012, and how the threat of SOPA united activists, technology companies, and the broader Internet community.
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Richard Brandt, technology journalist and author, discusses his new book, One Click: Jeff Bezos and the Rise of Amazon.Com. Brandt discusses Bezos’ entrepreneurial drive, his business philosophy, and how he’s grown Amazon to become the biggest retailer in the world. This episode also covers the biggest mistake Bezos ever made, how Amazon uses patent laws to its advantage, whether Amazon will soon become a publishing house, Bezos’ idea for privately-funded space exploration and his plan to revolutionize technology with quantum computing.
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Gina Keating, author of Netflixed: The Epic Battle for America’s Eyeballs, discusses the startup of Netflix and their competition with Blockbuster.
Keating begins with the history of the company and their innovative improvements to the movie rental experience. She discusses their use of new technology and marketing strategies in DVD rental, which inspired Blockbuster to adapt to the changing market.
Keating goes on to describe Netflix’s transition to internet streaming and Blockbuster’s attempts to retain their market share.
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Earlier this year, Ryan Radia and I spilled a lot of ink on these pages critiquing the various “cell phone unlocking” bills that were introduced in reaction to a successful White House petition. Our assessment of these bills was that they ranged from timid to unhelpful. Their biggest vice was that they were generally band-aids and temporary fixes aimed solely at cell phones and not the underlying problem of the DMCA’s anti-circumvention provision.
Today, I’m happy to see Rep. Zoe Lofgren introduced a bill that would not only fix cell phone unlocking, but also goes a long way in addressing the DMCA Section 1201’s fundamental problems. Quite simply, the Unlocking Technology Act of 2013 makes the DMCA’s anti-circumvention provisions applicable only in cases where the person circumvents a digital lock in order to infringe copyright. So, ripping a DVD in order to distribute a film without permission on BitTorrent would still be illegal, but ripping the same DVD in order to watch the film on your iPad would be OK. This is good sense and good policy.
The bill also would allow the manufacture, sale, and import of anti-circumvention tools now prohibited under DMCA 1201. Sounds nefarious, but in reality what this means is that, for example, Linux users may for the first time get a legal way to play DVDs on their computers. And making tools that help the blind read ebooks won’t get you in trouble with the FBI.
Finally, the bill requires NTIA to conduct a study and publish a report looking at whether the economic impact of the DMCA’s anti-circumvention provisions, and to look at whether Section 1201 should be further amended or even repealed. Yes folks, this bill uses the word “repeal” in its text.
Congrats to Rep. Lofgren and her bi-partisan co-sponsors, Reps. Massie, Eshoo, and Polis, for showing that common sense still has a shot on the Hill.
Over at Freedom to Tinker, Steve Schultze has a response to my Reason article about Craigslist suing its competitors. Steve expresses some surprise that I would suggest that we might want to recognize a new property right since I have been so critical of the excesses of our current IP regime. Let me take a stab at reconciling that seeming paradox.
First, I should say I’m sympathetic to Steve’s position, which he shares with many others, and which may well be right. I wrote the Reason article more than anything to provide some balance to what I saw as a knee-jerk reaction in the blogosphere to the Craigslist ruling. I really didn’t see anyone giving Craigslist’s claims a fair shake (probably because the company is acting hypocritically given the public profile they have cultivated). That’s why in the article I’m ambivalent about whether Craigslist should have any remedy, and why I don’t make the case that trespass to chattels is the right approach. The point is that neither am I convinced that it’s clearly the wrong approach, or that Craigslist should clearly not be waging this suit.
That said, let me suggest that my thinking on this is not at odds with my thinking on copyright. Steve chides me for saying that maybe there’s something to Craigslist’s claims because what its competitors are doing doesn’t “sit well.” He says that “the notion that something doesn’t ‘sit well’ is not necessarily a good indicator that one can or should prevail in legal action,” and he’s right, which is why I don’t make that claim in the article. He goes on to admit that “to be sure, tort law (and common law more generally) develops in part out of our collective notion of what does or doesn’t seem right.” And that was my point. The fact that what Craigslist’s competitors are doing doesn’t sit well, I suggest, should give us a hint that this isn’t as open-and-shut a case as some have made it out to be, and that perhaps we should take a closer look.
I’m glad Steve brings up the common law. One of the central critiques I have made about copyright as a property right is that it did not develop at common law, and is instead a creature of statute. The fact that copyright is created by politicians guessing about the future (and influenced by special interests), rather than courts deciding actual cases and controversies, is what in large part leads to its excesses. I am much less skeptical of property rights that emerge at common law over time after an evolutionary process of trial and error, and as Steve points out, this process usually begins when a court is presented with a novel question that doesn’t “sit well.”
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Over at Reason I take a look at the recent controversy around Craigslist suing some smaller competitors who have been using its listings data without permission. While I agree with most commentators that neither copyright nor CFAA claims make sense in this case, I depart from what seems to be the conventional thinking in arguing that it’s not so clear that Craigslist should have no remedy:
>[I]t’s pretty easy to see why Craigslist should care that others are building on top of and extending its service. What makes the company so valuable is its strong network effect. People go to Craigslist because that’s where the people are. If it loses that, it loses its business.
>PadMapper aggregates and presents listings not just from Craigslist, but from other apartment listing sites as well, including Apartments.com and Rent.com. This is great for users because they only need go to one site to browse all the listings across multiple databases. It’s bad for Craigslist, however, because it makes it less of a focal site. Such aggregators make it less important that an apartment be listed at Craigslist specifically as long as it is in the aggregated list.
>PadMapper also offers listings of its own listings through its PadLister service. This means that PadMapper relies on the network effects that Craigslist has developed in order to draw in an audience, and then promotes and sells its own listing service to that audience. While that business model is certainly innovative, and may not violate copyright, it doesn’t sit well, either.
>Craigslist disrupted the newspaper industry by decimating traditional classifieds. It did this by offering a better alternative to its competitors that attracted consumers away from newspapers. Craigslist didn’t copy newspaper ads to jumpstart its operation, just as Facebook didn’t jumpstart its network by copying over MySpace accounts. That’s true innovation: taking command of the network effect by offering a superior product. So shouldn’t we expect the same from new entrants in the classifieds space?
Check out the whole thing here.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.