Showdowns are likely in the Senate and House of Representatives later this month on legislation combating online piracy. The House Judiciary Committee is expected to vote on the Stop Online Privacy Act, H.R. 3261 (SOPA), and the full Senate on the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, S. 968 (Protect IP Act). These measures have generated some overheated rhetoric. A recent column in Roll Call by Stephen DeMaura and David Segal, entitled “All Candidates Should Be Concerned About SOPA,” for example, suggests that SOPA could be exploited by political opponents to restrict free speech. Here’s a plausible campaign scenario under SOPA. Imagine you are running for Congress in a competitive House district. You give a …
The National Telecommunications Cooperative Association (NTCA) began the process of litigating the Federal Communications Commission’s recent Connect America Fund Order on in the U.S. Court of Appeals for the Fourth Circuit Friday. NTCA, which represents over 570 “locally owned and controlled telecommunications cooperatives and commercial companies throughout rural and small-town America,” notes, among other things, that “rovisions mandating an ultimate price of zero for all switched access and reciprocal compensation services, imposing retroactive and dynamically changing caps on USF-supported costs and blurring the lines between regulated and nonregulated operations are inconsistent with law.” What this particular dispute is ultimately about is not whether …
An item in the Wall Street Journal by Emily Steel notes how software application developers could radically alter the online advertising business that has allowed firms like Google and Facebook to prosper. Consumers are downloading independently-produced apps which allow them to customize their Facebook page or optimize their Google search results. In the process, these consumers begin to see ads that do not originate from Facebook or Google. On Facebook, for instance, big splashy ads appear along the border and in the middle of the pages, pushing content–and the advertising actually sold by Facebook– further down the page. The applications can similarly interfere with search results, placing new sets of ads above the ones bought, say, by Google advertisers. This is the …
AT&T and T-Mobile withdrew their merger application from the Federal Communications Commission Nov. 29 after it became clear that rigid ideologues at the FCC with no idea how to promote economic growth were determined to create as much trouble as possible. The companies will continue to battle the U.S. Department of Justice on behalf of their deal. They can contend with the FCC later, perhaps after the next election. The conflict with DOJ will take place in a court of law, where usually there is scrupulous regard for facts, law and procedure. By comparison, the FCC is a playground for politicians, bureaucrats and lobbyists that tends to do whatever it wants. In an unusual move, the agency released an analysis by the staff that is critical of the merger. Although the analysis has …
The Federal Communications Commission issued its Connect America Fund Order to ensure ubiquitous broadband Internet access services on Friday. When Congress debated the Telecommunications Act of 1996, the section concerning Universal Service (Section 254) was somewhat controversial. Broadly speaking, there seemed to be considerable support in the House of Representatives for limiting Universal Service, and there were some influential senators who wanted to expand it (the House is somewhat more representative of urban areas that contribute subsidies, and the Senate is somewhat more representative of rural areas that receive subsidies). The result was a compromise in which Universal Service is defined (in Sec. 254(c)(1)) as “an evolving level of telecommunications services that the …
Testifying today before the Judiciary Committee of the House of Representatives, Google’s copyright counsel, Katherine Oyama, made a number of useful observations about the proposed Stop Online Piracy Act (H.R. 3261). For example, she claimed that the bill could require U.S. Internet and technology companies to monitor Web sites and social media for infringing content. It would make no sense to make companies like AOL, eBay, Facebook, Google, LinkedIn, Mozilla, Twitter, Yahoo! and Zynga responsible for the content that their customers link to or post on the Web. On the other hand, it would also not make sense for these companies to remain free to ignore obvious copyright infringement. Say the owner of a copyright notifies these companies about infringing material, and the …
Futurists have been predicting for years that there will be diminished privacy in the future, and we will just have to adapt. In 1999, for example, Sun Mcrosystems CEO Scott McNealy posited that we have “zero privacy.” Now, Wall Street Journal columnist Gordon Crovitz is suggesting that technology has the “power to rewrite constitutional protections.” He is referring to GPS tracking devices, of all things. The Supreme Court is considering whether it was unreasonable for police to hide a GPS tracing device on a vehicle belonging to a suspected drug dealer. The Bill of Rights protects each of us against unreasonable searches and seizures. According to the Fourth Amendment, The right of the people to be secure in their persons, houses, papers, and effects, …
Tomorrow the United States Senate will vote on S.J.Res. 6, a joint resolution disapproving the rule submitted by the Federal Communications Commission with respect to regulating the Internet and broadband industry practices. An identical resolution (H.J.Res. 37) has already passed the House of Representatives by a vote of 240-179. Today Sen. Marco Rubio (R-FL) explained why Congress should protect the Internet from unnecessary government regulation — because regulation inhibits investment and innovation. If the Senate adopts the resolution, the President will use his veto to block the will of the people as expressed through their Congressional representatives, according to …
Is the proposed Stop Online Piracy Act, H.R. 3261 (SOPA) a “massive piece of job-killing Internet regulation,” as our friends at the Electronic Frontier Foundation claim? According to the sponsor of the proposal, House Judiciary Chairman Lamar Smith (R-TX), there is an urgent need to protect American innovators from foreign theft via the Internet. Rogue websites that steal and sell American innovations have operated with impunity. The online thieves who run these foreign websites are out of the reach of U.S. law enforcement agencies and profit from selling pirated goods without any legal consequences. According to estimates, IP theft costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American jobs. The Stop Online Piracy Act helps …
Federal Communications Commission Chairman Julius Genachowski’s criticism of intercarrier compensation in extensive remarks on telephone subsidies last week is a reminder for many states of the need to reform intrastate switched access rates. Although Congress mandated the elimination of implicit subsidies embedded in the rates for both interstate and intrastate telecommunications services in the Telecommunications Act of 1996, it did not set a deadline. The FCC has substantially reduced interstate switched access rates in recent years, but a considerable amount of hidden subsidies remain in intrastate switched access fees. In Florida, for example, one telecom service provider charges 5.64 cents per conversation minute for intrastate long distance versus only 1.65 cents for …
At next week’s administrative session, the Georgia Public Service Commission will consider a proposed order from the Public Interest Advocacy Staff concerning the applications of three small telecom service providers for subsidies from Georgia’s Universal Access Fund. The companies are: Chickamauga Telephone Corp., Public Service Telephone Co. and Ringgold Telephone Co. According to Kristi E. Swartz, writing in the Atlanta Journal-Constitution in August, The Public Service Commission held two days of hearings this week on three requests of more than $1 million each. Opponents took particular aim at executive and owner compensation. Ringgold Telephone, which serves northeast Georgia, paid five executives more than $950,000, according to testimony and documents filed with the …
Chairman Julius Genachowski of the Federal Communications Commission spoke of the need to reduce subsidies for traditional wireline telephone service last week, as well as a perceived need for his agency to use the savings to subsidize broadband services (see the press release and the text of the speech). Genachowski is absolutely correct about the need for reforming universal service and intercarrier compensation. Unfortunately, his determination to reform telephone subsidies is not for the purpose of generating consumer savings, but about redirecting resources currently at his disposal for the purpose of gaining some measure of control over unregulated broadband networks. Though cleverly disguised, this is actually a third major attempt to (slowly) impose public utility regulation on …
Does Google present Google products at the top of search result lists? That was the question Senator Mike Lee (R-UT) asked at a congressional hearing this week. Senator Al Franken (D-MN) complained that Schmidt’s response was “fuzzy.” See, e.g., this. If the Google algorithm does favor Google products, is the implication that consumers are so stupid that they will not compare search results, but rather home in on the top search result? That’s absurd. Most consumers use the Internet in search or value, looking for the best products at the most reasonable prices. Consumers who want to save money are accustomed to hunting and searching. Google makes it easier than ever to hunt for bargains. Consumers can access the offerings of suppliers from all over the …
Congressman Lee Terry (R-NE) and Congressman Mike Ross (D-AR) are encouraging their colleages to co-sign a letter urging Federal Communications Commission Chairman Julius Genachowski to reinvent the Universal Service Fund that subsidizes telephone service in rural areas served by small telecommunications common carriers. The USF is an inefficient subsidy mechanism that may no longer be necessary. The Government Accountability Office made a similar observation in a 2008 report to Congress. While considering legislation codifying universal service, the Senate Committee on Commerce, Science, and Transportation anticipated that competition and new technologies would reduce or eliminate the need for universal service support mechanisms. However, rather than decreasing, the cost of the …
You gotta love this guy. Or do you? Referring to the Department of Justice’s challenge to the AT&T + T-Mobile USA merger, Sprint CEO Dan Hesse (mug shot to the right} claims, I don’t believe that what the DOJ said in any way, not even a little bit, should be viewed as we want to keep four …. My view is would look at other consolidation very differently. What is he saying? According to another report, Hesse believes, ou could make a very, very strong argument, I believe, that if you have two value players that, let’s say, got together, that gave them more scale and a better cost structure to compete with the twin Bells, that is an advantage that outweighs having a smaller three and four. This report notes that Sprint and T-Mobile did discuss a merger …
Title VI of the so-called American Recovery and Reinvestment Act of 2009 directed the Federal Communications Commission to submit a report to Congress containing a “national broadband plan.” Among other things, the statute specified that the plan should ensure that “all people of the United States have access to broadband capability.” It should also include a “detailed strategy for achieving affordability of such service and maximum utilization of broadband infrastructure and service by the public,” the statute said. This process provided regulatory enthusiasts like Public Knowledge, Media Access Project, New America Foundation and U.S. PIRG an opportunity to advocate for government control of the broadband economy. In joint comments filed with the …
Blocking the merger between AT&T + T-Mobile is apropos of this administration’s strategy for creating jobs, according to James M. Cole, the deputy attorney general. The view that this administration has is that through innovation and through competition, we create jobs. Mergers usually reduce jobs through the elimination of redundancies, so we see this as a move that will help protect jobs in the economy, not a move that is going in any way to reduce them. Remarkably, someone forgot to include that in the complaint filed by the Department of Justice in the District Court for D.C. The complaint itself does not allege that the merger will cost jobs, nor does it suggest that blocking the merger would create or save jobs. As a technical matter, antitrust is not concerned with job …
Sprint Nextel Corp. is a troubled company, and that is unfortunate. Government cannot save Sprint, only subsidize it. That could harm our economy. Government can only subsidize the weak at the expense of the strong. Sprint posted another dismal earnings report late last week. The company had a net loss of $847 million in the second quarter, for a total of $1.2 billion in net losses so far this year. Sprint also lost $3.5 billion in 2010, $2.4 billion in 2009, $2.8 billion in 2008 and it recognized net losses of $29.4 billion in 2007. What is Sprint’s comeback plan? Not surprisingly, the company is quietly seeking a stealth bailout from the Federal Communications Commission. To be sure, this bailout would not be financed by taxpayers, the banks and auto companies received. …
Counterfeiting and piracy are frequently presented as relatively minor costs of doing business for a small number of otherwise highly profitable industries, such as high-end designer labels, motion picture studios and record labels or pharmaceutical and software giants. Rarely are they acknowledged as a threat to the nation’s economy. In fact, counterfeiting and piracy are far more pervasive than they once were, having evolved into a “sophisticated global business involving the mass production and sale of a vast array of fake goods,” according to the U.S. Trade Representative’s annual review of the global state of intellectual property rights, protection and enforcement (“2011 Special 301 Report“). The fake goods deprive U.S. intellectual property …
H.R. 1981, the “Protecting Children from Internet Pornographers Act of 2011” was the subject of a hearing today in the Subcommittee on Crime, Terrorism and Homeland Security of the House of Representatives. The bill would require Internet Service Providers to retain customer logs which could be used to reconstruct the Internet activity all subscribers, not just those who are suspected of engaging in criminal conduct. Under current law, ISPs may be required to preserve records for 90 days at the request of law enforcement in connection with a particular investigation, plus a 90-day extension if the request is renewed. H.R. 1981 would require ISPs to retain everything for 18 months. H.R. 1981 is unfortunately not a good example of transparency in lawmaking. Although the …