Democracy and Technology Blog

This Is Not How We Should Ensure Net Neutrality

Chairman Thomas E. Wheeler of the Federal Communications Commission unveiled his proposal this week for regulating broadband Internet access under a 1934 law. Since there are three Democrats and two Republicans on the FCC, Wheeler’s proposal is likely to pass on a party-line vote and is almost certain to be appealed. Free market advocates have pointed out that FCC regulation is not only unnecessary for continued Internet openness, but it could lead to years of disruptive litigation and jeopardize investment and innovation in the network. Writing in WIRED magazine, Wheeler argues that the Internet wouldn’t even exist if the FCC hadn’t mandated open access for telephone network equipment in the 1960s, and that his mid-1980s startup either failed or was Read More ›


Secret conspiracy to revive SOPA?

According to Google, the Motion Picture Association of America (MPAA) has: "conspired to achieve [the Stop Online Piracy Act (SOPA)]'s goals through non-legislative means,"; "pointed its guns at Google," and "did the legal legwork for the Mississippi State Attorney General." Where to begin? If MPAA and its members are protecting their rights through "non-legislative means," is that a bad thing? Absolutely not. Read More ›

The Myth That Title II Regulation of Broadband and Wireless Would Be Comparable

Supporters of Title II reclassification for broadband Internet access services point to the fact that some wireless services have been governed by a subset of Title II provisions since 1993. No one is complaining about that. So what, then, is the basis for opposition to similar regulatory treatment for broadband? Austin Schlick, the former FCC general counsel, outlined the so-called “Third Way” legal framework for broadband in a 2010 memo that proposed Title II reclassification along with forbearance of all but six of Title II’s 48 provisions. He noted that “this third way is a proven success for wireless communications.” This is the model that President Obama is backing. Title II reclassification “doesn’t have to be a big deal,” Harold Read More ›


Combating online piracy with better and more convenient legitimate services

The motion picture industry has established a search site to help consumers find non-pirated movies and TV shows available on the Internet: WheretoWatch.com. A study by NetNames estimated that 23.8% of all the bandwidth consumed in North America, Europe and Asia-Pacific in January 2013 was used to access pirated content. There are more than 100 legal online services offering movie and television content in the U.S., according to Chairman and CEO Senator Chris Dodd of the Motion Picture Association of America, and a study by KPMG found that 94% of the most popular and critically acclaimed films were legally available online in December 2013. Read More ›

How Much Tax?

As I and others have recently noted, if the Federal Communications Commission reclassifies broadband Internet access as a “telecommunications” service, broadband would automatically become subject to the federal Universal Service tax–currently 16.1%, or more than twice the highest state sales tax (California-7.5%), according to the Tax Foundation. Erik Telford, writing in The Detroit News, has reached a similar conclusion. U.S. wireline broadband revenue rose to $43 billion in 2012 from $41 billion in 2011, according to one estimate. “Total U.S. mobile data revenue hit $90 billion in 2013 and is expected to rise above $100 billion this year,” according to another estimate. Assuming that the wireline and wireless broadband industries as a whole earn approximately $150 billion this year, the Read More ›


Tax Consequences of Net Neutrality

Would the Federal Communications Commission expose broadband Internet access services to tax rates of at least 16.6% of every dollar spent on international and interstate data transfers–and averaging 11.23% on transfers within a particular state and locality–if it reclassifies broadband as a telecommunications service pursuant to Title II of the Communications Act of 1934? As former FCC Commissioner Harold Furchtgott-Roth notes in a recent Forbes column, the Internet Tax Freedom Act only prohibits state and local taxes on Internet access. It says nothing about federal user fees. The House Energy & Commerce Committee report accompanying the “Permanent Internet Tax Freedom Act” (H.R. 3086) makes this distinction clear. The law specifies that it does not prohibit the collection of the 911 Read More ›


Study shows credit card companies collect millions for cyberlockers that infringe copyright laws

A report by NetNames for the Digital Citizens Alliance has found that the “overwhelming use of cyberlockers is for content theft.” At least 79-84% of sampled files on 30 of the most popular online file sharing destinations infringed copyright, according to the analysis.
The report also estimates that the sites generate profit margins of 88-96% on combined revenue of over $95 million per year. The primary sources of income are premium account subscriptions enabled by payment processors such as VISA and MasterCard, and advertising.

Every cyberlocker that offered paid premium accounts to users provided the ability to pay for those subscriptions by Visa or MasterCard, with only one exception. Only a single cyberlocker accepted PayPal.

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First Sale in the Digital Age

The House Judiciary Committee examined the “first sale” doctrine at a recent field hearing in New York City as part of the committee’s comprehensive review of copyright. The first sale doctrine made perfect sense during the Industrial Age, but in some respects it’s problematic for the Digital Age. Consumers have the right to give away, lend or sell a book that they own, thanks to a 1908 Supreme Court decision that was subsequently codified by Congress at 17 U.S.C. ยง109(c). There’s no dispute that “[p]hysical copies of works in a digital format, such as CDs or DVDs, are [covered] in the same way as physical copies in analog form.” However, consumers with an Internet connection are downloading more and more digital content from remote servers pursuant to license agreements. And the first sale doctrine does not apply to digital files that are transmitted from machine to machine, according to the Copyright Office, because transmission results in two copies (one on each machine).

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Son’s Criticism of U.S. Broadband Misleading and Misplaced

Chairman and CEO Masayoshi Son of SoftBank again criticized U.S. broadband (see this and this) at last week’s Code Conference. The U.S. created the Internet, but its speeds rank 15th out of 16 major countries, ahead of only the Philippines. Mexico is No. 17, by the way. It turns out that Son couldn’t have been referring to the broadband service he receives from Comcast, since the survey data he was citing–as he has in the past–appears to be from OpenSignal and was gleaned from a subset of the six million users of the OpenSignal app who had 4G LTE wireless access in the second half of 2013. Oh, and Son neglected to mention that immediately ahead of the U.S. in Read More ›


Copyright Alert System successfully launches

Over 1.3 million notices of alleged copyright infringement were sent to users of peer-to-peer (P2P) networks suspected of illegally sharing copyrighted material over a ten month period beginning in late February 2013, according to the Center for Copyright Information (CCI).
The Copyright Alert System, a voluntary private sector initiative of the CCI that is “based on the premise that most consumers will take corrective action if alleged copyright infringement involving their Internet account is brought to their attention,” generated the notices.
P2P networks are monitored on behalf of recording artists and music producers, filmmakers, and creators and distributors of movies and television shows, and notices of alleged copyright infringement are generated through the use of publicly available IP address data. This information is shared with Internet Service Providers (ISPs), who then deliver up to six separate alerts (for repeat violations) to the corresponding account holders without sharing any personally-identifiable information about their customers.

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