Allowing broadband providers to impose tolls on Internet companies represents a “grave” threat to the Internet, or so wrote several Internet giants and their allies in a letter to the Federal Communications Commission this past week. The reality is that broadband networks are very expensive to build and maintain. Broadband companies have invested approximately $250 billion in U.S. wired and wireless broadband networks–and have doubled average delivered broadband speeds–just since President Obama took office in early 2009. Nevertheless, some critics claim that American broadband is still too slow and expensive. The current broadband pricing model is designed to recover the entire cost of maintaining and improving the network from consumers. Internet companies get free access to broadband subscribers. Although the Read More ›
Recent reports highlight that the telephone meta-data collection efforts of the National Security Agency are being undermined by the proliferation of flat-rate, unlimited voice calling plans. The agency is collecting data for less than a third of domestic voice traffic, according to one estimate. It’s been clear for the past couple months that officials want to fix this, and President Obama’s plan for leaving meta-data in the hands of telecom companies–for NSA to access with a court order–might provide a back door opportunity to expand collection to include all calling data. There was a potential new twist last week, when Reuters seemed to imply that carriers could be forced to collect data for all voice traffic pursuant to a reinterpretation Read More ›
The Digital Millenium Copyright Act‘s notice-and-takedown safe harbor is rapidly becoming obsolete. The safe harbor, aka Section 512 of Title 17 of the U.S. Code, is the subject of a hearing tomorrow in the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet.
The safe harbor limits the liability of online service providers for copyright infringement if they remove infringing content upon receiving notice from the copyright owner. Safeguards are built into the law to protect against the possibility of erroneous or fraudulent notifications.
The problem is the safe harbor was designed for the Internet as it existed 15 years ago, before broadband. Most people did not access video over the Internet when Congress enacted the DMCA in 1998. As the Federal Communications Commission concluded at the time,
Due to bandwidth and other limitations, this method of video distribution does not yet produce programming that is comparable in length, quality, or convenience to broadcast video. Before Internet distribution of video becomes competitive in the video distribution marketplace, significant improvement must be made in this form of delivery.
The House Subcommittee on Communications and Technology will soon consider whether to reauthorize the Satellite Television Extension and Localism Act (STELA) set to expire at the end of this year. A hearing scheduled for this week has been postponed due to weather.
Congress ought to scrap the current compulsory license in STELA that governs the importation of distant broadcast signals by Direct Broadcast Satellite providers. STELA is redundant and outdated. The 25 year-old statute invites rent-seeking every time it comes up for reauthorization.
At the same time, Congress should also resist calls to use the STELA reauthorization process to consider retransmission consent reforms. The retransmission consent framework is designed to function like the free market and is not the problem.
A sampling of 596 web sites that deal primarily in pirated content made an estimated $227 million in annual advertising revenues, according to the Digital Citizens Alliance (See: “Good Money Gone Bad: Digital Thieves and the Hijacking of the Online Ad Business – A Report on the Profitability of Ad-Supported Content Theft“). “The 30 largest sites studied that are supported only by ads average $4.4 million annually, with the largest BitTorrent portal sites topping $6 million. Even small sites can make more than $100,000 a year from advertising.”
“It is important to note that the advertising profits garnered by content thieves do not equate with the losses incurred by the owners of the content,” notes the report. “These losses are unquestionably greater by many orders of magnitude…”
Fortunately, the advertising industry is not willing to tolerate intellectual property infringement. “The future health of digital media is at stake,” according to Bob Liodice, head of the Association of National Advertisers, “and we owe it to ourselves, our industry and its brands to attack the issue head-on.”
Retransmission consent came under attack again this month, and two long-awaited bills on the subject have finally been introduced–the Next Generation Television Marketplace Act (H.R. 3720) by Rep. Steve Scalise, and the Video CHOICE (Consumers Have Options in Choosing Entertainment) Act (H.R. 3719) by Rep. Anna G. Eshoo. The American Cable Association’s Matthew M. Polka has reiterated his view that the process whereby cable and satellite TV providers negotiate with broadcasters for the right to retransmit broadcast signals is a “far cry from the free market,” and Alan Daley and Steve Pociask with the American Consumer Institute claim that retransmission consent jeopardizes the Broadcast Television Spectrum Incentive Auction. As Jeff Eisenach pointed out at the Hudson Institute, “Congress created retransmission Read More ›
View my remarks during a panel discussion entitled “Regulation and Competition in the Digital Economy,” sponsored by the American Consumer Institute on Jun. 6, 2013.
DISH Network gets another opportunity on Tuesday to plead with Congress for another Satellite Home Viewer Act reauthorization–ostensibly to protect consumers from unwarranted rate increases and program blackouts, but actually to preserve and expand DISH Network’s and DirecTV’s access to broadcast programming at regulated, below-market rates. A couple minor provisions in the Act that have nearly outlived their original purpose are due to expire, but DISH Network is taking advantage of this opportunity to argue that “there is much more that Congress can do to expand consumers’ access to local programming…” DISH’s plea is an example of the narcotic effect of supposedly benign regulation intended to promote competition by giving nascent competitors a leg up. DISH Network, in particular, has Read More ›
In her new book, Captive Audience, Susan Crawford makes the same argument that the lawyers for AT&T made in Judge Harold H. Greene’s courtroom in response to the government’s antitrust complaint beginning in 1981, i.e., that telephone service was a “natural monopoly.” In those days, AT&T wanted regulation and hated competition, which is the same as Crawford’s perspective with respect to broadband now. Here is what she said today on the Diane Rehm Show: Diane Rehm: “Is regulation the next step?” Susan Crawford: “It always has been for these industries, because it really doesn’t make sense to have more than one wire into our homes. It is a very expensive thing to install; once it’s there, it has to be Read More ›
On Wednesday, the Subcommittee on Communications and Technology will conduct an oversight hearing of the implementation of spectrum auctions by the Federal Communications Commission. The subcommittee members ought to consider the fact that although the mobile wireless industry faces an acute shortage of spectrum (“broadband spectrum deficit is likely to approach 300 MHz by 2014“), the FCC risks getting distracted and mired in a pointless effort to leverage its spectrum auctioning authority to manipulate the structure of the mobile wireless industry. In mid-2011, former Commissioner Michael J. Copps warned of “darkening clouds over the state of mobile competition … we find ongoing trends of industry consolidation.” As Copps saw it, increasing concentration will lead to higher prices for consumers. His Read More ›