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More Observations on Obama's Speech

Stuff We Wish We Wrote - Homepage - September 10, 2014, 10:28 PM
Shortly, Paul will note the most important problems with President Obama’s speech tonight. In the meantime, here are a few secondary observations: 1) Obama…

CO2 Going Up. Human Progress Going Up. | Cato @ Liberty

Environment Suite - In The News - September 10, 2014, 10:15 PM
Latest Study Responsible Counterterrorism Policy John Mueller and Mark G. Stewart Featured Event August 26 Featuring Dan Mitchell, Senior Fellow, Cato…

CO2 Going Up. Human Progress Going Up. | Cato @ Liberty

Stuff We Wish We Wrote - Homepage - September 10, 2014, 10:15 PM
Latest Study Responsible Counterterrorism Policy John Mueller and Mark G. Stewart Featured Event August 26 Featuring Dan Mitchell, Senior Fellow, Cato…

Nicki Minaj and the rule of law

Out of the Storm News - September 10, 2014, 2:34 PM

Conservatives have long stood for the principle that the state ought to abide by the rule of law. Application of the law ought to be uniform across all actors and it should sufficiently transparent that pleading ignorance is equivalent to pleading negligence.

This has been true throughout history, from Edmund Burke denouncing the English throne’s violations of the American colonists’ rights right on through to modern conservatives’ jeering of Nancy Pelosi;s infamous “we have to pass the bill to find out what’s in it” gaffe. As Justice Antonin Scalia observed in Crawford v. Washington:

We have no doubt that the courts below were acting in utmost good faith when they found reliability. The Framers, however, would not have been content to indulge this assumption. They knew that judges, like other government officers, could not always be trusted to safeguard the rights of the people; the likes of the dread Lord Jeffreys were not yet too distant a memory. They were loath to leave too much discretion in judicial hands. 

Judge George Jeffreys, to whom Scalia alludes, was famous as the “Bloody Judge,” known to hand out death sentences for practically any offense. So iconic is Jeffreys’ menacing image that Christopher Lee even played him in an exploitation horror film which centered on the judge as the villain.

Were he alive today, one imagines Judge Jeffreys would have felt perfectly at home with the thoroughly nontransparent and often arbitrarily applied copyright damages regime. Not only do U.S. courts frequently hand out draconian punishments to those who fall afoul of copyright law, but they do so with neither predictability nor transparency. In line with Rep. Pelosi’s thoughts on Obamacare, the theory underlying copyright damages seems to be “you have to steal the property so you can find out who owns it.”

By way of example, consider Nicki Minaj’s song “Anaconda,” which currently stands at number the on the Billboard Hot 100 chart. The tune samples heavily from Sir Mix-a-Lot’s sleeper 1992 hit “Baby Got Back,” which itself drew from the 1986 single “Technicolor” by Channel One. The most prominent borrowing in Minaj’s song can be found in the chorus, which repeats Mix-a-Lot’s line: “My anaconda don’t want none unless you got buns, hun.”

Minaj’s army of agents, lawyers and other entertainment professionals no doubt were able to track down the rights-holder for Mix-a-Lot’s music, and there’s almost no doubt that Minaj could afford the rights to the song in question. However, if Minaj had been an independent artist and mixed exactly the same song – which, I repeat, is currently number three on the Billboard Hot 100, and so clearly has been judged to have artistic value by the market – the process might have taken an entirely different turn. She might never have found who owned the rights, and could have been sued for anywhere from $0 to a life savings’ worth of money for infringing this inaccessible owner. One of the year’s most popular songs likely could only have been made by an already-wealthy celebrity.

Unlike other forms of intellectual property, like patents, copyright claims in the United States do not have to be registered. That’s been true since 1989, when the United States signed onto the 19th century Berne Convention for the Protection of Literary and Artistic Works. Even for those copyrights that are registered, unlike patents, there is no comprehensive database where ownership can be checked.

As a result, the ownership of most copyrighted works – including songs, films, or even novel – cannot be publicly verified. In the case of music, private licensing agencies do maintain databases, but there is no guarantee that these are comprehensive or up-to-date, nor any requirement that they be. If you plan to sample music either as a musician, in your place of business or even on a karaoke machine, the only way to be absolutely safe is to pay membership fees to all three performing rights organizations – ASCAP, SESAC and BMI — even if you’ll never use the music that one provides. If you make a mistake, all the liability is on you.

This wouldn’t be so bad if it was possible to know how much you’d be expected to pay for violating a copyright, however unintentionally. But as Mitch Stoltz of the Electronic Frontier Foundation points out, this is exactly what you wouldn’t know if you got sued for a copyright violation:

U.S. law lets copyright holders ask for “statutory damages” in an infringement lawsuit. If a copyright holder proves its case, and asks for statutory damages, a jury decides how much the defendant must pay—anywhere from $750 to $30,000 per copyrighted work.1 If the court finds that the infringement was “willful,” the maximum per work jumps to $150,000.

A copyright holder who asks for statutory damages doesn’t have to show any evidence of harm, or that the defendant made any profit from the infringement. A copyright holder can, if she chooses, simply ask the jury to come up with a number…

The Copyright Act doesn’t give judges and juries any guidance on how to choose a number within the $750-$150,000 range. It only says that the amount should be “as the court considers just.”

Imagine if this were applied to any other system. Say you walked into an unlocked house, thinking it was abandoned. A stranger then walks in, has you arrested by claiming it’s his house (but produces no deed to this effect), claims you broke in (but never shows any sign of a broken lock) and the court not only believes him, but sentences you to between one year in prison and life in prison, leaving it up to your accuser to make the decision for them.

Judge Jeffreys couldn’t have designed a more dysfunctional system. Conservatives understand that, if copyright is going to be respected in the same way as other forms of property, its violation must be treated with the same predictability and transparency as other violations of property.

One excellent first step in this regard would be to at least add some guidance for courts on what damages should be. At least then, if any independent artists write the next “Anaconda,” they’ll know whether the rights holder will take a pound of flesh or their whole body.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

EXCLUSIVE: Key analyst says talk radio’s biggest companies close to pulling the plug | Jerry Del Colliano says format’s days are numbered, cites recent moves | Media Equalizer

Stuff We Wish We Wrote - Homepage - September 10, 2014, 1:38 PM
It was a move that sent shudders through an already-nervous radio industry: Pittsburgh’s WPGB-FM suddenly dumped its talk format, switching to country music.…

Quin Hillyer - Why a Nine-Month Extension of Ex-Im Is a Thoroughly Terrible Idea

FIRE Suite - In The News - September 10, 2014, 1:38 PM
No. Just no. No way. That should be the response of every real conservative to the proposed Appropriations Continuing Resolution, put forth today by committee…

Quin Hillyer - Why a Nine-Month Extension of Ex-Im Is a Thoroughly Terrible Idea

Stuff We Wish We Wrote - Homepage - September 10, 2014, 1:38 PM
No. Just no. No way. That should be the response of every real conservative to the proposed Appropriations Continuing Resolution, put forth today by committee…

Reid, Udall Launch New Assault on Citizens United and the First Amendment - US News

Law Suit - In The News - September 10, 2014, 12:56 PM
Free speech for whom? Nevada Democratic Sen. Harry Reid is anything but these days. As Senate majority leader, he gets to set the agenda for the chamber – when…

Reid, Udall Launch New Assault on Citizens United and the First Amendment - US News

Stuff We Wish We Wrote - Homepage - September 10, 2014, 12:56 PM
Free speech for whom? Nevada Democratic Sen. Harry Reid is anything but these days. As Senate majority leader, he gets to set the agenda for the chamber – when…

Guy Benson - Fun: Senate Dems Whine When GOP Calls Their Bluff on Show Vote

Stuff We Wish We Wrote - Homepage - September 10, 2014, 12:56 PM
The Politico story quoted extensively below is a gem, on several levels. By way of background, Senate Democrats are hopping mad because Republicans have…

These People Think the Way to Keep Things Fast is to Bring in the Government?

Somewhat Reasonable - September 10, 2014, 11:42 AM
The Left consists of two groups of people running on two parallel yet very different paths to Oblivion.

The Left’s leadership knows their Huge Government ideas are absurd and don’t work – but they’ll be in charge after the collapse they induce so they’re fine with it.

The Left’s rank and file actually thinks more government equals better – despite centuries of evidence to the contrary.

Then there’s the Tech World – by and large a subset of the Left.  These people should certainly know better about government sloth and general incompetence damaging their industry – likely the nation’s and the world’s fastest moving and best.

But the Tech World has thus far remained steadfastly impervious to facts.  Or they – like the Left’s leadership – have an agenda all their own.

How else to explain this?

Large US Tech Firms Plan ‘Go Slow’ Day in Protest over Net Neutrality Rules

On Wednesday, these Internet companies will protest the federal government not unilaterally power grabbing “enough” authority over the Internet.  And to demonstrate their upset with this lack of government control – they are mock slowing down their sites.

Get that?  To protest the Internet staying exactly the same as it’s always been – basically government-free – they will dramatically alter the Internet.

And get this – they are slowing the Web to demand more government Web imposition.  Which if they get their wish will inexorably lead to a dramatically slower Web.

What’s the government track record on fast?  Department of Motor Vehicles, anyone?

A Fatal Wait: Veterans Languish and Die on a VA Hospital’s Secret List

Government ‘Falls Behind Building Targets’

Government Falls Behind in Prompt Payments to Suppliers

Government Falls Behind on Repayment Schedule for Foreign Oil Companies

Government is Slow to Invest In Cybersecurity

Speaking again of Tech – how does the government do with technology?

Cost of ObamaCare Website Tops $1 Billion

A slew of management failures led to the site’s disastrous launch, according to a new GAO report.

How’s it working now?

With ObamaCare Systems Still Slow, Backlog Builds Among the Uninsured

Shocker – it isn’t.

Why Government Tech Is So Poor

Government Tech Problems: Blame The People Or The Process?

Sadly, it’s “C” – All of the Above.

How does the FCC itself do on Tech?

Government Agency That Wants To Commandeer The Internet Just Had Their Website Crash — Twice

Comforting.

So why are these Tech World denizens demanding greater government Internet involvement?  Perhaps they do indeed have an agenda of their own.

Like having the government mandate that they not have to pay for the unbelievable amounts of bandwidth they use.  Crony Socialism, anyone?

(Companies like) Netflix (are) looking to get Big Govs the world over to impose a whole new, ridiculously expansive definition of Network Neutrality.

“Netflix CEO Reed Hastings says that ‘net neutrality must be defended and strengthened,’ calling out giants like Comcast and Verizon for bad behavior.

Charging Netflix for their exorbitant bandwidth use isn’t “bad behavior it’s basic economics.  Imagine the government mandating that gas stations charge the same to fill up Escorts and Escalades.

If Netflix doesn’t pay for what it uses, all the rest of us do  in the form of higher prices for our Internet Service Providers (ISPs).

Why should a grandmother who only emails her grandkids pay substantially more to subsidize Netflix Ned and his twenty-movie-a-day download habit?

Bandwidth hogs?

Netflix Now More Than 1/3 of Internet Traffic

So it turns out the Tech World Left is also part of the Crony Socialist “I’ve Got Mine” Coalition.  They’ve built their market share – on the backs of others.  And they want the government to mandate that their free ride remains free.

While the rest of us pick up their tab.  And suffer the ever-slowing, economy-crushing dullness of a government-controlled Internet.

The neck the Tech World Left has grabbed – and wants to hand to the government for wringing – is their Golden Goose.  They have to know this, right?

[Originally published at Human Events]

 

Categories: On the Blog

Turkish rights and digital delights: an IGF recap

Out of the Storm News - September 10, 2014, 11:13 AM

The annual Internet Governance Forum was established to foster an open, inclusive dialogue among the parties that “govern” the Internet. IGF is a conference designed, somewhat counter-intuitively, to maintain a unified Internet by decentralizing control. This year’s conference, held Sept. 2-5 in Istanbul, itself prompted spinoff events — the Internet Ungovernance Forum and the “Bye Bye Internet Freedom” press conference — that focused on government efforts to use the Internet to violate freedom of expression and rights to privacy, particularly in Turkey, the IGF host country.

Though they featured less than a quarter as many sessions as the official IGF, the spinoff events and Turkey’s free speech violations dominated the online narrative emanating from Istanbul last week. The most popular Tweets from the conference focused on the Turkish government’s censorship of the Internet:

Sad to learn of 51,000 websites currently blocked in #Turkey – not just Twitter, YouTube and sexual sites – and no transparency. #IGF2014

— Neelie Kroes (@NeelieKroesEU) September 2, 2014

Twitter users on trial while #Turkey hosts key UN Internet summit http://t.co/Nqd3B5usWm #IGF2014 #humanrights

— AmnestyInternational (@AmnestyOnline) September 2, 2014

Rogue cell phone base stations? Welcome to Turkey. #IGF2014 HT @ioerror pic.twitter.com/4R6JQWBML9

— Kevin Bankston (@KevinBankston) September 3, 2014

The Turkish government’s increasingly intense violations of freedom of expression and privacy rights were covered comprehensively at the “Bye Bye Internet Freedom” press conference organized by Reporters Without Borders. Representing the Turkish Association of Journalists, Human Rights Watch, Reporters Without Borders, Amnesty International and Turkey’s Alternative Informatics Association, the panelists itemized the government’s laundry list of human rights violations, both on- and offline. These include increased censorship of media, massively expanding powers of the national intelligence agency (MIT), increased surveillance of citizens and other privacy violations.

Amnesty International’s Andrew Gardner emphasized that Turkey’s increased censorship of social media platforms such as Twitter and YouTube should not be viewed in isolation; they are merely the online manifestation of a government that is intolerant to dissent in any format. His point, reiterated throughout the conference, was that we can’t talk about Internet freedom without talking about basic political freedoms and holding governments accountable for violating them. Cynthia Wong of Human Rights Watch warned that digital technologies leave citizens much more vulnerable to surveillance, as we leave digital trails that can be used as tools for greater government control. Turkey’s current prosecution of 29 Twitter users for nonexistent incitements to violence nicely illustrates the points.

Many at the spinoff events criticized that main IGF as too exclusive, purportedly having rejected nearly all workshops proposed by Turkish activists to advocate for freedom of speech. One attendee with organizing experience explained the proposed workshops did not follow IGF protocols, which place priority on panels and sessions that represent people from multiple countries with diverse viewpoints.

Garnering publicity by being staged “in protest,” the IUF and the press conference were more supplementary than incendiary in practice. They both provided more appropriate platforms to lodge pointed, critical attacks at government programs, notably in Turkey, that violate an open Internet and free expression.

Can a unified, global information network be maintained when we can’t even have a unified discussion about it? Does the fragmentation of the IGF discussion portend dangerous fragmentation of the Internet, in which splintered groups have separate but unequal access to information? Is the freewheeling multi-stakeholder ecosystem crumbling before our eyes and becoming too fractured to function?

I would argue no. Steeped in comedy, irony and identity crises, the IGF remains a place for players in all areas of Internet governance to come together in a necessary dialogue. With no cost to participate, the vast majority are truly there to build and grow a free and open information network. If only the same could be said for the ITU Plenipotentiary Conference.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

What would Hillary Clinton’s Energy Policy Look Like?

Somewhat Reasonable - September 09, 2014, 2:13 PM

At Senator Harry Reid’s seventh National Clean Energy Summit held in Las Vegas on Thursday, September 4, Hillary Clinton said: “This is the most consequential, urgent, sweeping collection of challenges we face as a nation and a world.” She wasn’t talking about ISIS or the growing terrorist threat, but about climate change.

Her spot on the program has been referenced as: “her first energy and climate speech of a publicity tour that many believe is the springboard to a presidential campaign.”

In addition to the obvious misperception about “the challenges we face as a nation and a world,” her speech had several subtle, but instructive, misperceptions to explore.

For example, when addressing “unpredictable” subsidies for green energy projects, she claimed that $500 billion is spent every year subsidizing fossil fuels. According to the International Energy Agency (IEA), in 2012, global fossil fuel subsidies did, in fact, total $544 billion, however, citing that figure in the same breath as U.S. tax incentives and subsidies for renewable energy is deceptive at best.

Most global subsidies for fossil fuels are from oil rich countries that use low cost to keep the kingdom happy. A study from The Institute for Energy Research on global energy subsidies concludes: “Many Americans are confused by the large amount of global fossil fuel consumption subsidies that the IEA calculates, not realizing that these subsidies have nothing to do with tax policy, research and development or loan guarantees, where most U.S. programs are directed.”

Let’s look at those “incentives” for renewables and why they are “unpredictable.” Germany and Spain led the world in green energy subsidies but have since considerably dialed back on them.

In Germany, after more than a decade of green-energy subsidies, its electricity rates and carbon-dioxide emissions have gone up. According to a September 4 Reuter’s report, Germany’s reliance on coal has gone up each of the past four years. Germany is looking at levies for residential photo-voltaic system owners—something also being considered (and, in some cases, implemented) in the U.S.

After nearly100 billion U.S. taxpayer dollars have gone to green-energy projects, the stimulus-funded program has been plagued with failure, corruption, and illegal activity. Meanwhile—as has happened in Germany—utility bills have gone up and public support for subsidies has declined. After more than twenty years of taxpayer funding, theProduction Tax Credit (PTC) for wind energy finally expired on December 31, 2013—though forces that benefit from it are still hoping to extend it retroactively. The PTC is “unpredictable” at best.

In her Q & A session, Clinton said: “One day last summer, Germany got 74 percent of its energy from renewables.” Like the comment about $500 billion in global subsidies for fossil fuels, her speech writers did their homework—but they plucked data without looking deeper and as a result made her look foolish. The 74 percent figure is fact. But it represents a fraction of only one day, not recent history, or even a pattern. One month later, Germany got 50 percent of its electricity demand from solar—but six months earlier, in the January cold, it got only 0.1 percent. In his post in the Energy Collective, Robert Wilson, a PhD Student in Mathematical Ecology at the University of Strathclyde, calls Germany’s situation: “more of a coal lock-in than a solar revolution,” as the need for electricity, especially in the cold, grey days of January, requires the steady supply of coal-fueled electricity.

One other item to question: Clinton clearly collaborates with her former boss on his Clean Power Plan—which has a growing coalition of opponents.

The Clean Power Plan is about reducing carbon-dioxide emissions from existing power plants. In her speech, Clinton repeated a falsehood Obama likes to reference: reducing CO2 emissions will improve children’s’ respiratory health.

“Hillary apparently doesn’t know the difference between soot and CO2,” quipped Jane Orient, MD, and president of Doctors for Disaster Preparedness. She continued: “And the American Lung Association pretends it doesn’t. No one can claim that the tiny increase in CO2 from coal-fueled generating stations increases asthma—just being indoors with other breathing humans increases CO2 much more and doesn’t cause asthma.”

Clinton took a couple risks for which she deserves some credit. She strayed from the safe turf, when she admitted that Obama’s trajectory on climate change policy hit “a brick wall of opposition” at the 2009 United Nations climate talks in Copenhagen.

She also acknowledged: “Energy is a major part of our foreign policy.” As such, she supports development of American natural gas and oil, calling it an example “of American innovation changing the game.”

Addressing the benefits of producing and exporting natural gas and oil, she said: “Assuming that our production stays at the levels, or even as some predict, goes higher, I do think there’s a play there.” Noting it could help Europe and Asia, she added: “This is a great economic advantage, a competitive advantage, for us. …We don’t want to give that up.”

America does have an energy advantage—and Clinton is correct: “We don’t want to give that up.” Why then, does she (and President Obama) support policies that would take that away—or at least, not encourage our energy growth?

That fact that Clinton chose to start her publicity tour, the perceived springboard to her presidential campaign, with a speech on energy should signal to all of America how important the topic truly is.

Categories: On the Blog

Ray Rice’s knockout punch is ample reason to teach boys never to strike a woman

Out of the Storm News - September 09, 2014, 2:13 PM

This week, the Baltimore Ravens released Ray Rice, their star running back, after additional video emerged of him knocking out his future wife, Janay Palmer, in an elevator altercation in Atlantic City, N.J. The National Football League also suspended Rice indefinitely.

The irony is that the NFL only suspended Rice for two games after a previous video of the same incident showed Rice dragging the unconscious Palmer from the elevator. After public backlash, NFL Commissioner Roger Goodell conceded that Rice’s punishment was too lenient and subsequently strengthened the NFL’s domestic violence policy.

Sadly, the difference between the two responses highlights the failed reaction to domestic abuse by many Americans.  It was not until Rice was caught on camera actually hitting Palmer that he truly felt the consequences of his actions.

Rice’s violent act is a more public example of a larger problem in our society. How many Americans have seen bruises and the look of fear in a woman’s eyes and thought of every plausible explanation other than the obvious?

Is that the best we can do for our wives, sisters and mothers?

If callously dragging someone’s unconscious body can plausibly be interpreted as “an argument that got out of hand,” then we need to reconsider our perspectives. Do we really need to see the blows on tape before we can respond?

I teach my boys that physical violence is never acceptable except to protect themselves or others from bodily harm. Admittedly, that exception is a hard line to walk and an even harder concept to convey to growing boys. The same strength that can be used to protect can quickly turn into a dangerous weapon.

That protective maxim has a further clarification: NEVER strike a woman. My boys ask all sorts of follow-up questions. What if she makes me mad? NEVER strike a woman. What if she hits me first? NEVER strike a woman. What if she takes my toys? NEVER strike a woman.

That life lesson is may not be politically correct or gender sensitive, but a man has no business ever striking a woman. Period.

The lesson carries important corollaries. If you see a man hitting a woman, stop him. If you suspect abuse, confront it. Men can have a significant impact on reducing domestic violence by setting an example and being willing to oppose domestic abuse as they encounter it.

We cannot afford to accept more excuses or continue to believe that a victim’s contributions to a conflict somehow mitigate extremely violent physical responses.

Tempers flare, people yell and they sometimes do things to hurt one another. That is a sad reality of humanity. At the very least, men should hold onto one rule no matter how tough situations become:

NEVER strike a woman.

Letter to U.S. Congress on the Electronic Communications Privacy Act

Out of the Storm News - September 09, 2014, 2:06 PM

 

 

The Honorable Harry Reid
Majority Leader
U.S. Senate
Washington DC 20510

Dear Leader Reid,

We write to urge you to bring to the floor S. 607, the bipartisan Leahy-­Lee bill updating the Electronic Communications Privacy Act (ECPA).

Updating ECPA would respond to the deeply held concerns of Americans about their privacy. S. 607 would make it clear that the warrant standard of the U.S. Constitution applies to private digital information just as it applies to physical property.

The Leahy‐Lee bill would aid American companies seeking to innovate and compete globally. It would eliminate outdated discrepancies between the legal process for government access to data stored locally in one’s home or office and the process for the same data stored with third parties in the Internet “cloud.” Consumers and businesses large and small are increasingly taking advantage of the efficiencies offered by web‐based services. American companies have been leaders in this field. Yet ECPA, written in 1986, says that data stored in the cloud should be afforded less protection than data stored locally. Removing uncertainty about the standards for government access to data stored online will encourage consumers and companies, including those outside the United States, to utilize these services.

S. 607 would not impede law enforcement. The U.S. Department of Justice already follows the warrant‐for‐content rule of S. 607. The only resistance to reform comes from civil regulatory agencies that want an exception allowing them to obtain the content of customer documents and communications directly from third-party service providers. That would expand government power; government regulators currently cannot compel service providers to disclose their customers’ communications. It would prejudice the innovative services that we want to support, creating one procedure for data stored locally and a different one for data stored in the cloud. For these reasons, we oppose a carve‐out for regulatory agencies or other rules that would treat private data differently depending on the type of technology used to store it.

S. 607 was approved by the Judiciary Committee last year. We urge you to bring it to the floor. We believe it would pass overwhelmingly, proving to Americans and the rest of the world that the U.S. legal system values privacy in the digital age.

 

Sincerely,

 

Adobe
ACT | The App Association
American Association of Law Libraries
American Civil Liberties Union
American Library Association
Americans for Tax Reform
AOL
Apple
A Small Orange
Association of Research Libraries
Automattic
Autonet Mobile
Blacklight
Brennan Center for Justice at NYU Law School
BSA | The Software Alliance
Center for Democracy & Technology
Center for Financial Privacy and Human Rights
Cheval Capital
CloudTech1
Code Guard
Coughlin Associates
Competitive Enterprise Institute
Computer & Communications Industry Association (CCIA)
The Constitution Project
Council for Citizens Against Government Waste
Data Foundry
Digital Liberty
Direct Marketing Association
Disconnect
Discovery Institute
Distributed Computing Industry Association (DCIA)
Dropbox
DuckDuckGo
Endurance International Group
Evernote
Electronic Frontier Foundation
Engine Advocacy
Facebook
Foursquare
FreedomWorks
Future of Privacy Forum
Gandi
Golden Frog
Google
Hewlett‐Packard
Information Technology Industry Council (ITI)
The Internet Association
Intuit
Internet Infrastructure Coalition (i2Coalition)
Kwaai Oak
Less Government
LinkedIn
Media Science International (MSI)
Microsoft
NetChoice
New America’s Open Technology Institute
Newspaper Association of America
Oracle
Peer1 Hosting
Personal
Rackspace
Records Preservation and Access Committee
R Street Institute
reddit
ScreenPlay
Servint
Software & Information Industry Association (SIIA)
Symantec
Taxpayers Protection Alliance
Tech Assets
TechFreedom
TechNet
Tucows
Tumblr
Twitter
U.S. Chamber of Commerce
Yahoo! Inc.

The inequality of unisex pricing

Out of the Storm News - September 09, 2014, 12:34 PM

Equality before the law is a foundational principle of American democracy. Many policymakers are proud to pursue efforts to realize that principle. Perhaps that is why, cloaked by a sense of constitutional righteousness, California legislators have adopted a high level of deference for proposals intended to achieve equality.

As a matter of politics or philosophy, their devotion is laudable. As a matter of policy development, their enthusiasm is sometimes misdirected.

One such equality-inspired proposal, A.B. 1553, seeks to prohibit long-term care insurance premiums from reflecting the cost differences between insuring men and insuring women. Authored by Assemblymember Mariko Yamada, D-Davis, AB 1553 may be well meaning, but by restricting insurers from using actuarially sound rating factors, it does more harm than good.

The very nature of insurance demands concessions to distinctions based on immutable physical realities. For instance: women live longer than men.

In the case of long-term care insurance, the product is designed to provide insurance coverage to people as they age and become infirm. It does so by spreading the cost of their care among a pool of similarly situated individuals. The fact that policyholders are charged a premium that reflects the risk of similarly situated individuals ensures that those who pose a greater risk of utilizing the coverage do not inflate the premiums of others, whose risk is less.

Because women live longer than men, and are more likely to utilize their coverage, their rates must be higher. In fact, according to the Society of Actuaries, their premiums should be between 15 and 30 percent higher than men. Failing this, adverse selection can occur.

Adverse selection is what happens when insureds have more knowledge about the likelihood of loss than an insurer does. Even the best case outcome of adverse selection – one group paying to subsidize the risk of another, more expensive group – is problematic. The worst case outcome is a “death spiral,” which becomes progressively more expensive until the market simply collapses.

The risk that unisex pricing poses to long-term care insurance is different than the doomsday scenarios espoused by the right concerning the Affordable Care Act. Unlike the health-care market under the ACA, which compels participation and in which the possibility of a death spiral is contingent upon the failure of the law’s penalties and subsidies, the long-term care market is structurally vulnerable to a death spiral as a result of its voluntary participation.

Consider the following scenario. Faced with prices that do not reflect the true cost of their risk, lower-risk individuals (men) choose not to purchase long-term-care insurance. They steadily abandon the market. When only high-risk candidates (women) enter or remain in the pool, policy premiums inevitably increase, since those providing subsidies are gone. Higher prices result in a cascading decrease in both demand and product availability, as companies withdraw from unprofitable lines of business.

Because there is such a strong actuarial case for treating men and women differently in long-term care, the consequence of not doing so is the potential removal of the product from the market. Therein lies the great calamity of Yamada’s bill.

Sham equality hurts those that it claims to help. Thus, in the context of long-term care rating, treating men and women differently is not pernicious – it is essential. Fortunately for California women, the bill died in the Assembly Insurance Committee, for lack of a second motion to proceed to a vote.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Don’t give up America’s Economic and Competitive Advantage

Somewhat Reasonable - September 09, 2014, 11:09 AM

“This is the most consequential, urgent, sweeping collection of challenges we face as a nation and a world.”

With 9-11 nearly upon us, ISIS is brazenly beheading American journalists—with a promise of more to come; Christian congregations have been bombed during worship, churches have been destroyed, monasteries attacked, entire cities purged, hundreds of thousands have fled, while others have been slaughtered; and cities, weapons, banks, and key infrastructures are being captured. Surely, with all of these horrors playing out before our eyes, the crisis in Syria and Iraq is the “most consequential, urgent, sweeping collection of challenges we face.” No, the quote above was made about climate change by Hillary Clinton—the heavy favorite for the Democratic 2016 presidential nomination—before a standing-room-only crowd at Senator Harry Reid’s seventhNational Clean Energy Summit (NCES 7.0) held in Las Vegas on Thursday, September 4.

We could almost forgive Secretary of State John Kerry for his similar statement made in Jakarta, Indonesia, on February 16, when he referred to climate change as: “perhaps the world’s most fearsome weapon of mass destruction.” ISIS hadn’t yet erupted onto the international stage. But now we know better. We know that the world isn’t less violent than it has ever been. We know that it isn’t more tolerant than it has ever been.

Apparently, Clinton hasn’t been following the news. Or, as Senator Rand Paul pointed out: she’s “battling climate change instead of terrorism.”

Clinton’s speech on Thursday was presented to a “friendly crowd,” who cheered her on. In his introduction, Reid declared that Clinton is: “able to explain things in a way we all understand” and said that she was: “the first to identify the fact that there is something called climate change.” Her spot on the program has been referenced as: “her first energy and climate speech of a publicity tour that many believe is the springboard to a presidential campaign.”

While no one in the Mandalay Bay ballroom questioned the validity of her statements—and the Q & A session led by White House Senior Advisor John Podesta resembled a lovefest—there was more than her misperception about “the challenges we face as a nation and a world” to question.

For example, when addressing “unpredictable” subsidies for green energy projects, she claimed that $500 billion is spent every year subsidizing fossil fuels. According to the International Energy Agency (IEA), in 2012, global fossil fuel subsidies did, in fact, total $544 billion, however, citing that figure in the same breath as U.S. tax incentives for renewable energy is deceptive at best.

The Institute for Energy Research (IER) did a study on global energy subsidies that revealed: “Fossil fuel consumption subsidies are most prevalent in the Middle East and in North Africa.” The IER report states: “On a per-person basis, fossil fuel consumption subsidies are highest for the United Arab Emirates at $4,172 per person, Kuwait at $3,729 per person and Saudi Arabia at $2,291 per person.” It concludes: “Many Americans are confused by the large amount of global fossil fuel consumption subsidies that the IEA calculates, not realizing that these subsidies have nothing to do with tax policy, research and development or loan guarantees, where most U.S. programs are directed.”

white paper from the Independent Petroleum Association of America offered the following insights culled from a Congressional Research Service Memo titled Energy Production by Source and Energy Tax Incentives. “While fossil fuels (including oil, natural gas, and coal) accounted for 78 percent of domestic energy production, they received just 13 percent of energy related ‘tax incentives’ in 2009. Meanwhile, renewables accounted for more than 77 percent of the roughly $20 billion in ‘tax incentives’ that went to energy, but generated less than 11 percent of domestic energy production. Renewables have received additional boosts as part of Federal spending packages enacted under the banner of economic recovery.”

Let’s look at those “incentives” for renewables and why they are “unpredictable.” Germany and Spain led the world in green energy subsidies but have since considerably dialed back on them.

In Germany, after more than a decade of green-energy subsidies, its electricity rates and carbon-dioxide emissions have gone up. According to a September 4 Reuter’s report, Germany’s reliance on coal has gone up each of the past four years. Germany is looking at levies for residential photo-voltaic system owners—something also being considered (and, in some cases, implemented) in the U.S.

After nearly 100 billion of U.S. taxpayer dollars have gone to green-energy projects, the stimulus-funded program has been plagued with failure, corruption, and illegal activity—though the Department of Energy recently announced a new round of loan guarantees for green-energy projects. Meanwhile—as has happened in Germany—utility bills have gone up and public support for subsidies has declined. After more than twenty years, the Production Tax Credit (PTC) for wind energy finally expired on December 31, 2013—though forces that benefit from it are still hoping to extend it retroactively. (Clinton did point out that wind energy is a very big part of farmers’ income in New York.) The PTC is “unpredictable” at best.

In her Q & A session, Clinton said: “One day last summer, Germany got 74 percent of its energy from renewables.” Like the comment about $500 billion in global subsidies for fossil fuels, her speech writers did their homework—but they plucked data without looking deeper and as a result made her look foolish. The 74 percent figure is fact. But it represents a fraction of only one day, not recent history, or even a pattern. One month later, Germany got 50 percent of its electricity demand from solar—but six months earlier, in the January cold, it got only 0.1 percent. In his postin the Energy Collective, Robert Wilson, a PhD Student in Mathematical Ecology at the University of Strathclyde, calls Germany’s situation: “more of a coal lock-in than a solar revolution,” as the need for electricity, especially in the cold, grey days of January, requires the steady supply of coal-fueled electricity.

One other item to question: Clinton clearly collaborates with her former boss on his Clean Power Plan, which has a growing coalition of opponents as diverse as the Exotic Wildlife Association, the Foundry Association of Michigan, California Cotton Growers Association, Texas Aggregates and Concrete Association, The Fertilizer Institute, Georgia Railroad Association, Nebraska Farm Bureau Federation, electric utilities and co-ops, and city and state Chambers of Commerce from coast-to-coast.

The Clean Power Plan is about reducing carbon-dioxide emission from existing power plants. In her speech, Clinton repeated a falsehood Obama likes to reference: reducing CO2 emissions will improve children’s’ respiratory health.

“Hillary apparently doesn’t know the difference between soot and CO2,” quipped Jane Orient, MD, and president of Doctors for Disaster Preparedness. She continued: “And the American Lung Association pretends it doesn’t. No one can claim that the tiny increase in CO2 from coal-fueled generating stations increases asthma—just being indoors with other breathing humans increases CO2 much more and doesn’t cause asthma.”

Orient went on to explain: “Some very bad studies of associations between high air pollution days and ‘premature’ deaths are used to extrapolate as with the liner no-threshold radiation hypothesis—lots of diesel exhaust may provoke an asthma attack, therefore a vanishingly small increase in soot affecting many people will cause some asthma. Some dust is soot, which is carbon, quod erat demonstratum.” She added: “Unemployment, poverty, high electricity bills don’t figure into the calculation.”

Dr. Charles Battig, a board certified anesthesiologist, told me: “asthma sufferers, just like individuals without any respiratory disease, have 4 to 5 percent CO2 in their lungs as a normal component of their exhaled air. The CO2 levels will vary during an asthma attack. The presence of CO2 in expired air is normal for all humans, and ambient CO2 is not a trigger for an asthmatic attack.  CO2 is not a pathological pollutant per se at levels 100 times that of ambient (inspired air); 400ppm ambient vs. 40,000 ppm in expired air.”

As Reid announced, Clinton may be able to “able to explain things in a way we all understand,” but she is creative with the data—using it to make the points she needed to curry favor with the NCES 7.0 audience.

In its review of her speech, the National Journal pointed out: “As expected, Clinton’s keynote address at the National Clean Energy Summit didn’t wade into much controversial territory.” She never touched on the Keystone pipeline that the State Department positively reviewed under her watch and which, in 2010, she stated that she was “inclined to approve.”

Clinton did, however, take a couple risks for which she deserves some credit. She strayed from the safe turf, when she admitted that Obama’s trajectory on climate change policy hit “a brick wall of opposition” at the 2009 United Nations climate talks in Copenhagen.

She also acknowledged: “Energy is a major part of our foreign policy.” As such, she supports development of American natural gas and oil, calling it an example “of American innovation changing the game.”

Addressing the benefits of producing and exporting natural gas and oil, she said: “Assuming that our production stays at the levels, or even as some predict, goes higher, I do think there’s a play there.” Noting it could help Europe and Asia, she added: “This is a great economic advantage, a competitive advantage, for us. …We don’t want to give that up.”

America does have an energy advantage—and Clinton is correct: “We don’t want to give that up.” Why then, does she (and President Obama) support policies that would take that away—or at least, not encourage our energy growth?

That fact that Clinton chose to start her publicity tour, the perceived springboard to her presidential campaign, with a speech on energy should signal to all of America how important the topic truly is. Energy makes America great!

Categories: On the Blog

Official policy on ninjas

Out of the Storm News - September 09, 2014, 8:42 AM

The R Street Institute, a free market think tank located in Washington, D.C., stands opposed to ninjas. Firmly. We believe that excessive fanboy/fangirl interest in ninjas is inconsistent with our free market ideology.

While we acknowledge that some ninjas may have a number of reasonably cool attributes—such as the ability to use shuriken and fukiya to carry out silent assassinations of those who opposed their daimyo—we do not encourage ninjas to work here. We will never hire an office ninja to carry out assassinations or offer employee training in ninjitsu. While we reimburse gym membership for employees, the reimbursement may not be used for any type of ninja training. Those who hold college degrees in ninja arts need not apply for any jobs that R Street offers.

In short, we discriminate against those who work as professional ninjas.

Our reasons for opposition to ninjas are many:

  1. Ninjas were not involved in the market economy. They swore oaths of fealty to their liege lords, usually daimyos. Since daimyos represented the state, they were basically just government bureaucrats. And we favor fewer bureaucrats, not more.
  2. Ninja’s covert ways of waging war were not consistent with our desire to get ourselves in the media. A ninja would not do well during a talk radio interview, for example.
  3. Pirates are much, much, much cooler than ninjas in all respects. We explain why here.

We have likewise refused to swear fealty to any daimyo and, indeed, maintain a firm policy against any participation in the four-tier system of Japanese feudalism.

Local governments should reform to encourage broadband investment

Out of the Storm News - September 09, 2014, 8:03 AM

WASHINGTON (Sept. 9, 2014) – Local governments should explore ways to cut taxes, fees and regulations to spur renewed investment in broadband infrastructure, according to a new paper released today by the R Street Institute.

The paper, “Alternatives to Government Broadband,” authored by R Street Associate Fellow Steven Titch, argues that government-run broadband projects have largely failed. By contrast, the recent example of cities cutting through red tape for the roll-out of Google Fiber serves as a model that should be expanded to all competitors in the broadband market.

While the U.S. broadband industry invested $1.2 trillion in capital expenditures from 1996 through 2012, investment plummeted during and following the dot-com crash of the early 2000s, falling from a peak of $118 billion in 2000 to just $57 billion in 2003. Annual nominal capital expenditures have been roughly flat since 2005, still coming nowhere near their turn-of-the-century peaks.

“As service providers make decisions about where and when to build or add broadband capacity, upfront and ongoing costs are a significant factor,” writes Titch. “Cities and towns that make adjustments and reforms to their legacy utility regulations and fees will reduce barriers to investment and signal they want the private sector to succeed.”

Titch lays out several ways municipalities can achieve this goal, including abolishing unnecessary taxes and fees to enter the market; to the extent feasible, making requirements uniform across all broadband technologies; and making it easier to use the existing infrastructure and build new infrastructure where needed.

Google Fiber has been able to strike attractive deals with cities it has chosen for its new 1 Gbps broadband service, and 34 new cities have applied to lure Google Fiber to their area in the next round of development. Municipalities would do well to extend similar breaks on franchise fees, right-of-way costs and other regulations to incumbent service providers and any other new competitors who can provide the same level of service.

“Perhaps the ideal solution is being missed because it is so obvious. Reduce or repeal taxes, eliminate outdated regulations and bureaucracy, and broadband investment will increase,” Titch wrote. “Competitors will be willing to enter a market against entrenched incumbents. Incumbents will raise investment.”

The full paper can be found at:

http://www.rstreet.org/wp-content/uploads/2014/09/RSTREET27.pdf

Alternatives to government broadband

Out of the Storm News - September 09, 2014, 8:00 AM

 

Universal access to high-speed broadband is a desirable social goal. There is no question that broadband brings incalculable utility and value to individuals, businesses and organizations. Because broadband expands the Internet as a whole, it also creates a “network effect,” in which each marginal addition to the network substantially multiplies the value of the network as a whole.

While there is little debate that widespread broadband access has social value, there has been considerable policy tension about how best to accomplish it. This tension is rooted in the massive telecommunications deregulations of the early-to-mid-1990s that were designed to introduce competition and steer the industry away from the monopoly-utility model that had been the rule since the 1920s. The concurrent expansion of the Internet and introduction of the World Wide Web upended traditional monopoly phone models, as well. The development of the early browsers, such as Mosaic, gave users a point-and-click interface to the Web and opened the Internet to images, video and other applications that called for more bandwidth than copper land lines could handle. Service providers had to alter their long-term network-evolution plans to accommodate developments beyond their control. They faced huge capital outlays to upgrade their networks and to meet the burgeoning demand for household broadband.

Up until deregulation, U.S. telephone companies guaranteed universal phone service in return for a regulated monopoly. The standard utility thinking applied: telephone service was a social good that could best be met with one network per franchised area. Universal service goals could be met through a variety of subsidy formulas: business subsidizes residential; long-distance service subsidizes local service; urban subsidizes rural and so forth.

The emerging trends of long-distance competition, followed in short order by cable entry into broadband and, finally, the transition of telephone users from wired to wireless and Voice over Internet Protocol (VoIP) all upended the monopoly-utility model. The upshot was that, by the mid- to late 1990s, it was clear that broadband infrastructure was going to be expanded by companies with private investment, taking risks in a competitive market.

As a result, concern arose that many high-cost areas would be left behind, as telecom companies pursued wealthier communities in more densely populated areas. One idea that took hold to alleviate this perceived problem was municipal broadband. Local governments would take responsibility for financing and building broadband networks, as well as providing service and support. As a model, supporters cited telephone and electric co-operatives that brought service to many rural towns in the 1930s and 1940s. Their belief was that broadband could be done just as easily.

However, some correctly feared that municipal broadband was too risky. However laudable the goal, a municipal system would require a small city to borrow millions of dollars against projected revenue streams 10 to 20 years out. There also would always be the lingering threat that a private-sector competitor would enter the market at some future date, placing the municipality in direct competition with a deep-pocketed commercial provider with a national footprint and the accompanying marketing and technological clout.

While some local governments explored municipal broadband, others looked to exploit market forces that were in the process of transforming telecom’s value proposition from a one-size-fits-all utility to a tool that businesses and individuals could shape in line with their own needs. Private enterprises operating in a competitive environment could respond to opportunities more quickly, meet customer needs more efficiently and, if need be, react more decisively to changing market conditions. Rather than invest taxpayer money in government-run broadband operations, the alternative approach to encourage broadband expansion would be to make local investment in infrastructure as attractive as possible.

Yet to do so meant revisiting some long-held tax and regulatory shibboleths of the monopoly era. These included special taxes and fees on service, franchise fees and onerous charges for rights-of-way and pole attachments. Under the monopoly model, these costs were passed along to captive customers, so local governments saw an easy way to raise revenue without resorting to higher sales or property taxes. But now that broadband service providers were in competition, these extra costs created barriers to entry in local communities.

The latest major entrant into the broadband market, Google Fiber, has upped the stakes of this contest. In response to Google’s promise to build 1 Gbps fiber-optic broadband networks in select cities, municipalities across the country have fallen over themselves to make their towns attractive. In some cases, the efforts have become theatrical, such as when Topeka, Kan., temporarily renamed itself Google and Greenville, S.C. arranged for 1,000 citizens to use glow sticks to spell out the name “Google” large enough to be visible from the air.

As discussions between Google and prospective fiber cities have gotten serious, the company has generally asked that various fees and requirements that are imposed on incumbent broadband providers be waived. The emergence of Google Fiber is helping local governments understand how their legacy of regulations inhibits broadband investment. Unfortunately, for the most part, cities have thus far mostly only been willing to make regulatory accommodations for this one competitor. But Google is not the only broadband player. If certain changes in local regulatory requirements are enough to spark investment from one major company, there’s every reason to believe the same approach would work with others.

This paper will review reasons government broadband largely have failed and why, despite continued cheerleading from some corners, its prospects are worse now than they have ever been. It will then look at some of the major legacy costs and regulations that inhibit the spread of broadband and how cities are beginning to confront them. Finally, it will look at the lessons that can be learned from Google Fiber’s entry into broadband service provision.

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