Out of the Storm News

Syndicate content
Free markets. Real solutions.
Updated: 1 week 6 days ago

How Google Fiber is spurring more internet competition

September 30, 2014, 9:38 AM

From AEI Ideas:

As R.J. Lehmann of the R Street Institute points out, “it’s useful to remember that Eugenio Barsanti and Felixce Matteucci invented the free-piston, four-cycle internal combustion engine in the 1850s, a good half-century before automobiles started rolling off Michigan assembly lines.” Lehmann also notes the good news buried in the story:

Transformation, tests and t-shirts

September 30, 2014, 8:00 AM

Intellectual property laws sometimes pit different camps of creators against each other. On the one hand, makers want the freedom to pull inspiration from works that have already been made. On the other, they want to be paid for their own work. Last week, the Seventh U.S. Circuit Court of Appeals decided a case in Madison, Wisconsin that pitted a photographer against a t-shirt designer, with dashes of parody, political speech and perceived defamation thrown in.

In 2012, the mayor of Madison, Paul Soglin, tried to stop the annual Mifflin Street Block Party. The event, held on the first Saturday each May, was founded in 1969 as a protest of the Vietnam War. After the war ended, it evolved into a bacchanalia for University of Wisconsin students and their road-tripping friends. By 2011, the event was out of control, with allegations of fights, sexual assaults and stabbings.

Despite the problems, the students loved the Mifflin Street festivities, and they were not happy about the mayor’s threats. Before the 2012 party, the staff at Sconnie Nation, a local t-shirt store (WiSCONsin, get it?), pulled a photo of the mayor off of the city’s website, adapted it for a silk screen and produced t-shirts that said “Sorry for Partying” — in part, a reference to the fact that Soglin himself took part in the very first Mifflin Street Block Party. They sold a total of 54 shirts, making a small profit.

Michael Kienitz, the photographer who took the picture of Soglin, cried foul. He may have filed suit at the instigation of Mayor Soglin, although that’s neither here nor there from a legal perspective. Kienitz said the photo was copyrighted and that the city had a license to use it for non-commercial purposes only. Therefore, Sconnie Nation had appropriated his image, and Kienitz wanted compensation.

The federal court for the Western District of Wisconsin ruled for the defendants, saying that Sconnie Nation’s design was a transformative use of the photo. It cited a decision by the Second District Court of Appeals, Cariou v. Prince, about the right to create artwork based on copyrighted photographs. In that case, the court ruled that Prince’s artwork transformed the works enough to be considered fair use.

Kienitz appealed, and the case went to the Seventh Circuit. The appeals court not only upheld the decision, but it also criticized the Cariou v. Prince rationale. They said that it is difficult to determine whether something is transformative, and that a better test is Section 107 of the U.S. Copyright Act, which lists four factors that can be used to determine if use is fair:

  • The purpose and character of the use, including whether it is commercial in nature
  • The nature of the copyrighted work
  • The amount of the portion used in relation to the copyrighted work as a whole
  • The effect of the use upon the potential market for, or value of, the copyrighted work

Using these factors, the court noted Sconnie Nation’s use was commercial and that the photograph was copyrighted properly. However, the design and silk-screening process reduced the photo (see left) to the outlines of Soglin’s face, a small part of the original. Furthermore, the t-shirts didn’t affect the market for Kienitz’s original photo.

Legal scholars have been abuzz about this case because it criticized another court’s decision. It also upheld the use of the four factors in copyright law, giving makers good guidance on what to do when faced with similar situations.

In short, blur the heck out of the image so that the original work is not easily recognizable by an aggrieved subject. If your case is heard by the second circuit or the seventh, you’ll be safe.

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

Under carbon rule, the EPA will be either Alabama’s overlord or its puppet master

September 29, 2014, 3:13 PM

In June of 2014, the EPA proposed a draft rule to regulate carbon dioxide. The rule made headlines for weeks and then largely dropped from public conversation. While the conversation may have died, the ramifications of the rule will be felt by Alabama’s political class much sooner than many expect.

The EPA has proposed that Alabama reduce its carbon emissions related to electricity generation from 1,444 pounds per megawatt hour to 1,059 pounds by 2030, a reduction of slightly less than 30 percent.

The rule is based on EPA’s view of optimal future carbon reductions as embodied by the Best System of Emission Reduction (BSER). The BSER assumes four “building blocks” to reduce carbon. The first is heat rate improvements at existing generating units. The second block expects increased generation from natural gas combined-cycle plants. The third anticipates more low-or-zero carbon-emission generating units, and the fourth block predicts demand-side energy-efficiency improvements.

Most importantly, the EPA plans to issue a final rule by June 2015. From there, states must submit their compliance plans to their respective regional EPA office no later than June 30, 2016.

While the EPA considers its model to be an example of “cooperative federalism,” many state politicians would likely consider it an example of “federal puppetry.” Like other pollutants regulated under the Clean Air Act, Alabama is required to design a state implementation plan (SIP) for the new rule. If that plan does not meet EPA approval, the EPA may require amendments to the SIP. If those amendments do not occur within two years, the EPA can then craft a federal implementation plan (FIP) that cuts the state out of the regulatory framework entirely.

Needless to say, most of Alabama’s state and federal politicians consider the EPA’s carbon rule to be the height of federal overreach and a significant economic burden imposed on the state for a relatively negligible impact on global carbon emissions. Most opponents of the carbon rule continue to hope that the courts invalidate the rule or that political dynamics change enough to undo it.

While those options remain possibilities, time could become a critical issue. Without any immediate changes, Alabama could be facing a final EPA carbon rule around nine months from now.

If legal and political efforts to derail the EPA’s carbon rule fail, politicians who have fought President Obama’s carbon regulation plan tooth and nail will be required to create their own means of reducing carbon emissions under the EPA’s supervision, or stand idly by and watch the EPA completely craft the regulatory environment for energy generation in the state.

Neither option will be politically palatable in a conservative state like Alabama, but the situation could serve as a sobering reality concerning the growing power of the EPA and the states that have become little more than its puppets.

R Street is hiring a new outreach manager

September 29, 2014, 1:21 PM

The R Street Institute, a free-market think tank based in Washington, D.C., is looking for a dynamic, versatile, bright and well-connected person to serve as our outreach manager.  Founded in 2012, R Street operates under the motto “Free markets. Real solutions.” We’ve been called “pragmatic libertarians” and accept that label. Our work covers a variety of “high-complexity/low-salience” issues that we approach from a principled, free-market perspective.

Candidates should have at least three years of full-time experience working on public policy issues in Washington, D.C. In particular, experience at another think tank or on Capitol Hill is highly desirable. Some experience doing coalition work is also necessary. The ability to write well and quickly is also highly desirable and a record of published work is an enormous plus.

Candidates’ personality, cultural fit and work ethic are at least as important as their specific backgrounds. We’re all self-motivated, high-energy types who strive to get things done quickly without micromanagement. If you haven’t at least sometimes felt that you were more productive than almost everyone else in your workplace, you probably won’t fit in with the rest of us.

Because we work on a wide variety of issues, deep expertise in our issue set is not expected and, to some extent, we will build an outreach manager’s particular issue set around his or her own background. That said, we expect the person we hire will work on issues like intellectual property reform, agricultural policy, taxes, technology and the environment, so experience on those particular issues and others in R Street’s portfolio is highly desirable.

This position will report to R Street’s outreach director and, indirectly, to our executive director.

Pay is commensurate with experience. R Street’s salaries are highly competitive and people leaving other non-profits to work for R Street have always received significant raises. This is a full-time, W-2 job with health insurance fully paid by the employer and a suite of excellent benefits, including an employer-funded HRA, a 401(k), gym membership reimbursement and a very generous vacation policy.

R Street is a non-partisan organization, but is often identified with the political right. That said, we’re a lot more interested in solving problems than winning fights. As such, a willingness to work with people that you may agree with on few issues is a requirement. Likewise, we want and need someone who can disagree without being disagreeable. Someone who is actively opposed to our work shouldn’t apply, but there is certainly no party affiliation litmus test or need to agree with every word that everyone at R Street has ever written.

Needless to say, we don’t discriminate on the basis of sex, race, creed, color, national origin, sexual orientation, gender identity, veteran status, taste in music or anything else that is illegal, immoral or stupid to use as a basis for hiring.

To apply, put your cover letter into the body of an e-mail, attach a resume, and send it to employment@rstreet.org. Include the word “Outreach” in the subject line and include one writing sample (a published one is greatly preferred and web links are fine). We intend to accept applications until Oct. 24 and plan to do interviews in Washington, D.C. during the week of Oct. 27, probably on Oct. 31. If you think you’re very well qualified and we haven’t gotten back to you within a week of you submitting your resume, please drop us a line and we’ll be sure to take another look.

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

RESTORE Act committee should get back to work

September 29, 2014, 11:11 AM

The committee established by Monroe County to recommend how to spend nearly $1.2 million in BP Oil Spill money has an unprecedented and unique opportunity. (RE: “Back to work for RESTORE Act committee,” 9/16/14)

As your article states, the federal RESTORE Act authorizes counties affected by the 2010 oil spill including Monroe to receive a portion of the multimillion dollar fines paid by BP to be used for environmental restoration, capital improvements and other economic stimulus projects.

Monroe, however, is a special case. There is arguably no other Gulf Coast county whose natural environment is so precious and economically vital as Monroe’s. Additionally, there is likely no other county at greater risk of hurricanes, storm surge and other related disasters.

Therefore, the committee should examine ways to maximize RESTORE funds to mitigate against these risks and to make Monroe County more resilient while helping preserve its natural environment. Coastal wetlands restoration projects, for example, promote wildlife habitats and simultaneously provide natural buffers to wind and surge. Modernizing water and sewage systems reduce toxic leaks and runoff, and should make it easier to eventually restore services after a hurricane.

These are some examples, but the committee must remember that these are not recurring funds — eventually, the “free money” will run out. As such, the temptation to use these funds to create new programs or otherwise grow government should be avoided so taxpayers are not on the hook. The focus should remain on tangible investments that will help the environment, reduce risk and, by extension, help secure Monroe County’s economy.

Pornographers choke in ‘Deep Throat’ case

September 26, 2014, 12:34 PM

While Hollywood is often known as one of the groups most fiercely committed to protecting copyrighted works, a recent case shows that even in Tinseltown, the veto power of intellectual property owners is not absolute.

And what a case it is. The Guardian reports:

Producers of the most successful porn movie of all time, Deep Throat, have lost a legal battle against the makers of a biopic about its tragic lead, Linda Lovelace. A New York judge ruled on Monday that Lovelace, the 2013 biographical drama starring Amanda Seyfried as the title character, does not infringe copyright of the infamous 1972 porn film that inspired it.

Deep Throat’s producers had argued that three key scenes, two involving oral sex and one in which Lovelace can be seen driving in her Cadillac, “reproduced dialogue word for word, positioned the actors identically or nearly identically, recreated camera angles and lighting, and reproduced costumes and settings”.

After viewing both movies Judge Thomas Griesa demurred. “Deep Throat is a pornographic film containing 17 scenes of explicit sexual content,” he wrote in his ruling, which was covered by The Hollywood Reporter. “Conversely, Lovelace is a critical biographical film that documents the tragic story of Linda Lovelace and provides a behind-the-scenes perspective on the filming of Deep Throat. It does not contain any nudity.”

The decision will presumably cause some relief in Hollywood, which routinely recreates famous scenes for biographical films. Had the ruling gone differently, movies such as My Week With Marilyn, the 2011 film that depicted the shooting of scenes from the 1957 rom-com The Prince and the Showgirl, might conceivably have found themselves mired in legal difficulties.

Yes, that’s right, the pornographers behind Deep Throat sued not because another film used their footage, but because the filmmakers behind Lovelace mimicked the shots they made in order to lend authenticity to the film’s depiction of its subject’s career. Yes, they were the same shots, but on a different camera, with a different cast and crew, on a different set, as part of a different film.

It’s not just the lurid nature of this case that should tempt the reader to laugh. The entire theory underlying it is laughable. Imagine, for instance, that the estate of Richard Wagner sued every artist who set a composition in the key of E flat major, because the overture to Das Rhinegold is set in E flat major, or that the estate of Charles Dickens sued for every time the phrase “dead as a doornail” was used, and you have some idea of the degree of over-generalization involved. Granted, both the works of Wagner and the works of Dickens are in the public domain, but one could just as easily imagine similarly ridiculous ideas coming from the estates of authors whose work is still under copyright.

But there is a more fundamentally entertaining element of this case. That is, that is set up a fight between different elements of the film industry over exactly the sort of copyright legalism the industry frequently relies on in order to protect its almost deliberately obsolete business model. Unfortunately, what is not so entertaining is that, in cases where a studio’s financial and legal might can’t be brought to bear, such a copyright claim could easily have strangled legitimate artistic expression.

Suppose, for instance, that an independent filmmaker set out to create the exact scenes depicted in Lovelace with exactly the same degree of precision, and then released those scenes on YouTube. YouTube currently employs what is arguably an exceedingly overzealous copyright protection regime, which in some cases even blocks the accounts of independent critics and Let’s Play producers, because the background music in the very films and/or video games they are producing was licensed by the film/game producers but not by the users themselves. Never mind that this sort of usage clearly falls under Fair Use. YouTube blocks it anyway. So if that can be covered, why wouldn’t YouTube’s content bots flag the shots used in Lovelace, if they really are so exact as to be nigh indistinguishable from the original?

Answer: They would, and there would probably be nothing the user in question could do about it. Granted, YouTube is a private company, not the United States government, but the reason its copyright policy has to be so stringent is intimately tied with current copyright policy. Consider that 100 hours of video is uploaded to YouTube every minute. If even one of those hours contains a copyright violation, then in a single day, YouTube could be liable for as much as $200 million in damages. In fact, under current copyright law, a single year of copyright lawsuits could potentially cost a company like YouTube close to $80 billion, even if only 1 percent of their content was infringing, provided the studios asked for maximum damages. Even with minimum damages, in fact, the price tag would be close to $400 million. If you were potentially on the hook for at least one third the GDP of Zimbabwe every year, you’d employ a stringent copyright protection system as well.

In other words, unless you’re a major motion picture studio, you probably can’t make Lovelace the way it was filmed and expect to get away with the same leeway, even though if you did, you’d win in court. The fact that companies like YouTube are forced to resort to extra-judicial means of copyright enforcement that frequently fly in the face of Fair Use law, or that an independent filmmaker can have their livelihood wrecked by a contentless claim, ought to make all of us choke, Deep Throat or no.

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

Despite Senate inaction, progress on patent trolls

September 26, 2014, 12:15 PM

In May, Senate Democrats — led by Judiciary Committee Chairman Patrick Leahy, D-Vt. – tabled the patent reform bill on which his panel had worked for months. The bill was designed to curtail “patent trolls,” non-practicing entities whose business model is founded on extracting settlements in legal suits brought against alleged infringers of low-quality patents.

Patent trolls pose a threat to legitimate inventors and startups, stifling innovation with threats of litigation. However, in the months since Leahy sidelined the reform effort, major developments in both the courts and the executive branch have made the patent troll business model much more difficult.

In June, the U.S. Supreme Court upheld and expanded the precedent that abstract ideas could not be patented in the case of Alice Corp vs CLS Bank International. The ruling invalidated a patent held by Alice Corp. on how computers can settle financial transactions through a third party. The concept is called “escrow” and has been around since the beginning of finance, but Alice’s patent is one of thousands, possibly tens of thousands of patents that have been granted for taking such abstract concepts and adding the phrase “on a computer.”

Since Alice, federal courts have wiped out at least 11 software patents for functions that have been commonly performed by humans, in same cases since ancient times, when they are performed instead by a computer program. Some of the software patents that have been wiped out include patents for upselling customers , using surety bonds to guarantee transactions and even managing a bingo game. The courts increasingly are finding these “inventions” are not novel.

The courts are not the only place where it’s becoming harder to make a living as a patent troll. On Monday, the U.S. Patent and Trademark Office killed a company’s patent on screen displays that rotate when a device rotates, as it does on most smartphones. Cloud-computing pioneer Rackspace was threatened by a patent troll called Rotatable Technologies and instead of settling, Rackspace decided to take the case to the PTO. Rackspace successfully challenged the patent in a new inter partes review appeals process and it resulted in Rotatable’s patent being invalidated.

The expanded inter partes review system was created by the America Invents Act of 2012 and was designed to allow companies to challenge patents without the expense of a drawn-out court battle through the administrative law system. Instead of spending years fighting patent trolls, some low-quality patents now can be addressed within 12 to 18 months by the Patent Trial and Appeal Board. One of the first early tests of the board resulted in the crushing of a patent troll by Google and Apple over a lawsuit filed over the use of Google Maps “Street View” in the iPhone and iPad. The victories of Apple, Google and Rackspace are testament to the Patent Trial and Appeal Board’s ability to weed out patents that shouldn’t have been issued in the first place.

The combination of the Supreme Court’s decision in Alice and the expansion of inter partes review and creation of the Patent Trial and Appeal Board is threatening the patent troll model of doing business. This is a victory both for those who support innovation in the technology industry and for those who support an updated intellectual property system to protect legitimate creators and innovators.

While this is no substitute for legislative action, the developments in the courts and at the Patent Board are very good news for those of us who see patent trolls as innovation-killing parasites.

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

A modest proposal to the e-cigarette community

September 26, 2014, 10:12 AM



At the Sept. 24, 2014 IQPC ECig USA Industry Conference in Las Vegas, I opted to abandon my previously anticipated presentation in favor of the following, based on presentations and dialogue earlier that day. After a personal introduction and disclaimer, I presented the following:

A Modest Proposal to the E-Cigarette Community

  1. For reasons having to do with the FDA process and major differences between stakeholders as to how e-cigarettes (EC) should be regulated by the FDA, I estimate that it will be at least four years, and possibly as long as ten years before FDA will be in a position to implement regulations having to do with the manufacture and marketing of e-cigarettes. This being the case, it would be a losing strategy for the EC community to simply wait to see what FDA will do. Instead, I recommend that the EC community conduct a major research, policy development and advocacy initiative for the purpose of proposing to FDA what the industry believes would be appropriate regulations and to secure the support of elected officials and others for the proposed regulations. This would best be done by working through membership organizations representing manufacturers, vendors and vapors (SAFTA, TMA, CASAA and possibly others) and others in the EC community who can openly discuss the benefits of EC use without incurring the wrath of FDA for claiming tobacco harm reduction (THR) and cessation benefits.
  1. The major problem with the FDA, NIH and CDC approach and research agenda to date is that it has been entirely negative with regard to THR and e-cigarettes. They have considered only potential harms, but not the well-documented potential benefits of incorporating a THR component to current tobacco control programming. This would include e-cigarettes as a prominent, but not the only, harm-reduction modality. Once that is done, the federal agencies can then approach EC from the perspective of how best to maximize public health benefits while minimizing harms. Such benefits have not been considered to date by the federal advisors and decision makers, since there is no precedent for considering possible benefits of any non-pharmaceutical nicotine-delivery product and since such consideration would appear to conflict with their long-term goal of a “tobacco-free-society.” Ironically, available evidence strongly suggests that the most effective way to move us in the direction of an eventually tobacco-free society would be to encourage current smokers to switch to products like EC that are less addictive and easier to quit..
  1. Not only are ECs less harmful than cigarettes, they are also less addictive and easier to quit. Both the harm and addictiveness of a tobacco-related product are primarily based on whether they are absorbed through the mouth, trachea or pulmonary alveoli (the small air sacs in the lung where O2 and CO2 are exchanged). Risk and addictiveness are maximal for tobacco cigarettes, where toxic particulate material with nicotine attached are lodged in the alveoli, and remain there until fully absorbed by the body. ECs are intermediate in risk and addictiveness, since there is no solid particulate matter and the vapor is absorbed in the trachea and major bronchi. Here the tissue is less sensitive, and the trachea and bronchi are continually self-cleaning, so the residue of the vapor slowly but consistently are cleaned out from these sites. Smokeless whole-tobacco products are primarily absorbed through the oral mucosa, a tougher tissue that is continually bathed in saliva. (Please note that this explanation is both oversimplified and extrapolated from available literature and knowledge of oral and pulmonary physiology. Differences in addictiveness are well documented)
  1. If THR is to have maximal public health benefits, with minimal adverse consequences, it needs to be done on a partnership basis with manufacturers, vendors, vapors and other EC advocates working hand in hand with public-health authorities. Given the entirely negative attitude toward EC by current public health authorities, development of such partnership will depend on the generation of convincing research, development of policy recommendations, plus advocacy on behalf of ECs, primarily with and through influential academics and federal and state legislators.
  1. Finally, the industry and other EC advocates should play the lead role in proposing standards for EC manufacturing and marketing. In this regard, several items stand out as deserving special attention. The first is the maximal allowable dose per ml of nicotine in EC fluid. If the smokers we would most like to reach are the heaviest smokers, then high doses of nicotine in the EC fluid may be needed to enable them to switch to ECs. Second is the issue of flavoring. Here we must consider both the attractiveness of the fruit and candy flavors to adults, especially those 19-35 years of age, as compared to their attractiveness to minors. Such flavoring appears to be critical to attracting and retaining young adult smokers away from tobacco cigarettes. The third item in this regard is marketing – and consideration of what marketing guidelines would best attract adult smokers, and whether there are specific marketing practices that have been proven to attract teens and other non-smokers to continuing EC use. It would appear that it is marketing, not the chemical makeup of the EC fluid, which determines attraction to non-smokers relative to experimentation and/or continuing EC use.

In conclusion, I urge a major initiative to take advantage of the four to 10 years before FDA implements EC regulations. This initiative should take the form of manufacturers, vendors, vapors and other EC advocates working through their membership national organizations and consultants to do the research, policy development and advocacy needed to convince federal authorities to both implement optimal regulations and add a THR component to current tobacco-control programming. The purpose of this enterprise would be to achieve public health benefits not otherwise achievable, and do so while minimizing potential harms.

For additional detail and bibliographic references, please see: http://www.mdpi.com/1660-4601/11/6/6459andhttp://www.rstreet.org/wp-content/uploads/2014/07/20140630FDLI-EcigForum.pdf

Please note that these remarks represent the personal/professional opinion of Dr. Nitzkin, and do not represent established policy or perceptions of any organization that I am or have been affiliated with.   Joel L. Nitzkin, MD; jln@jln-md.com

Creating a national dialogue about sustainable greenhouse gas reduction

September 26, 2014, 9:39 AM

From Policy Interns:

As Doug Holtz-Eakin, the President of American Action Forum, stated earlier this month during a panel discussion co-hosted by R Street and the American Action Forum, the actions taken recently by the EPA are “penalizing the states that have been the most aggressive in their efforts.”

Conservatives cultivate taste for a green tea party

September 25, 2014, 4:35 PM

From Texas Observer:

Among the panelists: former Texas Republican state Sen. Kip Averitt, now head of the Texas Clean Energy Coalition; Debbie Dooley, founder of the Green Tea Coalition and national coordinator of the Tea Party Patriots; former six-term Congressman Bob Inglis (R-South Carolina); and Eli Lehrer of conservative think tank R Street Institute.

Dealing with Uber, Birmingham City Council must understand that common-sense regulation is not the same as deregulation

September 25, 2014, 11:47 AM

A few weeks ago, I wrote about Alabama’s failure to create opportunity for Uber, a popular ride-sharing service, to operate. I was particularly hard on the Birmingham City Council for their response to the issue.

Birmingham City Councilor Kim Rafferty responded to the article by sending me an email defending the council’s actions. One strong sentiment she shared was that Uber demonstrated “disrespect for the very governmental regulatory measures we have in place to protect public safety and ensure fair play by business in general, as it pertains to licensure, conduct, permitting and transparency.”

The business model of ride-sharing services necessarily pushes government regulators to reevaluate their rules. If there is a new type of entity in any economic sector, the rules probably need an update. That much should not come as a surprise to Rafferty or any other government official dealing with a novel issue.

Rafferty also stated that Uber “wants to be fully independent of regulatory measures yet they have not shown where they are adequately self-regulating successfully.”

If Uber and other ride-sharing services were such strident opponents of all regulation, then how are they operating successfully in cities like San Francisco, Chicago and Seattle? Nobody would consider any of those cities as “deregulated” environments. So what makes Birmingham different?

The Birmingham City Council seems to be missing the point that crafting updated regulations to accommodate a new business model is not the same as deregulation. The city should be bending over backwards to welcome ride-sharing and reevaluate burdensome regulations that have little impact on public safety.

For example, what does having an ordinance requiring a $45 minimum for an “executive sedan” have to do with keeping consumers safe? Why do ride-sharing services that respond to actual immediate demand need to wait for a city council resolution of “public necessity and convenience?” Is there a particular reason why ride-sharing services, which let drivers use their own cars, need to have a “terminal” for their operations?

Most people can see that there is a big difference between pushing for no regulation and expecting that regulations make sense. Rather than trying to balance public safety with accommodating a new business model, the Birmingham City Council has attempted to wedge the novel ride-sharing concept into the same outdated transportation framework. In the process, they have managed to treat an emerging class of transportation businesses as little more than outlaws in a city that needs better commuting options and an economic boost.

The Swedish snus experience isn’t Finnished

September 25, 2014, 10:33 AM

Despite the wealth of evidence demonstrating that snus has helped thousands of Swedish men and women avoid the ravages of smoking, the European Union continues to enforce an irrational ban on snus beyond Sweden’s borders.

I have documented that smoking deaths in Sweden are significantly lower than in all other EU countries. A new study clearly demonstrates the differences in smoking rates when snus is available and when it is banned.

Snus has been popular in Sweden for 200 years, but it was also used in neighboring Norway and Finland. In 1995, Sweden and Finland joined the EU. Sweden applied for and received a waiver on the EU’s existing snus prohibition, thereby allowing Swedes to continue producing and selling within the country. In contrast, Finland accepted the ban, denying its snus consumers a legal source. Norway never joined the EU, so snus remained available.

Jennifer Maki, an economist with the Center for Healthcare Economics and Policy, compared the smoking rates in these three countries before and after 1995. Maki’s figure above shows the rates among men in Sweden and Finland. Clearly, a decline in smoking levels off in Finland after 1995, while the decline in Sweden continues, despite the fact that it was far lower over the entire period. As Maki writes:

In the post-ban period, smoking increased in Finland by 3.47 percentage points relative to Sweden…this estimate can be interpreted as an increase in the smoking rate [in Finland], relative to what it would have been, in the absence of the ban.

The comparison of Finland and Norway, seen in Maki’s chart belo, also shows the effects of snus use on smoking. According to Maki:

The smoking rate [decline] in Norway is similar to that in Finland prior to 1995, after which point the rates diverge. Using Norway in place of Sweden as a control produces a result similar to, but not as drastic as, [the Swedish comparison].

Maki’s conclusions illustrate the impact of snus in Sweden, the impact of the snus ban in Finland and the utter failure of EU policy:

The smoking rate among Swedish males is remarkable [sic] low, and continues to decline; given Sweden’s low smoking rate pre-1995, the ability to achieve further reductions post-1995 is notable…The findings presented in this paper provide support for the viability of a harm reduction approach to smoking cessation and suggest that the Swedish Experience could be replicated elsewhere… It may have been underway in Finland prior to the implementation of the ban. These results are not only meaningful within Finland, but may be applicable to the entire EU.

Note: I am especially proud of Jennifer’s contribution. She contacted me when she was a doctoral student at North Carolina State University; I provided materials on tobacco harm reduction, reviewed and critiqued early versions of her thesis and helped her search for Swedish and Finnish datasets. Her mentor, Barry Goodwin, sponsored my guest lecture at N.C. State, and I hosted a visit by Jennifer to the University of Louisville so that she could present her work.

The unfortunate rise of data protectionism

September 25, 2014, 8:00 AM

The age of Internet exceptionalism is at risk of coming to a close. Thus far, the Internet has served as a platform for data transfer and information sharing that easily transcends national borders. But increasingly, complex pockets of data protectionism, localization laws and “privacy” regulations across the globe threaten to complicate, if not eliminate, this data-transfer process.

A host of global developments, following on the heals of the 2014 Internet Governance Forum, reveal tensions between the contending forces that threaten cyberspace. The European Commission’s (EC) Article 29 Data Working Group recently announced a coordinated approach to enforce the de-listing of links on search engines under the “right to be forgotten” portion of the Data Protection Regulation. Despite the EC’s recent release of a myth-busting fact sheet to counter misrepresentations of the ruling in the media, the working group continues to support the troubling suggestion that individuals or groups will not be informed when their content has been de-linked, making the appeals process a far less powerful mechanism.

“Right to be forgotten” clarifications were released as one of a flurry of statements about the future of Europe’s stricter data-protection and privacy standards. In the second of a new series of “Digital Minds for New Europe” articles, Google’s Eric Schmidt emphasized the benefits of forming a digital single market in Europe that reduces regulatory red tape. In the article, he quotes new European Commission President Jean-Claude Juncker, who stated that in order to form a digital single market:

We have to end the regulatory silos in telecoms and copyright regulation, in data protection and in the application of European competition rules.

There is a growing consensus among European heads of state that data-protection reform is a priority, with the goal to develop a data protection framework by 2015. In a recent statement, EU Commissioner for Justice, Fundamental Rights and Citizenship Martine Reicherts said strict European data-protection standards are not “fit for the Internet age” and are stifling economic growth, though maintaining strict standards for personal data protection remains a priority.

While the EC recently issued an updated version of the de minimis safe-harbor notice that includes a clarification and compilation of exceptions to the safe harbor and thus continues to facilitate US-European transnational data transfer and trade, influential European governing bodies continue to lobby for increased Internet “sovereignty,” especially in light of Edward Snowden’s surveillance revelations. The French Senate is advocating a more “stringent and realistic data-protection system” and threatening to suspend safe harbor renegotiations if European demands are not met. The German government cancelled a contract with Verizon following disclosures that the United States was conducing mass surveillance in Germany.

Elsewhere in the world, governments are flagrantly splintering and taking control over regionalized pieces of the Web. Russia’s well-documented crackdown continues as the government gets ready for “possible cut-offs” from the Internet, according to Kremlin Press Secretary Dmitry Peskov’s statements to Bloomberg news. Despite assurances that Russian President Vladimir Putin did not, at his Sept. 22 meeting with the Security Council, discuss the possibility of disconnecting Russia from the “global Internet” in times of crisis, the Russian government has made plans to take control over Russia’s top-level Domain Name System (DNS) and discussed the possibility of instituting an Internet “kill-switch” by shutting off the country’s limited international exchange points. Peskov said Russia is planning to ensure that the Russian Internet could function as a sovereign network in case the West removes Russia from the global Internet.

Meanwhile, China is heightening Internet censorship and surveillance, focusing especially on multinational companies. Virtually all Google websites have been blocked since June. The Turkish government is deepening existing Internet censorship, violating freedom of speech and increasing surveillance over its citizens.

Global movements in Internet governance will have major repercussions for the United States. Karen Kornbluh, previously U.S. ambassador to the OECD, explains in an article for Democracy (that I highly recommend):

Preserving the ability of information to flow through the pipes of the Internet should be a major U.S. foreign and international economic policy priority. According to the National Foreign Trade Council, a business organization, ‘goods, services, and content flowing through the Internet’ were responsible for 15 percent of U.S. GDP growth from 2007 to 2012. Products and services that rely on cross-border data flows were expected to add an estimated $1 trillion in value to the U.S. economy annually over the next ten years.

Kornbluh warns that the push to place Internet regulations entirely under the purview of the United Nations would clog the network with conflicting regulations and fundamentally alter how it functions.

All of which goes to show that, in the end, we are a few government decisions, be they misguided or purposefully isolating, away from a “splinternet.” It is no wonder that Milton Mueller, a professor at the Syracuse University School of Information Studies and one of founders of the Internet Governance Project, envisioned in his closing speech of IGF an “Internet nation,” autonomous and immune to harmful government interference.

Here's diagram just discussed by @Joe_Nye charting the many bodies attempting to manage the cyber realm. #techborders pic.twitter.com/EPRA76cfGw

— Kevin Bankston (@KevinBankston) September 19, 2014

The Internet has, up to this point, been revolutionary in its function and governance. It is an incredibly effective platform for information exchange. The hope is that Internet governance will maintain this functionality through equally revolutionary processes. By cutting horizontally across national borders and vertically across traditional power structures, IGF is supposed to be the realization of a revolutionary form of governance in which ordinary members of civil society make decisions about how to run the Internet, alongside government rather than being represented by government. And this governance structure is supposed to keep the Internet a borderless, open platform. But unless we can cut through unnecessary regulations and restrictive laws, all these good intentions and revolutionary dreams will be for naught.
Further readings on Internet localization:

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

Tax-free internet purchases could be coming to an end in Florida

September 24, 2014, 1:49 PM

From ABC Action News:

“A majority of those surveyed here in Florida are against an internet sales tax,” said Christian Camara of the Washington D.C. based think tank R Street Institute. The group commissioned the poll that he claims highlights the unfairness of the Marketplace Fairness Act.

“When you’re in New York City and you go to a souvenir shop, the owner doesn’t ask ‘where are you from? Oh you’re from Florida. Let me charge you the Florida State sales tax.’ No, you pay the New York State sales tax,” Camara said.

D.C. cabs companies blame ride-sharing for loss of revenue

September 24, 2014, 10:22 AM

From HotAir:

Eli Lehrer and Andrew Moylan have more in a policy paper for National Affairs. It’s called “Embracing the Peer Production Economy” and calls such shifts a “godsend to the political right” because “[r]epealing archaic laws and regulatory standards, reducing professional-licensing requirements, relying more heavily on price signals than command-and-control regulation, and restricting costly tort claims” are among the goals of the center-right. But the paper also sheds some light on the limits of the peer-to-peer economy while offering policy ideas for optimizing it:

Presentation to Ecig USA Industry Conference

September 24, 2014, 10:04 AM


The attached presentation was delivered by R Street Senior Fellow Joel Nitzkin at the IQPC Ecig USA Industry Conference, held in Las Vegas, Nev. from Sept. 23-25, 2014.

State-run lottery grows government at the expense of the poor and uneducated

September 24, 2014, 8:30 AM

With budgetary challenges again facing the State of Alabama, politicians are mulling the idea of a state-run lottery to provide an infusion of cash. Democratic gubernatorial candidate Parker Griffith has actively campaigned for a lottery to fund education. Gov. Robert Bentley has responded by discussing how the proceeds of a lottery should be spent in the event that the Alabama Legislature and the people of Alabama decide to permit a state lottery.

The appeal of a lottery is clear. Consenting adults play a game of chance, and a portion of the proceeds fund government programs, education or otherwise.

Unfortunately, the reality of a state-run lottery is far less convenient.

The first problem is that state-run lotteries only return 20 percent to 40 percent of their sales for state programs. Consider the Missouri Lottery. In a state similar to Alabama in terms of population, the lottery generated slightly more than $1.1 billion in sales for 2013. Of that amount, about 25 percent actually went to funding public education. The remainder went to prizes, commissions, advertising and administration.

It might feel good to say that the lottery is helping fund government priorities without a tax increase, but it functions like a tax in that it takes money out of a state’s economy and the government redistributes the proceeds. Unlike a tax, a lottery consolidates the revenue among relatively few individuals rather than spending it on public priorities. In 2013, Missouri saw more than $750 million pulled out of its economy and reallocated to a small subset of prizewinners.

The next issue is that people with less money and lower educational attainment are the ones spending the greatest portion of their income on lottery tickets.

A 1999 report to the National Gambling Impact Study Commission conducted by professors at Duke University found that “the education category with the highest per capita spending [on lotteries] is those who did not complete high school, and the college graduates have the lowest.” The study also noted “high-school dropouts and people in the lowest-income category are heavily over-represented among those who are in the top 20 percent of lottery players.”

While lottery participation is voluntary, there are plenty of evidence to believe it will have a negative fiscal impact on lower-income families and those with less educational attainment.

If pulling money out of the economy and generating revenues from the poor and uneducated were not enough to give Alabama’s legislators second thoughts, how can politicians who campaigned on limiting the size of government create another bureaucracy with the sole purpose of running state gaming operations? Such a move seems to say, “We needed more money, so we decided to create more government.”

Religious opposition to a lottery has often been cited as the reason for its failure to gain traction in Alabama, but some of the strongest reasons for questioning a lottery’s merit have precious little to do with morality. Most Alabamians will not lose sleep about whether the state has a lottery or not, but the implications of such a policy shift are significant and worth a more developed conversation than Alabamians are hearing from current political sound bytes.

America’s F-35: Coming in for a ‘crash landing’?

September 24, 2014, 8:00 AM

The F-35 Lightning II Joint Strike Fighter is slated to enter service for the U.S. military next year, with the Marine Corps shooting to achieve initial operational capability (IOC) for its first F-35B squadron by August 2015. This would be the first time the F-35 has achieved IOC status with any branch of the armed forces and comes three years after it was supposed to enter service. The purpose of the F-35 was to provide a fifth-generation airplane that could outfit the Air Force, Marine Corps and Navy to deal with any potential adversary.

In the meantime, the F-35 has been plagued with numerous cost overruns and delays. The development cost initially was expected to be $306 billion, but has jumped to $390 billion thus far. Software development and even overall build quality have been poor. An investigation into engine problems that grounded the F-35 fleet this summer is near completion. It also likely does not have the performance characteristics to be suitable for service as a fighter.

The continued delays and problems are costing taxpayers billions and are even harming military readiness, as the F-35 consumes a significant portion of the Pentagon’s procurement budget. Some international partners the United States had counted on to buy the fighter are reconsidering their participation in the project, citing high costs.

It’s time to cancel, or at the very least drastically scale down, the F-35 project and shift the funds to deal with the strategic realities America faces.

The F-35 was designed with a peer competitor in mind, such as Russia or China. However, since the end of World War II, U.S. defense needs have mostly been countries or irregular groups whose air capabilities are far inferior. In fact, we have not lost a plane in air combat since the Vietnam War. All subsequent aviation losses have been at the hands of air-defense systems or on the ground.

Proponents of the F-35 believe the project is too far advanced to be scrapped and replaced. However, that’s not so. Air Force Col. Michael Pietrucha wrote in the May-June issue of Air & Space Power Journal, that funds would be better spent upgrading existing F-15s, F-16s, F-22s and A-10s with the technologies and lessons learned from the F-35 program, while also taking into service those F-35s already built. Pietrucha also urged development of an exportable light-fighter project (the South Korean FA-50 is an example of the concept) to arm American allies and redevelopment of the Air Force’s electronic warfare capabilities, which rely on Navy EA-18G Growlers.

Similar reforms would be appropriate for the Navy and Marine Corps. The Navy could procure upgraded F/A-18 Super Hornets, along with taking into service the relatively few F-35Cs already produced. Boeing is developing an Advanced Super Hornet version that reduces radar visibility and introduces new weapon options.

The Marine Corps, on the other hand, is extremely determined to get the F-35B into service, even though it has been the most technically plagued version. One solution for the corps’ air-support capabilities could be to procure more AH-1Z Super Cobra attack helicopters, along with continuing with the planned AV-8B Harrier II upgrades to launch off of amphibious assault ships. This, combined with the F-35Bs already produced and ordered, would fulfill the Marines’ need for organic air assets to support Marine operations. Or the government could continue with the F-35B portion of the program alone (most of the redesigns of the F-35 were done to accommodate the Marines) and redevelop the Marines’ capabilities to form a more efficient strike force that can substitute for a full Navy carrier battle group at less cost to the taxpayer.

The most important lesson of the F-35 project is not to repeat its mistakes. From the outset, the F-35 was designed as a fighter that would be all things to all branches. It was doomed to failure because the expectations were too high and the capabilities were underwhelming. The only successful joint fixed-wing jet fighter—the F-4 Phantom of the Vietnam era—succeeded because it was originally a Navy design that the Air Force later altered for its own purposes.

It’s not too late to end this wasteful project and reinvest the money in projects that better reflect the current geopolitical reality, rather than the reality arms manufacturers, military brass and congressional members from aerospace-heavy districts wish to foist on the country. We can develop forces that can keep America safe, while protecting taxpayers. Hopefully our leaders will have the courage to make this decision.

Rob Schneider: Makin’ enemies

September 23, 2014, 1:05 PM

In a decision that had to be as awkward as it was necessary, State Farm has cut ties with pitchman Rob Schneider, following a social media campaign to make the home and auto insurance giant aware of the comedian’s unfortunate recent history of promoting bogus claims about the alleged dangers of vaccination.

State Farm spokesman Phil Supple told PRWeek of the decision:

“[Schneider’s] ad has unintentionally been used as a platform for discussion unrelated to the products and services we provide,” he said. “With that, we are working to remove the ad from our rotation at this time.”

Schneider’s tenure as a spokescharacter was mercifully brief. In late August, the company began airing a spot in which Schneider revived his “Richmeister” character – perhaps better known as “the copy guy” — that was made popular on Saturday Night Live in the early 1990s:

The spot is part of a broader campaign to use properties owned by SNL creator Lorne Michaels’ Broadway Video Entertainment, which has also already featured spots in which Dana Carvey and Kevin Nealon revive their “Hans and Franz” characters:

Schneider was an active and vocal opponent of A.B. 2109, a California law signed in September 2012 by Gov. Jerry Brown that requires parents seeking a “personal belief exemption” from mandatory vaccinations first consult with a physician. While there’s room for reasonable disagreement on the degree to which public health concerns trump First Amendment rights or other civil liberties, Schneider’s comments on the subject (like those of former Playmate of the Year Jenny McCarthy, the most prominent anti-vaccine activist) clearly cross over the line into spreading dangerous falsehoods:

On the topic of vaccine safety, Schneider said, “The doctors are not gonna tell you both sides of the issue… they’re told by the pharmaceutical industry, which makes billions of dollars, that it’s completely safe.”

“The efficacy of these shots have not been proven,” he later continued. “And the toxicity of these things — we’re having more and more side effects. We’re having more and more autism.”

California law requires children be vaccinated against measles, pertussis (whooping cough), polio, mumps, rubella, hepatitis B, chicken pox, diphtheria and tetanus in order to attend kindergarten. But the shocking spread of the belief that vaccines cause autism – a theory first presented in a 1998 paper in The Lancet, which was later retracted, and that has been thoroughly debunked, including by the National Academies Institute of Medicine — has led to a situation in which many schools, particularly those serving wealthy parents, are seeing vaccination rates fall below the 92 percent threshold that public health experts believe is crucial to ensure “herd immunity.”

The Centers for Disease Control & Protection found that measles outbreaks in 2013 were the worst in 17 years, with roughly 80 percent of the unvaccinated citing “philosophical differences” as motivating their decision.

Recent reporting by the Los Angeles Times found that, statewide in California, the rate of children whose parents cited personal belief exemptions for not vaccinating their children jumped from 1.5 percent in 2007 to 3.1 percent in 2013. Over that same period, the number of public school kindergartens where more than 8 percent of children were unvaccinated more than doubled from 5 percent to 11 percent, while at private schools it jumped from 1 in 10 to 1 in 4.

Bucking immunization trends throughout history, the rates of vaccination actually correlate negatively with income. The Times found 150 schools in Los Angeles County with exemption rates of greater than 8 percent, and the average incomes in those districts was $94,500, 60 percent more than the county median. Separate analysis by The Hollywood Reporter looked at personal belief exemptions filed on behalf children in wealthy West Los Angeles schools, “particularly those attending exclusive, entertainment-industry-favored child care centers, preschools and kindergartens,” finding that:

The number of PBEs being filed is scary. The region stretching from Malibu south to Marina del Rey and inland as far as La Cienega Boulevard (and including Santa Monica, Pacific Palisades, Brentwood, West Hollywood and Beverly Hills) averaged a 9.1 percent PBE level among preschoolers for the 2013-14 school year — a 26 percent jump from two years earlier. By comparison, L.A. County at large measured 2.2 percent in that period. Many preschools in this area spiked far higher, including Kabbalah Children’s Academy in Beverly Hills (57 percent) and the Waldorf Early Childhood Center in Santa Monica (68 percent). According to World Health Organization data, such numbers are in line with immunization rates in developing countries like Chad and South Sudan. These two schools aren’t outliers; dozens more — including Seven Arrows, Turning Point and Calvary Christian — report PBE levels that are five times the county average.

All of which is to say that, while Mr. Schneider’s beliefs on the subject of childhood vaccination might be typical among parents in his neighborhood, that doesn’t make him a “good neighbor.” Insurance companies are in the business of managing and mitigating risk. That should render associating with a high-profile disseminator of false information that could do catastrophic harm to public health off the table.

We commend and congratulate State Farm on their decision to let him go.

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

YODA takes on the dark side of copyright enforcement

September 23, 2014, 10:32 AM

Imagine the following scenario: You buy a computer secondhand off eBay at a bargain price that would put most computer stores out of business. You then boot up the machine, only to learn that, in order to make any of its features work, you need to enter a host of product keys to prove that you do, in fact, own the operating system. You email the original owner, who replies:

“Sorry, but it’s illegal for me to give you the product key. They only licensed me to use it. You’ll have to buy your own copy of the software before you can use the computer.”

Absurd, right? Depressingly enough, what I’ve just described is the status quo when it comes to the secondhand sale of software. A byzantine web of user license agreements, product keys (supposedly designed to protect against piracy) and other tools allow companies to essentially revoke basic property rights, such as the right to resell your own possessions or even to have them repaired.

As Techdirt notes:

Earlier this year, there was a big lawsuit in which Avaya had sued a company for copyright infringement for merely servicing Avaya equipment. Many other equipment manufacturers have terms of service or “transfer” policies that either effectively block such sales, or (more commonly) include a bunch of hoops that everyone has to jump through just to sell the products you thought you owned. All because of the software that comes with the hardware.

In other words, if you own an Xbox 360 and the dreaded “three red rings” light up (indicating a problem with the hardware or power supply) don’t even think about sending it to a cheap repair service not authorized by Microsoft. You could be on the hook for copyright violations, which could cost you anywhere from $750 to $150,000 if the matter goes to court. That’s a lot of copies of Destiny!

This is a system that should raise major alarms for property rights advocates, as it transforms owners into the equivalent of digital serfs, at the mercy of software manufacturers.

Responding to such concerns, U.S. Rep. Blake Farenthold, R-Texas, has just introduced the aptly named You Own Devices Act (YODA). Like the lovable, but extremely powerful fictional Jedi master whose name it bears, YODA is intended to cut through red tape with the same speed and dexterity that its namesake uses to push aside lightsaber-wielding Sith.

Here’s the relevant piece of the bill:

…If a computer program enables any part of a machine or other product to operate, the owner of the machine or other product is entitled to transfer an authorized copy of the computer program, or the right to obtain such copy, when the owner sells, leases or otherwise transfers the machine or other product to another person. The right to transfer provided under this subsection may not be waived by any agreement.

The bill also explicitly allows the new owner to receive security update patches, just as the original owner would. In other words, when you resell a computer to someone they get that computer with exactly the same software they would expect if they bought it new. No more, no less.

Let’s not mince words: This bill shouldn’t need to exist. Imagine selling a car, but being prohibited from selling the engine that makes it drive. Yet because software property rights exist in a nebulous netherworld where companies can mandate adherence to often abusively self-favoring contracts with no room to negotiate, a legislative fix has become necessary.

If companies want to treat the purchase of their software as if it’s merely a glorified rental, then there needs to be more transparency in terms of service agreements, which consumers don’t read and wouldn’t be able to decipher even if they did. Either companies should disclose that you are merely leasing their products, or they should acknowledge the common and reasonable expectation that buying a computer or a game console or any other piece of electronic hardware means you do, in fact, own it in full, including the right to resell it.

Or, to paraphrase Yoda, if once you buy software from a company, forever should it not dominate your destiny.