Out of the Storm News

Syndicate content
Free markets. Real solutions.
Updated: 40 min 16 sec ago

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

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 It would eliminate outdated discrepancies between the legal process for government access to data stored locally in one’s home or office and the process for the same data stored with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

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.

Official policy on ninjas

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

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

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.

Letter to Congress: Oppose the Marketplace and Internet Tax Fairness Act!

September 08, 2014, 4:10 PM

 

 

Dear Member of Congress,

On behalf of the millions of citizens represented by the undersigned organizations, we write in strong opposition to S. 2609, the so-called “Marketplace and Internet Tax Fairness Act.” This confused legislation is a strange combination of a common sense extension of the federal ban on state efforts to tax Internet access with highly unpopular and misguided legislation to grant states cross-border tax authority for businesses located outside their jurisdiction. While we support a ban on Internet access taxes, the provision previously known as the “Marketplace Fairness Act” would dismantle proper limits on state tax-collection authority, while causing serious damage to electronic and interstate commerce.

The “Marketplace Fairness Act” would countenance an enormous expansion in state tax-collection authority by wiping away the “physical presence standard,” a baseline protection that shields taxpayers from harassment by out-of-state collectors. Far from a “loophole” intended to advantage the Internet, it is the result of a Supreme Court decision grounded in a bedrock foundational principle of tax policy: states must not be allowed to extend their taxation and regulatory authorities beyond their borders. Dismantling this protection for remote retail sales would create a very slippery slope for states to attempt collection of business or even income taxes from out-of-state entities.

Furthermore, the bill would create a decidedly “unlevel” playing field between brick-and-mortar and online sales. Brick-and-mortar sales across the country are governed by a simple rule that allows the business to collect sales tax based on its physical location, not that of the item’s buyer. Under the “Marketplace Fairness Act,” that convenient collection standard would be denied for online sales, forcing remote retailers to determine the appropriate rules and regulations in as many as 46 different states with sales taxes, and then collect and remit sales tax for that distant authority.

Imposing this unworkable collection standard on remote retail sales but not on brick-and-mortar retail sales would not only be unfair, it would result in enormous complexity while damaging interstate commerce. Online sellers would be weighed down by substantial compliance burdens and the bill’s paltry “small seller exception” of just $1 million (when the Small Business Administration sets the limit as high as $30 million in some cases) in remote sales does little to mitigate the damage.

In seeking to address the failures of the “use tax” systems employed by states, the “Marketplace Fairness Act” ends up giving a federal blessing to a massive expansion in state tax-collection authority, the dismantling of a vital taxpayer protection upon which virtually all tax systems are based, while harming a segment (online sales) that despite its dramatic expansion still only accounts for roughly $0.07 of every $1 in retail spending.

We urge you to oppose attaching this destructive language to an uncontroversial extension of a ban on Internet access taxes and moving it through procedural sleight-of-hand, once again bypassing the committee of jurisdiction.

Andrew Moylan
R Street Institute

Phil Kerpen
American Commitment

Brent Wm. Gardner
Americans for Prosperity

Grover Norquist
Americans for Tax Reform

Norm Singleton
Campaign for Liberty

Andrew F. Quinlan
Center for Freedom and Prosperity

Jeff Mazzella
Center for Individual Freedom

Tom Schatz
Citizens Against Government Waste

Wayne Crews
Competitive Enterprise Institute

Katie McAuliffe
Digital Liberty

Matt Kibbe
FreedomWorks

Joe Bast
The Heartland Institute

Mike Needham
Heritage Action for America

Tom Giovanetti
Institute for Policy Innovation

Seton Motley
Less Government

Pete Sepp
National Taxpayers Union

David Williams
Taxpayers Protection Alliance

Alabama’s Uber failures showcase big brother bureaucracy over consumer opportunity

September 08, 2014, 10:42 AM

First it was Birmingham that refused to accommodate Uber, the popular app-driven transportation service, and then the Tuscaloosa Police Department began enforcing the city’s transportation regulations against drivers working with the company.

While the Birmingham City Council has managed to bungle a badly needed economic opportunity for the city, the Tuscaloosa Police Department is simply enforcing the regulations as they read them and highlighting the need for Tuscaloosa to revisit the issue.

Birmingham and cities throughout Alabama need jobs of any stripe. Not only do Uber and companies like them create employment, but they offer even more value by providing a tech-savvy convenience to move about Alabama’s cities. Many of the state’s cities are less walking-friendly than larger metropolitan counterparts around the nation. These transportation innovation companies sound like the kind of business opportunities politicians would be begging to have.

Instead, the message from Birmingham and Tuscaloosa is that Alabamians need to be protected from the likes of Uber. They claim that public safety is at stake.

Uber and similar app-based transportation services function by contracting with drivers in cities where they operate. Uber, for example, manages a web-based interface that connects passengers and contract drivers. Some of the contract drivers are simply interested in picking up some part-time cash.

That is where city governments start to have conniptions. For many politicians, bureaucracy must be preserved. After all, there is paperwork that needs to be filled out, inspections to be performed, background checks to conduct. Without layers of government, some city leaders apparently feel that Alabamians would not be able to make reasonable decisions.

Never mind the fact that Uber already requires proper insurance, a valid driver’s license and passage of DMV and background checks. City leaders feel that they must protect the taxi industry public from the growing transportation menace.

Since I discovered Uber, I have not taken a taxi in a city where they operate. Safety is a big reason why. My family or I could get into a taxi with precious little information about the fare, route or driver. On the other hand, I could take Uber, where the ride is tracked and information about the driver and passenger is retained. Not only am I able to access my account and see a record of all my trips, but the service radically improves my chances of recovering items I might accidentally leave behind in the car. Most importantly, I am able to focus on getting my family or myself out of the car safely rather than fiddling with a cash transaction.

If private citizens are able to get into a car with a complete stranger at any time, why are they incapable of making that same decision when it comes to a private transportation service?

Alabama’s cities should find ways to expand employment opportunities and choices for consumers, rather than maintaining an unyielding devotion to a one-size-fits-all regulation, especially in a situation where there is no clear and immediate danger to the public.

Taxis should have same opportunities as companies like Uber, but Alabamians, not city bureaucracies, should be able to decide which type of transportation meets their needs, ensures their safety and is more reliable.

Survey: Ky. against Internet tax

September 05, 2014, 4:57 PM

From the Bowling Green Daily News:

States rely on taxpayers to report their online purchases and remit the taxes that are due, but few do. Online retailers that have a physical presence in the state where a purchase is made usually collect and remit the tax, as is the case with Kentucky. The National Taxpayers Union and R Street Institute conducted a poll among several states, including Kentucky, to gauge how state taxpayers felt about legislation that could be passed someday to change the current sales tax laws.

“When we looked at all the demographic background … we found pretty consistently across the board not just opposition, but double-digit opposition,” said Andrew Moylan, executive director of R Street Institute.

Letter to Senate on USA FREEDOM Act

September 05, 2014, 11:31 AM

 

 

Majority Leader Harry Reid
Minority Leader Mitch McConnell
U.S. Senate

Chairman Patrick J. Leahy
Ranking Member Charles E. Grassley
U.S. Senate Committee on the Judiciary

Chairman Dianne Feinstein
Vice Chairman Saxby Chambliss
U.S. Senate Select Committee on Intelligence

Chairman Thomas R. Carper
Ranking Member Tom Coburn
U.S. Senate Committee on Homeland Security and Governmental Affairs

Dear Majority Leader Reid, Minority Leader McConnell, Chairmen Leahy, Feinstein, and Carper, Ranking Members Grassley and Coburn, and Vice Chairman Chambliss:

As Congress begins its next work session, the undersigned civil liberties, human rights, and other public interest organizations are writing to urge the Senate to quickly pass the USA FREEDOM Act (S. 2685) without adding new data retention requirements, and without further consideration of the gravely concerning Cybersecurity Information Sharing Act of 2014 (CISA, S. 2588).

On July 30, 2014, many of the undersigned groups sent a letter to Congressional leadership voicing a unified statement of support for the new version of the USA FREEDOM Act (S. 2685). Though further reform will still be needed, it is an important first step to reining in the National Security Agency’s (NSA) overbroad surveillance authorities.

As that letter explained, S. 2685 in its current form would provide significant transparency and privacy safeguards while preserving the tools intelligence agencies need to protect national security. The bill would prohibit “bulk” and limit large-scale data collection under the USA PATRIOT Act Section 215, the FISA pen register authority, and National Security Letter authorities. The bill would also enhance public reporting of surveillance orders by the private sector and the government, and reform the FISA Court to provide more accountability and transparency, including by appointing a special panel of civil liberties and privacy advocates to the court. Additionally, this version of the USA FREEDOM Act would permit the new call detail records (CDRs) authority under Section 215 to be used only for counterterrorism purposes, and avoid implicitly codifying controversial “about searches” under Section 702 of the FISA Amendments Act that implicate the privacy of millions of Americans. Based on these important improvements, a wide range of major technology companies and public interest groups spanning the political spectrum is eager for Congress to pass this legislation swiftly and without weakening the bill.

However, as we made clear in both our July 30 letter and our previous letter of June 18, the broad consensus in support of the USA FREEDOM Act among companies and advocacy groups would be severely disrupted if any new mandatory data retention requirement were added to the bill. Data retention requirements pose significant threats not only to privacy and civil liberties, but also to data security, as stories of data breaches at major corporations like Target, Neiman Marcus, UPS, and major banks demonstrate.

There is no evidence that such a mandate is necessary to protect national security. Rather, as Attorney General Eric Holder and Director of National Intelligence James Clapper made clear in a letter earlier this week, and as NSA Deputy Director Richard Ledgett testified before the Senate Select Committee on Intelligence in June, the NSA does not need a new data retention requirement to maintain its current level of effectiveness.

At the same hearing, Verizon Vice President and Assistant General Counsel Michael Woods stated unequivocally that Verizon would strongly oppose a new data retention requirement because it would be burdensome to business and pose a significant threat to Americans data and privacy. We agree, and reiterate our strong opposition to the inclusion of any such mandate in the USA FREEDOM Act, which we urge the Senate to pass without delay. Ironically, just as Congress is struggling to pass meaningful surveillance reform to rein in the NSA, the Senate Select Committee on Intelligence has approved a problematic bill that would give the NSA even more access to Americans’ data: the Cybersecurity Information Sharing Act (S. 2588). Dozens of members of the advocacy community have joined in three coalition letters to the Senate and to the president opposing that bill, which would authorize companies to share with the Department of Homeland Security broadly defined “cyberthreat indicators” from the communications of their users and subscribers. That information would be immediately and automatically disseminated to the NSA and a host of other government agencies. The companies would not be required to affirmatively look for and remove personally identifiable information that is not relevant to the threat before the information is shared. Among other problems, CISA also authorizes companies to monitor their customers’ activities on their networks and employ a range of dangerous countermeasures that could affect innocent Internet users.

Despite the serious privacy problems with CISA, especially in comparison with the last, more privacy protective, cybersecurity information sharing bill considered by the Senate, the Cybersecurity Act of 2012 (S. 3414), its proponents are urging that the Senate take it up in the limited time that remains after this August recess. Instead, the Senate should make passing the USA FREEDOM Act (S. 2685) a key legislative priority for September. Passing effective and comprehensive surveillance reform is necessary not only to protect our privacy, but also to restore the trust of Internet users around the world who rely on, and are relied upon by, the U.S. Internet industry. The USA FREEDOM Act, as reintroduced last month, would substantially advance both of those goals, whereas CISA would undermine them.

We therefore urge the Senate to swiftly pass the USA FREEDOM Act (S. 2685) without any amendments that would weaken its protections or create any new data retention mandates, and without taking up the Cybersecurity Information Sharing Act (S.2588) in its current form. The Senate cannot seriously consider controversial information-sharing legislation such as CISA without first completing the pressing unfinished business of passing meaningful surveillance reform.

Sincerely,

Access
Advocacy for Principled Action in Government
American Association of Law Libraries
American Booksellers Foundation for Free Expression
American Civil Liberties Union
American Library Association
Arab American Institute
Association of Research Libraries
Bill of Rights Defense Committee
Brennan Center for Justice
Campaign for Digital Fourth Amendment Rights
Center for Democracy & Technology
Citizen Outreach
Competitive Enterprise Institute
The Constitution Project
Constitutional Alliance
Council on American Islamic Relations
Defending Dissent Foundation
DownsizeDC.org, Inc.
Electronic Frontier Foundation
Freedom of the Press Foundation
FreedomWorks
Free Press Action Fund
GenOpp
Government Accountability Project
Hon. Bob Barr, Former Congressman
Human Rights Watch
Liberty Coalition
Media Alliance
National Coalition Against Censorship
National Security Counselors
New America’s Open Technology Institute
OpenMedia.org
OpenTheGovernment.org
PEN American Center
PolitiHacks
Project on Government Oversight
Public Knowledge
Republican Liberty Caucus
R Street
The Rutherford Institute
Student Net Alliance
TechFreedom

It doesn’t take much to imagine that campaign cash is buying influence in the courtroom

September 04, 2014, 10:42 AM

Imagine for a minute that a corporation with an effective monopoly in the State of Alabama became the target of litigation initiated by a state prosecutor. Not only does the corporation use their cash to fight the litigation in court and by lobbying legislators, but they also go after the prosecutor politically in the middle of the legal proceedings.

In an attempt to find a more favorable prosecutor, the corporation funnels $1 million to the prosecutor’s political opponent through a series of vaguely named political action committees (PACs) managed by a former felon.

Why not make it even more interesting? What if the transfers and the amount of money were legal under state law and the manager received a pardon a few months after his conviction?

While the hypothetical might seem like the latest legal fiction thriller, it happens to be reality in Alabama politics. The state prosecutor is none other than Attorney General Luther Strange, the business is the Poarch Band of Creek Indians that operates casinos in Alabama, and the A, T, and Speed PACs the tribe funds are managed by former state Sen. John Teague.

Saying that gambling is a controversial issue in Alabama is an understatement, but the fact that the litigation involves gambling does not change the hypothetical situation above.

Nobody believes that the Poarch Creek money is funding Strange’s opponent for any reason other than their legal battles. Even if the Poarch Band of Creek Indians and Teague are operating within the law, the scenario still seems off. In Alabama, where we have elected judges and prosecutors, should we permit litigants to make political contributions in support or opposition to officials within the legal system when they have pending litigation involving them?

Contributing to public officials in the legal system to generally shape the legal climate is common in Alabama. For example, trial lawyers and the business community have waged political war for decades in an effort to influence Alabama’s legal system. Political fights over general legal philosophy are a different matter altogether than using campaign cash in response to unfavorable legal proceedings.

Preventing political contributions in a direct conflict situation is already recognized under Alabama law. Utilities regulated by the Public Service Commission (PSC) are prohibited from making political contributions to candidates for the commission.

If anything, elected state prosecutors and judges have more discretion and individual autonomy over decisions impacting litigants than PSC members have over regulated entities. There are some general ethics rules for attorneys and recusal issues for judges, but none of them squarely take the issue head on.

The very presence of elected public officials in the legal system carries with it politics, campaigns and financial contributions. The question for Alabamians is whether we want to make legal changes that keep those campaign conflicts out of the courtroom.

NEJM irresponsibly damns e-cigarettes as gateway to cocaine, based on mouse nicotine studies

September 04, 2014, 10:33 AM

The New England Journal of Medicine yesterday published an incendiary anti-e-cigarette article that tags nicotine as a gateway to cocaine use… in mice. It’s another sad day for tobacco truth.

The authors are Drs. Denise and Eric Kandel, the latter a Nobel Prize-winner for his work on the physiological basis of memory storage in nerves. Since 1975, Dr. Denise Kandel has aggressively promoted a gateway theory that adolescent use of legal drugs like alcohol and tobacco causes use of illegal drugs, starting with marijuana and progressing to cocaine and heroin. The theory is highly contested among addiction research and policy experts because it is not supported by human studies.

The NEJM presents the Kandels’ laboratory data on how nicotine and cocaine affect the mouse brain at the cellular and molecular level. Their experiments involved force-feeding nicotine to and injecting cocaine into mice. Post-mortem studies on the rodent brains led the authors to conclude that nicotine/tobacco causes cocaine use.

Following a nine-page technical discussion of their research that made no mention of e-cigarettes, the authors inserted a concluding three paragraphs claiming that smoking, vaping and even passive smoke are gateways to cocaine.

In a crass attempt to heighten interest in the publication, the Kandels and the NEJM offered the media a press release with an attention-grabbing e-cigarette-bashing headline and inflammatory quotes that exceed and distort the authors’ scientific work.

Shame on all parties for allowing marketing to trump the truth.

Poll: Kentucky voters reject Internet sales tax law

September 04, 2014, 9:37 AM

FRANKFORT, Ky. (Sept. 4, 2014) — When it comes to a federal law allowing out-of-state tax collectors to reach into the pockets of Kentucky’s online merchants, by a 55 percent to 34 percent margin, Bluegrass State voters have a resounding and simple answer: No way! That’s just one of several findings from a statewide poll released today by National Taxpayers Union and the R Street Institute.

In the survey of likely 2014 general election voters in Kentucky, strong majorities across many ideological and partisan persuasions also indicated their belief that the Internet should remain as free from regulation and taxation as possible (by an astounding 58-point margin). One of the most lopsided results concerned federal legislation in Congress called the “Marketplace Fairness Act.” When told (factually) the plan “would allow tax enforcement agents from one state to collect taxes from online retailers based in a different state,” 71 percent of respondents were opposed, with just 22 percent in favor.

“It’s no surprise that Kentucky voters are opposed to legislation that would effectively force e-retailers across the state to serve as tax collectors for other jurisdictions, like New York and California,” said Andrew Moylan, executive director of the R Street Institute. “Moreover, our polling finds that the belief that the Internet should exist to benefit Kentuckians, not other states’ bottom lines, is not a partisan issue.”

“Our poll is designed to explore the specific – and sophisticated – opinions of Kentucky voters on this critical issue,” said Pete Sepp, president of National Taxpayers Union. “Kentucky politicians of all persuasions and philosophies should take note of the results, and understand that supporting proposals like the Marketplace Fairness Act puts them out of step with the majority of their constituents; that’s why Sens. McConnell and Paul should be applauded for standing with Kentucky voters on this critical issue.”

A statewide survey of 400 likely voters in Kentucky was conducted June 2-3, 2014 by live telephone interviewing. Thirty percent of the interviews were conducted using a cell phone sample. The margin of error is ±4.9% at the 95% confidence level.

For the full list of NTU-R Street state-level polls on Internet sales tax laws, visit: rstreet.org/donttax.

Letter to U.S. Senate on permanent Internet tax moratorium

September 03, 2014, 1:58 PM

 

 

Dear Senators,

On behalf of the undersigned, we encourage you to pass a clean permanent extension of the Internet Tax Moratorium, and commend the House of Representatives on passage of H.R. 3086, the Permanent Internet Tax Freedom Act (PITFA).

Sens. John Thune, R-S.D., and Ron Wyden, D-Ore., have introduced S. 1432, the Internet Tax Freedom Forever Act (ITFFA), which mirrors the House language. Both ITFFA and PITFA reauthorize and make permanent legislation that has been U.S. national policy since 1998. The clean Internet access tax moratorium overwhelmingly passed the House, and similarly a clean ITFFA will easily pass the Senate, and again protect unfettered access to Internet connections.

Americans would be overjoyed to see Congress agree, and pass, legislation that protects consumers from increased costs when accessing and using the Internet, and protects them from discriminatory or duplicative taxation of Internet commerce.

Taxes on communications services are already punitive and discriminatory. The average sales tax rate on voice services is 17 percent, and 12 percent on video services, while the average general sales tax rate is 7 percent. A clean ITFFA would at the very least prevent this targeted tax on Internet access. Excessive taxes will hinder continued growth in the digital space. The FCC’s National Broadband Plan states that the largest barrier to consumer adoption and expanded use of Internet-based services is cost. Allowing the Internet access tax moratorium to lapse would certainly lead to higher tax rates on consumers and thus reduce the rate of adoption and innovation. The Internet is our greatest gateway to innovation and education, higher taxes on Internet access undermines American economic competitiveness and growth.

We encourage the Senate to act now to permanently extend the Moratorium on Internet Access Taxes.

Grover Norquist
Americans for Tax Reform

Katie McAuliffe
Digital Liberty

Morgan Reed
Executive Director
ACT | The App Association

Phil Kerpen
President
American Commitment

Mac Zimmerman
Director of Policy
Americans for Prosperity

Steve Pociask
President
American Consumer Institute
Center for Citizen Research

Lisa B. Nelson
CEO
American Legislative Exchange Council

Diana Waterman
Chair
Annapolis, MD Center-Right Coalition

Chuck Muth
President
Citizen Outreach
Mt. Reagan, Nevada

Eunie Smith
President
Eagle Forum of Alabama

Norman Singleton
VP of Policy
Campaign for Liberty

Brian Garst
Director of Government Affairs
Center for Freedom and Prosperity

Timothy Lee
Senior Vice President of Legal and Public Affairs
Center for Individual Freedoms

Clyde Wayne Crews
Vice President for Policy
Competitive Enterprise Institute

Ryan Radia
Associate Director of Technology Studies
Competitive Enterprise Institute

Thomas A. Schatz
President
Council for Citizens Against Government Waste

Wayne Brough
Chief Economist and Vice President of Research
FreedomWorks

George Landrith
President
Frontiers of Freedom

William Estrada
Director of Federal Relations
Home School Legal Defense Association

Andrew Langer
President
Institute for Liberty

Seton Motley
President
Less Government

Bartlett Cleland
Managing Director
MaderyBridge

Mike Wendy
Director
MediaFreedom

Brandon Arnold
Executive Vice President
National Taxpayers Union

Steve DelBianco
Executive Director
NetChoice

Scott Cleland
Chairman, NetCompetition
President of Precursor LLC

Christopher P. Finney, Esq.
Finney Law Firm, LLC
Cincinnati, Ohio

Richard Watson
Co-Chair
Florida Center-Right Coalition

Stephen P. Gordon
President
Forward Focus Media, LLC
Atlanta, Georgia

Louie Hunter
Director
Georgia Center Right Coalition

William Keli’i Akina, Ph.D.
President/CEO
Grassroot Institute of Hawai’i

Darcie L. Johnston
President
Johnston Consulting, Inc.
Montpelier, Vermont

Marty Connors
M.J. Connors Consulting
Government Relations
Birmingham, Alabama

Jack Boyle
Co-Founder & President
Put Growth First
Ohio

Charlie Gerow
CEO
Quantum Communications
Harrisburg, Pennsylvania

Mike Stenhouse
CEO
Rhode Island Center for Freedom & Prosperity

John Colyandro
Executive Direction
Texas Conservative Coalition
Research Institute

Paul Gessing
President
Rio Grande Foundation

Lorenzo Montanari
Executive Director
Property Rights Alliance

Andrew Moylan
Executive Director and Senior Fellow
R Street Institute

David Williams
President
Taxpayers Protection Alliance
Campaign for Liberty

Jason Pye
Editor
United Liberty

Cameron Smith

August 29, 2014, 11:23 AM

Cameron Smith is the principle of  Smith Strategies LLC, a regular columnist for the Alabama Media Group and a senior fellow with the R Street Institute.

Prior to founding Smith Strategies, Cameron was vice president and general counsel of the Alabama Policy Institute, where he managed all policy, legal and communications operations.

Previously, Cameron had a number of posts in both the U.S. House and U.S. Senate. He was legislative counsel for Sen. Jeff Sessions, R-Ala., on the Senate Judiciary Committee. He ran the House Intellectual Property Caucus and was counsel to Rep. Tom Feeney, R-Fla. He also served as counsel to Rep. Geoff Davis, R-Ky., where his primary legislative project was the REINS Act, which would provide significantly more accountability for Congress regarding the impacts of federal regulation.

Cameron is a graduate of Washington and Lee University and the University of Alabama School of Law. He is a member of the Tennessee and Alabama bars. He resides with his wife, Justine, and their three sons in Vestavia Hills, Ala.

Email: csmith@rstreet.org

Slowing the rise of the oceans

August 29, 2014, 10:28 AM

From Al Gore to the leadership of groups like the Union of Concerned Scientists, environmentalists long have warned that global disaster is certain unless we do something about rising sea levels. The “something” that most on the left want is to remake our energy economy and increase government control over energy use in order to cut down on human emissions of greenhouse gases that cause the thermal expansion of ocean water and the melting of polar ice sheets.

A look at the facts reveals a less alarming, although still disconcerting, environmental picture. When it comes to combating and adapting to rising sea levels, many of the factors most within our control are not directly associated with the climate.

The environmentalists deserve some credit. It is beyond dispute that greenhouse gas emissions are the most important factor behind the global rise in sea levels. Releasing carbon dioxide and other greenhouse gases into the atmosphere, largely from burning fossil fuels, traps heat from the sun. Over the past two decades, global sea levels have been rising at a rate of slightly more than 0.11 inches per year.

But projections about the future extent of the trend remain too imprecise to be of practical use to policy-makers. The United Nations’ Intergovernmental Panel on Climate Change predicts that the “most likely” case is that global sea levels will rise between one and four feet over the next century. A continuation of the trend of the last 20 years (roughly twice the average rate most scientists believe seas rose over the 20th century) would result in total sea-level rise near the low end of the IPCC projections.

Although many models indicate the rate will accelerate, whether it does, and by how much, will make an enormous difference. A one-foot rise would be reasonably easy to deal with in many places, while four feet could be catastrophic. And complex climate models have a dismal record of predicting the future.

It’s also important to note that greenhouse gas emissions are not the only factor in climate change, and that climate change is not the only cause of rising sea levels. In North America, relative sea levels are changing not only because of rising waters, but also because of sinking landmass. The East Coast has been slowing sinking for thousands of years. The intersection of these two phenomena, rising seas and sinking landmass, could make sea-level rise doubly destructive in certain parts of the country.

For instance, along the Gulf Coast of Louisiana, sea-level rise appears to be happening at nearly a dozen times the global rate: nearly an inch a year. The reasons are complicated, but relate to tectonic shifts in the ocean floor. The consequences could be disastrous. Much of southern Louisiana may be inundated in the next century, and parts of Texas may not be that far behind. And, if the projections are right, controlling greenhouse gas emissions would do almost nothing to change things.

Development has made an already severe natural problem worse. A century-long project to control the Mississippi-Missouri River system and prevent flooding has reduced the amount of silt the river carries. This results in “silt starvation” that is slowly eating away at the land in the Mississippi Delta.

Also contributing to this kind of erosion have been the heavily subsidized National Flood Insurance Program and local economic incentives to build in river valleys and along the coasts. Other causes are more bizarre. The nutria or “river rat,” a South American critter that fur farmers brought to the United States in the 1940s, has no natural predators here and feasts on the plant life of coastal marshes. Along the Chesapeake Bay and other areas, river rats eat so many plants that the land is left bare and gets washed away.

For the regions most likely to face dramatic impacts from rising sea levels in the near future, no amount of emissions control will make a major difference. In fact, for some, the only solution may be to relocate people and property away from the coast.

At a minimum, in our most densely populated hurricane-prone areas, like the New York/New Jersey and Miami metropolitan areas, large investments in “structural mitigation,” seawalls and the like, is almost certainly going to be necessary to protect lives and property. Spending several billion dollars to protect Manhattan from rising seas and hurricane-driven storm surges will almost certainly offer a very good return on investment, even if 21st-century weather patterns aren’t significantly different from those of the last century. A vigorous nutria control and eradication effort is also in order, as are local zoning standards that take potential sea-level rise into account.

In many cases, however, government would do best by simply getting out of the way. Subsidies for flood insurance, which Congress recently voted to extend, need to be eliminated, as do all other federal and state programs that provide implicit and explicit subsidies to build in low-lying areas. A comprehensive review of Army Corps of Engineers river control projects, with an eye to reducing silt-starvation, is long overdue.

Climate change presents its own set of challenges on the global level, and we will need ways to respond to that, as well. Some changes to energy policy are likely justified. But the favorite policies of many environmentalists—heavy-handed regulation of carbon dioxide emissions and subsidies for trendy alternative energy sources like wind and solar power—are not effective ways to help the areas of this country most threatened by rising seas and falling coasts. Policymakers can deal with sea-level rise. But they don’t have to follow the environmental left’s playbook to do it.

Cameron Smith

August 28, 2014, 3:57 PM

Cameron Smith is the principle of  Smith Strategies LLC, a regular columnist for the Alabama Media Group and a senior fellow with the R Street Institute.

Prior to founding Smith Strategies, Cameron was vice president and general counsel of the Alabama Policy Institute, where he managed all policy, legal and communications operations.

Previously, Cameron had a number of posts in both the U.S. House and U.S. Senate. He was legislative counsel for Sen. Jeff Sessions, R-Ala., on the Senate Judiciary Committee. He ran the House Intellectual Property Caucus and was counsel to Rep. Tom Feeney, R-Fla. He also served as counsel to Rep. Geoff Davis, R-Ky., where his primary legislative project was the REINS Act, which would provide significantly more accountability for Congress regarding the impacts of federal regulation.

Cameron is a graduate of Washington and Lee University and the University of Alabama School of Law. He is a member of the Tennessee and Alabama bars. He resides with his wife, Justine, and their three sons in Vestavia Hills, Ala.

Email: csmith@rstreet.org

Ian Adams

August 28, 2014, 3:16 PM

Ian Adams is senior fellow and California director of the R Street Institute.

Most recently, Ian was the Jesse M. Unruh Assembly Fellow with the office of state Assemblyman Curt Hagman, R-Chino Hills, while Hagman served vice chairman of the California Assembly Insurance Committee. In this role, Ian was responsible for appraising legislative and regulatory concepts, providing vote recommendations for bills in committee and on the Assembly floor and performing a host of other public affairs duties.

Previously, while still enrolled at the University of Oregon School of Law, Ian was a legal extern with the office of state Rep. Bruce Hanna, R-Roseburg, who was then co-speaker of the Oregon House of Representatives. Ian’s prior experiences include serving as a law clerk for the Personal Insurance Federation of California and as an intern in the office of former Gov. Arnold Schwarzenegger.  He also works pro bono as registered in-house counsel with Transitional Living & Community Support.

Ian is a 2009 graduate of Seattle University, with bachelor’s degrees in history and philosophy and received his law degree from the University of Oregon in 2013.

Phone: 916.751.5269

Email: iadams@rstreet.org

 

In the CDC-FDA e-cigarette study, ‘probably not’ is the new ‘yes’

August 28, 2014, 1:38 PM

Assume that you conducted a survey in which you posed two multiple-choice questions:

“Do you think you will smoke a cigarette in the next year?”

“If one of your best friends were to offer you a cigarette, would you smoke it?”

Respondents could choose from these answers:

Definitely yes

Probably yes

Probably not

Definitely not

You’d add up the “definitely yes” and “probably yes” responses to tally those intending to smoke; and you’d total the negative responses to gauge how many are unlikely to smoke.

This would be a straightforward and uncomplicated task, unless you were a CDC or FDA analyst, milking the National Youth Tobacco Survey for scary numbers.

On Aug. 25, the CDC issued its latest sky-is-falling press release, suggesting that e-cigarettes are driving teenagers to smoke. The release focused on a study coauthored by CDC and FDA researchers whose core finding was:

Among non-smoking youth who had ever used e-cigarettes, 43.9 percent said they intended to smoke conventional cigarettes within the next year, compared with 21.5 percent of those who had never used e-cigarettes.

To reach this conclusion, the CDC-FDA redefined “probably not” to mean “yes, I will.” Adolescents who answered “probably not to either of the two questions were classified as intending to smoke.

The feds used 2013 data that is not yet public, but using the 2012 NYTS, I can show you how much the distorted definition matters.

This table shows the numbers of never and ever users of e-cigarettes who intended to smoke, using the CDC-FDA definition (i.e., “probably not” means “yes, I will”). The percentages in parentheses are weighted to reflect the population of the survey.

  Never Users of E-cigarettes Ever Users of E-cigarettes No intention to smoke 13,312   (76%) 70   (41%) Intention to smoke 4,360   (24%) 80   (59%) All 17,672 (100%) 150 (100%)

 

Using conventional definitions, I produced the chart below. Any two yes responses defined intention to smoke, any two no responses were no intention, and mixed responses were just that, mixed. These are my results:

  Never Users of E-cigarettes Ever Users of E-cigarettes No intention to smoke 17,103 (97%) 128 (81%) Mixed intention      422 (2%) 13 (11%) Intention to smoke      147 (1%)    9 (8%) All 17,672 (100%) 150 (100%)

This paints a completely different picture of the e-cigarette situation. The appearance that adolescents who have ever used an e-cigarette (even one puff) might be more likely to intend to smoke is based on the responses of just nine survey participants.

Carl Phillips has extensive comments on at the CASAA blog here and here.

This is not the first time that a highly questionable definition has been used to fabricate a highly speculative gateway claim. I assure you that this is probably not the last bogus CDC analysis of youth e-cigarette use.

Can Prop 103 handle driverless cars?

August 27, 2014, 8:00 AM

Earlier this year, Google announced the introduction of a completely driverless car. On this blog, Eli Lehrer took time to discuss the insurance implications of such a development. Among other things, he posited that, as drivers become less involved in the decisions made by their car, the associated risks of operating the vehicle will go down.

It stands to reason that a reduction in the risk presented by a driver’s behavior may lead to a reduction in the amount that a driver will pay for auto insurance – provided that the current model of individual vehicle ownership and auto insurance coverage persists.

Insurance products designed to cover autonomous vehicles will likely need to parallel whatever evolutionary course of technological development autonomous vehicles take.

In the near-term, the autonomous vehicles taking to the roads will likely be incremental in their approach to reducing driver involvement. For the sake of continuity alone, those vehicles will look and operate more like the Lexus SUVs driving around Mountain View today than they will the grinning ovoid pods touted on Google’s blog. Early adapters of autonomous vehicles will still enjoy the presence of steering wheels and pedals that will allow them to maintain control over the vehicle.

In California, it is an open question as to whether and how early autonomous vehicle adapters will enjoy auto insurance rates that reflect the reduced risk their limited involvement will represent.

The current system for determining rates and premiums for auto insurance policies is dictated in code by 1988′s Proposition 103. California Insurance Code Section 1861.02(e) lays out with great specificity a list of rating factors that insurers are obligated to use as they develop auto insurance rates. The list of rating factors is divided between mandatory and optional factors. Today, there are three mandatory factors and 16 optional factors. Additional rating factors may be adopted via regulation by the insurance commissioner, so long as those factors have a “substantial relationship to the risk of loss.”

What is significant about Prop 103′s mandatory rating factors is that they have very little relationship to the risk of loss presented by the operator of an autonomous vehicle. Consider, in decreasing order of importance, what the three rating factors are now:

  1. The insured’s driving safety record.
  2. The number of miles he or she drives annually.
  3. The number of years of driving experience the insured has had.

As operator influence over the course and speed of a vehicle wanes, so too will the importance of an operator’s driving record and the number of years of experience they have sitting in their vehicle. Of Prop 103′s three mandatory rating factors, only the number of miles annually driven will bear directly on the risk presented by autonomous vehicle operation.

Because of Prop 103′s rigid control of rating practices, absurd scenarios involving autonomous vehicle insurance policies are not hard to imagine. For instance, an autonomous vehicle operator with a poor conventional driving history who operates her Google car very little could pay more for her insurance than another adopter with a better history who operates his autonomous vehicle a great deal. Both drivers would present the same risk, but old rules would make one pay more, unnecessarily.

To avoid absurdity, policy makers, regulators and stakeholders will have to craft a new system that can accommodate the risks presented by autonomous vehicles. And yet, while it seems inevitable that some changes will be needed, changing Prop 103 is not a straightforward task. On the one hand, a legislative fix would require a two-thirds vote of the Legislature on a measure that courts could deem “furthers the purposes” of Prop 103. On the other hand, interested parties could qualify an initiative and work to convince 50.1 percent of Californians of the merits of their new system.

In either case, the sooner that all parties can agree upon a system and an approach, the better.

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

Delaware becomes first state to include digital accounts in estate law

August 26, 2014, 4:08 PM

Say you have an iTunes library that’s the envy of the most obsessive music collectors. Or a Facebook account with thousands of friends who obsessively share and “like” anything you post. Or a Twitter account that can drive media discourse due to its massive number of followers.

And then, you die.

What happens to these very real forms of digital and (in some cases) social capital?

Believe it or not, under the status quo, your heirs could (and probably would) be completely shut out of any inheritance of these things. In fact, given that Facebook and Twitter’s current terms of use explicitly foreclose people logging into accounts they don’t own, any attempt to claim a dead relative’s social media account could very well lead to the destruction of that social media account, along with whatever was built into it.

Even worse, iTunes has no mechanism by which ownership can be transferred to an heir, which in the real world is like having one’s record collection go up in flames the instant he or she dies. Something clearly needs to be done to remedy these problems.

Fortunately, in at least one state, something has. This month, Delaware enacted the Fiduciary Access to Digital Assets and Digital Accounts Act, which permits people to leave instructions in their wills for social media and email accounts, blogs, iTunes and cloud storage lockers like Dropbox to be passed onto their heirs. And if Suzanne Brown Walsh of the Uniform Law Commission has her way, similar laws will be enacted in all 50 states.

On the one hand, the fact that such a law passed apparently without resistance is welcome news. On the other hand, the fact that a law like this is only now being pushed, despite the fact that iTunes and cloud computing are both years old, is a troubling sign of how slow the law is to change in an era when planned obsolescence sometimes happens in mere months, rather than years. It also is emblematic of a failure by lawmakers to view digital assets as real in the same sense as actual physical ones, despite the fact that they often mimic physical assets.

Just as iTunes is, in principle, no different from a collection of compact discs, blogs can easily be thought of as collections of correspondence and/or private diaries that, in an older era, might have been passed down in actual physical form. Emails are clearly analogous with letters. Cloud computing of the type practiced by Dropbox may as well be considered the equivalent of a safety deposit box, and no one would contest the right of loved ones to inherit those.

While most of the digital goods under consideration look and act like physical goods of times past, there is another element to the issue that makes it especially puzzling that it has taken so long to address this issue. That is, unlike physical goods, which can depreciate with the effects of time, it’s taken for granted that the Internet is forever. The existence of the Wayback Machine, as well as numerous other means by which archived materials can be recovered from digital netherspace (that is, if it even needs to be recovered at all) speak very well to this sense of agelessness. If a person’s perishable physical assets can be passed down, then surely goods that can last forever without aging or depreciating should be covered the same way.

Whatever the reason that it has taken so long to update the law, hopefully the rest of the nation will look to Delaware as an example. And hopefully in future, the law can change in response to technological shifts at the speed of email, rather than lagging behind it like some imitation of the Pony Express.

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