Technology & Communications

Texas is quickly rapidly evolving into a hub for technology and innovation, as the state continues to serve as a refuge for companies and homeowners fleeing the regulatory morass of California.  

Unfortunately, there are some bad regulations that just can’t be escaped. 

In response to the state’s rise as a hub for ascendant technology, Texas universities have worked to build out programs that would allow students to take advantage of tech opportunities. This is a no brainer. Unfortunately, the federal government is throwing a wrench in the works, by pushing for regulatory changes that would dramatically disrupt institutions' ability to partner with online program managers (OPMs) - a critical partner that’s helping schools scale up low-cost, relevant programs to meet emerging market demands. 

These partnerships between universities and OPMs took off after the Department of Education (ED) issued a Dear Colleague Letter in 2011, to provide guidance on college contractors, called “third-party servicers.” At the time, the ED clarified that contractors offering “bundled services” (often a combination of online technology platforms, coursework design, recruiting, and other services) could be compensated via tuition revenue-sharing arrangements. 

Streaming has become the main way most Americans consume movies, TV shows and music today, and the transition has been rapid and disruptive. Hollywood and the streaming services have been much in the news lately, with writers and actors striking over issues including the compensation changes that streaming has introduced into the content economy. 

Today, the Institute for Policy Innovation (IPI) filed comments with the Federal Communications Commission (FCC) in support of the FCC’s 5.9 GHz proceeding.

If you’re into that sort of thing, that’s all you need to know. If you have no idea what that is about, the rest of this is for you.

Spectrum is a limited resources, and these days is in more demand than ever. Broadcast TV and radio, wireless phones, Wi-Fi, baby monitors, home security devices, first responder communications, military and satellite applications—and scores more things all use wireless spectrum. And because there seems no end of demand for spectrum, policymakers have recognized that it could get crowded.

That’s why the FCC has for years been identifying bands of unused and underused spectrum so that it could be repurposed for more efficient use. Oh, and because it is auctioned off, that’s more revenue for the federal government.

In recent years spectrum belonging to television broadcasters and satellite companies has been auctioned and repurposed to obtain more spectrum for wireless phones.

But it turns out, the biggest hoarder of unused and underused spectrum is the federal government itself. Many agencies have been allocated spectrum, and much of this spectrum has been left idle or underused for decades. A lot, but not all, has been reserved by the military, and eventually some of that is going to have to be clawed back as well.

In 1999 a block of spectrum was allocated to the Department of Transportation (DOT) to be used for future smart cars to be able to talk with each other, with the goal of increased public safety. The DOT came up with a plan called Dedicated Short-Range Communications (DSRC) for cars to communicate with each other and coordinate with each other.

Well, fine. Except that for the last 20 years, almost nothing has been done with this important band of spectrum. Meanwhile, it has become clear that autonomous vehicles aren’t going to be safer because they are dependent on communications with all the other vehicles around them – they are going to be safer because they are autonomous and independent. Creating a system of dependencies just doesn’t make sense—it probably makes such cars more vulnerable in that it could create a false sense of security.

So the FCC essentially wants to take part of the 5.9 GHz spectrum away from the DOT. Can you predict how the DOT might respond to such a request?

Yeah, you’re right. Huge, ugly turf battle between Elaine Chao (Sec. of Transportation) and Ajit Pai (Chairman of FCC). Except that the FCC has final say over such things.

The best use of the 5.9 GHz spectrum is to leave a little bit of it with DOT and see if they come up with something useful to do with it, while making most of it available for more efficient uses. And that is what the FCC’s proceeding is about, and it’s why IPI filed comments today in support of the FCC’s proceeding.

In the course of trying to reorganize my little home office so that it could become an actually useful and productive space . . . I just snipped off my old ISDN line.

Only you old timers will remember when we were dependent on ISDN lines for clear voice lines for radio interviews, and for “high speed” internet. ISDN was faster than dial-up (barely) and clearer than twisted pair analog voice lines.

Getting one installed in my home was an ordeal, but also a treasure. You could split 1 ISDN line into two channels so that—get this—you could be on the phone and on the internet at the SAME TIME.

It was really incredible that you could have decent data speed (at that time) and also be on the phone, all through a single phone line. 

Because we lived\live out in a rural area, we weren't exactly among the first to be offered higher speed technologies. DSL (remember that?) was never available at our house, and to this day cable has never been available at our address.

So it was ISDN for a number of years, even while others went to DSL, and then we were able to go to a regional fixed wireless provider, before in the most amazing circumstance we ended up being one of the very first areas to have Verizon's "new" FiOS product offered. I believe I was the 3rd home hooked up to FiOS, and for many months called once a week to find out whether they were yet taking installation appointments.

Unbelievable.

And unbelievable how far we have come.

During the 86^th Texas Legislature, which took place from January to May, 2019, legislators passed a really stupid, transparently awful bill. Governor Abbott signed it. Now the state is being predictably sued.

IPI warned them. The Trump administration Justice Dept. warned them. They passed it anyway.

And I mean, they REALLY passed it. It passed the Texas House 141 to 5, and it passed the Texas Senate 31 to 0.

It still boggles my mind that a piece of legislation with such obvious flaws sailed through the legislature with hardly any notice. But now the chickens are coming home to roost, and Texas taxpayers are going to be paying for the state to defend the indefensible in a likely losing cause.

Ronald Reagan was fond of reminding us of a fundamental economic truth: “If you want less of something, tax it.”

Of course, President Reagan wasn’t referring to broadband infrastructure at the time.  But his observation is no less true in today’s digital economy.  In fact, since the earliest days of the commercial internet back in the ‘90s, a bipartisan consensus in Congress has recognized the universal truth of President Reagan’s warning and worked to ensure that local taxes and fees didn’t become an impediment to the build-out of our national broadband infrastructure.

Congress enshrined this prohibition against local taxes on broadband in the bipartisan Internet Tax Freedom Act.  Similarly, the Cable Act provides a national framework that encourages network deployment by limiting the power of local governments to impose investment-killing fees.

The success of this light-touch framework is self-evident.  Since 1996, broadband providers have invested $1.6 trillion to build out our nation’s broadband infrastructure, deploying high-speed networks at a pace that far exceeds what European countries have managed.  And while there are clearly deployment gaps still to be closed – particularly in rural America – the urgent necessity of closing these gaps argues even more strenuously for continuing to heed President Reagan’s warning.

But as sure as the sun rises in the East, there will always be high-tax local jurisdictions eager to treat private sector investments as their own personal piggy bank to be raided to fund big-spending government budgets.  Despite the obvious historic success of the federal prohibition on internet taxes and fees – and despite the fact that world-class broadband infrastructure is increasingly become table stakes for any local community that hopes to thrive in the digital age – some localities have challenged the bipartisan pro-investment consensus in court.

Faced with these legal challenges, the FCC is about to kick off a proceeding to clarify its policies limiting how local jurisdictions can use local franchising laws to impose taxes and fees on broadband providers.  We strongly urge Commissioners to defend the longstanding, bipartisan consensus pre-empting state and local efforts to add new fees or obstacles to broadband investment.

Make no mistake about it:  The internet is an interstate service.  Networks – and the packet of data that fly across them at the speed of light – don’t stop at state lines.  If ever a technology existed that met the Constitutional definition of “interstate commerce”, it’s the internet.  That means it’s up to federal policymakers to defend the (wildly successful) national pro-deployment framework against attacks from local jurisdictions more interested in grabbing a few short-term bucks.

As a nation, we want more broadband investment.  It’s one of the few things Democrats and Republicans seem to agree on.  So the FCC should remember President Reagan’s wise advice and preempt local governments from adding taxes and fees that will discourage the very investment we all agree is needed.

I’ve done a lot of work on the role of intellectual property in trade agreements, so when nuttiness makes its way into the mainstream, I tend to notice.

If you’re interested in some of the work I’ve done on IP and trade, here’s a little:

• In 2014, during the Trans-Pacific Partnership (TPP) discussions, I spoke as a panelist at a Cato Institute event. The panel was pretty much stacked 3:1 against me, and I think I held my own pretty well. It’s one of the more fun things I’ve done in policy in the last couple of years.
• Why Intellectual Property Should be Included in Trade Agreements

Anyway, recently, the anti-copyright coalition Re:Create’s Executive Director Josh Lamel wrote an op-ed in “The Hill” claiming creative industry calls for modern, strong copyright provisions in NAFTA that reflect lessons learned about internet ills since the DMCA was enacted in 1998 “would cripple the creative economy and the internet economies.”

To support his bizarre and counterintuitive assertions, Lamel relies on dubious claims and ends-driven research. To help everyone see through Re:Create’s artifice, I set the record straight below.

A couple of weeks ago, back on August 29^th, the Federal Communications Commission (FCC) once again lost a major case when the US Court of Appeals for the Sixth Circuit ruled unanimously in favor of the states and against the FCC’s brazen attempt to overrule state laws regulating municipal (government-owned) broadband networks.

Here's some language we'd like to see in the appropriate section of the GOP platform. In case anyone's interested:

The Internet is a platform for disruption, allowing individuals, private enterprises and entrepreneurs to communicate and engage in commerce in new ways, breaking down walls of distance, size and established power.  Regulators and tax collectors, threatened by the disruptive Internet that empowers people and private businesses, are pushing for their powers to regulate and tax to grow in the same way, across borders and reaching every corner of the Internet.  The Republican Party should consistently support Internet policies that allow people and private enterprise to thrive, without providing new and expanded powers to tax and regulate so that the Internet does not become the vehicle for a dramatic expansion of government power.  Maintaining fundamental principles of limited government in an increasingly Internet-enabled world is a critical role for the party that puts people ahead of government bureaucracies and regulators.

HBO’s “Silicon Valley” has built a successful show satirizing the real Silicon Valley’s hubris and worst excesses. Many of the funniest moments follow the struggles of the protagonists with various venture capitalists who have invested in their business (Russ Hanneman anyone?). VCs – or “Angel Investors” – are the demigods of Silicon Valley. Their decisions can make or break companies. As such, they hold a special place in tech circles and their opinions are given a lot of deference.

It’s this VC worship that likely led Silicon Valley-backed intellectual property skeptic advocacy group Engine to commission a 2014 survey of investors (and law firms that advise them) concluding VCs may be less likely to invest in “digital content intermediaries” (firms like YouTube) if the company were exposed to legal risk for copyright infringing content on their sites.

The notion that investors account for legal liability as they choose their investments isn’t insightful or new. And the idea that a VC might choose not to invest in a new business built on facilitating access to unlicensed copyrighted content shouldn’t be either.

This “innovation at all costs” mentality, which seems to fuel the Engine report, reminded me of a 2013 Wired article discussing Silicon Valley’s “threadbare nature of digital exceptionalism.”

The undue emphasis placed on entrepreneurship, combined with a limited view of who “counts” as an entrepreneur, functions to exclude entire categories of people from ascending to the upper echelon of the industry. And the ideal of authenticity privileges a particular type of self-presentation that encourages people to strategically apply business logics to the way they see themselves and others.

One argument against the FCC’s recently announced “AllVid” plan to regulate and “open up” the video set-top box is that set-top boxes are NOT a natural monopolistic platform that must be regulated by government in order to allow competition – in fact, set-top boxes are on the verge of being phased out and replaced by a variety of innovative new options. Apple TV, for instance, is an example of innovative new hardware for video access. But even a look at Apple TV lets you quickly see the real future of video access – apps. Put simply, in the normal course of innovation responding to consumer demands, set-top boxes are being replaced by apps on smart TVs, mobile and streaming devices. There may never be a better example of government regulation being behind the pace of innovation.

And today, Comcast announced its Xfinity Partners Program, which will allow Comcast customers to access their Xfinity content through a variety of devices and platforms using an Xfinity TV Partner app. Samsung and Roku have already joined the program, which means Comcast customers simply won’t need a set-top box if they own one of the new Samsung or Roku devices featuring the Xfinity TV app.

Seeing Comcast join the impressive number of over-the-top video providers who allow access to their content through apps demonstrates that the FCC’s AllVid rulemaking is not a response to a problem in the marketplace. The FCC has also done no economic analysis whatsoever to justify its scheme. Nevertheless, the FCC is pushing the Allvid scheme very aggressively with shortened timeframes for comments and public input.  One has to wonder what, exactly, is the FCC trying to accomplish? And why the rush?

Meanwhile, industry continues at the speed of innovation while the FCC regulates looking backward.

The Consumer Electronics Show, hosted by CTA, is appropriately lauded for being a showcase of technology and innovation.  As they tout themselves, “For 50 years, CES has been the launch pad for new innovation and technology that has changed the world. Held in Las Vegas every year, it is the world’s gathering place for all who thrive on the business of consumer technologies and where next-generation innovations are introduced to the marketplace.”

This year the buzz around the show was even greater than usual, largely because of the promise of a connected life becoming real in so many ways—from cars, to wearables, to thermostats and home alarm systems.  Sharper pictures, bendable screens, virtual reality and the reality that your “phone” is rapidly becoming your personal “smart hub” all fought for attention inside the show.  But the most accessible innovation may have been happening off of the show floor.

This year Uber, the ride hailing app provider, was operating in Las Vegas during the show.  The impact was obvious.  The infamous hours-long taxi lines for those trying to leave the convention center were cut by half or more. This year show attendees were able to make productive use of their time instead of waiting thirty minutes or more for a cab from the hotel to the show.  As a further customer service, Uber partnered with a Dallas start-up company, Vinli, to provide riders with a Wi-Fi connection while they rode.  The entire experience of attending a trade show that attracts 180,000 visitors to Las Vegas changed for the better

We’ve often argued that a combination of government enforcement and private voluntary agreements is necessary to reduce illegal online theft of copyright materials [ex here and here]. Everyone in the online world has an interest in ensuring that a complete array of rich content is easily accessible online, but that requires a healthy Internet environment, which means the rule of law predictably applies in the online world as well as it does in the analog world. That the online community resists the idea that piracy is a “killer app,” either for Internet adoption or for selling advertising.

And it’s entirely consistent with America’s long tradition of civil society and free association for voluntary agreements among Internet players to be a big part in creating this healthy internet ecosystem. That’s why it’s been cheering to see several recent examples of voluntary agreements designed to reduce online piracy.

Last week Donuts—the world’s largest Internet domain name registry and the registrar of the new .MOVIE domain extension, announced that it has entered into an agreement with the Motion Picture Association of America (MPAA).

Essentially, infringement notices from MPAA to Donuts will be treated with high priority, and MPAA’s notices will have a presumption of credibility, so long as MPAA provides sufficient information to Donuts. That information includes:

• A statement that the MPAA is authorized by its members to submit the referral;
• Detailed description of the clear and pervasive copyright infringement occurring on the domain (e.g., sample URLs, screen shots);
• Non-exhaustive identification of the law(s) being violated and a description of why the copyright infringement violates the specified law(s);
• Statement that, prior to sending the referral, the MPAA alerted or attempted to alert the registrar of record and hosting provider, including a description of the response received, if any, from registrar and hosting provider and an explanation of why such responses failed to mitigate the infringement;
• Statement that the referral is submitted with a good faith belief that the information contained therein is true and accurate; and
• Confirmation that the referral was subject to careful human review and not submitted solely based on automated Internet scanning or scraping services.

This is more than enough information to guard against the concerns of copyright critics that such takedown notices are sometimes used nefariously to suppress legitimate content.

IPI commends Donuts for its willingness to work cooperatively with content owners to reduce online piracy. We’ve not simply reproduced the entire agreement in this blog entry, but the agreement is a robust model for other registrars and operators to follow, and we hope further such voluntary agreements are in the offing.

One day soon the streetlight will do far more than simply hold back the darkness. AT&T envisions an entire smart city where such poles might alert citizens to danger, respond to gun shots by enabling all lights in the area to automatically turn on, or determine how to conserve energy and still be effective in providing all the light needed. During the AT&T Developers Summit, held immediately before the Consumer Electronics Show in January, a vision for smarter cities was revealed by AT&T and their partner companies. Their combined vision is the Smart Cities initiative.