You are here

OpenMarket: Tech and Telecom

  • What Will a Chaffetz Speakership Mean for Internet Freedom? Part 2

    October 8, 2015 12:23 PM

    Utah Republican Congressman Jason Chaffetz recently threw his hat in the ring in a bid to replace Speaker John Boehner, after House Majority Leader Kevin McCarthy’s (R-Calif.) gaffe regarding the Benghazi investigation made the race far more open. As my colleague Jessica Melugin notes, Chaffetz considers himself one of the more tech-savvy members of Congress and a strong defender of the Tenth Amendment.

    Yet, Chaffetz has twice introduced the Restoration of America’ Wire Act (RAWA, H.R. 707), which would allow the federal government to overturn state laws that govern a wholly intrastate activity. Internet gambling has been around since the day the Internet made it into American homes. And Republican lawmakers have been trying to ban it—without much luck. So much for state sovereignty.

    There is no federal law directly governing Internet gambling, so the task has been left to the Department of Justice to interpret existing federal gaming laws. During the Clinton administration, DOJ defined online sports betting as unlawful. Then during George W. Bush’s administration, DOJ determined that all online gambling was illegal under U.S. law—an interpretation that held until 2011 when, pressed by state lotteries, the Obama DOJ returned to the previously held understanding: As long as the gambling is intrastate and not related sports betting, it is not illegal under federal law.

    This opened the door for states to legalize intrastate online gambling. Three states—New Jersey, Delaware, and Nevada—have done so. In addition, more than a dozen states have some form of lottery games available online.

    Unsurprisingly, casino magnate and GOP mega-donor Sheldon Adelson has poured millions of dollars into promoting legislation meant to crush the burgeoning online competition to his business. What is surprising is who in Congress is now pushing his federalism-trampling bill.

  • What Will a Chaffetz Speakership Mean for Internet Freedom?

    October 8, 2015 11:33 AM

    With House Majority Leader Kevin McCarthy’s (R-Calif.) gaffe regarding the Benghazi investigation, the race to replace outgoing Speaker John Boehner (R-Ohio) appears much more open. Days later, Utah Republican Jason Chaffetz seized the opportunity to announce his own bid for the Speaker’s gavel. The second-term congressman considers himself one of the more tech-savvy members of Congress, but how might a Chaffetz Speakership affect Internet freedom?

  • Court Upholds Legality of NSA's Bulk Collection of Telephone Records

    August 31, 2015 4:35 PM

    On Friday, the U.S. Court of Appeals for the District of Columbia Circuit handed down its much-awaited ruling in Obama v. Klayman, one of several lawsuits challenging the legality of the NSA’s bulk collection of Americans’ telephone records. In 2013, the District Court for D.C. issued a preliminary injunction after it found the plaintiffs were “substantially likely” to show that the NSA was collecting their telephone records in violation of the Fourth Amendment to the U.S. Constitution. The D.C. Circuit disagreed with this conclusion, reversing the preliminary injunction and sending the case back to the lower court for further proceedings.

    Although the D.C. Circuit’s decision in Klayman has major implications for future cases about government surveillance, it won’t immediately affect the NSA’s bulk collection program. When the District Court in D.C. granted the plaintiffs a preliminary injunction, the court decided to “stay” its preliminary injunction pending an appeal—meaning the NSA could continue its bulk collection while the lawsuit made its way through the federal courts. This process has taken longer than expected, with nearly two years elapsing since the preliminary injunction issued in December 2013.

  • Did North Dakota Just Authorize Pepper-Spraying Police Drones?

    August 27, 2015 1:26 PM

    The Daily Beast’s Justin Glawe has written an article about a North Dakota law aimed at limiting law enforcement use of unmanned aircraft systems (UAS), or drones. He claims that the law was watered down by police interests and corporate lobbyists, and that the weakened protections now authorize law enforcement’s use of non-lethal UAS-mounted weapons:

    With all the concern over the militarization of police in the past year, no one noticed that the state became the first in the union to allow police to equip drones with “less than lethal” weapons. House Bill 1328 wasn’t drafted that way, but then a lobbyist representing law enforcement—tight with a booming drone industry—got his hands on it.

    The bill’s stated intent was to require police to obtain a search warrant from a judge in order to use a drone to search for criminal evidence. In fact, the original draft of Representative Rick Becker’s bill would have banned all weapons on police drones.

    Then Bruce Burkett of the North Dakota Peace Officer’s Association was allowed by the state house committee to amend HB 1328 and limit the prohibition only to lethal weapons. “Less than lethal” weapons like rubber bullets, pepper spray, tear gas, sound cannons, and Tasers are therefore permitted on police drones.

    Scary stuff, right? I certainly don’t want the police to have armed UAS—whether they be deployed with lethal or non-lethal weapons—and requiring warrants is a good first step. But based on a reading of the statute in question, it does not appear to do what Glawe and others claims it does.

  • Senate Prepares to Vote on Cybersecurity Information Sharing Act (CISA)

    August 5, 2015 12:59 PM

    Today, the U.S. Senate is scheduled to vote on the Cybersecurity Information Sharing Act (CISA), which is a serious threat to civil liberties and privacy.

    CEI’s Ryan Radia offered these thoughts:

    CISA doesn’t provide any meaningful deterrent against government agencies using information they receive from companies in ways that exceed the uses authorized by the Act. Although CISA requires agencies to issue guidelines that are supposed to prevent the misuse of information shared under the Act, this is hardly reassuring. Agencies violate their own internal procedures and guidelines all the time with impunity, from the IRS to the State Department.

    That’s why it’s critical that any cyber information sharing legislation include a provision that gives relief to individuals injured by governmental misuse of information shared by companies. In this Congress, and in the last two Congresses, the House passed cyber threat information sharing legislation that allowed injured parties to sue the government for damages (i.e., a waiver of sovereign immunity). Another approach to deterring misconduct, used in the Wiretap Act, would bar the government from using evidence in court that is derived from shared cyber threat information for purposes beyond those allowed by the bill. Either a waiver of sovereign immunity or a suppression remedy needs to be included in any bill that liberalizes information sharing, or else companies won’t be able to meaningfully ensure that the government doesn’t use information they share with it for impermissible purposes.

    Read more on CISA:

    CISA Steps into the Limelight with a Manager’s Amendment and Agency Discontent

  • FCC Ignores Rule of Law in Attempt to Fine AT&T for Throttling Wireless Users

    June 17, 2015 8:37 PM

    Today, the Federal Communications Commission (FCC), on a three-to-two vote, found that AT&T violated federal regulations by failing to disclose that it was throttling certain wireless customers on an “unlimited” data plan. The FCC claims AT&T owes a $100 million fine. This announcement follows a lawsuit filed in October 2014 by another federal agency, the Federal Trade Commission (FTC), arguing that AT&T violated federal consumer protection law by throttling its unlimited data plan customers. AT&T has pledged to take both agencies to court to defend itself against these allegations.

    By way of background, for many years, AT&T and many other wireless providers offered data plans—used for Internet browsing, email, video, and so forth—on an all-you-can eat, unlimited basis. These plans let customers transmit and receive as much information as they wish, without facing overage charges for downloading too much data.

    However, in mid-2010, AT&T stopped offering unlimited data plans to new customers. For existing customers on an unlimited plan, AT&T allowed them to stay “grandfathered” on their old plans. Then, in 2011, AT&T began throttling the throughput—commonly known as “speed”—of its highest users of unlimited data plans. This throttling didn’t stop any customers from using as much data as they wanted, but it did substantially degrade a fraction of AT&T customers’ connectivity.

    Had AT&T not told anybody about this throttling, it would clearly run afoul the FCC’s transparency rule, which was issued in 2010 and upheld on judicial review by the Court of Appeals for the D.C. Circuit in 2014.

    Yet AT&T did disclose its behavior to customers and the public through various means:

    • AT&T issued a press release in 2011, which over 2,000 news outlets covered;
    • AT&T included an insert explaining its new policy in the bills of unlimited data customers;
    • AT&T posted an informational page on its website explaining the throttling, and linked to this page on the AT&T Wireless homepage;
    • AT&T modified its service contract in August 2012 to mention the potential throttling of heavy users;
    • AT&T sent text messages to heavy unlimited data users in the months before it began throttling to warn such users that they would face throttling in future months; and
    • AT&T sent text messages to heavy unlimited data users after it began throttling, warning such users that their usage was approaching the threshold where throttling would begin and explaining how to change to a different plan to avoid throttling

    A majority FCC, however, found that none of these disclosures were enough, because some customers might have missed all of them and simply assumed that “unlimited” meant not only unlimited usage, but unlimited throughput, too. But as dissenting FCC Commissioner Ajit Pai argued in his dissent, unlimited data and unlimited speed aren’t the same—and AT&T never promised its customers they would enjoy both. 

  • CEI Statements on the Failed Comcast-Time Warner Merger

    April 27, 2015 3:35 PM

    CEI responded to the news that the Comcast-Time Warner merger failed. You can read more analysis from CEI's Vice President for Policy Wayne Crews here.

    "The deck was stacked against this deal from the beginning: Comcast and Time Warner Cable had to seek permission to merge from not only the Department of Justice, but also the Federal Communications Commission. While the DOJ must win in court before it can block an acquisition, the FCC has unilateral power to send a transaction into regulatory limbo for years before the merging parties get a chance to be heard by an independent federal judge. This process turns the rule of law on its head, and only Congress can fix it." 

    -- Ryan Radia, Associate Director of Technology Studies

    “The collapse of the Comcast-Time Warner merger merely because of the interference of government, not because of actual market rejection, illustrates the overwhelming power of the modern state to undermine the advance of communications technologies and services. These bureaucrats have decided on our behalf to award other communications industry companies a government-granted reprieve from the pressures of competition.”

    -- Wayne Crews, CEI Vice President for Policy

  • Fix Cyber Information Sharing Bill, Free Market Groups Urge

    April 21, 2015 11:29 AM

    The Competitive Enterprise Institute, TechFreedom and a coalition of free-market groups issued an open letter to Members of Congress, urging them to consider amendments to the National Cybersecurity Protection Advancement Act (NCPAA) of 2015. The NCPAA intends to increase cyber security by facilitating greater sharing of potential cyber threats by private companies with each other and with government. But it also raises real privacy concerns because potential Cyber Threat Indicators could include private information like email content or Internet usage history.

    “Congress must ensure that agencies can’t strongarm companies into sharing information involuntarily, and that agencies can be held liable for recklessly misusing private data they might receive. And agencies should be barred from using such information for regulatory purposes or for unrelated criminal prosecutions,” said Ryan Radia, Associate Director of Technology Studies at the Competitive Enterprise Institute. “Finally, the existing bill’s blanket immunity for ‘defensive measures’ could encourage unauthorized access to protected computers, potentially endangering innocent bystanders caught in the middle of cyberattacks.”

    The letter proposes eight amendments:

  • Marketplace Fairness Act Is More about Tax Revenue and Rent-Seeking than Fairness

    March 11, 2015 12:10 PM

    Yesterday, Sens. Mike Enzi (R-Wy.), Dick Durbin (D-Ill.), Lamar Alexander (R-Tenn.), and Heidi Heitkamp (D-N.D.) reintroduced the speciously named Marketplace Fairness Act (MFA) in the 114th Congress. The legislation would authorize state tax collectors to reach across borders and tax out-of-state businesses, therein subjecting online retailers to taxation without representation.

    Certainly, there are inequities in the way remote sales are taxed, but the MFA’s approach is a cure worse than the disease. It would unfairly burden remote retailers by forcing them to calculate for approximately 10,000 distinct tax jurisdictions—each with their own rates, definitions and tax exemptions—while leaving brick and mortar shops to simply apply and remit tax based on the point of sale. Not much of a level playing field there.

    So if not “fairness,” as supporters of the bill claim, what is motivating pro-MFA sentiments?

    For the states and localities it’s purely a tax grab. Instead of trimming fat from their bloated budgets, governors and mayors are opting to spend time in D.C. schmoozing congress for the right to tax other state’s businesses. Why deal with disappointing or taxing your own constituents, to whom you are politically accountable, when you can spend the week office hopping on the Hill, collecting pins for your lapel, and topping it all off with an expensed dinner at Cap Grille? 

  • Net Neutrality Vote Shows Congress Must Rein In and Replace the FCC

    February 26, 2015 4:45 PM

    The separation of powers doctrine demands that Congress not tolerate unelected federal agencies going it alone and making binding law. 

    The Federal Communications Commission (FCC), on a party line vote, has elected to impose so-called net neutrality regulation via a reclassification of the formerly lightly regulated Internet under Title II of the Communications Act. 

    Somehow, we suddenly need government force to protect the freedom we’ve known online, with a 332-page set of rules no one outside the agency has seen. 

    Thursday's Federal Communications Commission (FCC) net neutrality conceit should trigger the Congress’ replacement of this rogue agency with something that recognize  boundaries, something attuned to the future and reality. 

    Airwave scarcity and public interest concerns are the causes that long presumably justified telecommunications regulation. But thanks to Thursday's FCC vote, the FCC bureaucracy itself undermined those values with a new regime that will inhibit new infrastructure development and ultimately freedom of speech itself. 

    Under utility-style micromanagement of the Internet, which is what Title II would allow, the agency will be reenergized as a magnet for political cronyism. The “bad guys” or villainous “gatekeepers” according to net neutrality partisans are the Internet service providers. 

    But ironically, with net neutrality, there's a much greater chance of there still being an AT&T and Comcast 100 years from now since upstart competing and overlapping infrastructures can scarcely cope with the likes of Title II. (Here’s Comcast’s highly promoted advertisement in support of enforceable net neutrality rules.) 


Subscribe to OpenMarket: Tech and Telecom