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OpenMarket: Media, Speech and Internet Freedom

  • Net Neutrality Questions FCC Commissioners Need to Answer

    November 16, 2015 4:56 PM

    In a House Energy & Commerce Committee oversight hearing on Tuesday, November 17, all five Federal Communications Commissioners will testify. Net neutrality, the FCC’s broad push to control both the infrastructure and content of tomorrow’s Internet, with full support of America’s left-wing, will be a lead topic.

    The debate over net neutrality has been done to death and elements are subject to legal challenge. Yet even Republicans can’t let go of wanting to regulate boogeymen like so-called “throttling” and “discrimination,” so in that respect they have themselves improperly conceded a moral victory and undermined the advance of free, competitive enterprise and consumer welfare in infrastructure wealth.

    All this mess and distraction at a time when Congress needs to dismantle the FCC altogether.

    I think the best approach for the members is to frame all questions from the right perspective: that FCC’s entire purpose is outdated and its intervention destabilizing, anti-technology, anti-infrastructure—and just plain anti-Internet, and anti-neutral, for that matter.

  • 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?

  • 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? 

  • Besting a Billionaire: How a Grassroots Campaign Stopped a Ban on Internet Gambling

    December 17, 2014 3:13 PM

    This week we get to say goodbye to the 113th Congress. For those who believe in free markets and individual liberty, it was a doozy. There were some losses, but also some big wins. One victory in particular is worth noting because the battle involved one of the worst aspects of politics: entrenched and connected special interests, versus one of the best aspects: a pro-liberty grassroots uprising of individuals against cronyism.

    Like all so-called vices, gambling has always had its foes, from religious leaders who believe it is evil to public health professionals and social advocates worrying exploitation of young, ill, and poor. For the most part, these interests have been unable to stop the demand for or rise in legal gambling throughout the United States. But when one of the world’s richest men says he’ll spend what it takes to ban Internet gambling, all bets are off.

    Intrastate online gambling does not violate federal law: that was the conclusion the department of justice came to in 2011 after two years of consideration. So long as the gambling was not sports related, no federal laws prohibited states from allowing online gambling within their borders. Within the next two years three states, Delaware, New Jersey, and Nevada, began offering licensed and regulated online gambling.

    Not long after that, in November 2013, Sheldon Adelson—CEO of Sands Casino—announced his plan to stop the spread of legal online gambling in the U.S. Coming from the man who almost single-handedly funded Newt Gingrich’s 2012 presidential campaign and who donates millions more to members of Congress—it was a threat that nobody considered empty.

    • December 23, 2011: DOJ declares no federal law preventing intrastate online gambling
    • November 2013: Nevada, New Jersey, Delaware offer legal online gambling
    • November 2013: Adelson announces Coalition to Stop Internet Gambling
    • March 20, 2014: Draft bill written by Adelson’s lobbyist circulated through Congress—on March 26, Sen. Lindsey Graham (R-S.C.) and Rep. Jason Chaffetz (R-Utah) officially introduce the Restoration of America’s Wire Act (S. 2159, H.R. 4301)
  • Why the Supreme Court's Aereo Decision Protects Creators without Endangering the Cloud

    June 26, 2014 10:41 AM

    This post was coauthored by Geoffrey Manne and Ben Sperry of the International Center for Law and Economics. It originally appeared at Truth on the Market.

    Yesterday, the Supreme Court released its much-awaited decision in ABC v. Aereo. The Court reversed the Second Circuit, holding that Aereo directly infringed the copyrights of broadcast television program owners by publicly performing their works without permission. Justice Breyer, who wrote the opinion for the Court, was joined by five other Justices, including Chief Justice Roberts, Justice Kennedy, and the liberal-leaning bloc. Interestingly, Justice Scalia dissented on textualist grounds, joined by his conservative-leaning colleagues Justice Thomas and Justice Alito.

    As this split illustrates, debates about intellectual property often don’t break down along partisan or ideological lines, and the division between the majority and the dissent in Aereo focused entirely on how to interpret the copyright statute, not on the underlying philosophical merits of property rights or policy judgments regarding the costs and benefits of stronger or weaker IP.

    The majority, relying on both the legislative history and the text of the Copyright Act of 1976, emphasized that the Act sought to foreclose the workaround by cable companies of broadcasters’ copyrights that the Supreme Court had previously sanctioned in a duo of cases—and that Aereo’s conduct was functionally almost identical to the unauthorized retransmissions by cable companies prior to the 1976 Act.

    Justice Scalia dissented on two grounds: first, that the majority based its reading of the statute on legislative history, a practice he opposes as a means of divining a statute’s meaning; and second, that the majority relied on a vague and inapt comparison between Aereo’s allegedly infringing conduct and cable companies’ pre-1976 retransmissions of broadcast network programming.

    We argue here, building on our amicus brief and our previous blog post on Aereo, that, regardless of which test applies, Aereo infringes on television program owners’ exclusive right under the Copyright Act to publicly perform their works. Moreover, we argue that the Court’s test in Aereo is far less ambiguous than its critics assert, and that it does not endanger cloud computing services like so many contend.

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