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OpenMarket: Media, Speech and Internet Freedom

  • 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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