Luke Pelican

In a recent Washington Times op-ed, Mark Hyman of the Sinclair Broadcast Group makes some compelling arguments calling for a spectrum inventory. His suggestion that the NTIA and FCC fulfill their mandate from President Bush in 2003 to increase spectrum efficiencies is on point and laudable. It’s certainly true that plenty of spectrum currently sitting in government hands could be put to better use, and thus a part of the problem is spectrum management. But that’s about all Hyman gets right.

His assertion that the “looming spectrum crisis” is a ruse manufactured by FCC Chairman Genachowski and parroted by major cell phone companies is completely erroneous. Hyman points to “the only independent study” on this subject to support this claim, one conducted by Citigroup. That report claimed that cellular companies were using just a fraction of the spectrum assigned to them. Critics have since eviscerated the Citigroup report, pointing to its use of outdated figures and misunderstandings of mobile technology as the cause of its flawed and ultimately inaccurate conclusions.

Hyman also alludes to public statements from Sprint and Verizon as proof that no spectrum crunch exists. Yet this September Verizon’s CEO declared that the AT&T / T-Mobile merger “was kind of like gravity” and had to happen in part because of the government’s inability to get sufficient amounts of spectrum to carriers. Such a statement bolsters claims that we do in fact face a spectrum crunch.

The FCC was actually aware of this problem at least as far back as 2002, when the Spectrum Policy Task Force issued its report. That report detailed how FCC’s allocations of spectrum in 1994 were based on predictions that there would be 54 million mobile users by the year 2000. In 2000 however the number of mobile users was more than double that base amount; the authors explained that the FCC and industry “have significantly and consistently underestimated the need for additional spectrum and the public’s utilization of new technologies and applications.”

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Wired welcomed a new author to its Science Blogs on Monday afternoon — Kristian von Bengtson, an aerospace engineer and co-founder of Copenhagen Suborbitals. His three year-old group is working on ways of achieving suborbital spaceflights with rockets. As its website indicates, the effort is supported entirely by private donations, sponsors, and the work of part-time specialists.

von Bengtson’s discusses in his inaugural piece what makes their effort unique in today’s environment:

This is not a business, nor is it an attempt to race against being the first doing private space travel in Europe. It is truly a project pushing the limits of a small group of individuals.

Human space flight has always been “untouchable.” It has been for big companies or governments only to take on. But Copenhagen Suborbitals would like to show the world that it can be done by thinking unconventionally in all areas, not only in terms of research and development but also on the financial side. We want to find the old spirit of the pioneer and entrepreneur in ourselves and in the process hopefully inspire as many as possible.

Amid the uncertainty about the start of commercial suborbital flights and gloom surrounding the termination of NASA’s shuttle program, there’s something refreshing about Copenhagen Suborbitals. It represents the power of innovative dynamism — as von Bengtson observes, spaceflight is no longer a realm restricted to large corporations or nation states. Their effort is reminiscent of the Wright Brothers at Kill Devil Hills — a group of people with a dream getting together, enduring the trials and tribulations of working on a small budget to achieve something great, and ultimately changing the world.

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Post image for SEC Jumps into Cybersecurity Debate

Much of the cybersecurity focus this year has been on Congress’s efforts to mandate data breach notifications and security standards. Now the Securities and Exchange Commission (SEC) is entering the fray. On Friday, The Washington Post reported that the agency issued a guidance document instructing publicly traded companies on the procedures they must follow relating to cybersecurity issues.

The SEC makes clear that these obligations are preexististing, and that the guidelines merely clarify the requirements as they pertain to cybersecurity. For example, regarding risk disclosure, the SEC states:

Consistent with the Regulation S-K Item 503(c) requirements for risk factor disclosures generally, cybersecurity risk disclosure provided must adequately describe the nature of the material risks and specify how each risk affects the registrant. Registrants should not present risks that could apply to any issuer or any offering and should avoid generic risk factor disclosure.5 Depending on the registrant’s particular facts and circumstances, and to the extent material, appropriate disclosures may include:

  • Discussion of aspects of the registrant’s business or operations that give rise to material cybersecurity risks and the potential costs and consequences;
  • To the extent the registrant outsources functions that have material cybersecurity risks, description of those functions and how the registrant addresses those risks;
  • Description of cyber incidents experienced by the registrant that are individually, or in the aggregate, material, including a description of the costs and other consequences;
  • Risks related to cyber incidents that may remain undetected for an extended period; and
  • Description of relevant insurance coverage.

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This morning, the House Transportation and Infrastructure Committee’s Subcommittee on Highways and Transit held a hearing on the President Obama’s infrastructure bank proposal. In September, the president announced this solution as part of his plan to get America’s economy back on track.

Though not an entirely novel concept, the idea is that by funding massive projects to improve our national highways, water systems and energy infrastructure, jobs will be created and the economy will rebound. This $10 billion project would be overseen by a new bureaucratic entity, the American Infrastructure Financing Authority (AIFA).

Defenders of the proposal claim the bank is necessary to put Americans back to work. The president, in calling for Congress to pass his American Jobs Act and the infrastructure bank plan included within it, proclaimed it is time to “build an economy that lasts.”

But as my colleague Wayne Crews observed, the infrastructure bank idea is fruitless idea:

Government money is a trap, with labor and environmental strings attached. It promises to crowd out, reduce and degrade American infrastructure.

America does desperately need “infrastructure wealth”; we need it just as we need financial wealth, real estate wealth, manufacturing and service wealth, and health-care wealth. But like all wealth creation, the root is enterprise and property rights.

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Yesterday the House Subcommittee on Commerce, Manufacturing, and Trade held a hearing addressing the economic consequences of the European Union’s internet privacy regulations. The hearing is part of a comprehensive review of the online privacy aimed at encouraging discussion about how to best satisfy consumer privacy concerns while maintaining a robust and innovative digital ecosystem.

Among the issues raised was the concern that the US’s less restrictive framework for online privacy puts American companies at a disadvantage in the form of aggressive enforcement by EU member states. Also discussed was the question of whether there is a demonstrable harm to consumers from behavioral advertising, which utilizes browsing data to improve advertising efficiency for both businesses and customers.

Catherine Tucker presented results from a ten year study she conducted with Avi Goldfarb evaluating the effects of the EU Data Privacy Directive on advertising by European companies. Their study revealed that the directive “reduced advertising performance by 65%.” She cited an estimate based on the study indicating U.S. companies could suffer losses of $33 billion over five years if Congress chose to adopt opt-in online privacy measures similar to the EU directive. Tucker also observed that strict regulations in this area can incentivize companies to switch to more intrusive, less tailored advertising to maintain their current business models, or even switch to pay-wall type models.

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Last week the House Appropriations Committee released its draft bill for funding of Transportation, Housing and Urban Development. Of particular note is the appropriation for the FAA’s Office of Commercial Space Transportation (AST). As Marcia Smith observes, the $13 million set forth by the Committee is half of what agency director George Nield requested back in May:

The request was 74 percent higher than what it had received for FY2010 and FY2011… Nield said at the hearing that he expected a ten-fold increase in the number of commercial launches and pointed to new initiatives such as the Commercial Spaceflight Technical Center at Kennedy Space Center, FL and a “prize” program.

The news was greeted with skepticism in some quarters, with predictions of permit and license delays as a consequence of the trim-down. Alternatively, Behind the Black’s Robert Zimmerman sees this as a positive sign:

This is good, to my mind. Cutting their budget will pull the teeth from their regulatory efforts. As the commercial space industry ramps up, the political pressure on this office to approve permits will increase, and if they are short of cash they will have no choice but to keep things simple and say yes.

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More news from the frontlines in the battle over school choice, as thousands of Indianans have taken advantage of the Hoosier state’s Choice Scholarship Program. Public school teachers and administrators are naturally panicked over this development, going so far as to contact parents and persuade them to keep their children enrolled.

The program is welcome news for many parents concerned about the education their children are currently receiving in public schools.

Yet opposition to the program is strong, and the Indiana teachers’ unions are working to thwart the program. They claim it violates the Indiana constitution by using taxpayer dollars to subsidize religious education, and runs afoul of the state’s obligation to provide “tuition-free system of common schools.”

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In response to Jacob Heilbrunn’s August 12 opinion piece in the Los Angeles Times entitled, “Berlin Wall: A blessing in disguise,” I submitted the following letter to the editor, which was published on Tuesday:

I am appalled by Heilbrunn’s characterization of the Berlin Wall as a “blessing in disguise.” I wonder if the estimated 169 (and very likely many more) East Germans killed while trying to flee their prison of a country would agree.

Luke Pelican

Alexandria, Va.

This morning the House Judiciary Committee began markup on H.R. 1981, the “Protecting Children from Internet Pornographers Act of 2011,”  which would among other things force all commercial Internet providers who charge fees for web access to store data on the customer Internet Protocol (IP) addresses for an entire year. The Competitive Enterprise Institute, TechFreedom, and Americans for Tax Reform’s Digital Liberty joined together in raising grave concerns about the legislation in a letter which can be viewed here.

Child exploitation is a heinous crime and should be punished severely. Allocating more resources to law enforcement to pursue such criminals and evaluating the effectiveness of current data sharing procedures is a logical first step. Instead, H.R. 1981 will impose a collection regime that casts suspicions on ordinary law-abiding Americans.

The retention requirement will burden Internet providers with significant equipment and maintenance costs, which will inevitably be passed onto consumers. The legislation draws no distinction between large companies and smaller outfits, and would impose substantial burdens on providers who are forced to refit their networks in order to comply. As the coalition letter states,

Requiring all firms that sell Internet access to log temporary network address data as prescribed in the legislation would impose substantial costs. As with all burdensome regulations on the private sector, consumers themselves ultimately bear most of the costs incurred by companies in complying with the data retention mandate. Thus, the bill would directly hinder Congress’s laudable objective of promoting the deployment and adoption of broadband at a time when many Americans are struggling to make ends meet. Lawmakers should be working aggressively to remove burdensome regulations on Internet service providers, rather than creating costly new mandates.

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Back in April of this year Massachusetts Attorney General Martha Coakley issued emergency regulations prohibiting Internet gambling at “cyber cafés” and “phone card businesses,” claiming the regulations were needed to “protect consumers.” Now, despite complaints from businesses targeted by these regulations, Coakley has instituted a permanent ban on the operation of the establishments, in particular “where a gambling purpose predominates over the bona fide sale of bona fide goods or services.” Interestingly this ban comes at a time when Massachusetts legislature, facing tight economic times, has cut upwards of $3 billion from the state’s budget since fiscal year 2009. Projections are the 2012 budget will continue that trend.

The aforementioned circumstances make the decision to ban these businesses all the more confusing. Colleagues here at CEI have discussed at length the nonsensical nature of these regulations and the benefits that can accrue by legalizing Internet gambling. In this particular case, there are questions as to whether the activities were violations of Massachusetts law in the first place, as Coakley claims. Legislators and the governor meanwhile are engaged in “closed-door” sessions considering the approval of new casinos and the placement of slot machines at race tracks. There’s no inconsistency there.

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