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December 19th, 2014 at 2:38 pm
Google Seeks to Exploit Sony Cyberattack for Its Own Self-Interest
Posted by Timothy Lee Print

The Sony cyberattack – apparently state-sponsored – obviously raises solemn concerns, including national security and the very safety of American citizens.

Accordingly, immediate public discussion should focus primarily upon the gravity of the attack and how the Internet, one of the most transformative and beneficial innovations in human history, can sometimes become a tool for those with destructive and even deadly intent.  While Sony Pictures, its employees, and its customers were the immediate victims this time, the reality is that this could happen to anyone and any enterprise.  In fact, such attacks on other companies and individuals occur at an alarmingly accelerating pace.

Leave it to Google, however, to attempt to profit from the attack and leverage it on behalf of its own self-interest.

Instead of joining the rest of the responsible online community in addressing the important issues of cybersecurity and the way in which the Internet is increasingly exploited to invade privacy, commit theft, sabotage and even terrorize, Google seeks to malign a very serious investigation into its own questionable Internet conduct.  Specifically, it remains under scrutiny by federal and state authorities for years of alleged anticompetitive conduct and invasion of privacy, as well as for potentially facilitating theft, fraud, illicit sale of drugs and even human trafficking.  The allegations are obviously serious, and Google is even more obviously worried enough about them to exploit the Sony cyberattack for its benefit.

Google even resurrected the SOPA corpse, which in its case is an acronym not for the Stop Online Piracy Act, but rather Same Old Predictable Arguments.  And rather than adhering to its self-proclaimed motto “Don’t Be Evil,” acting like a responsible participant in the Internet ecosystem and joining the condemnation and fight against cyberthreats, it is instead attempting some sleight of hand by highlighting materials leaked in the Sony attack to trot out stale arguments about “censorship across the web” and somehow breaking the Internet to obfuscate ongoing investigations into its behavior.  For instance, it highlights documents apparently stolen from Sony’s network and purportedly relating to internal strategy discussions among movie studios regarding how judicial remedies under current law might be employed to target websites trafficking in stolen content and operating illegal businesses that profit from the work of others.

That sort of strategy would actually be the polar opposite of SOPA, which was new federal legislation to change the law in order to more effectively target online piracy.  In contrast, discussions focused upon existing judicial remedies to “follow the money” to curb online content theft are precisely what the critics of SOPA argued the studios should pursue.  More broadly, the ongoing investigations into Google, and the judicial strategies the studios appear to have been considering are not about “regulating the Internet” or changing the way it operates.  Rather, they are about applying existing law to rightfully combat illegal conduct that happens to occur on the Internet.  The fact that it is occurring online doesn’t make it any more legal or sympathetic than if it was occurring in the physical realm.

Oddly, Google’s executive chairman Eric Schmidt even made a puzzling trip to North Korea in 2013 over the objections of the State Department, which labeled it unhelpful and “ill-timed.”  Schmidt encouraged North Korea to more actively embrace the Internet, but perhaps he should’ve followed the adage, “be careful what you wish for.”

Regardless, whether one favored or opposed SOPA – and we detailed at the time how the criticisms were largely uninformed or flatly dishonest – Google shouldn’t be trying to pull a fast one.  We should instead transcend its transparent rhetoric and focus on the important issue at hand:  What responsible Internet stakeholders should be doing to strengthen our bulwarks against cyberattack, and to avoid facilitating illicit behavior on the Internet.

December 19th, 2014 at 10:02 am
Mukasey: CIA Interrogations Followed the Law
Posted by Timothy Lee Print

We explained last week how the Feinstein “Torture Report” constituted governmental malpractice for a variety of reasons, including its failure to interview any of the relevant former CIA directors, deputy directors or officials who had briefed them on the enhanced interrogation techniques, and in its preposterous and counterfactual denial of the interrogations’ fruitfulness.  Largely overlooked in current debate, however, is how too many people carelessly assume that the approved interrogation techniques constituted “torture” or failed to meet the applicable legal standards.

Enter former U.S. Attorney General and District Judge Michael Mukasey.

In a searing must-read commentary this week in The Wall Street Journal, Mukasey explains that the interrogations followed the law:

It is stunning to hear those now criticizing the program issue the solemn reminder that ‘we are a nation of laws’ – while devoting little attention to what was actually in those laws.  Odder still, among the critics those who wrote the laws seem to devote the least attention to them…  Laws are a technical business in which both terminology and chronology play a part.  So if the law that criminalizes torture defines it in a certain way, that definition – and no more – is what it is, punditry and cocktail-party figures of speech notwithstanding.”

Mukasey proceeds to state that the applicable law requires an intent to cause “severe physical mental pain or suffering,” how the techniques used did not violate that rule as determined by courts or the law’s text, how we apply those same techniques to our own troops during military training, how Senator Feinstein herself was briefed on the techniques and how she unsuccessfully attempted to change the law to make those techniques illegal.  If they violated existing law, then she obviously wouldn’t have needed to propose that change.

He then illustrates how, if the interrogation techniques in question constituted “torture,” then it wouldn’t be the case that so many have voluntarily subjected themselves to them in the intervening years:

If she is looking for a ‘common meaning’ of torture, how about something like a procedure to which no rational person would submit voluntarily?  More journalists have tried the experience of being waterboarded than terrorists were subjected to it.  That wouldn’t be the case if, for example, we were talking about needles under fingernails.”

Finally, he wisely notes that while Senator John McCain (R – Arizona) is often lauded as a particular authority on what constitutes “torture” due to his own experience as a prisoner of war, “Others with credentials similar to Sen. McCain’s, including Medal of Honor recipients and fellow Vietnam prisoners of war Leo Thorsness and Bud Day, believe in the efficacy and morality of waterboarding.”  It’s an excellent piece that re-centers the ongoing debate upon the actual legal standards, as opposed to sloppy and easy shorthand employed by people like Senator Feinstein and many in the mainstream media.

December 12th, 2014 at 3:10 pm
New Congress Provides Perfect Opportunity for Broad Corporate Tax Reform
Posted by Timothy Lee Print

In a recent speech before the Business Roundtable, an association of top business leaders from the nation’s largest corporations, President Obama addressed a variety of issues, including the critical matter of tax policy.  To his credit, he acknowledged there is a “deal to be done” when it comes to corporate tax reform.

But as we’ve often noted, it is important that any deal with the new Congress involve comprehensive reform, rather than just a series of short-term fixes.

At a rate exceeding 39%, American companies are subject to the highest corporate income tax in the developed world, far higher than the developed nation average rate of 25%.  On top of that, our firms face the burden of being taxed twice on profits earned overseas.  Whereas every company in the world pays tax in the nation where it earns profits, American companies are then subject to an additional domestic tax on those profits when repatriated.  That punitive process, known as our “worldwide tax regime,” is practiced by virtually no other country on Earth.

And unfortunately, what we’ve done in the past to address the problem is akin to treating a bullet wound exclusively with painkillers.  In other words, we’ve addressed the symptoms, but not the problem.

For example, recall the Treasury Department’s counterproductive decision earlier this fall on the issue of corporate tax inversions, imposing punitive new rules.  Corporate tax inversions constitute a perfectly logical response to the flawed system under which our economy’s biggest drivers are forced to work – one that is outdated and anti-competitive.  The Treasury Department’s new inversion rules will only serve to hamper American firms already disadvantaged by our sky-high domestic tax rates, they will drive even more companies and employers abroad and they will retroactively punish them for making sound, logical, completely legal business decisions.  Additionally, they threaten job growth in some of our most important sectors, as American firms become less competitive globally.

As another example, Obama in his post-election comments expressed support for a corporate tax holiday.  Such a corporate tax holiday – or repatriation – would allow companies with profits overseas to bring them back to the United States at a reduced tax rate.  His underlying motive wasn’t common-sense reform so much as the belief that the revenues could then be used for federal infrastructure spending.  But as a Congressional committee report found, tax holidays did not achieve that end, as confirmed by the experience of a previous tax holiday in 2004.

As these illustrations make painfully obvious, the bottom line is that our policymakers fail to understand the broader problem that hinders America’s economic growth and global tax competitiveness.

Fortunately, with the new Congress we now possess an excellent opportunity to make real progress, an opportunity to enact broader tax reform.  With a more simplified and competitive corporate tax code, we would add roughly 540,000 jobs and increase our national gross domestic product by $92 billion through 2032, according to a Heritage Foundation Report.  In addition, not only would we remove the obstacles that currently drive American companies (and the jobs they create) abroad along with their profits, but we would make the United States an even more attractive place for companies all over the globe to relocate and invest.

Finally, it should be noted that this is not an issue constrained by traditional political divisions, a typical divide between the left and the right.  Rather, it’s an issue that offers the opportunity for bipartisan and commonsense reform.  Accordingly, there’s no excuse not to finally get it done, thereby improving our economy, boosting jobs and making our code competitive with the rest of the world at long last.

December 11th, 2014 at 10:53 am
Pew: More Now Support Gun Rights than Gun Control
Posted by Timothy Lee Print

Here’s some good news from Pew Research to interrupt the current sense that the world in which we live is collapsing into a smoldering heap:

For the first time in more than two decades of Pew Research Center surveys, there is more support for gun rights than gun control.  Currently, 52% say it is more important to protect the right of Americans to own guns, while 46% say it is more important to control gun ownership.  Support for gun rights has edged up from earlier this year, and marks a substantial shift in attitudes since shortly after the Newtown school shootings, which occurred two years ago this Sunday.”

Additionally, a healthy majority believes that firearms protect law-abiding citizens more than they create a safety risk:

The latest national survey by the Pew Research Center, conducted Dec. 3-7 among 1,507 adults, also finds a shift in attitudes about whether gun ownership in this country does more to protect people or put people’s safety at risk.  Nearly six-in-ten Americans (57%) say gun ownership does more to protect people from becoming victims of crime, while 38% say it does more to endanger personal safety.  In the days after Newtown, 48% said guns do more to protect people and 37% said they placed people at risk.”

Just more confirmation that the American public demonstrates greater wisdom than our self-appointed shamans in the mainstream media and political classes.

December 8th, 2014 at 3:33 pm
This Week’s “Your Turn” Radio Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CST to 6:00 p.m. CST (that’s 5:00 p.m. to 7:00 p.m. EST) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CST/5:00 pm EST: Patrick Hedger, Policy Director of American Encore – EPA and Carbon Emission Regulation;

4:15 CST/5:15 pm EST: Sean Noble, President of American Encore – Blueprint for Republican Presidential Victory in 2016;

4:30 CST/5:30 pm EST: Craig Shirley, President of Shirley & Bannister Public Affairs and author – What Should Conservatives Do?;

5:00 CST/6:00 pm EST:  Dr. Jeffrey Singer, Adjunct Scholar at the Cato Institute and Doc Squads Member – “2014 Survey of American Physicians”; and

5:30 CST/6:30 pm EST:  Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs – Senator Rand Paul and Foreign Policy.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

December 8th, 2014 at 10:24 am
“The U.S. Leads the World in Broadband” – Bret Swanson Debunks Net Neutrality Myths
Posted by Timothy Lee Print

In an excellent commentary in today’s Wall Street Journal, AEI visiting fellow and Entropy Economics LLC president Bret Swanson debunks “the two central contentions of ‘net neutrality’ fans, including President Obama, who want the Federal Communications Commission to regulate the Internet as a public utility.”  Specifically, the myths of “lagging U.S. broadband and the specter of content blocking.”

Swanson proceeds to demonstrate that neither of those rationalizations for net neutrality or regulation of Internet service under laws enacted in the 1930s is true:

…the U.S. generates far more traffic per capita and per Internet user than any other major nation save South Korea, which is a vertical metropolis and thus easy to wire with fiber optics.  U.S. traffic per capita is 2.1 times that of Japan and 2.7 that of Western Europe.  Several years ago, U.S. and Canadian traffic measures were similar, but today the U.S. has raced ahead by 25%.  The U.S. lead is similar in traffic per Internet user, which tends to reflect how intensely people use broadband and mobile connections.  The U.S. outdoes its closest European rival, the U.K. by 57%.  The U.S. outdoes all of Western Europe – the best comparison in terms of geography, population and economic development – by a factor of 2.5.”

He also rebuts the claim that U.S. broadband is comparatively slow or more expensive, and concludes that there’s no “problem” demanding an Obama Administration “fix”:

The U.S., with 4% of the world’s population, has 10% of its Internet users, 25% of its broadband investment and 32% of its consumer Internet traffic.  The U.S. policy of Internet freedom has worked.  Why does Washington want to intervene in a thriving market?”

It’s a good question, and an excellent piece.

December 5th, 2014 at 1:36 pm
Proposed Federal Legislation Banning Online Gaming in All 50 States Is a Bad Idea
Posted by Timothy Lee Print

Here at the Center for Individual Freedom, we broadly favor the federalist and Tenth Amendment concept of states’ rights and individual liberty, as our name suggests.

Both principles are implicated in an emerging debate at the Congressional level.  Namely, proposed new legislation that would prohibit all 50 states and their citizens from allowing online poker and other gaming as they see fit.  That would upend states’ historical right to regulate gaming, and it would obviously mean yet further intrusion of federal power into individual Americans’ right to freely make their own entertainment choices and choose how to spend their own dollars.

Without getting to deep into the weeds, the Wire Act of 1961 was originally enacted to address interstate sports betting via telephone, partly an effort to fight organized crime in that domain.  In 2013, the Justice Department determined that the Wire Act is inapplicable to non-sports Internet wagering, based upon relevant caselaw and legislative history.  That confirmed that other forms of online poker and gaming remain properly in the realm of individual states to legislate.  It also accorded with the Fifth Circuit Court of Appeals, the highest court to consider the question, which had determined in 2002 that the Wire Act addresses sports gambling only.

On that reasoned basis, multiple states have authorized online poker and various other forms of Internet wagering for citizens within their own borders, with many more considering similar moves.

Unfortunately, that’s where the ill-advised new proposed federal legislation comes in.  The so-called Restoration of America’s Wire Act (H.R. 4301 in the House and S. 2159 in the Senate), which wouldn’t “restore” the Wire Act to its original meaning but rather significantly expand its reach contrary to the Fifth Circuit and Justice Department rulings, aims to impose a de facto prohibition on online gaming in all 50 states and thereby increase federal regulatory power.  Proponents claim that the new bill would protect children and problem gamers, but the more realistic consequence would be shutting down existing law-abiding companies and driving commerce toward criminal sites and unaccountable overseas entities less interested in restricting minors or problem gamers.

The better option is to maintain existing law, which rewards law-abiding domestic companies and ensures greater safety and security.  And as noted above, the proposed legislation would grossly violate the concepts of state sovereignty, free-market principles and individual consumer freedom.  The last thing we need right now is even more federal regulation of states and legal commerce, particularly within the flourishing Internet sector.

Conservatives, libertarians and Americans of every other political persuasion should therefore oppose the so-called Restoration of America’s Wire Act, and contact their Senators and Representatives to demand the same.

November 14th, 2014 at 3:39 pm
WhereToWatch.com – New Search Tool Locates Films and Shows on Legal Sites
Posted by Timothy Lee Print

We’ve written extensively on the destructive nature of illegal online piracy, as well as various market and legal avenues to combat it.

In positive news this week, the Motion Picture Association of America launched WhereToWatch.com, a one-stop-shop for consumers to locate legal sites for their favorite films and television shows.  Visitors to the site can (1) search for films and shows on digital downloading and streaming sites, as well as at stores and kiosks;  (2) quickly and easily find theater times and locations for new movies;  (3) watch trailers and access original behind-the-scenes content;  and (4) create settings to receive alerts when movies and shows they want become available from various providers.

Studies show that almost 95% of popular films and shows are already legally available for viewing, via over 100 legal online services across the U.S. Accordingly, there’s simply no need or excuse for anyone to steal the films or TV shows they enjoy on illegal sites, when legal alternatives are now so readily available.

In that vein, WhereToWatch.com offers a welcome innovation.

November 7th, 2014 at 12:24 pm
WSJ’s Gordon Crovitz Veers Off Course on Intellectual Property Rights
Posted by Timothy Lee Print

Each Monday, The Wall Street Journal’s “Information Age” column by L. Gordon Crovitz is a must-read.  His analyses are invariably intelligent and his policy positions are usually wise.

On intellectual property (IP), however, Crovitz occasionally hits discordant notes.  Unfortunately, this week provided another example.

In “Even Silicon Valley Tilts Republican,” he highlights the surprising news that this year, technology companies reversed tradition and gave 52% of their political contributions to Republicans.  He also touches upon the topic of patent law reform, which CFIF has broadly supported.  But then he veers off logical course by maligning patent rights, specifically with regard to software patents:

Patents make little sense for software, which almost always builds on an earlier work.  There are some 250,000 potential patent violations in smartphones alone.  Companies known as ‘patent trolls’ stockpile patents to extract huge settlements from technology companies, not to build products.  Plaintiff lawyers joke that their focus has gone from ‘PI to IP.’  Now that personal-injury litigation has been reformed in many states, they’re turning to intellectual property lawsuits such as patent infringement.”

It’s difficult to fathom how Crovitz continues to make such a claim.

The United States maintains by many measures the world’s strongest patent and IP protections.  It also leads the world in technological innovation, including software and smartphones.  That’s not coincidence.  It’s cause-and-effect.  In an excellent recent piece for IPWatchdog.com, patent attorney Gene Quinn offers a superior analysis on IP rights and innovation in such areas:

Why will anyone invest the extraordinary sums of money to create the innovations we want without an expectation of exclusivity that will allow for a recoupment of the investment plus a reasonable return on investment?  ‘The Truly Staggering Cost of Inventing New Drugs unveils a Forbes study finding:  ‘The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion.’  And it is pure fiction to believe that software development doesn’t follow the same economic realities.  When IBM produces one of their large-scale projects, there will have been many hundreds of people working on the software solution for at least several years.  The same is true for a new Apple operating system, or the next version of Microsoft Windows.  It is pure fantasy to believe that software programs are written over a long weekend by a single person who is merely a second-year engineering student.  Software that is compatible, secure and actually works is rare these days, and takes real development effort, which costs real sums of money.  The quickest way to get less innovation is to destroy the patent system.”

Quinn is correct, and the real-world facts speak for themselves.  Strong patent protections spur the innovation for which America and its tech sector are known.  Moreover, there isn’t anything inherently wrong if a patent holder with no ability or intention of manufacturing or marketing an invention sues for violation.  A patent right is simply a property right enforceable by law, just as a songwriter can rightfully sue for infringement even if he or she didn’t have the ability to sing the song, assemble a band, reserve a recording studio or find an agent.

That obviously doesn’t mean that we should in any way condone the filing of frivolous lawsuits based upon false claims of patent infringement.  But it does mean that much of the “patent troll” problem can be resolved via litigation reform, such as requiring greater specificity in court pleadings and shifting of attorneys’ fees and costs to more of a “loser pays” system.

What we don’t want to do is demonize patent rights, which have been the foundation for American innovation through the decades and centuries.

October 27th, 2014 at 2:48 pm
This Week’s “Your Turn” Radio Show Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn:  Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Phil Kerpen, President of American Commitment — Election 2014, why democrats will never fix ObamaCare and American Commitment’s big win in Moveon.org’s video contest;

4:30 CDT/5:30 pm EDT:  Steve Bucci, Director for Foreign and National Security Policy at The Heritage Foundation — “Lone Wolf” terrorist attacks;

4:15 CDT/5:15 pm EDT:  Mike Wendy, President of Media Freedom — Net Neutrality;

5:00 CST/6:00 pm EDT:  Jonathan Last, Senior Writer at the Weekly Standard — “The Seven Deadly Virtues: 18 Conservative Writers on Why the Virtuous Life is Funny as Hell”; and

5:30 CDT/6:30 pm EDT:  Sally Pipes, President and Taube Fellow in Health Care Studies at the Pacific Research Institute — ObamaScare and Ebola.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.


October 27th, 2014 at 10:22 am
Title II Reclassification: Not Just Unwise, But Also Illegal
Posted by Timothy Lee Print

Those of us who oppose the Obama Federal Communications Commission’s (FCC’s) effort to bridle the Internet  with so-called “net neutrality” regulation have explained at length why reclassifying the Internet as some sort of 1930s-style public utility under Title II is a dangerous idea.

Perhaps we we haven’t devoted appropriate time, however, to explaining why it’s almost certainly illegal.

As a broader policy matter, the vague and muddled calls from the extremist left to reclassify broadband typically don’t extend beyond an emotional demand for federal bureaucrats at the FCC to “do something.”  Or, as we often put it, they seek to impose a “fix” for an Internet that isn’t at all “broken.”  Accordingly, they go about offering substantive policy proposals as if lunching at a salad bar stocked with bad ingredients.  They pick and choose bad items, assembling what they consider a perfect combination.

But what they instead create is a Frankenstein-like monstrosity.

And in terms of legality more specifically, the FCC would be treading onto extremely unstable ground if it opts to follow the demands of far-left activists by rushing headlong into this dubious Title II reclassification proposal.  The fact of the matter is that the FCC has long contended that the Internet is a Title I service.  Therefore, in order to reclassify, the law requires it to meet a higher burden of proof as to why it got the initial classification wrong.  Hysterical activism from the far left that has tended to characterize this debate won’t suffice, whether as a matter of law or a matter of logic.  The FCC has already twice lost this legal battle in court (first in 2010, and again in 2014).  Rather than stubbornly tempt a third judicial rebuke of its effort to impose “net neutrality,” it would be better to learn its lesson as it proceeds with its rulemaking effort.

And that’s only with regard to traditional wired networks.  When it comes to wireless Internet (like the 4G/LTE smartphone technology), the law actually expressly prohibits the FCC from imposing Title II-type rules.  That clarity may not discourage the net-roots fringe from demanding reclassification, but it most certainly should stop the FCC from exceeding its legal mandate and once again blatantly flouting both the letter and spirit of applicable law.

Despite six years of effort to the contrary from the Obama Administration, we remain a nation of laws, not men.  That timeless principle does not yield to extremists’ pursuit of the “net neutrality” unicorn.

To date, and through previous administrations of both parties over the past two decades, the FCC has avoided attempting to classify Internet service under Title II for good reason:  it is bad policy and bad law.  Everyone except those clinging to an ideologically extreme position on the matter have recognized that reality.  We therefore cannot allow such Title II extremists to suddenly divert us from the “light touch” regulatory course that has made the Internet one of the most beneficial and revolutionary innovations in human history.  There’s too much to lose.

September 30th, 2014 at 4:17 pm
Global Warming… Back in 1821?
Posted by Timothy Lee Print

Like clockwork, climate alarmists attributed Hurricane Sandy in 2012 to anthropogenic (man-caused) global warming.  In one typically irrational commentary, Paul Barrett equated global warming to steroids in its effect on the storm.

With that hyperbole and hysteria in mind, a Discovery Channel item this week provided appropriate humor.  Entitled “Thought Sandy Was Bad?  Revisit This 1821 Hurricane,” its historical piece offers beneficial perspective:

Remember all the hype about Hurricane Sandy being a ’superstorm,’ a once-in-500-years convergence of meteorological nastiness?  According to a newly-published study by a Swiss insurance firm, Swiss Re, things could have been a lot worse.  Though the combination of factors that created Sandy was indeed unusual, Sandy wasn’t the most powerful storm that’s ever hit the U.S. East Coast.  That distinction probably belongs to the massive 1821 Norfolk and Long Island hurricane, which moved along the Mid-Atlantic before striking the New York/New Jersey coastline with wind speeds of 156 miles per hour.”

Too bad the alarmists weren’t around in 1821 to attribute causation to steam engine technology.  But perhaps contemporary alarmists can instruct us on how this only substantiates their ongoing charade.

September 26th, 2014 at 1:30 pm
In Property Rights Victory, Court Rules Digital Radio Must Compensate Artists for Playing Pre-1972 Songs
Posted by Timothy Lee Print

Last June, we highlighted important legislation proposed by Rep. George Holding (R – North Carolina) by asking a straightforward question: “Is it fair that digital radio broadcasters pay royalties for the privilege of playing songs recorded after the arbitrary date of February 15, 1972, but not for pre-1972 recordings?”

This week provided welcome news out of California, as a court correctly answered “no” to that question.

Here is the basic legal issue, as we wrote in June:

Recordings predating 1972 remain protected by a patchwork of state laws, whereas recordings after February 15 of that year going forward are covered under federal law.  That amounts to a historical idiosyncrasy, without any prevailing substantive logic.  But digital radio stations, some of which center entirely upon pre-1972 music, have capitalized on the legal aberration to simply stop paying for performance of the pre-1972 songs still covered by state laws…

Digital radio stations operate under privilege of federal license to broadcast, but take the position that they need not pay for pre-1972 songs that remain protected under state laws.  They profit from playing those songs, but refuse to pay accordingly.  Keep in mind that unlike contemporary performers, many of those older affected artists are no longer capable of touring, and sales of their records have diminished over the years, leaving royalties for performance of their songs as their only remaining means of continuing compensation.”

The proposed federal legislation to rectify that anomaly remains pending, but a court applying one among the patchwork of existing state laws referenced above ruled in accord with the bill’s goal.  In fact, the California court in question granted summary judgment, meaning that it didn’t consider the legal question worthy of going before a jury:

In the battle between today’s digital-music services and yesterday’s oldies artists, score one for the geezers.  The founders of the ’60s rock band the Turtles won a summary judgment on Monday against Sirius XM Radio Inc., in a lawsuit alleging that the satellite-radio company violated California copyright law by playing the band’s songs without permission.  The decision could entitle the band and other oldies acts to royalties from the satellite-radio broadcaster as well as from Internet radio companies like Pandora Media Inc.  Terrestrial radio broadcasters in the U.S. don’t pay royalties to performers of songs but the decision could affect their obligation to do so.”

This is a welcome and correct ruling, but the fact remains that artists shouldn’t have to sue across 50 various states, with inconsistent legal venues, to vindicate their property rights.  Digital radio is a fantastic technological advance, but that doesn’t justify exploitation of legal quirks to dodge compensation to artists who recorded songs prior to the arbitrary date of February 15, 1972.  Hopefully, federal lawmakers follow the court’s wisdom and streamline federal law to resolve this troublesome issue.

September 22nd, 2014 at 11:44 am
If Britain Were a U.S. State, It Would Be the Second-Poorest
Posted by Timothy Lee Print

An interesting new bit of original research by The Spectator’s Fraser Nelson entitled “Why Britain Is Poorer Than Any US State, Other Than Mississippi” helps reconfirm the concept of American Exceptionalism even amid the Obama Malaise. First, Mr. Nelson takes a welcome swipe against the all-too-common habit of American self-criticism:

No one beats up America better than Americans.  They openly debate their inequality, conduct rigorous studies about it, argue about economics versus culture as causes.  Their universities study it, with a calibre of analysis not found in Britain.  Americans get so angry about educational inequality that they make films like “Waiting for Superman.”  And the debate is so fierce that the rest of the world looks on, and joins in lamenting America’s problems.  A shame:  we’d do better to get a little angrier at our own.”

Nelson then gets to the heart of the matter:

If Britain were to somehow leave the EU and join the US, we’d be the 2nd-poorest state in the union.  Poorer than Missouri.  Poorer than much-maligned Kansas and Alabama.  Poorer than any state other than Mississippi, and if you take out the south east we’d be poorer than that, too.”

He also addresses the cliche of horrific American inequality along the way:

It’s not surprising that America’s best-paid 10 per cent are wealthier than our top 10 percent.  That fits our general idea of America:  a country where the richest do best while the poorest are left to hang.  The figures just don’t support this.  As the below chart shows, middle-earning Americans are better off than Brits.  Even lower-income Americans, those at the bottom 20 percent, are better-off than their British counterparts.  The only group actually worse-off are the bottom 5 per cent.”

Obama may not believe that American Exceptionalism is of any greater merit than British Exceptionalism, but the facts and some Britons contradict that notion.

September 19th, 2014 at 2:43 pm
New Study: Online “Cyberlockers” Facilitating Piracy
Posted by Timothy Lee Print

Happy “International Talk Like a Pirate Day,” which can make for a bit of harmless office fun on a Friday.

Unfortunately, real piracy of the online variety is no laughing matter.  It costs the American economy billions of dollars and tens of thousands of jobs each year, and even threatens life and health through such things as counterfeit drugs.

This week, a new report was released highlighting the role played by online “cyberlockers” in facilitating worldwide piracy.  Entitled “Behind the Cyberlocker Door:  A Report on How Shadowy Cyberlocker Businesses Use Credit Card Companies to Make Millions,” the report from Digital Citizens Alliance cogently introduces and explains the nature of this problem:

Rogue ‘cyberlocker’ operators peddling stolen content are making nearly $100 million in annual revenues by operating as hubs for the for-profit distribution of infringing digital copyrighted content.  That is the finding of our research looking at the profitability of the leading cyberlockers.  Unlike legitimate cloud storage services whose clients are people and businesses that need to store, access, and share data, the cyberlocker business model is based on attracting customers who desire anonymously to download and/or stream popular, copyright infringing files that others have posted.  The cyberlocker business model is designed around content theft.  In fact, cyberlockers generally pay or provide various incentives to those who distribute popular infringing content and discourage the use of their services for reliable data storage.  As this study shows, the overwhelming bulk of files distributed by cyberlockers infringe copyright.”

For those unfamiliar with the term “cyberlockers,” here is DCA’s definition:

Cyberlockers are online services that are intentionally architected to support the massive distribution of files among strangers on a worldwide and unrestricted scale, while carefully limiting their own knowledge of which files are being distributed.  The link to a user’s file stored on a cyberlocker can be posted to any location for any user to access:  cyberlockers generally place no limits on who can download or stream a file.”

DCA studied 30 sites, and those alone accounted for some $96.2 million in total annual revenue, or $3.2 million per site (one site alone accounting for $17.6 million).  While we must avoid interfering with meritorious technological innovation and the legitimate online marketplace, we must at the same time recognize this emerging problem and advocate corrective social policy to remedy existing piracy threats and deter their spread. Legitimate market participants must therefore determine proper recourse, and elected officials must also begin to consider reasonable avenues to help put a stop to this growing form of theft.

September 12th, 2014 at 10:18 am
David Horowitz: Stop Playing Nice Guy, Republicans
Posted by Timothy Lee Print

In our piece this week entitled Senate Democrats and Scorched-Earth Judicial Politics , we note the way in which Senate Democrats habitually play hardball, whereas Republicans tend to play Nerf.  Disturbingly, the Democrats’ methods paid off just days ago:

Just days ago, the D.C. Circuit Court of Appeals, which Reid and Obama had packed after ending the Senate filibuster, voted to rehear en banc the Halbig v. Burwell decision from earlier this year…  The full court’s unjustified decision to rehear the case en banc not only unnecessarily obstructs and delays Supreme Court resolution, it appears to be a transparently politicized decision to rescue ObamaCare.  On that note, Harry Reid openly congratulated himself when asked whether his Senate tactics underlie this turn of events by saying, ‘If you look at simple math, it sure does.’”

Famed conservative author David Horowitz agrees in an excellent Washington Times piece today entitled “Why Nice Guys Finish Last in Politics:  Politics is War, but Some GOPers Just Don’t Get It.” His observations are worth quoting at length:

Going into the 2016 election, you can count on Republicans to stay ‘positive,’ to emphasize policy, and above all, not to hit the Democrats where it hurts.  You can also count on Democrats to do just the opposite.  Because they always do…

Democrats have a massive punch in the mouth for Republicans, and it’s always the same punch.  Republicans are painted as racists, sexists, homophobes, anti-poor, selfish and uncaring.  Note that this is a moral indictment.  It defames the character of Republicans like the corporate predator and dog-abuser Mitt Romney.  The only answer to an attack like this is to attack Democrats with an equally potent indictment of their moral character…

How difficult is it to understand this:  If you are perceived by voters as racist or even just selfish and uncaring, they are not going to have the same interest in your policy advice, as Mitt Romney found out in 2012.  Here is what Republicans need to understand to win:  Politics is street war, and there are no referees to maintain the rules – and the ones that infrequently pop up (such as CNN’s Candy Crowley during one of the last presidential debates) are there to bury you.  Attack your opponents before they attack you.  Attack them with a moral indictment;  if well-executed, it will win the day.

And remember that even if you fail to do this to them, they will certainly do it to you.  You can count on that.”

Americans can determine for themselves whether Horowitz’s advice is wise.  But they must also acknowledge that Republican presidential campaigns in recent decades have been more notable for their moderation than their tenacity, whereas the opposite is true of Democratic campaigns.  And which party has won five of the past six popular presidential votes, after the landslide Reagan and Bush victories of the 1980s?

September 8th, 2014 at 2:42 pm
This Week’s “Your Turn” Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Ambassador Francis Rooney, former U.S. Ambassador to the Holy See and author of The Global Vatican — Persecution of Christians in the Middle East;

4:30 CDT/5:30 pm EDT:  Andrew Langer, President of the Institute for Liberty — Local Choice Broadcast Reform;

5:00 CST/6:00 pm EDT:  Nan Swift, Federal Affairs Manager for the National Taxpayers Union — “No-Brainer” Bills Congress Should Pass; and

5:30 CDT/6:30 pm EDT:  Marita Noon, Executive Director of Energy Makes America Great — What President Obama Hasn’t Done for American Energy Workers.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

August 25th, 2014 at 3:57 pm
This Week’s “Your Turn” Radio Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Phil Kerpen, President of American Commitment — Halbig Decision as Major Legal Challenge to ObamaCare;

4:30 CDT/5:30 pm EDT:  Brad Smith, Chairman and Founder of Center for Competitive Politics — DISCLOSE Act of 2014;

4:45 CDT/5:45 pm EDT:  Robert Knight, Senior Fellow and Policy Expert at The American Civil Rights Union — Rock the Vote’s Liberal Designs;

5:00 CST/6:00 pm EDT:  Chris Griffin, Executive Director of the Foreign Policy Initiative — Iraq Crisis; and

5:30 CDT/6:30 pm EDT:  Bart Hinkle, Editor and Columnist with the Richmond Times-Dispatch — The Democratic Shift to the Left.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

August 18th, 2014 at 9:46 am
Hillary Inevitable in 2016? These Numbers Say “Not So Fast”
Posted by Timothy Lee Print

Since World War II, only one president has been so successful, his party’s brand name so enhanced during his two presidential terms, that his party’s subsequent nominee won a third consecutive presidency for his party:  Ronald Reagan.

According to the old adage, although history doesn’t always repeat itself, it does tend to rhyme.  Accordingly, that speaks to the steep uphill battle that the Democratic Party faces in winning the 2016 presidential election.  On that note, this morning’s commentary from Bill Kristol highlights a numerical headwind facing Hillary Clinton, whom some consider “inevitable” in 2016 (just as she supposedly was in 2008):

Speaking of 2016, the NBC News/Wall Street Journal poll this summer had a couple of interesting findings on the question of who might be our next president.  The good news is that while 38 percent of respondents say they ‘probably’ or ‘almost certainly’ will vote for Hillary Clinton in 2016, 37 percent say they ‘definitely’ will not vote for her.  This means that Clinton, the candidate with by far the highest name recognition and the longest résumé, starts off at about 50-50.  And while her approval numbers remain decent, they’re falling:   Today, 44 percent view her positively against 37 percent negatively.   Those numbers were once 48 percent positive, and only 32 percent negative.

By contrast, in the sixth year of the Bush administration, John McCain, the frontrunner and eventual nominee of the party in power, had a favorable rating in the mid-50s and an unfavorable number in the mid-20s.  And of course he lost.”

Barack Obama is no Ronald Reagan by any meaningful measure, and there’s a reason that Hillary’s “inevitability” evaporated in 2008.  These numbers suggest that the “inevitability” narrative may prove just as ephemeral in 2016.

August 11th, 2014 at 2:11 pm
This Week’s “Your Turn” Radio Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Lori Lowenthal Marcus, co-founder of Z STREET — Politicization of the IRS and Z STREETS lawsuit against IRS for First Amendment violations;

4:30 CDT/5:30 pm EDT:  Mike Wendy, director of MediaFreedom — Net Neutrality;

5:00 CST/6:00 pm EDT:  Dr. Sunil Gupta, founder, chairman and chief medical officer of IRIS — Barriers to Medical Care and Access to Latest Technologies; and

5:30 CDT/6:30 pm EDT:  Quin Hillyer, political commentator and contributing editor for National Review Online — An Early Look at Elections 2014.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.