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July 2nd, 2015 at 2:43 pm
Forty Attorneys General and Broad Internet Safety Alliance Fight Google’s Attempt to Avoid Investigation of Alleged Illegal Behavior
Posted by Timothy Lee Print

Last December, we detailed how Google sought to exploit last year’s cyberattack against Sony for its own self-interested purposes:

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.”

Dating back to 2011, Google admitted to illegally facilitating and profiting from advertising by Canadian pharmacies unauthorized to sell to U.S. consumers.   The charges were so grave that Google agreed to pay a half-billion dollar settlement.  State-level investigations, however, continued.  But instead of cooperating with authorities and remedying its wrongdoing, Google utilized documents exposed by the North Korean cyberattack against Sony to ask a federal court to halt further investigation into possible violation of state consumer protection laws.  Specifically, Google sought injunction prohibiting Mississippi Attorney General Jim Hood from looking into allegations that it advertised and provided access to such illegal products and services as false government IDs and even child prostitution.  A federal judge unreasonably accepted Google’s petition based upon a strained reading of a federal statute, the Communications Decency Act.

The baselessness of that injunction is vividly illustrated by the fact that some forty state attorneys general – a bipartisan alliance of 23 Republicans and 17 Democrats – petitioned the court this week to vacate the injunction.  Sustaining the ill-advised injunction, they emphasized, “would provide a roadmap for any potential wrongdoer subject to a legitimate state law enforcement investigation to attempt to thwart such an inquiry.”

Former U.S. Solicitor General Paul Clement, who has worked alongside CFIF in the past, captured the essence of the matter in a separate brief on behalf of the Digital Citizens Alliance:

The preliminary injunction entered below is the wrong remedy in the wrong court at the wrong time.  Google will enjoy ample opportunities to protect its rights if the Attorney General’s investigation is allowed to progress.  But if that investigation is halted before it begins in earnest, there will be no later opportunity to vindicate the public interest in seeing criminal misconduct investigated and stopped.  Because Google has no federal right to block a state investigation into its suspected wrongdoing, and because in any case the other relevant factors weigh unmistakably against a preliminary injunction, the decision below cannot stand.”

Mr. Clement stands among the top legal minds in America, and he hits the bullseye on this count.  When such an overwhelming bipartisan group of attorneys general joins a broad alliance of Internet safety groups, the balance of justice on this question is even more clear.

June 30th, 2015 at 2:10 pm
Two-Face T-Mobile 2.0
Posted by Timothy Lee Print

We recently described how T-Mobile was playing crony capitalist DC games and talking out of both sides of its mouth.  On one side, it told Wall Street that it’s in a great position.  On the other side, it pleaded with federal regulators in DC that it needs their help in order to remain competitive in the wireless marketplace.

The company CEO, whom The Wall Street Journal’s Holman Jenkins labeled “Potty-Mouth” Legere, is now doubling down on the company’s “Little Sisters of the Poor” message to DC and calling for a larger set-aside in the upcoming spectrum incentive auction.  The Obama Federal Communications Commission (FCC) already promised to set aside 30 MHz, but that just wasn’t enough for T-Mobile.  Now Mr. Legere and the Save Wireless Choice coalition – which conspicuously counts T-Mobile, Sprint, and DISH as members – are pushing for at least 40 MHz.

That set-aside proposal is a bad idea for several reasons.  First, T-Mobile wants the FCC to make it easier for it to get spectrum at below-market value without competing against AT&T and Verizon.  There’s no reason, however, to believe that T-Mobile can’t compete in a fair and open auction without federal bureaucrats tipping the scales in their favor.  Moreover, even if money were an issue, couldn’t T-Mobile’s multi-billion dollar parent company, Deutsche Telekom, come to its aid?

Consider the straightforward numbers:  Deutsche Telekom, a German company with a market cap over €70 billion, is a 66% stakeholder in T-Mobile.  Additionally, the German government maintains approximately a 1/3 stake in Deutsche Telekom.  Accordingly, offering T-Mobile an unjustified advantage translates into a giveaway to a foreign company and a foreign government.

But what about American consumers?  The set-aside could drive down auction revenue, which in turn means less money for the U.S. Treasury and less spectrum that’s sold and brought to market for the benefit of U.S. consumers.

FCC Chairman Tom Wheeler recently said that he thinks the set-aside should remain at 30 MHz and NOT get increased.  That’s a rare bit of moderately positive news, but if the FCC is really reviewing the set-aside in advance of its July 16th open meeting, it should eliminate this cronyist monstrosity entirely, and send Mr. Legere and his tin can packing.

June 29th, 2015 at 1:03 pm
Protectionist “Local Radio Freedom Act” Would Prevent Payment to Musicians for Songs
Posted by Timothy Lee Print

Under current law, recording artists remain free to negotiate performance payment rights with Internet, cable and satellite stations.  Due to an unfair exception, however, artists cannot negotiate in the same manner with traditional AM-FM radio.  Unfortunately, proposed federal legislation backed by broadcasting interests would cement that anomaly.  Deceptively entitled the “Local Radio Freedom Act” (”LRFA”), the bill would stifle a potentially freer marketplace and foreclose future negotiation for payment to musicians for songs.

If successful, that would perpetuate terrestrial radio broadcasters’ ability to exploit a legal loophole allowing them to earn billions of dollars by playing songs whose artists would remain uncompensated.  Exacerbating matters, those same terrestrial broadcasters simultaneously ask Congress to require cable and satellite providers to pay them for retransmission of television programming from stations that they own.  That similarly violates straightforward concepts of fairness and intellectual consistency.

This past January, CFIF joined an array of other free-market organizations in a letter to Congress opposing the LRFA and setting forth the policy basis for our objection:

The Constitution protects private property rights and specifically delegates to Congress authority to protect creative works.  Unfortunately, LRFA closes the discussion about how best to protect property rights by resolving that terrestrial radio should never pay performance royalties on music broadcast on their stations used for raising advertising revenue.  That is not equitable treatment for any musical artist or music distribution service.”

Fortunately, there’s a superior alternative also before Congress.

Representative Marsha Blackburn (R – Tennessee), perhaps the most reliable advocate of property rights in Congress, has joined Representatives from both parties in introducing the Fair Play, Fair Pay Act of 2015.  This bill would correct the existing unfairness described above by finally requiring terrestrial broadcasters to negotiate with artists who seek compensation for broadcast of their creative works.

Advocates of LRFA claim that artists have no reason to complain when terrestrial radio plays their works without compensation, since that provides them publicity and free advertising.  But that’s something for artists and broadcasters to freely negotiate, rather than have broadcasters make that decision for them and deprive them of choice in the matter.  Some artists may indeed opt to allow their works to be broadcast for free.  But as Taylor Swift just illustrated in standing up for her rights, other artists have a right to disagree and negotiate payment for those playing their songs.

CFIF believes that property rights, including intellectual property (IP) rights for artists and musicians, must be fiercely defended.  America’s foundation of strong IP protections is one reason we’re the most innovative and artistically productive nation in human history.  Accordingly, we encourage our supporters and activists to contact their representatives, demanding that they reject the dangerous LRFA and support Rep. Blackburn’s PRMA.

June 26th, 2015 at 4:12 pm
Senators Graham and Rubio Unwisely Reintroduce Nationwide Online Gaming Ban Legislation
Posted by Timothy Lee Print

In our federalist system of government, individual states constitute laboratories of democracy and remain free to enact laws as they see fit, absent explicit federal power over a particular area.  That’s a fundamental value of conservatism and libertarianism, so it was disappointing this week to see that Senators Lindsey Graham (R – South Carolina) and Marco Rubio (R – Florida) were among those reintroducing proposed legislation that would impose a blanket, nationwide prohibition of online gaming.

Such a law would commandeer states’ historical and constitutional right to regulate gaming, never mind that it would mean yet another imposition of federal power into citizens’ entertainment choices and how they spend their own hard-earned dollars.

Stated simply, individual states across the nation have authorized online poker and various other forms of Internet wagering for citizens within their own borders, with many more considering similar moves. Unfortunately, the ill-advised new proposed federal legislation introduced by Senators Graham and Rubio would upend that state of affairs.  The so-called Restoration of America’s Wire Act of 2015, 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.

June 19th, 2015 at 9:51 am
WSJ News Item Debunks Leftists’ Anti-Texas Myth
Posted by Timothy Lee Print

Texas illustrates the real-world success of less government and free market principles, yet leftists like oft-discredited New York Times columnist Paul Krugman attempt to dismiss it as some sort of demographic or energy fluke.

A news feature this week in The Wall Street Journal, however, offers yet another objective refutation of their efforts.  Entitled “Texas’ Engine Keeps Revving,” the article details how jobs and population continue to grow despite the recent energy sector slump:

The continued economic success of the Dallas-Ft. Worth metro area, the nation’s fourth largest, with nearly seven million people, is one of the reasons Texas has so far managed to stave off a sharp downturn despite losing thousands of jobs in the oil patch and related industries.  The region lost more than 100,000 jobs during the recession, but it has added nearly four times that number since then…   Dallas isn’t the only Texas region that has diversified.  The San Antonio metro area, which has 2.3 million residents, now has a burgeoning biotech sector.  Austin, with its population of 1.9 million, had the lowest unemployment rate among the nation’s largest metro areas in April as it undergoes a hotel boom.”

That doesn’t happen by accident.  After all, California enjoys a higher population, better weather, diversified economic base and greater access to trade with its vast coastal area.  In other words, the sorts of things that Krugman offers as rationalizations for the Texas boom.  The reality is that Texas continues to flourish despite the rapid drop in oil prices because unlike states like California, Connecticut or Illinois, it opts for lower taxes, less regulation and freer markets.  Hopefully, that lesson will continue to sink in with the rest of the nation and our federal leaders.

June 16th, 2015 at 1:13 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:  Lawrence J. McQuillan, Senior Fellow at the Independent Institute – “California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis”;

4:30 CDT/5:30 pm EDT:  Robert King, Healthcare Correspondent for the Washington Examiner – High Drug Prices, Bioterror and ObamaCare;

5:00 CDT/6:00 pm EDT:  Mark Bauerlein, author and editor of “The State of the American Mind” – The Fall of Civics, a Profile of the American Mind and National Consequences; and

5:30 CDT/6:30 pm EDT:  Scott Blackburn, Research Fellow at the Center for Competitive Politics – Get IRS Out of Speech Police Business.

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

June 15th, 2015 at 2:33 pm
Gallup: Other Than Military and Small Business, Americans’ Confidence in U.S. Institutions at Historic Lows
Posted by Timothy Lee Print

As an organization whose very name prizes individual freedom, it cannot escape notice that as liberty in all aspects of American life seems under siege, citizens’ confidence in major institutions reaches historic lows.  According to a Gallup survey released today, only the military and small business remain notable (and telling) exceptions:

Americans’ confidence in most major U.S. institutions remains below the historical average for each one.  Only the military (72%) and small business (67%) – the highest-rated institutions in this year’s poll – are currently rated higher than their historical norms, based on the percentage expressing ‘a great deal’ or ‘quite a lot’ of confidence in the institution…  From a broad perspective, Americans’ confidence in all institutions over the last two years has been the lowest since Gallup began systematic updates of a larger set of institutions in 1993.”

As the 2016 presidential race accelerates, this has important implications for the candidates and potential candidates.  That’s particularly ominous for Hillary Clinton, who in effect demands “Four more years!” from the American electorate in the face of historical fact that only once since World War II has a party been elected to a third consecutive White House term (George H.W. Bush in 1988).

June 5th, 2015 at 3:52 pm
Bipartisan Copyright Office Modernization Legislation Introduced in Congress
Posted by Timothy Lee Print

The U.S. Copyright Office is in need of modernization, and this week brought positive news in that regard.

Congressman Thomas Marino (R – Pennsylvania) and Judy Chu (D – California) introduced draft legislation entitled the Copyright Office for the Digital Economy (CODE) Act to improve the way the office operates.  Although not typically in the headlines every day or in the forefront of public attention, the Copyright Office not only helps set policy as it relates to both domestic and international copyright matters, it administers broad aspects of existing laws.  Copyright-related industries – especially creative industries like entertainment that dominate the globe – constitute an estimated $1 trillion portion of the American economy, and account for an estimated 5.5 million jobs.  Moreover, it’s an export sector that continues to grow.  And with the constant transition to a digital world marketplace, the strain upon our Copyright Office only increases each day.

Among other things, the CODE Act would:  (1) establish the Copyright Office as an independent agency; (2) allow it to physically relocate from the Library of Congress into its own federal building;(3) transfer administrative functions and legal duties from the Library of Congress; (4) allow appointment of a director for one ten-year term following review by a bipartisan and bicameral commission and then consent of the Senate;  and (5) allow the Copyright Office to deliver any and all communications directly to Congress, free of mandatory White House review.

Given the enormous and growing importance of copyright industries, legislation to bring reform and modernization to the Copyright Office is to be welcomed.  The merits of the bill and its individual provisions must still be discussed and debated, but this is a positive first step.  To modernize the office would not only constitute a bipartisan accomplishment for Congress, it would amount to a victory for American consumers, creators and innovators.

June 5th, 2015 at 10:58 am
Additional Thoughts on Criminal Justice Reform
Posted by Timothy Lee Print

A couple of additional points on the need to tread carefully on criminal justice reform, the topic of my commentary this week.

First, Michael Barone, the dean of American politics, emphasizes that same theme in his column today:

Are we seeing a reversal of the 20-year decline in violent crime in America?  A new nationwide crime wave?  Heather MacDonald fears we are, and as a premier advocate and analyst of the policing strategy pioneered by Rudy Giuliani in New York City and copied and adapted throughout the country, she is to be taken seriously.  And the statistics she presented in an article in last weekend’s Wall Street Journal are truly alarming.

Gun violence is up 60 percent in Baltimore so far this year compared to 2014.  Homicides are up 180 percent in Milwaukee, 25 percent in St. Louis, 32 percent in Atlanta and 13 percent in New York in the same period.

Why is this happening?  MacDonald writes, ‘The most plausible explanation of the current surge in lawlessness is the intense agitation against American police departments over the past nine months.’”

Barone concludes:

We must hope that the fire does not spread and dies down.  Perhaps it will if police resume the tactics that have proven so successful.  The alternative, for those of us who have witnessed the last half-century, is terrifying.”

Second, Rick Perry’s entry into the 2016 presidential race highlights another example of the danger of overzealous prosecution and overcriminalization.  Recall that Perry was preposterously charged with felonies for simply exercising his powers as governor.  Specifically, he merely threatened to veto funding for a state district attorney’s office unless one of its prosecutors who had been arrested for driving while intoxicated and behaving abusively toward officers – all captured on profane video – resigned or was fired.  As today’s Wall Street Journal notes, “Unlike many of President Obama’s actions, this was a constitutional exercise of executive power.”  The awful tale of the late Senator Ted Stevens (R – Alaska) is yet another example.  Stevens was convicted on the basis of prosecutorial corruption, he subsequently lost his reelection bid by an extremely narrow margin (which proved the decisive vote in passing ObamaCare), but then was cleared after his death and his prosecutors were themselves disciplined.

Barone’s piece and those two additional examples help confirm that we need criminal justice reform, but that we must do so carefully.

June 4th, 2015 at 3:19 pm
New Study: The Economic Case for Crude Oil Exports is Clear
Posted by Timothy Lee Print

This week, Dr. Margo Thorning, Senior Vice President and Chief Economist for the American Council for Capital Formation (ACCF), and William Shughart, former Federal Trade Commission (FTC) economist and professor of economics at the Jon. M. Huntsman School of Business at Utah State University, convincingly set out the economic case for finally allowing the export of U.S crude oil in a study entitled, “The Economic Case for Lifting the Crude Oil Export Ban.”

In their paper, the two notable economists analyze multiple macroeconomic studies by highly-respected public policy think tanks, including the Brookings Institution, IHS, the Aspen Institute and ICF International.  All reached the same conclusion:  Removing the crude oil export ban will bring measurable economic advantages to our economy and our nation.

And what are those economic advantages?  First, allowing oil exports will  create high-paying jobs, increased economic investment, higher gross domestic product (GDP) and downward pressure on fuel prices.  Specifically, the Brookings Institution study analyzed by Thorning and Shughart found that lifting the ban will reduce unemployment by an annual average of 200,000-400,000 jobs between 2015 and 2020. For its part, ICF predicted gains of up to 300,000 new jobs by 2020.

Accordingly, continuing to observe our outdated and restrictive crude export policy, we are demonstrating a blatant disregard for economic growth and expansion, particularly in the jobs sector.

Along with the significant economic benefits, we also possess an opportunity to strengthen ties with our trading partners in the global market, upholding the very free trade principles we encourage other countries to practice.

Additionally, the new paper highlights the contradictory nature of the U.S. prohibiting crude oil exports while professing to the world that we practice free trade. Crude oil is no different than other domestically produced products bought and sold daily in the global economy, and removing the ban and instituting a more truly free market boosts our credibility as a nation that practices capitalism and open trade.

Simply put, changing our outdated energy policy on crude exports would be a sound economic approach that takes advantage of our current domestic energy abundance. The U.S. would benefit on the economic front and position ourselves to become a top player in the global energy market while more truly embracing a free trade doctrine.

That’s a win-win for our economy and the American people.

June 1st, 2015 at 9:39 am
Bankruptcy for Puerto Rico? Bad Idea
Posted by Timothy Lee Print

Puerto Rico’s years of fiscal mismanagement, cronyism and corruption have come to a head.  The island territory is at least $73 billion in debt, and guess who Congressional Democrats think should pick up the tab:  American taxpayers, savers and seniors.

Puerto Rico Resident Commissioner Pedro Pierliusi and Governor Alejandro Garcia Padilla are working with fellow Democrats to lure Republicans into passing a bill (H.R. 870) that would give Puerto Rico a bailout, and allow Puerto Rico to walk away from its debts.

We at CFIF are concerned that some Republicans in Congress are receptive to this taxpayer bailout.  Representative Goodlatte of Virginia, who chairs the House Judiciary, recently visited Puerto Rico to explore pursuing Chapter 9 having set the legislative process in motion when he consented to having a public hearing on the proposal back in February.

Chapter 9would hurt thousands of hardworking Americans on the mainland and in Puerto Rico who have invested savings in Puerto Rican bonds.  And longer-term, it would do nothing to reform a broken Island.  Furthermore, a Chapter 9 bailout flies in the face of principles for which Republicans are supposed to stand:  limited government, fiscal responsibility and the rule of law.  Some Puerto Rican apologists have even suggested that if Puerto Rico is not granted Chapter 9, the Island will just come calling for a bailout.  But that is a false choice, and a stick-up by San Juan and their cronies.

Fortunately, better alternatives exist.

For example, the Puerto Rican Government could actually pay the hundreds of millions of dollars it owes to the power authority (PREPA) or Congress could also impose greater oversight over Puerto Rico. Remember, a financial control board was effective in reforming the District of Columbia’s finances 20 years ago, accomplished on a bipartisan basis by a Republican Congress and a Democratic President.  Ultimately, that might be the way to put in place comprehensive, structural reforms so that Puerto Rico never again spirals out of control.

This brings us back to the Republican Congress, specifically Rep. Goodlatte.  At a minimum, holding a hearing signals openness to the bill.  Yet, this changes the rules in the middle of game and can have economic consequences, which Rep. Goodlatte has acknowledged.

Now that Rep. Goodlatte has met in Puerto Rico with its leaders, fellow conservatives are looking to him to put the brakes on this bailout.  As Jay Marts of the Virginia Northern Shenandoah Tea Party writes, “H.R 870 is not a conservative solution,” but “a gift to the Democrats.”

American taxpayers should not be saddled with yet another bailout and force Americans saving for retirement to take a financial hit.  Instead, Congressional Republicans should guide Puerto Rico into doing the right thing:  trim spending and taxes, stand up to unions and undertake badly-needed governing reforms.  The time is right for a control board.

May 29th, 2015 at 11:03 am
Pass Free Trade Legislation, But Ignore Calls to Insert “Fair Use” Provisions That Weaken American IP Protections
Posted by Timothy Lee Print

We at CFIF strongly advocate both free trade and intellectual property (IP) protection.  Although typically distinct policy questions, they are currently intertwined as Congress finally and fortunately moves toward passing free trade legislation.

The pending legislation rightly demands that trading partners recognize American IP rights, but that has naturally drawn fire from some of the usual suspects (e.g., Google, the Internet Association, et al.) who tend to oppose stronger IP rights because those protections tend to run contrary to their own particular business interests.  Specifically, those interests seek to include copyright limitations in free trade bills, including mandatory “Fair Use” exceptions.

That would be a bad idea.

Among other problems, those voices misstate domestic law in suggesting that “generally, an Internet company in the U.S. is not held liable for the conduct or content of third parties who use its platform.”  While existing law provides a level of immunity for Internet companies, such immunity is limited and does not excuse violations in numerous circumstances, including:  (1) when the interactive computer service materially contributes to the illegal content; (2) when the interactive computer service itself engages in fraud/misrepresentation; (3) when the interactive computer service engages in, or aids and abets, criminal activity; or (4) if the illegal activity violates IP laws.  Accordingly, omitting discussion of an Internet company’s liability for copyright infringement is particularly and intentionally misleading.  American law regarding the liability of intermediaries is infinitely more complicated, and intermediaries may face liability under a variety of circumstances, including where they induce the infringement of third persons (the Grokster standard), and in other circumstances in which they meet the standards of contributory infringement or vicarious liability.  Additionally, “safe harbors” under applicable law remain conditioned on a number of affirmative acts on the part of intermediaries, such as promptly taking action once they learn of infringing content (rather than merely upon receiving formal notice), maintaining policies with regard to repeat violators and adoption of standard technical measures designed to prevent infringement.

Thus, domestic law does not extend some blanket, general exemption from liability for Internet companies with regard to the conduct of third parties, and the scope of liability in the U.S. continues to evolve, both from a judicial standpoint and a legislative one.  Furthermore, Congress is presently considering the appropriate contours of the safe harbors established in the 20-year-old DMCA, with many members expressing concerns about the levels of piracy that prevail, and the fact that “notice and takedown” has been largely ineffective in reducing piracy levels, with a particularly devastating impact on individual creators and actors who can ill afford to pursue takedowns only to have the same content immediately re-uploaded.  Accordingly, it remains unclear exactly what liability regime the US should be seeking to export.  But it’s absolutely clear that American interest in foreign markets remains primarily in promoting greater discipline and accountability to reduce piracy levels that deprive the US billions of dollars in earnings.

Furthermore, U.S. trade agreements already include provisions relating to exceptions and limitations.  They also already recite the relevant provisions of international law that define the scope of permissible exceptions and limitations.  Those binding provisions are contained in a variety of agreements, including the Berne Convention, TRIPS, the WIPO Treaties (WCT and WPPT), and each of our free trade agreements.  Other nations have employed different means to achieve what they believe is a proper balance between protection and limitations, but remain they bound by the provisions of international law.  A particularly wide variance exists in how common law and civil law nations approach exceptions and limitations.  More specifically, courts in civil law countries are not permitted to interpret general provisions, and legal standards that require the weighing of different factors are a poor fit.  As a result, legal provisions such as Fair Use are ill-suited to the jurisprudence of most countries across the globe.

Moreover, as the world’s leading producer and exporter of copyright protected materials, the U.S. maintains a tremendous economic interest in ensuring the effective protection of copyright works.  While all parties strongly endorse balanced copyright protection that both protects works and provides reasonable flexibility, the biggest problem in foreign markets is lack of discipline, and not overboard protection.

It is critical that Congress passes free trade legislation currently on its agenda, and those who seek to exploit it as a device to weaken American IP protections must be rejected.

May 26th, 2015 at 3:05 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:  Robert Pondiscio, Senior Fellow and Vice President for External Affairs at the Thomas B. Fordham Institute – Lessons from the Opt Out Debate;

4:30 CDT/5:30 pm EDT:  Florida Senator Don Gaetz – 2015 Legislative Session Continues;

5:00 CDT/6:00 pm EDT:  Steven Bucci, Director, Douglas and Sarah Allison Center for Foreign and National Security Policy at The Heritage Foundation – ISIS;

5:15 CDT/6:15 pm EDT:  Daniel Allott, Deputy Commentary Editor at the Washington Examiner – The GOP Field Grows; and

5:30 CDT/6:30 pm EDT:  Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs – Current News Regarding the FCC, ISIS and other Issues.

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

April 29th, 2015 at 4:29 pm
Rep. Blackburn Introduces Important Property Rights Bill – The Protecting the Rights of Musicians Act (PRMA)
Posted by Timothy Lee Print

Representative Marsha Blackburn (R – Tennessee) is perhaps the most steadfast property rights advocate in Congress.  In that vein, she has joined Rep. Anna Eshoo (D – California) in introducing another important piece of proposed legislation:  the Protecting the Rights of Musicians Act (PRMA).

Under current law, terrestrial radio broadcasters exploit a loophole that allows them to play songs without compensating artists who created and performed them.  That stands in contrast to other forms of radio transmission – including satellite and Internet radio – that justifiably pay the performers whose songs they play.  Terrestrial radio companies thus earn billions of dollars in advertising revenues largely on the basis of songs for which artists remain uncompensated, contrary to fairly straightforward concepts of fairness.

Ironically, some of the companies that own those terrestrial radio stations turn around and ask Congress to require cable and satellite providers to compensate them for retransmission of television programming of stations they own.  Fair enough that they be paid for such retransmission, but the same logic should in turn apply to their own radio programming.

Representative Blackburn’s proposed PRMA would correct that ongoing unfairness by requiring broadcasters to practice what they preach and pay performers for the works they’ve worked hard to create.

Importantly, the legislation would also interrupt broadcasters’ effort to force tech companies to include an analog FM radio chip in smartphones and other mobile devices.  If device manufacturers wish to include FM chips in their products, that’s all well and good.  Indeed, many already do.  And if consumers demand products that include them, then the market will respond accordingly.  But it’s simply not something the federal government should be dictating.

By the way, that FM chip mandate proposal is also a sneaky way for terrestrial broadcasters to expand their exploitation of playing songs without compensating artists.  After all, as noted above, Internet broadcasters must pay artists under current law.  But by asking the federal government to compel FM chip inclusion, terrestrial broadcasters would be able to expand their loophole to mobile devices.

That is the epitome of crony capitalism.

We at CFIF remain strong defenders of property rights, including intellectual property rights for artists and musicians.  Accordingly, we applaud Rep. Blackburn for her leadership on this issue, and encourage our supporters and activists to ask their own elected representatives to stand alongside her.

April 27th, 2015 at 2:29 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:  Peter Roff, Contributing Editor at U.S. News & World Report – Trade Promotion Authority;

4:30 CDT/5:30 pm EDT:  Mac Zimmerman, Director of Policy at Americans for Prosperity – Why Congress Must Allow the Export-Import Bank to Expire;

5:00 CDT/6:00 pm EDT:  David Keating, President of the Center for Competitive Politics – Five Years After Citizens United, Wisconsin’s Attempt to Criminalize Political Speech, and Nevada Express Advocacy Case; and

5:30 CDT/6:30 pm EDT:  Quin Hillyer, Contributing Editor for National Review Online and Political Commentator  What Hillary Clinton’s Past Scandals May Mean for 2016.

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


April 13th, 2015 at 2:20 pm
Music Equity: Fair Play Fair Pay Act Introduced in Congress
Posted by Timothy Lee Print

We at CFIF strongly support free markets and property rights.  That includes the rights of music writing and recording artists, who deserve to enjoy the fruits of their labor, which should not be affected by the means via which their creations are transmitted.  Unfortunately, however, current law leaves them with no effective rights when it comes to terrestrial radio.

We also support legislation to correct the historical anomaly 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.

As we stated in June of last year, the anomaly is due to a quirk in federal law, one that has unfair consequences:

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.  Estimates of royalties lost as a result reach $60 million per year.

As a result, the Righteous Brothers’ “You’ve Lost that Lovin’ Feelin’” receives no payment, but Hall & Oats’s remake does.  The Rolling Stones’ “(I Can’t Get No) Satisfaction” is not compensated, but Devo’s remake is.  The Beach Boys get paid for “Kokomo” but not “Good Vibrations.”  This situation has also led to numerous lawsuits spanning various states, adding further legal complexity and uncertainty for artists, consumers and digital broadcasters alike.

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.”

We have noted how various state courts have overturned that anomaly within their jurisdictions, but it’s time that the same fairness was extended at the federal level.

Fortunately, bipartisan legislation introduced in the House today by Rep. Marsha Blackburn (R – Tennessee) and Jerry Nadler (D – New York) aims to resolve these forms of unfairness.

Entitled the “Fair Play Fair Pay Act of 2015,” the bill would end the way in which federal law props up AM/FM radio and exempts them from paying artists for performance of their songs.  Also under the bill, digital radio stations that enjoy federal broadcast privileges would finally be obliged to provide royalties for songs recorded prior to 1972, in the same way they already pay for songs recorded after 1972, in order to maintain their licenses.

The Fair Play Fair Pay Act offers a corrective to years of unfairness in the industry, and it’s something that conservatives, libertarians and anyone who values property rights should support.

April 13th, 2015 at 12:37 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:  Tiger Joyce, President of the American Tort Reform Association – Fraud and Mass Tort Advertising;

4:30 CDT/5:30 pm EDT:  Tzvi Kahn, Senior Policy Analyst for the Foreign Policy Initiative – Iran;

5:00 CDT/6:00 pm EDT:  David Rivkin, Jr., Partner at Baker & Hostetler – The Senate Filibuster; and

5:30 CDT/6:30 pm EDT: Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs – The Fight Against Net Neutrality and Congressional Litigation Reform Efforts.

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

April 3rd, 2015 at 10:10 am
Jobs Report: Worst “Recovery” in U.S. History Continues Under Obama
Posted by Timothy Lee Print

As we’ve noted on multiple occasions, the cyclical economic recovery under Barack Obama is objectively the worst in recorded U.S. history.  Recessions and recoveries come and go, but never have we suffered one with declining median incomes, such low economic growth or this level of employment sluggishness.

Unfortunately, today’s unemployment report brought additional bad news and only serves to further cement Obama’s disastrous legacy.  Economists expected 250,000 new jobs for the month of March, but we only saw 126,000, the lowest since 2013:

The 126,000 increase was weaker than the most pessimistic forecast in a Bloomberg survey, and followed a 264,000 gain a month earlier that was smaller than initially reported, the Labor Department in Washington said.  The median forecast in a Bloomberg survey of economists called for a 245,000 advance.

‘There’s really no way to sugarcoat this.  This is a soft print all the way around, no matter how you slice it,’ said Omair Sharif, rate sales strategist at Newedge USA LLC in New York.  ’It seems that it’s corroborating that the U.S. definitely hit a soft patch in the first quarter.’”

Making matters even worse, the labor participation rate continued it’s decline to 62.7%, the lowest since 1978, before women fully entered the U.S. workforce.

The unprecedented weakness of the economy under Obama establishes the backwardness of his policies.  Although he and his supporters remain unwilling to internalize the obvious lesson that lower taxes and less federal regulation lead to a stronger economy, the American electorate fortunately maintains the opportunity to do so as 2016 brings the opportunity to select new leadership.

March 24th, 2015 at 3:52 pm
This Week in Congress: Hearing on Ill-Advised Nationwide Online Gaming Ban Proposal
Posted by Timothy Lee Print

Gaming is an issue traditionally governed at the state level, and rightfully so.  Under our federalist system, such questions are best resolved according to what the citizens of individual states – our “laboratories of democracy” – prefer.  What fits the citizens of Nevada may differ from what fits the citizens of New Hampshire, and vice-versa.

Unfortunately, some in Congress who typically demonstrate better political and policy judgment hope to impose a blanket, nationwide, one-size-fits-all prohibition of online gaming upon all 50 states.  The proposed bill failed in the last Congress, but this week on Capitol Hill its ill-advised reincarnation will be the focus of a Congressional hearing.  Nothing has changed over the past year to suddenly justify a bill that we opposed in its first iteration:

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.”

Proponents have even attempted to rig the hearing to exclude opposition voices.  But regardless of parliamentary shenanigans, the bottom line is that this is an ill-advised bill.  Conservatives and libertarians should strongly oppose this intrusion into individual states’ rights and consumer freedom, and contact their elected representatives to make their preference clear.

March 23rd, 2015 at 3:48 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:  Patrick Hedger, Policy Director of American Encore – Preserving the Work Requirement for Welfare Act and Proposed IRS Rules to Police Nonprofits;

4:30 CDT/5:30 pm EDT:  Michael Brickman, National Policy Director at the Thomas B. Fordham Institute – “Free Community College”;

5:00 CDT/6:00 pm EDT:  Jason Kimbrell, Leslie Coleman and Leah Taylor, Santa Rosa County Chamber of Commerce – Excellence in Business and Leadership Conference; and

5:30 CDT/6:30 pm EDT:  Professor John Eastman, Director, Center for Constitutional Jurisprudence, Henry Salvatori Professor of Law and Community Service, Chapman University Dale E. Fowler School of Law – Texas Immigration Case.

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