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May 27th, 2016 at 12:52 pm
“Reset” Fail: Russian Approval of U.S. Leadership at Record Low 1%
Posted by Timothy Lee Print

In this week’s Liberty Update commentary “Captain America, Barack Obama and Surrender of U.S. Internet Authority” we highlight the Obama Administration’s uninterrupted pattern of foreign policy failure to illustrate one reason its plan to surrender oversight of the open Internet to the “international community” is a toxic idea.

Perhaps nothing better represents Obama’s record of failure better than Russia, where he and former Secretary of State Hillary Clinton bungled their infamous “Reset” attempt.  For all of its efforts to placate Vladimir Putin to the detriment of U.S. allies like Poland and Ukraine, a new Gallup survey shows that Russians’ approval of U.S. leadership has fallen to a record low of 1%:

Just 1% of Russians approved of U.S. leadership in 2015 – the worst rating in the world last year, and the lowest approval Gallup  has measured for the U.S. in the past decade.  Remarkably, this is even worse than their previous record low 4% approval in 2014.”

It’s as if Obama and Clinton should receive commemorative shirts reading, “I Caved to Russian Dictators and All I Got Was This Lousy T-Shirt.”   Regardless, neither Obama nor Clinton can claim a single substantive foreign policy success during their tenures.  It’s again something to keep in mind as the administration pursues its inexplicable goal of surrendering U.S. Internet oversight before he coasts into retirement and leaves the rest of us to deal with the consequences.

May 25th, 2016 at 12:22 pm
Former Clinton Administration Official Rips FCC’s Set-Top Box Proposal as “Massive New Federal Regulation”
Posted by Timothy Lee Print

Alongside nearly every other conservative and libertarian organization of which we’re aware, CFIF opposes a toxic and wholly unnecessary new proposal from the Obama Administration’s Federal Communications Commission (FCC) to regulate cable television set-top boxes before the clock runs out on the Obama presidency.

But opposition extends across the political spectrum.  In today’s Wall Street Journal, former Clinton Administration Undersecretary of Commerce Ev Ehrlich excoriates the FCC’s proposed set-top box regulation for what it is — a crony capitalist, purloining, invasive, already-obsolete, anti-competitive, “massive new federal regulation”:

The Federal Communications Commission wants you, the consumer, to allow a new set-top box into your home that rearranges the programs you buy and inserts new advertising while tracking what you watch.  Movie studios, labor unions and civil rights groups all oppose it.  Why?  Because this ‘All-Vid’ proposal isn’t about the box fees the senators-turned-lobbyists decry.  Instead, it’s all about appropriating content.  Google and Amazon want to capture, repackage and profit from TV programming in their own competing services without having to pay for it…

If Google, Amazon or anyone else wants to build a better set-top box, they can do so the way these services have – in a way that respects federal privacy laws and negotiated licensing agreements with program producers.  Or they can actually license the content from creators, the way everybody else does, as opposed to demanding a gift from a captive FCC.”

Mr. Ehrlich gets it exactly right.

As we have stated, there is simply no realm of American life today that manifests badly-needed innovation, consumer choice, quality, affordability and sheer enjoyment than the video entertainment sector.  The variety and excellence of today’s video choices continues to expand at breakneck speed on (literally) a daily basis.  We therefore ask officials at all levels of government, as well as our 250,000 supporters and activists across the country, to oppose what Mr. Ehrlich rightly describes as a looming federal atrocity.

May 23rd, 2016 at 2:00 pm
In Frightening and Extraordinary Order, Federal Judge Sanctions Obama DOJ’s “Calculated Plan of Unethical Conduct” in Immigration Case
Posted by Timothy Lee Print

The Court does not have the power to disbar the counsel in this case, but it does have the power to revoke the pro hac vice status of out-of-state lawyers who act unethically in court.”

During my years of legal practice, if I received anything close to that official rebuke from a federal judge, the only question in my mind would’ve been whether to bother stopping by the managing partner’s office to receive a formal termination notice before packing up my belongings.

But that’s exactly the rebuke that federal Judge Andrew Hanen just issued against Barack Obama’s Department of Justice.  The occasion for this extraordinary and frightening order was the Administration’s bald misconduct in litigating the immigration executive order case now before the U.S. Supreme Court:

The United States Department of Justice (”DOJ” or “Justice Department”) has now admitted making statements that clearly did not match the facts.  It has admitted that the lawyers who made these statements had knowledge of the truth when they made these misstatements…

To say that the government acted contrary to its multiple assurances to this Court is, at best, an understatement.  The Government knowingly acted contrary to its representations to this Court on over 100,000 occasions.  This Court finds that the misrepresentations detailed above:  (1) were false;  (2)  were made in bad faith;  and (3) misled both the Court and the Plaintiff States.  The misconduct in this case was intentional, serious and material.  In fact, it is hard to imagine a more serious, more calculated plan of unethical conduct.  There were over 100,000 instances of conduct contrary to counsel’s representations;  such a sizable omission cannot be classified as immaterial.”

Lest anyone attempt to dismiss this outrage as limited to a few attorneys, Judge Hanen’s order extended to the DOJ itself:

[W]hatever it is that the Department of Justice Office of Professional Responsibility has been doing, it has not been effective.  The Office of Professional Responsibility purports to have as its mission, according to the Department of Justice’s website, the duty to ensure that Department of Justice attorneys ‘perform their duties in accordance with the high professional standards expected of the Nation’s principal law enforcement agency.’”


Among other remedies, Judge Hanen ruled that any DOJ lawyer based in Washington, D.C. who “appears or seeks to appear” in any state or federal court among those 26 states involved in the immigration case attend remedial ethics courses.  Additionally, current Attorney General Loretta Lynch was specifically ordered to come up with a program to prevent future misconduct of this sort.

Anyone still curious regarding the origins of the political and social turmoil this nation is suffering after two terms under Obama, look no further.  When a president and his administration cannot even be trusted to tell the truth in pleadings and statements to a federal court, we approach a disintegration of the rule of law.  The potential repercussions, both near-term and long-term, are terrifying to contemplate.

May 23rd, 2016 at 1:29 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 –  Justin Johnson, Senior Policy Analyst for Defense Budgeting Policy at The Heritage Foundation:  Military Readiness;

4:15 CDT/5:15 pm EDT – Trey Kovacs: Policy Analyst at the Competitive Enterprise Institute:  Obama’s New Overtime Rule;

4:30 CDT/5:30 pm EDT – Ari Cohn, Legal and Advocacy Officer at the Foundation for Individual Rights in Education:  Free Speech on College Campuses;

5:00 CDT/6:00 pm EDT – Tzvi Kahn, Senior Policy Analyst at the Foreign Policy Initiative:  Iran, Syria, and the Egyptian Air Crash;

5:15 CDT/6:15 pm EDT – Ike Brannon, Visiting Fellow at the Cato Institute and Former Treasury Department Official:  Biggest Flaws in the Latest Version of Puerto Rico Debt Legislation; and

5:30 CDT/6:30 pm EDT – Sally Pipes, President, CEO and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute:  Medicare — The Times They are a Changing.

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

May 17th, 2016 at 11:04 am
Welcome to the Age of Asymmetrical Regulation
Posted by Timothy Lee Print

We are fortunate to live in what many have called the “Golden Age of Television,” a time when an explosion of creativity and innovation have collided to create more audience choice than ever before.

In light of that, the Federal Communications Commission’s (FCC’s) recent decision to “Unlock the Box” with their “AllVid” proposal seems especially puzzling.  Upon further reflection and considering the bigger picture, however, the misguided AllVid proposal regarding technology that is already antiquated and will soon  be entirely irrelevant is merely the most recent in a string of illogical and counterproductive proposals from the current FCC.

From the so called AllVid proposal to the FCC’s Privacy proposal, it is evident that we live not only in the “Golden Age of Television,” but also in the “Age of Asymmetrical Regulation.” Current regulations impose one set of rules upon incumbents in the telecommunications industry and another set of rules entirely for so-called  “edge” providers like Google. In fact, regulation under this FCC seems to deliberately create a crony capitalist environment where incumbents can’t compete and the edge providers alone can thrive.

Equally troubling is the abnormally notoriously close relationship between Google and the White House, a partnership that was extensively detailed in a recent piece in The Intercept. Not only did Google’s top lobbyist visit the White House 128 times, but during the company’s annual State of the Union YouTube interviews with the President, Google is reported to have planted questions on policy issues important to Google on at least 3 occasions. That conspicuous degree of access and flagrant favoritism suggests that it has contributed to the severely asymmetrical regulation that we continue to witness from this FCC.

Again and again we have seen examples of this type of successful rent-seeking behavior from Google, and their ilk, and the remedy is clear: the FCC must stop its transparent favoritism and heavy-handed regulation of the telecommunication incumbents.  Instead, it should focus on maintaining a level playing field. Regulating based on crony capitalist bias and personal friendship is not only wildly inappropriate, but also a recipe for interventionist disaster. Continuing to disproportionately impose destructive regulations on the telecommunications for the benefit of other favored sectors not only violates the rights of disfavored enterprises, it ultimately serves to stifle competition and innovation for years to come in same the way that all government interventions into the free market tend to do.

May 16th, 2016 at 11:52 am
Congressional Reform Legislation Targeting IRS Abuse Deserves Our Support
Posted by Timothy Lee Print

In the Mario Lopez interview immediately below and a recent Liberty Update piece noting a welcome federal court victory, CFIF continues to emphasize and oppose ongoing official governmental efforts to intimidate and silence conservative donors:

[P]ublic officials and vindictive private citizens persist in demanding access to membership records and donor lists of conservative and libertarian organizations whose missions they deem unacceptable.  Anyone requiring confirmation need only look to Internal Revenue Service (IRS) harassment of pro-Israel and conservative nonprofit groups, or California citizens driven from their jobs simply for advocating a position on marriage that even a majority of state voters at the ballot box.

A recent federal court ruling in California vindicates donor privacy and the logic underlying [the Supreme Court ruling in] NAACP v. Alabama.”

On the same note, it’s worth highlighting Congressional legislation led primarily by Ways and Means Oversight Subcommittee Chairman Peter Roskam (R – Illinois) targeting Internal Revenue Service (IRS) abuses that deserves our support.  Specifically, the House of Representatives recently passed a set of reforms to stop IRS abuses, improve protections for everyday American taxpayers and finally hold IRS officials accountable for official misconduct.  Here’s what the package of reforms would accomplish:

  1. Force the IRS to implement the Taxpayer Bill of Rights;
  2. Prevent the IRS from targeting donors to nonprofit organizations;
  3. Prohibit IRS officials from using private email accounts to conduct official government business;
  4. End IRS abuses of taxpayer privacy protections;
  5. Allow social welfare nonprofit organizations to self-declare their tax-exempt status rather than subject themselves to politicized IRS stalling tactics;
  6. Allow organizations to appeal IRS denials of their tax-exempt status applications;  and
  7. Immediately terminate IRS employees found guilty of targeting Americans on the basis of political bias.

It’s a good sign that IRS abuses and other governmental efforts at the federal, state and local levels targeting Americans – especially conservative and libertarian Americans – who simply wish to exercise their First Amendment rights have been exposed.

But that’s not enough.  We can’t let the opportunity to actually change the atmosphere in which these abuses occurred, and prevent similar abuses going forward.  Americans of every political persuasion should therefore contact their elected representatives and the White House to demand their support for these common-sense reforms.

May 6th, 2016 at 11:23 am
Good News: Free Enterprise Remains Far More Popular Than Socialism
Posted by Timothy Lee Print

Don’t give up on American culture and run off to some deserted island or desolate wilderness hut just yet.  There’s still some good news to report.

According to a new Gallup survey, free enterprise, small businesses and capitalism remain far more popular among Americans than socialism or the federal government.  Despite the media kid-gloves treatment of admitted socialist presidential candidate Bernie Sanders, only 35% of respondents say they maintain a positive view of socialism.  That is actually down from 2010 and 2012, when 36% and 39% reported positive feelings.  As for the federal government, which too many candidates from all parties continue to offer as some sort of elixir for what ails us, only 44% report positive feelings.  That is also down from 2010 and 2012, when 46% and 51% held it in high esteem.

So congratulations, Obama.  Not exactly the transformative presidency in the mold of Ronald Reagan to which you aspired.

Meanwhile, 85% of Americans report positive feelings toward free enterprise, 60% hold capitalism favorably despite constant sloganeering from the political left and an astonishing 96% hold small business in high esteem.

Now it’s just a matter of all of us doing a better job of putting those ideals into practice.

April 29th, 2016 at 11:42 am
GDP Report Confirms Our Commentary on Obama’s Economic Record
Posted by Timothy Lee Print

In this week’s Liberty Update, we highlight the falsity of the persistent claim that Barack Obama somehow prevented a great depression:

[T]he federal government’s own economic data shows that Obama actually inherited an emerging recovery.  The American economy was already rebounding before he even officially became president.  What he has done is impose policies that have resulted in the slowest decade of economic growth in recorded U.S. history.”

Yesterday’s official report on first-quarter 2016 economic performance provided same-day confirmation.  More specifically, the U.S. Commerce Department announced that gross domestic product (GDP), the basic metric by which the economy is measured and by which recessions and recoveries are defined, grew at a disturbing 0.5%.  Not only is that number alarmingly low, it amounts to the worst mark in two years.  Echoing our own commentary, The Wall Street Journal emphasizes how this places Obama’s legacy in perspective:

The reality is that the first quarter is further evidence of what has been the weakest economic expansion in the postwar era.  The 0.5% growth is subject to revision but it follows 1.4% in the fourth quarter.  Growth over the last six months has averaged about 1%, and under 2% over the last 12 months…  The American economy hasn’t grown by more than 3% since 2005 (3.3%), the longest such stretch of malaise that we can find in the Bureau of Economic Analysis tables going back to 1930.  Even the Great Depression saw a snapback to rapid growth from 1934-1936.”

The explanation for that is simple.  Obama has pursued the most hyper-regulatory, big-government, wasteful-spending economic policy in U.S. history.   That’s illustrated among other things by his horrific deficit record, which saw four consecutive deficits in excess of $1 trillion dollars, and more accumulated debt than all previous presidents combined.  Until America has a president and Congress that pursue the proven supply-side policies that result in economic prosperity (see, e.g., Ronald Reagan), this will likely remain the new normal.

April 27th, 2016 at 6:45 pm
TechNotes: Market Continues to Work Without FCC Meddling
Posted by Timothy Lee Print

Throughout the Obama Era, his Federal Communications Commission (FCC) has destructively imposed regulation after regulation upon a tech and telecommunications market that was not broken.  Indeed, that sector has thrived like no other in the modern American economy.

An announcement today from Comcast provided just the latest evidence of that thriving market.

Specifically, Executive Vice President of Consumer Services Marcien Jenckes announced an Internet data trial that will introduce a terabyte data plan to its offerings.  Beginning June 1, data plans in trial markets will upgrade from 300 gigabytes to one terabyte, regardless of speed.

To place that in perspective, their average customer reportedly uses only 60 gigabytes per month – 940 gigabytes short of a terabyte.  A terabyte allows streaming of 700 hours of high-definition video, 12,000 hours of online gaming and 60,000 high-resolution photo downloads in a month.  Fewer than 1% of its customers even approach a terabyte in monthly usage, and even they will be free under the new plan to receive unlimited data for merely $50 more per month or individual increments of 50 gigabytes for $10.

In other words, the market is working without FCC “solutions” to non-existent problems.  This announcement offers merely the latest proof.

April 26th, 2016 at 4:01 pm
CFIF Celebrates World Intellectual Property (IP) Day
Posted by Timothy Lee Print

Please join CFIF in celebrating World IP Day!

Over more than two centuries, the U.S. has become the most innovative, prosperous and powerful nation in human history, without even remote competition.  What nation in all of recorded history rivals our array of patented advancements, from the light bulb to powered flight to computer technology to lifesaving pharmaceutical and medical advancements?  What nation has so dominated the world in terms of copyrighted content, from blockbuster films to popular music to literature to television entertainment?  What nation has ever maintained such disproportionately high levels of valuable trademarks recognized instantaneously throughout the world, from soft drink logos to technological products that have revolutionized our lives?

The simple answer is that no society rivals the U.S. in any one of those categories, let alone all of them simultaneously.

And that is the direct result of America’s tradition of strong IP protections, as the U.S. Chamber of Commerce’s annual International IP Index makes clear.  Our Founding Fathers specifically protected IP rights in the text of the Constitution, and the U.S. has consistently led the world in protecting IP rights.  The relationship between America’s IP protections and our unrivaled innovation and prosperity therefore isn’t coincidental, it’s causal.

So today let us celebrate IP, which accounts for over 40 million American jobs, rewards innovation, incentivizes inventiveness and helps ensure safe and genuine products for consumers.

April 26th, 2016 at 3:30 pm
Congress: Don’t Reward Russian Aggression by Purchasing Their Rockets
Posted by Timothy Lee Print

During the 2012 presidential campaign, Mitt Romney presciently identified Russia as America’s foremost global threat.  Barack Obama and his apologists immediately heaped scorn upon Romney, including Obama’s sophomoric “the 1980s called” remark during one debate.

History, however, has vindicated Romney’s pronouncement.

Reflecting upon events since that date, Secretary of the Air Force Deborah Lee James stated in July 2015, “I do consider Russia to be the biggest threat.”  And none other than Joint Chiefs of Staff Chairman General Joseph Dunford proclaimed that same month, “If you want to talk about a nation that could pose an existential threat to the United States, I would have to point to Russia, and if you look at their behavior, it’s nothing short of alarming.”

To its credit, Congress acted accordingly.  Following Russia’s aggression against Ukraine and its broader pattern of malfeasance across the globe, Congress, as part of two consecutive National Defense Authorization Acts, overwhelmingly supported a gradual phase out of purchases of Russian rocket engines through no sooner than 2020. The law could not have been any more accommodating without allowing indefinite purchases of these engines.

Sadly, today some seek to reverse that prudent Congressional action by sending some $540 million more to the Russian government for at least 18 new Russian RD-180 engines. Despite the law unambiguously allowing engines through at least 2020, they claim that they’re needed until a new domestically-manufactured engine arrives in 2019.  Those claims, however, do not accord with reality.  Senator John McCain (R – Arizona) summarized that reality cogently:

Today, we have two space launch providers – ULA and SpaceX – that, no matter what happens with the Russian RD-180, will be able to provide fully redundant capabilities with ULA’s Delta IV and SpaceX’s Falcon 9, and eventually, the Falcon Heavy space launch vehicles.  There will be no capability gap.  The Atlas V is not going anywhere anytime soon.”

He further noted that ending reliance would not result in increased costs to the taxpayer.

In fact, according to [the Department of Defense Office of Cost Assessment and Program Evaluation], the cost of meeting assured access to space requirements without the use of Russian rocket engines could be similar to what we pay today.”

Reversing America’s existing prohibition would merely reward Russian behavior and thereby undermine global and national security.  As evidence, consider the words of Russia’s Deputy Prime Minister Dmitry Rogozin:

The sale of engines benefits our engine making enterprises, in that they use the money for their own modernization…  We need the most modern engines that produce more thrust.  In order to design them, we need free money.”

Notably, rogue nations like Iran remain prime beneficiaries of Russian rocket technological advances.

The Obama Administration’s infamous “reset” attempt with Russia several years ago stands among its most costly foreign policy misjudgments.  We cannot afford to repeat that mistake by failing to learn from our mistakes and rewarding Russia’s worldwide menace.

April 20th, 2016 at 4:01 pm
Xfinity Announcement Demonstrates Folly of FCC Set-Top Box Regulatory Proposal
Posted by Timothy Lee Print

Alongside other free market organizations, CFIF adamantly opposes a new proposal by the Obama Administration’s Federal Communications Commission (FCC) to regulate cable television set-top boxes.

More specifically, Obama’s FCC seeks to impose a 1990s-vintage, one-size-fits-all mandate to make cable TV set-top boxes artificially compatible with third-party devices.  As we have detailed, the proposed regulation constitutes crony capitalism in its worst form, it poses a threat to consumer privacy, it undermines the creative community and jeopardizes intellectual property protections by potentially facilitating piracy.  In addition to those problems, it also constitutes an anachronism in the sense that it freezes in place an outdated set-top box  model that is already being left behind by technological advance and private sector innovation.  Cable companies and other entertainment industry players are already abandoning traditional cable boxes in favor of devices owned and maintained by individual consumers as they choose.

Today’s announcement of the new joint Xfinity TV Partner Program between Comcast, Samsung and Roku provides just the latest example illustrating that dynamic.  Stated simply, consumers can access their cable subscription via the Xfinity TV Partner app that will be compatible with RokuTV and Roku devices.  Thus, without the need for a set-top box at all, customers can now access live, on-demand, cloud, DVR and other televised content on smart TVs and other IP-enabled technology.

What this shows is that the video entertainment and app markets continue to evolve alongside consumer demand, rendering the FCC’s set-top box proposal obsolete before it can even be imposed.  The new regulation would disrupt market innovation of this sort while threatening the privacy and piracy perils noted above.  Simply put, the marketplace is working, and this latest FCC “solution” to a non-existent problem will only create more problems.

As we have emphasized, and as any American who watches television well knows, there is no realm of contemporary life that manifests innovation, consumer choice, quality, affordability and sheer enjoyment than the video entertainment sector.  The variety and excellence of today’s video choices continues to expand at breakneck speed and literally on a daily basis.

Today’s news serves to confirm that reality, and demonstrates why leaders in Congress, the innovation community, consumer groups and everyday American consumers should stand together and oppose this latest FCC overreach.

April 20th, 2016 at 11:10 am
Piracy, Data and AllVid: If Past is Prologue, Creators Should Worry a Google Delivered Pay-TV Service Would Promote Pirated Content
Posted by Timothy Lee Print

This is an amazing time for the film and TV industry, as audiences have never possessed more entertainment choices on more platforms.

To illustrate, FX Networks recently conducted a study demonstrating that the total number of scripted series (think dramas and comedies, not reality-TV) across cable, satellite and online increased to 409 in 2015. That represents a 94% increase from 2009, with a 174% growth in scripted series on basic cable (181 vs. 66). What’s more, all this great content is widely available online. SNL Kagan recently released a report finding that “98% of premium films and 94% of premium TV series were digitally available on at least one of the online services that were reviewed.”

Given this explosion of creativity and innovation, a sense of growing and justifiable bewilderment in the creative community exists over a recent FCC proposal, commonly referred to as “AllVid,” that would force creators, networks, and pay-TV providers to give away their products and services for tech giants like Google to exploit for their own commercial purposes. The beneficiaries of this government handout would be free to repackage video content as they see fit, drop programming or bury it on the channel guide, add their own advertising and strip out existing ads, and mine viewer data – all without negotiating with cable programmers or distributors or adhering to privacy laws and regulations that apply to traditional providers.

Further, there is nothing in the proposed rule to stop tech companies from combining legitimate content with video from piracy sources. “Walking Dead” producer Gale Ann Hurd articulated these concerns well in a recent USA Today op-ed stating:

[The proposal] would also allow Google — and for that matter set-top box manufacturers from all over the world, including China (where rogue boxes are being built by the millions) — to create and market applications or boxes with software that will treat legitimate and stolen material exactly the same, and may in many cases help to steer consumers to piracy.”

Her concern regarding piracy-laden devices is legitimate. As just one recent example, the UK’s Police Intellectual Property Crime Unit arrested six people for selling Android set-top boxes modified to deliver illegal movies and TV shows. And Hurd’s concerns about boxes manufactured in China are made plain in this Forbes article.

Proponents of AllVid claim they merely want to show consumers “all their video,” meaning they want to mix and match content from YouTube and other online sources with pay-TV. Setting aside the fact that existing technologies like Roku and Apple TV already provide that capability, the creative community is understandably nervous about stolen content appearing alongside legitimate video if Google gets its way with the set top box proposal. As Hurd points out, “Google’s search engine does this today. Here’s what happens when I search “www.google.com/?gws_rd=ssl#q=watch+Fear+the+Walking+Dead">watch www.google.com/?gws_rd=ssl#q=watch+Fear+the+Walking+Dead">Fear the Walking Dead.

The role search plays in facilitating piracy is significant, so those concerns about the mixing of stolen online video with legal pay-TV content are well founded. According to one survey, 74% of consumers say they used a search engine when they first viewed pirated content. And researches at Carnegie Mellon University conducted an experiment conclusively demonstrating that search rankings drive consumer behavior. The more prominently pirated content appears in search results, the more likely consumers are to choose it.

Worse, TorrentFreak recently reported that Google Now is pushing links to piracy sites, even when consumers don’t engage in any search at all. As TorrentFreak explains:

Google can’t read people’s minds but it does harvest data from Google accounts in order to provide its Now services. That includes your search and location history, sites you’ve visited and the content of Gmail messages. It can also access your phone contacts, calendar entries and even certain apps.”

In this instance, after Google Now determined that user Ryan Raab had “shown an interest” in the movie “Deadpool,” it proactively delivered a link to one of the largest torrent sites in the world, 1337x (see the screenshot below).  The troubling nature of this behavior can’t be understated. Based on data collected across multiple services, Google’s algorithm unilaterally suggested Raab access stolen content – without any action on his part. The FCC’s proposal would only increase the likelihood that Google continues to engage in such irresponsible conduct.

Creators like Hurd have fought hard to keep the pay-TV environment piracy-free. But the FCC – in its eagerness to foment “innovation” – seems determined to compromise the integrity of the creative ecosystem that has produced an explosion of creativity and innovation. AllVid supporters see content merely as bait – a digital lure to attract their ultimate prize: data. If Google and the FCC succeed, creative content could be taken without negotiation or compensation and used by large tech companies to collect consumer viewing data – thereby undermining the economics of creation and consumer trust in one fell swoop.

Or as Hurd puts it, “I’m afraid that all of us who create, market and broadcast legitimate content will be like the zombies on my show: the walking dead.”

April 11th, 2016 at 1:06 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:  Sam Kazman, General Counsel at the Competitive Enterprise Institute – CEI’s Subpoena from US Virgin Islands Attorney General on Climate Change Policy;

4:15 CDT/5:15 pm EDT:  Jim Phillips, Senior Research Fellow for Middle Eastern Affairs at The Heritage Foundation – Is ISIS developing a dirty bomb?

4:30 CDT/5:30 pm EDT:  Michi Iljazi, Communications and Policy Manager for the Taxpayers Protection Alliance – Corporate Inversions, Hillary Clinton’s Attacks on Business, US Postal Service, and Tax Day;

4:45 CDT/5:45 pm EDT:  Kevin Corinth, Research Fellow in Economic Policy Studies at the American Enterprise Institute – Smartphones for the Homeless

5:00 CDT/6:00 pm EDT:  Jeffrey J. Selingo, Author and Higher Education Expert – “There is Life After College: What Parents and Students Should Know About Navigating School to Prepare for the Jobs of Tomorrow”; and

5:30 CDT/6:30 pm EDT:  Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs – Puerto Rico, Internal Revenue Service and the Second Amendment.

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

April 8th, 2016 at 10:31 am
Puerto Rico: Representatives Say They Oppose Bailout, But That’s Exactly What “Super Chapter 9″ Bill Means
Posted by Timothy Lee Print

CFIF opposes the dangerous proposed “Super Chapter 9″ bankruptcy legislation for Puerto Rico (under the title “Puerto Rico Oversight, Management, and Economic Stability Act” or “PROMESA”), which was recently released by the Committee on Natural Resources in the House of Representatives.

Believe it or not, that proposed bill constitutes an even more dangerous version of the Obama Administration’s unprecedented bailout proposal, leaving American savers and retirees to pay the price for the fiscal irresponsibility of politicians in Puerto Rico.  It also would create a dangerous precedent encouraging high-spending states like Illinois to seek the same bailout from Congress, it would raise borrowing costs for states, it would undermine the value of retirement funds across America and it would remove any incentive for fiscally irresponsible states to enact meaningful reform.

Unfortunately, some in Congress claim to oppose a bailout for Puerto Rico without recognizing and acknowledging that the proposed legislation means exactly that.  Representative Rob Bishop (R – Utah) offers a leading example, saying that, “there will be no bankruptcy, there will be no bailout.”

Fortunately, Mainstreet Bondholders, a project of the 60 Plus Association, provides a useful corrective appropriately entitled “Read the Bishop Bill – This Is Super Chapter 9″.  It itemizes in easily-understood bullet-point terms how, “Insisting that this bill is not Chapter 9, and simply renaming it something else, does not change the substance of the legislation.  Make no mistake – this is exactly what the Obama Administration asked for when it lobbied for Super Chapter 9!”  It is worth the quick read.

Those who support the proposed legislation, including Rep. Bishop, may have their hearts in the right place.  But that doesn’t change the fact that the bill would bring precisely the sort of bailout on the backs of Americans they purport to oppose.

We at CFIF therefore ask all Americans to contact their elected representatives in Congress to express their unequivocal opposition to the House’s “Super Chapter 9″ bailout plan for Puerto Rico and its spendthrift politicians.

April 4th, 2016 at 3:53 pm
Bipartisan House Request to GAO: Investigate FCC’s Set-Top Box Proposal
Posted by Timothy Lee Print

We at CFIF recently highlighted a dangerous new regulatory proposal from the Obama Administration’s rogue Federal Communications Commission (FCC):  Its set-top box proposal that simultaneously embodies crony capitalism, regulatory overreach and technological sclerosis:

The latest manifestation is a new initiative from Obama’s overactive FCC to impose a one-size-fits-all mandate to make cable television set-top boxes artificially compatible with third-party entertainment devices.  In other words, even as cable companies themselves voluntarily move in the direction of abandoning traditional cable boxes and toward devices owned and maintained by individual customers as they so choose, the FCC wants to impose 1990s-style regulation on the industry.  That would essentially freeze in place the increasingly outdated model of set-top cable boxes even as it becomes increasingly anachronistic on its own.”

Fortunately, there’s good news to report.

Specifically, a bipartisan House Communications and Technology Subcommittee coalition led by Chairman Greg Walden (R – Oregon) and committee member Yvette Clarke (D – New York) sent a letter on Friday asking the nonpartisan federal Government Accountability Office (GAO) to investigate the FCC’s set-top box proposal.  For those unfamiliar with the GAO, it is popularly known as the “Congressional Watchdog,” and is more officially the agency that provides investigatory and auditing services to Congress of various institutions within the federal government.  The joint letter highlights their concerns and requests a formal GAO examination:

We are concerned that the agency’s efforts do not include a meaningful assessment of the effects on independent and diverse networks, whose business models may be greatly threatened and undermined by the FCC’s proposed rules.  The FCC must proceed with a better understanding of how their proposed rules could limit diversity and inclusion on our nations shared media platforms.  We are requesting that the U.S. Government Accountability Office examine the impact of the FCC’s proposal to change the rules regarding cable set top boxes on small, independent, and multicultural media programmers and content providers.”

This constitutes great news.

It shows a bipartisan Congressional concern over the broad array of potential damage that the FCC’s proposed set-top box regulation would inflict.  And Congress isn’t alone.  A diverse group of consumer groups, innovators, employers and businesses join in opposing the proposal, which offers optimism that it will be rightfully stopped before further damage occurs.

March 25th, 2016 at 5:17 pm
Senate VENUE Act: Badly-Needed Venue Reform in Patent Litigation
Posted by Timothy Lee Print

CFIF strongly favors comprehensive patent litigation reform, in particular the Innovation Act that passed by a bipartisan 325-91 House vote in the last Congress.  Venue reform constitutes one important part of that broader effort, which CFIF has also emphasized.

By way of review, current federal rules allow patent lawsuits to be filed almost anywhere, which in turn allows plaintiffs to file in districts where no defendant resides, where no substantial portion of the events in dispute occurred and where few if any relevant witnesses and evidence are situated.

As we have noted, one manifestation that of venue abuse problem is the preposterous overabundance of patent lawsuits in a single federal district – the Eastern District of Texas:

Since 2009  alone the total number of patent lawsuits in the United States has more than doubled from 2,500 to over 6,000 in 2014.  And of that total, a preposterous 44% of new patent lawsuits last year were filed in a single federal court district, the Eastern District of Texas.  Even more preposterously, one judge in that district – Rodney Gilstrap – oversees 900 cases and actually accounts for almost one-fifth of all patent lawsuits in the entire U.S.

Plaintiffs’ attorneys game the system by suing in the Eastern District of Texas for a variety of reasons, including its reluctance to allow transfer of cases to more appropriate districts, its prevalence of high ‘jackpot jury’ awards, its willingness to allow excessive document and witness discovery demands, its friendly verdict rate and its local court rules favorable to plaintiffs.  The district is so notoriously welcoming that plaintiffs create artificial connections such as bogus offices and document warehouses for the sole reason of convincing judges to keep cases there.”

Fortunately, Senators Mike Lee (R – Utah), Cory Gardner (R – Colorado) and Jeff Flake (R – Arizona) have introduced legislation to surgically pursue venue reform.

Their Venue Equity and Non-Uniformity Elimination Act (VENUE Act) of 2016 (S. 2733) would limit litigants’ ability to game the system and play “jackpot justice” when choosing the district in which to sue.  Stated simply, the VENUE Act would now require plaintiffs to sue in districts more appropriate for the case in question and convenient for the parties and witnesses.  No longer would plaintiffs possess almost unlimited ability to drive opposing parties to nuisance settlements by filing in faraway districts untethered to the parties or legal issues.  Instead, patent lawsuits would be litigated in districts where defendants’ principle places of business are located, where the patent holders and important witnesses reside, where the evidence is more centralized or where the more substantial portion of alleged infringements occurred.

It should be noted that the VENUE Act would still allow parties to voluntarily agree amongst themselves to a particular district, so this wouldn’t constitute a one-size-fits-all mandate.

Although comprehensive patent litigation reform remains the goal, the VENUE Act advances the ball on this issue in an important manner.  We therefore encourage our supporters and activists across the country to contact their Senators and express support for this important patent litigation venue reform bill.

March 21st, 2016 at 11:54 am
CFIF TechNotes: WSJ Hits FCC’s Set-Top Box Scheme in “Government by Google”
Posted by Timothy Lee Print

In recent weeks we’ve highlighted a destructive new initiative by the Obama Administration’s Federal Communications Commission (FCC) to impose a one-size-fits-all regulation forcing cable TV set-top boxes to become artificially compatible with third-party devices.  Translation:  in the ever-evolving home entertainment market, where cable companies themselves are already moving from traditional cable boxes toward devices owned by individual consumers, the FCC remains mired in a 1990s mindset and wants to regulate accordingly.  The FCC’s inexplicable proposal would freeze in place a technological state that is already outdated.

Check that.  Perhaps the FCC’s behavior isn’t so inexplicable at all.

This morning, The Wall Street Journal editorial board highlights many of the concerns that we and others address, but notes in “Government by Google” that crony capitalism constitutes the underlying foundation of the initiative:

The Federal Communications Commission has proposed rules that would force television providers to create a universal cable-box adapter.  This would hand over shows to companies – TiVo, Google – that would peddle programming as their own…

The new rule amounts to government-sponsored piracy in allowing TiVo and Google to broadcast programs that providers pay to distribute.  Google wouldn’t have to abide by carriage agreements or pay licensing fees, which is one reason content creators are pushing back.  The stealing would no doubt violate copyright.  Some 30 members of the Congressional Black Caucus sent a letter to FCC Chairman Tom Wheeler saying the rule would relegate minority programming to channels rarely visited by viewers.  Google prodded the supposedly independent FCC in 2014 to bust open cable boxes, and Chairman Wheeler followed orders.  The tech giant wants to sell ads against poached content, mowing over cable commercials and crushing advertising competitors.”

The federal government can’t be trusted to control our healthcare industry, our free speech rights, our children’s educational options, our Second Amendment rights and so on.  Why would control over our home entertainment choices or the constantly-advancing telecommunications industry somehow be any different?

The Journal concludes by noting another ominous element:  the Obama Administration’s mad rush to impose the remainder of its to-do list as the sun sets on its tenure:

The FCC rejected a similar proposal in 2010, but now the Democratic majority seems committed to ramming it through before President Obama leaves office.  Mr. Wheeler has already done great harm to his reputation by taking direction from the White House to regulate the Internet.  He’ll do even more damage if he does the cable-box bidding of Google.”

Well said.  Fortunately, a bipartisan Congressional consensus, the creative community, consumer groups and other elements stand ready to stop the FCC’s scheme at the legislative, judicial and regulatory levels.  Its up to the American electorate justifiably disgusted by crony capitalism and stifling federal overregulation to support them.

March 14th, 2016 at 2:58 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:  Nathan Nascimento, Senior Policy Advisor at Freedom Partners – Obamacare’s Skyrocketing Costs;

4:15 CDT/5:15 pm EDT:  Roslyn Layton, Visiting Fellow at the American Enterprise Institute’s Center for Internet, Communications and Technology Policy – FCC’s Foray into ISP Privacy Regulation;

4:30 CDT/5:30 pm EDT:  Ambassador Francis Rooney, Former U.S. Ambassador to the Holy See and Author of “The Global Vatican” – Continuing Threat Posed by ISIS and Islamic Extremism;

5:00 CDT/6:00 pm EDT:  Thomas Pyle, President of the American Energy Alliance – Stop Work Orders to States in Wake of SCOTUS Ruling on Obama’s Clean Power Plan;

5:30 CDT/6:30 pm EDT:  Quin Hillyer, Contributing Editor of National Review, a Senior Editor for The American Spectator, and a nationally recognized political expert – Florida’s Primary; and

5:45 CDT/6:45 pm CDT:  Jonathon Wood, Staff Attorney at Pacific Legal Foundation – Sports Betting.

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

March 11th, 2016 at 11:28 pm
Patent Litigation Reform Is Not “Patent Reform”
Posted by Timothy Lee Print

In the accelerating debate over patent litigation reform legislation, opponents continue to mischaracterize it as “patent reform,” as if the bill would somehow reorder the system by which patents are granted, the duration of protection and so on.

Whether deliberate or simply careless, that’s simply untrue.

Patent litigation reform legislation, including the Innovation Act that we at CFIF most strongly favor, would reform how patents are litigated, not our patent system itself.  And as Dana Rao, Vice President and Associate General Counsel of Intellectual Property and Litigation at Adobe Systems, details in The Hill, patent litigation abuse remains a serious problem:

The numbers are in.  And they aren’t good.  Patent trolls filed 3,604 suits in 2015, making it the second busiest year on record for abusive patent litigation.  And if anyone had any doubt about the merit of those suits, the busiest filing day last year, by far, came one day before a court rule permitting vague complaints was set to expire.  A record 212 patent infringement lawsuits were filed on November 30.  That is nearly 18 times as many as a normal day.  What kind of patent holder would scramble to file a suit to take advantage of this rule?  A patent holder who knew their suit had no merit.  These recent numbers reveal that court decisions and rule changes do not discourage abuse of our patent system.  In the current system, trolls continue to bring frivolous suits in sympathetic courtrooms around the country.  Only legislation will change these dynamics.”

The Innovation Act addresses that critical need for reform.

The Innovation Act targets patent litigation abuse by:  (1)  Forcing frivolous litigants who can’t demonstrate to the court that their “position and conduct … were reasonably justified in law and fact, or that special circumstances (such as severe economic hardship to a named inventor) make an award unjust”;  (2)  Changing pleading standards so that parties must state their allegations with greater clarity and specificity, instead of relying upon vague and summary allegations that offer little insight into the nature of their claims;  (3)  Reforming the pretrial discovery process (witness depositions, document requests, etc.) in order to reduce the oppressive burdens currently imposed on parties, often as a tactic to drive innocent parties to settle rather than vindicate their rights;  and (4)  Bringing greater transparency regarding true ownership of disputed patents.

Notice what the Innovation Act does not do:  overhaul the patent system itself.  Which is one reason why the bill passed by an overwhelming and bipartisan 325-91 vote in the last Congress.

So why do opponents continue to mischaracterize it as “patent reform?”  Only they possess the certainty of their own minds to explain, but one suspects that it’s a ploy to frighten those of us who support strong intellectual property (IP) protections.  But CFIF takes a backseat to no one in advocating strong IP protections, and we would not support any bill that threatened to undermine them.

Whatever their motivations or confusion, however, it’s important that elected officials, policy analysts and everyday Americans remain clear that patent litigation reform should not be confused with “patent reform.”