Category: Business

Like a President Bush veto threat, only more ridiculous

If Rep. Tom Davis wants to be involved in baseball so badly, he should retire from Congress and apply for a job with Major League Baseball or one of its teams. Instead, we’re stuck with more meddling in affairs that have nothing to do with him or his supposed authority to conduct hearings anywhere on any topic he wants.

The Virginia Republican, the chairman of the House Government Reform Committee, spoke to a crowd in front of RFK Stadium, where elected officials from across the region gathered to denounce Comcast’s refusal to carry the Mid-Atlantic Sports Network, the regional network created by Baltimore Orioles owner Peter Angelos and Major League Baseball.
…

Comcast, which currently carries Orioles games on Comcast SportsNet, sued [Orioles owner Peter] Angelos, contending that he improperly terminated the Orioles’ contract with Comcast. A Montgomery County, Md., judge dismissed the lawsuit, but Comcast is appealing.

Davis said his staff would meet with officials from Comcast, Major League Baseball and the Orioles in the coming days to try to resolve the problem. But he warned that congressional hearings might be necessary if informal talks fail.

Why might they be necessary? Explain to me why the House Government Reform Committee feels that a dispute between two television networks and a baseball team falls under its jurisdiction. Show me how this isn’t a power grab or indulging in a fetish. I’m waiting.

I want to exercise my “Phillies win every World Series” rights.

I understand that this quote is a simplification of copyright “fair use” for clarity, but I found it amusing anyway.

“Consumers have well-established rights to ‘time-shift’ television programming by making copies for personal, in-home viewing,” [Cablevision] says. “This new technology merely enables consumers to exercise their time-shifting rights in the same manner as with traditional DVRs, but at less cost.”

Let’s see them find that in the Constitution. Activist judges cable television providers!

Don’t bite the Apple that feeds you

Here’s an interesting critique of the Cato Institute’s new white paper on Digital Rights Management. I haven’t read the white paper, so I’ll confine myself to the Boing Boing critique. First, this:

The Cato Institute, an ultra-libertarian, right-wing think tank, has released a white paper damning the US Digital Millennium Copyright Act’s ban on breaking the anti-copying systems used to cripple digital media, like DVDs and iTunes songs.

I’m not sure what to make of “ultra-libertarian, right-wing”? Ultra-libertarian sounds good enough to me, both in a utopian view of the world and as a descriptive statement for the Cato Institute. So why the addition of “right-wing”? This context reads as if we the reader should replace “right-wing” with “bad” as we follow along. This is too broad, in what appears to be an attempt to smear the Cato Institute’s normal beliefs. Are they not liberal progressive enough? I don’t know, I could be wrong. The post later describes them as “sharp free-market types”, which I like, so “right-wing” just strikes me as a weird to introduce them for this topic.

Moving on:

I’ve heard for years that the Cato Institute was divided on DRM and copyright, so it’s good to seem them taking a stand now. I think they’ve only scratched the surface, though. Of special interest to free-marketeers should be the way that DRM lets Apple hijack the music companies’ copyright monopoly and turn it into a tax on Apple customers who switch from an iPod to a competing product. You can keep your MP3s if you switch from Windows to Mac, but if you switch from iPod to Creative, kiss your iTunes goodbye. Talk about anti-competitive!

That’s too simplistic, I think. It’s too easy to lump DRM and the corporations that use it into the bad category and customers into the good category. I spent a long time not using Apple’s products (iPod and iTunes) because of the DRM issues and the potential choice problems later. Ultimately, my subjective conclusion of Apple’s superiority convinced me.

Apple’s behavior can be seen as anti-competitive, since it’s a closed source process. Boo-hiss, and all that. But I also have a choice. I didn’t have to convert to Apple products. I weighed the factors (cost, options, future conversion efforts) and decided that the deal is sufficient. The free market is functioning.

The flaw in the excerpted passage lies with an incorrect assumption that the free market means the solution comes up roses for the customer every time. The best solution doesn’t have to involve sticking it to The Man. Customers may make irrational decisions that benefit one company more than another. That doesn’t make it wrong. More than anti-competitive dreck surrounding the DRM, the real issue might be whether or not legal digital music would’ve happened without Apple. I have no idea. But the free-market decided that this is good enough for now.

The US Digital Millennium Copyright Act’s ban is absurd, of course, but there’s a difference between a corporate decision to implement licensing requirements DRM and government regulation. With Apple’s scheme, customers have a choice. With the Digital Millennium Copyright Act, customer’s have no choice, aside from whether or not to abide by the law. It’s even more glaring considering how intentionally skewed the DMCA is to content owners. Hitting Apple for its business practices because they correspond with government regulation is too intellectually soft.

When government is right and citizens are wrong

Do French youth not understand cause and effect? In the 21st Century, it should be obvious by now since it’s a simple lesson. Apparently not:

French riot police have used tear gas and water cannon after protests against a new labour law turned violent.

More than 160 people were arrested after clashes erupted in eastern Paris following a day of largely peaceful demonstrations across France.

Vehicles were set on fire and stores were damaged as masked youths clashed with police.

It sounds very important. The government’s betrayal, which the unions and its lackeys point out, is the government’s First Employment Contract (CPE), which

… allows employers to end job contracts for under-26s at any time during a two-year trial period without having to offer an explanation or give prior warning.

I know, the horror! No civilized country can have employers firing employees arbitrarily, even if the employee is incompetent or labor needs change, when “more than 20% of 18 to 25-year-olds are unemployed.” What would happen then? It’d be mass chaos. Definitely worse than street rioting, I’m sure.

Why is it so hard for people to understand that when employers are locked into retaining new employees by law, with no chance of dismissal for any reason, that unemployment will be artificially low, not high? People like options. When your option is irrevocable commitment or nothing, nothing seems like a smarter deal for a business than getting by with existing staff. That may hinder growth, but small(er) is better than bankrupt from paying for employees that don’t generate revenue. When employers can dismiss employees at will, they’ll hire more people when opportunity arises. Without ridiculous labor laws, the bar of opportunity is lower.

Uncertainty is a factor in free markets. Trying to hedge it away results only in losing the reward. It’s not particularly complicated. Whether it’s socialist youth in France or socialist unions in America, the result is the same. The happy feelings of security fade quickly in a safe environment.

Very aggressive. A new day, and you won’t be pushed around.

If only he and his colleagues believed this statement in response to the bill pending in Congress that would criminalize gambling on the Internets by turning financial institutions into a police extension of the state (or is that “extension of the police state”?):

“Adults are entitled to do with their money what they want to do,” [Rep. Barney Frank] said.

I want to retire at fifty, but the government keeps requisitioning 40 percent of my income every year. Am I entitled to stop contributing taxes for government benefits I don’t receive? I can dream.

Roads? Where we’re going, we don’t need roads.

As in most cities, traffic is atrocious in the metro Washington area. I missed the train one day last week and my morning commute took me almost two-and-a-half hours. My highway miles, which constitute probably 90% of the drive into the District consist of HOV lanes, whether in the one designated lane outside the Beltway or both lanes inside the Beltway. (I-66 is all HOV once it crosses inside the Beltway.) The area needs a transportation solution.

As a libertarian, this story about some localities in Northern Virginia considering offers from private developers to pay for road upgrades in exchange for zoning approvals fascinated me. I’m certainly in favor of privatizing governmental activities wherever possible, and as I’ve read more, I’m not opposed to private roads instead of public roads. (I’m not rah-rah over the idea yet, but that’s the practical side of me. The intellectual battle continues.) Whether or not this current scenario in Virginia could work is worth discussing, as it provides insight into the debate. Consider:

“This is one of the prices we pay for not adequately funding our transportation system,” said Ronald F. Kirby, director of transportation planning for the Metropolitan Washington Council of Governments. “We’re getting into a situation where we’re so desperate for improvements that we’re willing to make deals like this.”

County officials say they are aware that the offers are a Faustian bargain of sorts, since the deals would draw even more cars onto the roads that need fixing. But they are fed up with waiting, they said, and if legislators fail to agree on a funding package in the coming weeks — one with clear guidelines for where the money’s going — turning down the developers will be more difficult.

I read the first quote with a skeptic’s interpretation. For the purpose of today’s debate, I’ll agree that we’re not funding transportation adequately. But where does that simple statement end? Do we raise taxes? Or do we analyze what we’re spending public funds on today? Essentially, it’s worth separating any idea of a causal link between transportation funding and government tax receipts. Mr. Kirby doesn’t carry it that far, so I have no idea what his position is regarding how to fix it. But the natural inclination of legislators is to not eliminate spending if funds aren’t available when new needs arise. That shouldn’t be the automatic leap in Virginia, although I suspect that’s where the plan is going.

Of course, turning over funding and construction to private developers could lead to the Faustian bargain some fear. My morning commute shows that it’s not unfounded. It would be unwise for local politicians to use that theory as the sole deciding factor in the deals. Let the developers present a cost-benefit analysis and present it for consideration. Then review it thoroughly. It sounds simple, but I hold little confidence. A few circuitous re-election campaign donations seem more likely.

Later in the article, more details arise. What I find most telling is this passage:

Some local officials are less impressed by the developers’ largesse than others. Skeptics note that builders are paying for many of the improvements by establishing special tax districts within their developments, thereby passing on much of the cost to the new residents.

That sounds sinister, but how is passing the cost to new residents different than how the state would pay for increased spending on improvements? Leprechauns don’t deliver pots of gold to government coffers every time a rainbow appears. Since I’m certain residents in the new development will know that they’re in a special tax district, they’ll be in the best position to decide if they want to buy a home in the neighborhood, given the tax implications. If the developer over-estimates what home-buyers are willing to pay, it could lose money or go bankrupt. It comes down to two private parties negotiating terms for conducting a transaction. It’s capitalism. Where’s the flaw?

It’s clear that hurdles to privatizing exist. Whether or not this is the place to start is a question worth asking. The debate should be interesting, at least. However, it should teach legislators and the voters who elect them that the private market isn’t scary. Profit motive isn’t dangerous. When private entities seek to get something done, that’s a sign of where the market wants to go. Government doesn’t need to rubber stamp anything just because it’s a private individual or company, but government shouldn’t be a hurdle just to keep its action in the monopoly.

Uncle Sam is a brilliant banker

This article about state prepaid college savings plan raised an interesting point, without actually making that point. I noticed it because my experience reflects a flaw in the financial aid system for college. Consider:

But under the new law, prepaid plans will receive the same financial aid advantage that 529 college savings plans do. The money in 529 plans, which let parents save in a tax-advantaged investment account, is treated as the parents’ money. And under the federal aid formula, only 5.64% of parents’ money is expected to go toward college expenses, [Mark Kantrowitz, a financial aid expert in Pittsburgh] says.

I haven’t dealt with undergraduate financial aid in more than a decade, so perhaps the rules have changed, but when I attended college, I faced a different reality than some alleged 5.64% parental responsibility. Coming from a poor background, I knew two facts: I was going to college and I was paying for it. The federal financial aid process would only recognize one of those facts by making it virtually impossible for anyone other than an orphan or 23-year-old to be considered independent financially from his parents. My mother had to take out PLUS loans, which amounted to 40% of the total I borrowed for four years of undergraduate study because the borrowing limits for me as the student were capped. (They still are.) So I ended up with only 60% of the debt from my 94.36% federal responsibility. My mother enjoyed debt totaling 700% of her responsibility.

But let’s continue pretending that turning private dealings over to the rule-making of government nannies works best.

The instructions explain the volume controls

Because turning the volume down is too obvious:

A Louisiana man claims in a lawsuit that Apple’s iPod music player can cause hearing loss in people who use it.

Apple has sold more than 42 million of the devices since they went on sale in 2001, including 14 million in the fourth quarter last year. The devices can produce sounds of more than 115 decibels, a volume that can damage the hearing of a person exposed to the sound for more than 28 seconds per day, according to the complaint.

The iPod players are “inherently defective in design and are not sufficiently adorned with adequate warnings regarding the likelihood of hearing loss,” according to the complaint, filed Tuesday in U.S. District Court in San Jose, Calif., on behalf of John Kiel Patterson of Louisiana.

Personally, I use my iPod at a low volume. Most times, I keep the volume at no more than 20% of the available volume. Perhaps this is still a significant volume and I don’t know it, but I’ve noticed no difference. And if a song, audiobook, or podcast is too loud, I quickly turn it down. (I usually don’t have to because I’m smart enough to start low and adjust up. Strange concept.) It seems apparent that Mr. Patterson’s lawsuit is without merit.

There are potential consequences to everyone who knows how to operate the volume if Mr. Patterson’s lawsuit ends in a victory for him:

Apple was forced to pull the iPod from store shelves in France and upgrade software on the device to limit sound to 100 decibels, but has not followed suit in the United States, according to the complaint. The headphones commonly referred to as ear buds, which ship with the iPod, also contribute to noise-induced hearing loss because they do not dilute the sound entering the ear and are closer to the ear canal than other sound sources, the complaint states.

I prefer the volume choice the iPod offers since I’m not always listening with earphones. Sometimes I feed my music to my car stereo through an FM transmitter. The transmitter sends a low volume signal. Turning up the volume on the iPod is the most effective way to get a quality, reasonable volume sound. When I want to hook it up to my stereo, the same scenario applies.

Apple appears to have engineered the iPod to be versatile, implementing flexibility with a dose of trust in the consumer’s intelligence. Aside from the meddling aspect, a change such as that imposed in France would reduce the functionality of the iPod. One day I’m going to want a video iPod. I expect it to offer me the same choice I have today. People like Mr. Patterson need to stop with the money grabs helping.

Join the revolution, eh

I wrote a few weeks ago that Sirius would not carry Howard Stern on its Canadian service due to decency standards in Canada revolving around the country having no equivalent to our First Amendment. It’s embarrassing that a democracy in the 21st century has no guaranteed free speech, but at least it gives us some perspective on how much worse our situation could be. Unless our courts decide not to be activist or legislate from the bench and allow Congress to pass laws restricting pay content. But I digress. Yesterday, Sirius Canada announced that it would begin airing Howard Stern’s radio show beginning Monday.

“It’s no secret that Howard Stern’s programming is not consistent with the kind of programming you would find on CBC/Radio Canada’s airwaves, but this is a Sirius Canada decision,” said CBC spokesman Jason MacDonald.

The subscription-based network is 40 per cent owned by the CBC, 40 per cent by Standard Radio and 20 per cent by Sirius in the United States.

“Sirius Canada is a separate company,” noted MacDonald.

“Yes, we’re partners and Sirius Canada made the decision that was right for it based on what the market demands.”

This is obviously a triumph for free speech and free markets in Canada, but I don’t know how long it’ll last. Stern said as much yesterday. He was joking, but this makes me wonder:

[MacDonald] said new technology that allows Sirius Canada subscribers to block out Stern if they so choose was a significant factor in finalizing the deal.

Sirius Canada has said it does not expect Stern to run into censorship trouble this time because his satellite show is a pay service.

“It’s really up to the public to decide whether it wants to submit a complaint, regardless of the fact that it’s a service that is purchasable,” says CRTC spokeswoman Miriam Gennaro.

She couldn’t immediately say, however, whether different standards will apply to satellite radio.

I know Ted Stevens, Brent Bozell, and James Dobson would love to implement such a scheme in the United States, but I’m thankful the First Amendment says what it says. Now, if we just convince those non-“activist” judges to read it with the same deference to the text they would apply to any more favored portion of the Constitution. I know that’s crazy talk, but I can dream, right?

I was much angrier last night

Last night I tried to put a few songs onto my iPod. Unlike every other experience, last night’s attempt became a debacle. iTunes refused to transfer any songs until I’d installed the latest firmware update to my iPod. I downloaded the update (iPod Updater 2006-01-10) and installed it as recommended. Unlike the intended effect, Apple’s update hosed my iPod’s hard drive. Outstanding. Now, not only do I still have to transfer those few songs I’d intended to transfer last night, I have to transfer every song that was already on it since I had to reformat the hard drive to make my iPod work again.

Today’s lesson: Do not install iPod Updater 2006-01-10. It will corrupt your iPod’s hard drive.