There is bipartisan agreement that the 1996 Telecom Act was antiquated only shortly after President Clinton’s signature had dried on the legislation. There is also consensus that spectrum policy, still largely grounded in the 1934 communications statute, absolutely distorts today’s wireless markets. And there is frequent criticism from thought leaders, right and left, that the FCC has been, for decades, too accommodating to the firms it regulates and too beholden to the status quo (economist Thomas Hazlett quips the agency’s initials stand for “Forever Captured by Corporations”).
For these reasons, members of Congress every few years announce their intention to reform the 1934 and 1996 communications laws and modernize the FCC. Yesterday, some powerful House members unexpectedly reignited hopes that Congress would overhaul our telecom, broadband, and video laws. In a Google Hangout (!), Reps. Fred Upton and Greg Walden said they wanted to take on the ambitious task of passing a new law in 2015.
Much depends on next year’s elections and the composition of Congress, but hopefully the announcement spurs a major re-write that eliminates regulatory distortions in communications, much as airlines and transportation were deregulated in the 1970s–an effort led by reformist Democrats.
About ten years ago, more than fifty scholars and technologists crafted reports which constituted the Digital Age Communications Act (or DACA) that is largely deregulatory (a majority of the group had served in Democratic administrations, interestingly enough). In 2005, then-Sen. Jim DeMint proposed a bill similar to the working group’s proposals. The working group’s recommendations aged very well in eight years–which you can’t say about the 1996 Act–and represents a great starting point for future legislation.
As Adam has said the DACA reports have five primary reform objectives:
- Replacing the amorphous “public interest” standard with a consumer welfare standard, which is more well-established in field of antitrust law
- Eliminate regulatory silos and level the playing field through deregulation
- Comprehensively reform spectrum not just through more auctioning but through clear property rights
- Reform universal service by either voucherizing it or devolving it to the States and let them run their own telecom welfare programs; and
- Significantly reforming & downsizing the scope of the FCC’s power of the modern information economy
DACA redefines the FCC as a specialized competition agency for the communications sector. The FCC largely sees itself as a competition agency today but the current statutes don’t represent that gradual change in purpose. The FCC is slow, arbitrary, Balkanizes industries artificially, and attempts to regulate in areas it isn’t equipped to regulate–the agency has a notoriously bad record in federal courts. These characteristics create a poor environment for substantial investments in technology and communications infrastructure. The DACA proposals aren’t perfect but it is a resilient framework that minimizes the effect of special interests in communications and encourages investments that improve consumers’ lives.
Harm reduction refers to a range of services and policies that lessen the adverse consequences of drug use and protect public health. The Open Society Foundations support efforts to advance harm reduction around the globe.
Earlier today, the Committee on House Administration held an oversight hearing on the “Mission of the Government Printing Office in a Post-Print World.” GPO is responsible for publishing government information from all three branches of government. This timely hearing featured Public Printer Davita Vance-Cooks, whose testimony focused on rebranding GPO and reframing its role around the dissemination of information in a “digital future,” including a recommendation that the agency be renamed the Government Publishing Office.
We commend the Committee for examining how GPO must continue to transform itself in light of the two decades-old internet revolution. Indeed, today’s environment is reminiscent of the circumstances that led to GPO’s creation and evolution in the 19th century. As Harold Relyea explained in his seminal article “The Coming of Secret Law,” GPO was charged with ensuring reliable public awareness of and access to government information, and its creation was an attempt to address waste and fraud in printing public documents. In our modern age these goals persist, but with the twist that public access means publishing information online, in useful formats, and without a public access charge.
Today’s hearing focused more on GPO as a business than GPO as a public service. Questions circled around “rightsizing” staff, the recent government shutdown, the relationship between management and labor, and so on. An ill-founded National Academy of Public Administration report on the future of the GPO — which failed to obtain comments from the public interest community, non-profit data re-publishers, journalists, and others — was entered into the record, although no mention was made of the Committee’s rebuke of the report’s recommendation that GPO consider charging “end users” for online access to government information. The GPO’s written comments accompanying the testimony echoed the rebuke, declaring “we have no intention of charging users a fee to access content available through FDsys.”
During the course of the testimony and Q&A, a few thoughts came to mind:
- The Public Printer cited GPO’s laudable role in supporting efforts to make legislative data available to the public in bulk as well as creating several mobile apps. Will GPO make the underlying data behind the Plum Book, the Constitution Annotated, and other apps available as APIs or in bulk as well? Will the default for new data offering include releasing the information in machine-readable formats? Does the GPO view itself as a provider of raw data?
- We were pleased that the Public Printer cited James Madison’s famous saying, “A popular government without popular information or the means of acquiring it, is but a prologue to a farce, or a tragedy, or perhaps both.” Given the GPO’s historic and important role as the conduit of information to the public, would the agency establish a public advisory committee to provide recommendations on the means by which it releases information? Surely the efforts of Cornell’s Legal Information Institute and GovTrack demonstrate how third parties can help GPO fulfill its mission of “keeping America informed.”
- Does the GPO see the public as stakeholders, customers, or something else?
- GPO explained that it has excess office space it is trying to lease. While there may be legal or prudential considerations to the contrary, would it consider sharing space with non-profit organizations dedicated to public access to information? Bringing open government technology startups into close proximity to GPO may bring significant benefits to GPO as it moves into the digital future.
- Will there be additional hearings by the Committee on House Administration that address these issues, and if so, will there be an opportunity for public comment?
Chairman Candice Miller (R-MI), Ranking Member Robert Brady (D-PA), and members of the Committee on House Administration were right to draw back the curtain on GPO’s plans for its digital future. We are looking forward to more hearings along these lines, including some by the Senate Rules Committee.
The IRS has been criticized — quite fairly — for spending the last two elections sitting on its hands while dark money groups, organized under section 501(c)(4) of the tax code, spent millions of dollars contributed by anonymous donors to run vituperative, deceptive political ads. Last week, at the advent of the Thanksgiving holiday, the Service finally offered some new proposals allegedly aimed at reining in abuse of section 501(c)(4) tax status. Unfortunately, they fall far short of the much-needed reforms my organization, Citizens for Responsibility and Ethics in Washington (CREW), and other good government groups have been advocating.
Special 501(c)(4) status was created for groups promoting social welfare; it was never intended to apply to political groups. As enacted by Congress, the statute provides that 501(c)(4) groups must operate “exclusively for the promotion of social welfare.” Nevertheless, the IRS promulgated regulations allowing groups “primarily” engaged in social welfare activities to take advantage of tax-exempt status. Based on this misreading of the law, many 501(c)(4) groups have interpreted this to allow them to spend up to 49 percent of their funds on political activities. But even this line has proven meaningless as some social welfare organizations have blatantly violated this standard without suffering any consequences. As a result, some members of Congress have offered legislation, and earlier this year, CREW sued the IRS after the agency failed to act on our request for a rules change to harmonize IRS regulations with the tax code.
Rather than addressing the issue head-on, the IRS has committed to considering the disparity between “exclusively” and “primarily” at some indeterminate future time, for now merely soliciting comments on whether and how it should proceed. While at first glance this may seem reasonable, it is decidedly less so in light of the fact that the IRS has repeatedly considered the issue over the past five decades.
The IRS acknowledged the conflict between the law and the regulation internally in 1959, when it first drafted its primary activities regulation. In 1963, the agency initiated a “regulations project” to address the conflict, but it went nowhere. Internal IRS documents reveal the agency continued to recognize and wrestle with the discrepancy between its regulations and the statute for the next several decades, but never acted. More recently, in response to rulemaking petitions from CREW and other non-profit organizations, the IRS promised to “consider proposed changes in this area.” But, as the latest regulatory proposals make clear, the IRS still is not prepared to square its regulation with the congressional mandate. Once again, the IRS merely is pushing the problem down the road — well into a new administration, or perhaps a new decade.
Of course, portions of the new proposal do have merit. For example, treating contributions by section 501(c)(4) groups to other organizations engaged in politics as “candidate-related political activity” that does not promote social welfare would help prevent the sort of money laundering that has become routine. Dark money groups, like the Koch brothers’ Freedom Partners, increasingly are using grants to like-minded organizations to hide their role in funding political activities, and the IRS’s proposal should put an end to this. Similarly, the proposal makes clear that advertisements run close to an election mentioning a candidate by name count as political activity, effectively ending the fiction offered by some dark money groups that they are not.
Still, the crux of the 501(c)(4) problem long has been the exclusively/primarily dichotomy. As the 2014 election cycle gets underway, while the IRS continues to offer up tepid proposals that may or may not ever be enacted, the super-rich and corporations with deep coffers will continue to influence our elections anonymously. The IRS appears intent on ignoring the simplest and most effective solution — repealing the regulation that allows 501(c)(4) organizations to engage primarily in social welfare activities, and requiring them, as Congress intended, to engage exclusively in such activities. This change wouldn’t prevent anyone from participating in electoral politics, it would merely prevent them from using 501(c)(4)s to do so anonymously.
While at least the IRS has stopped pretending to have no role in curbing the abuse of social welfare organizations, the proposed regulations offer too little, too late. Unless and until the IRS fixes the problem it created, CREW will advance its argument in court and Congress should move legislation. One thing is clear: after 50 years of dithering, the IRS can no longer be trusted to get this right on its own.
In the next few days, the United Nations General Assembly will vote on a draft resolution reaffirming the right to privacy in the digital age.
The draft resolution passed out of the UN third committee last week with a strong support of 50 Member States. Now that it's facing the whole 193-members of the United Nations General Assembly, it's time for you to tell the world leaders that #privacyisaright. Take action and sign the 13 Principles to end the vast collection of data of innocent individuals at home and abroad.
Though the current draft resolution has seen a few changes over the last few weeks as it went through amendment process, it remains a strong statement that will help in the fight to reassert the digital privacy rights of citizens around the world.
Critically, the draft resolution reaffirms a core principle of international human rights law: states cannot ignore their human rights obligations simply because their surveillance activities occur outside of their borders. The draft resolution, if adopted, will make it harder for the US and its Five Eyes allies to claim that their human rights obligations stop at their borders in an effort to justify their mass surveillance activities. As we have previously said, "Just as modern surveillance transcends borders, so must privacy protections."
Tell the world leaders: end mass surveillance at home and abroad. Sign the 13 Principles now.
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One of the criticisms leveled at Bitcoin by those people determined to hate it is that Bitcoin transactions are irreversible. If I buy goods from an anonymous counterparty online, what’s to stop them from taking my bitcoins and simply not sending me the goods? When I buy goods online using Visa or American Express, if the goods never arrive, or if they aren’t what was advertised, I can complain to the credit card company. The company will do a cursory investigation, and if they find that I was indeed likely ripped off, they will refund me my money. Credit card transactions are reversible, Bitcoin transactions are not. For this service (among others), credit card companies charge merchants a few percentage points on the transaction.
The problem with this account is that it’s not true: Baked into the Bitcoin protocol, there is support for what are known as “m-of-n” or “multisignature” transactions, transactions that require some number m out of some higher number n parties to sign off.
The simplest variant is a 2-of-3 transaction. Let’s say that I want to buy goods online from an anonymous counterparty. I transfer money to an address jointly controlled by me, the counterparty, and a third-party arbitrator (maybe even Amex). If I get the goods, they are acceptable, and I am honest, I sign the money away to the seller. The seller also signs, and since 2 out of 3 of us have signed, he receives his money. If there is a problem with the goods or if I am dishonest, I sign the bitcoins back to myself and appeal to the arbitrator. The arbitrator, like a credit card company, will do an investigation, make a ruling, and either agree to transfer the funds back to me or to the merchant; again, 2 of 3 parties must agree to transfer the funds.
This is not an escrow service; at no point can the arbitrator abscond with the funds. The arbitrator is paid a market rate in advance for his services, which are offered according to terms agreed upon by all three parties. This is better than the equivalent service using credit cards, because credit cards rely on huge network effects and consequently there are only a handful of suppliers of such transaction arbitration. Using Bitcoin, anyone can be an abitrator, including the traditional credit card companies (although they might have to lower their fees). Competition in both terms and fees is likely to result in better discovery of efficient rules for dispute resolution.
While multisignature transactions are not well understood, they are right there in the Bitcoin protocol, as much a valid Bitcoin transaction as any other. So some Bitcoin transactions are irreversible; others are reversible, exactly as reversible as credit card transactions are.
Bitrated.com is a new site (announced yesterday on Hacker News) that facilitates setting up multisignature transactions. Bitcoin client support for multisignature transactions is limited, so the site helps create addresses that conform to the m-of-n specifications. At no point does the site have access to the funds in the multisignature address.
In addition, Bitrated provides a marketplace where people can advertise their arbitration services. Users are able to set up transactions using arbitrators both from the site or from anywhere else. The entire project is open source, so if you want to set up a competing directory, go for it.
What excites me most about the decentralized arbitration afforded by multisignature transactions is that it could be the beginnings of a Common Law for the Internet. The plain, ordinary Common Law developed as the result of competing courts that issued opinions basically as advertisements of how fair and impartial they were. We could see something similar with Bitcoin arbitration. If arbitrators sign their transactions with links to and a cryptographic hash of a PDF that explains why they ruled as they did, we could see real competition in the articulation of rules. Over time, some of these articulations could come to be widely accepted and form a body of Bitcoin precedent. I look forward to reading the subsequent Restatements.
Multisignature transactions are just one of the many innovations buried deep in the Bitcoin protocol that have yet to be widely utilized. As the community matures and makes full use of the protocol, it will become more clear that Bitcoin is not just a currency but a platform for financial innovation.
Originally posted at elidourado.com.