Internet

Mobile Phone

Florida’s Cell Phone Tax Cut Could Help Reduce the Digital Divide

Governor Rick Scott (R-FL) is asking the Florida legislature to cut $470 million in taxes that the state collects from residents on their cell phone, satellite, and television bills. This proposal to cut the cellphone and TV tax rate by 3.6 percentage points will not only put money back into the pockets of everyday Floridians, but it is also a positive step in the right direction to help reduce Florida’s digital divide and will enable more innovation though mobile broadband.

Florida has one of the highest tax rates for wireless services (16.59 percent), falling behind only Washington, Nebraska and New York. In fact, consumers in seven states—Washington, Nebraska, Rhode Island, New York, Illinois, Missouri, and Florida—pay in excess of 20 percent of their bills for their combined state and federal tax rates.

So why have these taxes to begin with? States have traditionally turned to taxing services that people consume in their home because it is a reliable form of revenue. Someone in Florida cannot travel to Georgia to get a lower tax rate on their cell phone bill like they could for purchases of goods that include

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Phones

The Miraculous Cell Phone

As the economy emerges from the Great Recession, it is hard to deny that times are still tough for many Americans. Some advocates have attributed difficulties to rising basic costs such as health care and, puzzlingly, cell phones, that limit discretionary spending power. The Wall Street Journal, in an article about rising costs for the middle class, reports that spending on cell phones by the average American middle class family has increased by 49 percent from 2007 to 2013 according to data from the Bureau of Labor Statistics (BLS).  Some have interpreted this as showing that price inflation for these services is growing faster than the overall consumer price index (CPI).

But what it in fact shows is that while Americans are spending more on these telecom services they are getting more.  Americans are spending more on cell phones in part because more Americans have cell phones- the number of cell phones in the United States grew by 17 percent from 2007 to 2013. At the same time, spending on landline telephones declined by 31 percent over the same period. So spending on all phones, the more accurate measure

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tina-fey-amy-poehler

Piracy is Unstoppable (Like MySpace)

On Tuesday, Swedish officials shutdown the notorious illegal file-sharing website The Pirate Bay, striking a serious blow against the content thieves that have sucked millions of dollars out of the U.S. economy. Rushing to defend The Pirate Bay, however, was Caitlin Dewey, a blogger at the Washington Post focusing on Internet and digital culture. On her the blog The Intersect, she wrote an article alleging that the removal of The Pirate Bay from the Internet will do nothing to stem the rise of online piracy. Indeed, she argues that The Pirate Bay, “has done something a bit more significant, and a bit more permanent, too: It’s made digital piracy a casual, inarguable part of the mainstream.”

First, her argument that because piracy is common today, it will be common tomorrow reflects a surprisingly poor understanding of the history of the Internet (especially for a tech blogger). If there is one lesson from the Internet economy it is that nothing is permanent. This applies not only to website like MySpace, but also online behavior: how often are you instant messaging these days?

Second, by alleging that piracy is an inevitable part

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clock

The Clock Is Ticking on ITFA

Since 1998, the Internet Tax Freedom Act (ITFA) has been essential in promoting the expansion of e-commerce and ensuring a level playing field for Internet businesses. This will change on December 11th without decisive action from Congress.

The moratorium on Internet access taxes has been a central tool in driving innovation and the exponential growth of the Internet over the last two decades. It has spurred development in nearly every sector of the economy from Silicon Valley technology giants to new entrepreneurs to more traditional industries such as manufacturing, health care and education.

Since the ITFA was enacted, the Pew Charitable Trust estimates Internet usage among Americans has grown from below 25 percent in 1998 to over 85 percent today. For minorities, the growth in usage has occurred primarily in the last decade. These gains could be reversed if the act is allowed to expire and costs on Internet access rise.

What’s more, helping consumers, schools and small businesses continue to access the Internet is not a partisan issue. Permanently extending the moratorium on Internet access is widely supported in both the House and Senate by both parties. Everyone agrees:

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the-mindy-project-2-main

Newsflash: You Don’t Have to Pirate Content

Today, the Motion Picture Association of America (MPAA) launched its innovative new Website: WheretoWatch.com (WTW).  The search engine is a simple way for consumers to find all the movies and television they are interested in viewing — from new episodes of The Mindy Project to classics like Casablanca and even Oscar contenders still in theaters, such as The Theory of Everything. Indeed WTW allows consumers to:

  • Search for movie/TV show availability on digital downloading sites, streaming sites or in stores;
  • Find theater times and locations for every newly released movies nearby;
  • Receive notifications when the content they are interested in becomes available from their favorite providers.

The site works by aggregating content from a range of outlets, including Netflix, Amazon, iTunes, Xbox and smaller indie sites such as Snag Films and WolfeOnDemand. By simplifying the search process, consumers will be able to find exactly what they are looking for exactly when they want it: it marries accessibility to content for customers with protection of the intellectual property for creators of the content.

Even more importantly, however, WTW reaffirms the commitment that Hollywood is making toward more legally available content.

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New York is moving in the right direction on BitLicenses

On July 17, 2014 the New York State Department of Financial Services (NYSDFS) released a proposed regulatory framework for businesses that use virtual currencies (e.g., Bitcoin) to apply for BitLicenses. The proposed policy would regulate businesses if they hold or transmit virtual currency on behalf of others, or if they convert virtual currencies to everyday currencies (e.g., USD). These rules were proposed to bring regulatory certainty, transparency, and clarity to virtual currency businesses (for background on the BitLicensing framework, read our previous post). Seeing areas that were ripe for improvement in these proposed regulations, ITIF filed comments with NYSDFS to encourage innovation, competition, and investment in virtual currency businesses.

Since the comment period ended on October 21, 2014, NYSDFS Superintendent Benjamin Lawsky has signaled that NYSDFS may adopt several of the recommendations outlined in our comments. Among them, Lawsky has signaled that BitLicenses will not apply to virtual currency miners—businesses or individuals that create and circulate virtual currency on the blockchain.  Lawsky has also stated that NYSDFS is considering a transitional BitLicense for startups, and may exempt non-financial blockchain projects. We applaud Superintendent Lawsky and

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search

The Best Search Results are the Legal Ones

Last Friday, Google published its new How Google Fights Piracy report with details of the improved methods Google is using to combat piracy across a variety of its services. While the report itself is an impressive overview of the many policies and protocols Google has put in place, as well as the results of such protocols, most notable are the three ways Google has reformed search over the last year: demoting sites with many DMCA takedown notices, removing piracy-related autocomplete terms, and improving ad formats.

The report notes that in 2013, Google received just over 224 million DMCA requests for Google search results and they removed over 222 million of them, with an average turnaround time of six hours or less. But in addition to removing these infringing pages from search results (whether through its content removal webform or the Trusted Copyright Removal Program that allows trusted content owners to submit bulk takedown requests), Google has improved and refined its search algorithm to rank sites in part by how many removal notices it has received. Consequently, sites with high numbers of removal notices are demoted to lower search results. This

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bitcoin & Litcoin

New York should ensure “BitLicenses” are a Step Forward for Innovation

On July 17, the New York State Department of Financial Services (NYSDFS) released a proposed regulatory framework for virtual currencies, such as Bitcoin, that would require businesses that hold, transmit, or convert virtual currencies to everyday currencies to apply for “BitLicenses.” (For background on the BitLicensing framework, read this previous post.)

The following is a truncated version of the comments we filed with NYSDFS today:

It is important to note that while ITIF applauds the desire to bring regulatory certainty, transparency, and clarity to virtual currency businesses, the State of New York is likely the wrong entity to address these important policy issues. One of the challenges of global systems, such as virtual currencies or the Internet, is that they are subject to multiple jurisdictions by sovereign countries. Subnational governments, like states, should not compound the problem of multiple and varied laws between countries by creating their own additional rules and regulations. A better approach would be for states to either defer to the federal government or work in partnership with all states to create a single, national approach to policy.

However, if NYSDFS continues to pursue these regulations,

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Gilmore-Girls

Spoiler Alert! Illegal Downloaders Steal Content Even When Legally Available

The film and TV industry receives a lot of flak from critics for being its own worst enemy. If Hollywood studios want consumers to pay for content, the argument goes, then they should make it easier to download legally. If piracy is a problem for the industry, then maybe it should take a hard look in the mirror.

The only problem with this argument is that it’s completely false. KPMG just released a first of its kind study assessing the availability of movies and TV shows online. It found that as of December 2013, 81 percent of the 808 unique films studied were available on at least 10 of the 34 online video-on-demand (VOD) service providers. Only 50 of the films studied were not available on any of the 34 online video offerings that KPMG reviewed. The study also found rapid growth in the number of TV viewing options available to audiences. Overall, 85 percent of the most popular and critically acclaimed TV titles were available in the U.S. through legitimate online video services.

This development could not be timelier, with both the ramp up to the Oscars and Fall

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Taken by Tom Blackwell

The LEADS Act presents a path forward for cross-border digital searches

Last week, Senators Hatch, Coons and Heller introduced the Law Enforcement Access to Data Stored Abroad (LEADS) Act which seeks to clarify the powers that warrants issued by the U.S. courts have on data stored abroad. The LEADS Act also focuses on reforming the Mutual Legal Assistance Treaty (MLAT) process, which are agreements designed for law enforcement agencies to receive and provide assistance to their counterparts in other countries. If enacted, this law could have both immediate effects on a current court case, and far-reaching effects on international agreements for cross-border access to data for law enforcement purposes.

Until now, the U.S. government has argued that it could use the powers granted to it under the Electronic Communications Privacy Act (ECPA) to gain lawful access to data stored abroad if the company storing it had a presence on U.S. soil. The LEADS Act would clarify ECPA, stating specifically that the U.S. government cannot compel the disclosure of data from U.S. providers stored abroad if accessing that data violates the laws of the country where it is stored or if the data is not associated with a U.S. person—a citizen or

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