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Some Things Are Worth Requiring Permission

Posted by Tom Giovanetti | Comments | September 17, 2014

Wednesday the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet will hold a hearing on the portion of the Digital Millennium Copyright ACT (DMCA) that makes legally possible and enforceable strong digital rights management (DRM) and other forms of technical protection measures (TPMs). Section 1201 of the DMCA makes it illegal to circumvent such technical protection measures, and was designed in part to implement the WIPO Internet treaties.

Section 1201 has been the subject of much ire from both technologists (who didn’t see the point and who like things simple) and from the IP skeptic community (who don’t like IP and certainly don’t like anything that reinforces IP). TPMs are occasionally inconvenient, but the track record of TPMs has been one of facilitating numerous new business models for the distribution of music, video and software. Today’s content-rich environment is due largely in part to the fact that content owners have sufficient confidence that they can make their content available through reasonably secure channels, and those channels are made reasonably secure through TPMs. Read More >>

We're Flaring (Wasting) Shale Gas Because We Can't Export It

Posted by Tom Giovanetti | Comments | September 16, 2014

I have one of those "Earth at Night" maps from National Geographic on a wall in IPI's offices. Among the things it shows is places in Russia, the Middle East and East Africa that seem to be on fire. That's flaring--the burning off of gas or oil because for one reason or another it isn't being captured and refined.

Most of the time this is because of inefficient operations, lack of pipelines, etc. But according to a piece a few days ago in the San Antonio Express-News, there's quite a bit of flaring going on in U.S. shale formations like the Eagle Ford.

The article is reasonably fair and balanced, but, as Jon Cassidy at points out, the main reason for flaring in the U.S. is the federal export ban on oil & natural gas.

There is one key fact, however, that went missing from the series, which explains a lot of what’s going on. If the reporters knew of it, they may have just decided it was beyond the scope of their story. It’s this: low natural gas prices are not some inalterable fact of the free market. They are largely the result of a federal ban on natural gas exports that dates back to the Arab Oil Embargo. Read More >>

U.S. Energy Boom not about to Run Out

Posted by Tom Giovanetti | Comments | September 16, 2014

According to a piece in the Wall Street Journal, the U.S. energy boom is not about to run out:

The number of rigs drilling in the U.S. is basically flat, but production is rising. The federal Energy Information Administration calls this "drilling productivity" and says it is showing no sign of slowing.

Lynn Westfall, the EIA's director of energy markets and financial analysis, points out that the rig count in South Texas' Eagle Ford Shale "has not changed since 2012, but the production per new well has doubled."

Innovation makes the difference. The federal government recently predicted that oil production would rise through 2019 and then flatten off. But a second scenario in the report assumed that extraction technology would continue to improve, leading crude output to rise through 2040, if not longer. Read More >>

U.S. Shale Boom Is Saving the World $5 Billion a Day

Posted by Tom Giovanetti | Comments | September 16, 2014

Interesting piece in Quartz about how the U.S. shale revolution has dramatically stabilized world oil and gas prices, saving the world almost $5 billion every day:

Oil prices continue to plunge today despite the beheading of another western hostage by the Islamic State, tensions between Russia and the West, and mayhem in Libya. As Quartz has reported, one of the main reasons is surging US oil production, which has made up for supply disruption almost barrel for barrel—and is also a bad sign for the leaders of petrostates.

Now we have an estimate of where oil prices might have been absent the American oil boom—a sobering $150 a barrel, former BP CEO Tony Hayward told the Financial Times (paywall).

That’s 55% higher than the current benchmark price of $96.27 that was trading in Asia this morning. If Hayward’s number is right, it means that the US boom is saving the global economy about $4.9 billion a day in oil spending. Global consumers currently demand about 92 million barrels of oil a day, and without the extra US supply the market would be about 3 million barrels short, sufficient to send traders into a frenzy bidding up the price.

Since 2011, US oil production has soared by about 3 million barrels a day, to about 8.5 million barrels, thanks mostly to the technique of hydraulic fracturing in shale oil fields. That is just a bit less than the volume of oil production that has been persistently off line since the 2011 Arab Spring ushered in the three-year wave of unusual oil disruptions the world has experienced. When you add in a 1-million-barrel-a-day rise in Canadian oil production in the same time period, North America as a region has swamped the lost barrels.

Quotes from UNT Prof. Adam Briggle that Undermine his Call for a Ban on Fracking in the City of Denton, Texas

Posted by Tom Giovanetti | Comments | September 3, 2014

Last night I had the pleasure of taking part in a debate over the proposed ban on fracking in the City of Denton, Texas. My debate partner was Dr. Ed Ireland of the Barnett Shale Energy Education Council, and our opponents were Professor Adam Briggle of the University of North Texas, and Calvin Tillman, the former mayor of DISH, Texas.

My side was in favor of energy exploration and opposed to the ban on fracking.

During my research for the debate I found a number of articles by Prof. Briggle where he expressed sentiments that were often reasonable and that thus undermined his case for the fracking ban. I used a few of these quotes in last night’s debate, but not all of them.

Some folks have asked me for copies of those quotes, so I’m reproducing them here, with links to their sources. Read More >>

Muni Broadband Isn't About the Unserved

Posted by Tom Giovanetti | Comments | August 28, 2014

Independent, Technical, Multistakeholder Organizations that Have Become Part of the United Nations

Posted by Tom Giovanetti | Comments | August 26, 2014

In relation to the debate over whether and how the U.S. should hand over control of the root zone (IANA) functions of the Internet to an independent, multistakeholder organization like ICANN, the Obama administration (and many others) have been adamant that they "are not turning the Internet over to the United Nations!" We absolutely will not allow that to happen, they insist.

And I give them credit for wisely and uncharacteristically (for this administration) understanding the problem with turning Internet governance over to the United Nations.

The long-term problem, as I have argued previously, is that independent multistakeholder organizations set up to do technical functions that are of interest to the global community have a habit of getting absorbed into the United Nations system.

Here is a list of such organizations that have ended up as "specialized agencies" in the UN system, despite the fact that there was no compelling reason why that function needed to be subject to the rules and governance of a UN organization. Tourism, really? Read More >>

Piracy Killing Movie Franchises

Posted by Tom Giovanetti | Comments | August 26, 2014

Interesting piece on The Hollywood News website about the impact of piracy on the film production business.

It has to do with the "Kick-Ass" movies, and the fact that there probably won't be any more of them, due (at least in part) to the piracy problem. Actress Chloe Moretz, who played the character "Hit Girl" in the movies, gave an interview:

"Sadly, I think I’m done with the character. Hit-Girl was a very cool character, but I don’t think there will be any more movies. You make these movies for the fanboys, but nowadays everyone seems to pirate them rather than watch them in the movie theatre. KICK-ASS 2 was one of the number one pirated movies of the year, but that doesn’t help us because we need box office figures. We need to prove to the distributors that we can make money from a third and fourth movie – but because it didn’t do so well, we can’t make another one. If you want more than one movie, everyone has to go and see movies at the cinema. It’s all about the the numbers in the theatre." Read More >>

The One-Two Punch Against American Agriculture

Posted by Tom Giovanetti | Comments | August 22, 2014

It’s almost as if it is official U.S. policy to make it difficult for American businesses to succeed.

First and most significantly, we subject American businesses to the highest tax rates among all of our competitors—39.1% when you add in state taxes. That’s significantly higher than the O.E.C.D average of 25 percent, and it’s even higher than the supposedly “high tax European countries”—consider that Belgium (34 percent), France (34.4 percent), and Sweden (22 percent) all have lower business taxes than does the United States.

Then, at least for select industries, we aid their overseas competitors. Through the Export-Import Bank we finance foreign purchases of Boeing jets, which helps foreign competitors of Delta, Southwest, American, FedEx and UPS. We could solve that problem this year by simply allowing Ex-Im to expire.

We allow other of our domestic industries to be exposed to blatant market manipulation and outright attack by our trading partners, particularly in agriculture. Yes, American agriculture policy is a rats nest of loans, supports and protections that are hard to justify in a free-market economy, and conservatives recognize these as market distorting. Of course we should move toward phasing out these protections. Read More >>

Creativity is More than Pushing Buttons

Posted by Tom Giovanetti | Comments | August 7, 2014

The hot story in copyright this week is about Wikimedia (Wikipedia) refusing repeated takedown requests by a photographer because Wikimedia claims that no one owns the copyright to the image. And why does no one own this image? Because a monkey pushed the button on the camera.

You can read the story here—I have no interest in simply retelling the story.

What’s at issue in the story is that, because the monkey pushed the button on the camera, Wikimedia claims that the monkey should own the copyright. But since animals can’t own copyrights, Wikimedia concludes that no one can own the copyright, so the picture must immediately go into the public domain.

In an interview, Wikimedia Foundation’s Chief Communications Officer Katherine Maher said the organization is confident that the legal basis for denying Slater’s request is sound, because the person that takes the photo should own the copyright. But a person didn’t take this one. Read More >>

The Left Bashes, then Copies, Center-Right Institutions

Posted by Tom Giovanetti | Comments | August 5, 2014

There’s a bit of a brouhaha the last couple of days about the discovery of a closed Google group that Left-leaning journalists and activists use to coordinate their messaging.

Which really is of no interest to me whatsoever. I assume many such sorts of coordination and communication among political activists and journalists, which is why I wasn’t at all overwrought a few years ago over the JournoList saga.

But buried in the story is something that I DO find interesting. The progressive Left has this funny habit of denouncing and bashing the institutions of the center-right while at the same time, copying them. Read More >>

So Do We Need Pharmaceutical Innovation, or Not?

Posted by Tom Giovanetti | Comments | August 4, 2014

Today in the Wall Street Journal, there is good op/ed about the threat of Ebola and other infectious diseases that urges us to invest more money in medical innovation.

There's also another op/ed complaining that cutting edge, innovative medical cures are too expensive, and that we need something apparently just short of price controls to do something about it.

So which is it? Do we want pharmaceutical and biotech companies taking risks and innovating new cures, such as Sovaldi, the new cure for hepatitis? Or not?

Ms. Ignagni's piece is particularly egregious. It's part of a campaign that she's behind to get the federal government to forceably lower the price of Sovaldi, a blockbuster new miracle cure for hepatitis C. Note the word "cure."

First, she writes as if concern over high drug prices is a recent phenomenon, which of course it isn't. I've been hearing statists complaining about high drug prices for the 20 years I've been doing public policy. In fact, the first paper I ever edited and published at IPI was on this very topic. The redistributionists have never understood why they can't have all their diseases cured and their pain alleviated without it costing anyone anything. They're always focused on the second order concern--how goods are distributed--without fully appreciating the first order concern--how goods come to be in the first place.

Distributing existing goods is easy--innovating a new product or service that never existed before, now that's impressive. But apparently not to Ms. Ignagni. Read More >>

Piracy and the Small Indie Filmmaker

Posted by Tom Giovanetti | Comments | August 4, 2014

Those who dismiss concerns about copyright piracy always deflect the conversation to the big Hollywood studios, as if piracy only affects extremely wealthy people driving around in Bentleys. It's not surprising that defenders of piracy tend to be class warriors in other areas of politics as well.

But the greatest impact of piracy is on those downstream small businesses and employees who work in the industry. Losses due to piracy, at the margin, affect the number of people hired, how much they are paid, and how many projects are undertaken in the first place.

But then there's the indie filmmaker, for whom the entire project is being done on a shoestring. When everything is being done with marginal resources, marginal impacts have a major impact. The same protections that would protect the major Hollywood studios against rampant piracy would be even more beneficial to the little guys.

There's a very interesting article up on about filmmaker Zak Forsman and the experience he's having with piracy of his new indie film, Down and Dangerous. Read More >>

Distinctive packaging: Private property and a protection for consumers

Posted by Erin Humiston | Comments | July 31, 2014

Shocking Reports Show Great Dangers of Counterfeit Goods

Posted by Erin Humiston | Comments | July 21, 2014

A particularly shocking report comes today from the UK, in which counterfeit wine and liquor are flooding the market, containing dangerous chemicals such as methanol, chloroform, bleach, nail polish remover and anti-freeze. According to the report, up to 2 dozen bottles of vodka were being produced every minute at one counterfeiting site. 

And it’s not just occurring in the UK.  

In the United States, federal agencies have stepped up to identify, intercept, and prosecute criminal activity attempting to import or manufacture fakes in the U.S. to protect innovators and consumers from the dangerous impact of counterfeits.  Read More >>


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