New Campaign Fighting Connecticut's War on Indian Country.more»
Today the Institute for Liberty’s President Andrew Langer released the following statement in response to reports that four journalists cooperated with the progressive Consumer for Responsible Lending in crafting messaging.more»
Today, the Institute for Liberty submitted comments to the FCC on the ATSC mandate.
September 19, 2014
Hon. Julius Knapp, Chief
Office of Engineering and Technology
Hon. William Lake, Bureau Chief
Federal Communications Commission
445 12TH ST SW
Washington. D.C. 20554
Dear Mr. Knapp and Mr. Lake:
As the summer comes to and an end many Americans families make the transition from convening around the patio and grill to gathering indoors back to their living rooms and televisions. Whether it’s the NFL or a seemingly endless selection television series and movies available in the press of a button or click of a mouse, there is no question that consumers have more choices than ever in what they choose to watch. And the way they receive the content is also coming from a more diverse set of providers. Gone are the days when antenna and cable are the only choices. A new influx of media available through the Internet provides consumers even more choices without having to pay a traditional cable bill.
However the ATSC license mandated by the FCC requires these consumers to pay a license fee built into the cost of their television whether or not they ever use it to receive a digital broadcast cable signal.
A growing number of people are eschewing traditional cable or satellite entirely, and are using broadband content services like Apple TV, Netflix or Roku to get entertainment streamed to them. Still others use them, quite literally, like a computer monitor, hooking up their desktop or laptop to them in order to watch YouTube or any of the Internet-available cable programming. Similarly the droves of college and professional sports fans that turn to satellite providers for their more robust coverage of their favorite events have no use for the ATSC license because the satellite signal is not reliant on the ATSC broadcast standard.
Because of the policies put in place during the Digital Transition of 2009, U.S. consumers are now paying what can essentially be considered a tax on every piece of equipment that contains a digital receiver, such as a modern cable box. This tax is basically the cost related to manufacturers paying the patent licensing fees mandated by your agency. The $5.00 per unit license fee may not seem like a lot, but as the price of televisions continue to drop, this tax makes up a larger percentage of the overall product cost. Making matters worse, a quarter of the individual patents within the ATSC standard have already expired, yet the license fee charged by MPEG LA remains unchanged. Similar licensing fees in Europe and Asia cost around $1.00. Under normal circumstances, the laws of supply and demand would push manufacturers toward a competing standard. However in this case, there are no alternatives due to the FCC granting monopoly power to MPEG LA, solidifying their ATSC pool as the only option for digital receivers.
The practice of including patent licenses in the cost of products is not in any way objectionable. Research and development costs are almost always included in the price of consumer goods. What is troubling about this case in particular is that the FCC is exclusively grating licensing privileges to the for-profit MPEG LA, who are abusing their position. Consumers are left paying the inflated tab for a license filled with expired patents that many will never use because they don’t subscribe to broadcast cable.
Thank you for your consideration of this important issue and continued dedication to promoting policies that encourage innovation and fair competition that benefits consumers in the fast-evolving communications ecosystem.
Andrew Langer, President
Institute for Liberty
Legal Advisor to Chairman Wheeler
Office of Engineering and Technology, Wireless, and Incentive Auction
Legal Advisor to Chairman Wheeler
Office of Media, Consumer and Governmental Affairs, and Enforcementmore»
On July 30th, the Institute for Liberty submitted comments to the House Ways and Means Committee regarding their inquiry into issues surrounding global "patent trolls":
Chairman Devin Nunes
Subcommittee on Trade
House Ways and Means Committee
1102 Longworth House Office Building
Washington, D.C. 20515
July 30, 2014
The Institute for Liberty is a not-for-profit advocacy organization based here in Washington, DC, focusing on federal public policy. Two of our areas of expertise are private property rights (including intellectual property rights), and global trade policy. We believe in a rational, common-sense approach to trade (and the protection of intellectual property rights), and as such, appreciate the time you are taking to examine the U.S. trade agenda and our relationship and membership in the World Trade Organization (WTO).
Part and parcel of a rational, common-sense approach to trade policy is the recognition of the WTO’s important role in resolving disputes regarding international trade agreements. Further, we share the mission of seeking to reduce or unwieldy tariffs. But not all tariffs that harm free trade principles are simply affixed to the price of imports. Foreign countries like China, France, Japan, and Taiwan have taken an offensive footing into the intellectual property arena by erecting government-sponsored “patent trolls” (GSPTs) which raise the price of goods from would-be commercial competitors outside their borders. Further, it is our belief that WTO member states that control entities like these are likely in violation of numerous trade obligations under the WTO.
The offensive actions of GSPTs are akin to the protectionist industrial policies of many 19th-century regimes. Exacerbating the problem, because national governments are tasked with regulating intellectual property rights; GSPTs create a tremendous inherent conflict as the regulators and lawmakers then become the shareholders as well. Foreign governments cannot both be authoritarian regulatory agents and market actors at the same time. Otherwise, they are placed at an unfair advantage relative to their competitors, and become the very essence of crony capitalist states (or crony communist states).
Consider China’s Ruichuan IPR Funds, France Brevets, the Innovation Network Corporation of Japan, or Taiwan’s Industrial Technology Research Institute. These quasi-governmental/quasi-market actor entites are setting a dangerous precedent that could set off an international “race to the bottom” which encourages other nations to either start their own GSPT or risk falling behind in a globalized marketplace. France Brevets has openly and proudly asserted that they will be using their acquired patents to the benefit of only companies within their borders, while taking offensive legal action exclusively against foreign companies.
In the past, Chairman Nunes, you have previously taken leadership by presenting draft legislation designed to reign in foreign abuse of the Tariff Act of 1930, 19 U.S.C. § 1337, known as “Section 337,” with particular focus on foreign entities which lack actual domestic industry through significant expenditures in plant, equipment, labor, or capital. GSPTs like those listed above serve as the epitome of these abuses. France Brevets and Taiwan’s Industrial Technology Research Institute have already taken infringement actions in the U.S. District Court for the Eastern District of Texas, which has a well-known reputation for siding with patent infringement plaintiffs (as we are certain you are well-aware, the Eastern District of Texas is the epicenter of America’s domestic patent troll problem, plaguing entrepreneurs throughout the nation).
Never has it been more imperative that the U.S. demonstrate vigilance in foreign trade policy and priorities, particularly in the face of protectionist foreign governments who choose to abuse the system on which we rely. We must push back against the cronyism of other nations. Foreign governments which fund and control GSPTs are colluding with their country’s corporate assets. This massive subsidization by nations who host GSPTs tips the scales of the free market and serves to undermine our nation’s economic interests and role in global trade
Thank you for the committee’s attention to these and other vital trade related concerns. If you have any questions or require additional information from the Institute for Liberty, do not hesitate to contact me at (202) 261-6592 or via email at Andrew.Langer@InstituteForLiberty.org .
Andrew Langer, President
Institute for Libertymore»
By Andrew Langer
Recently, for the first time in more than seven years, I had occasion to buy a new television.
I was astounded at the sheer number of options that were available to me: Roku-capable, Wifi-ready, multiple HDMI inputs, USB access, etc. And I thought long and hard about which options I really wanted or needed, or what I thought I might need a few years down the road. I priced the TVs accordingly, and could clearly differentiate the price levels given what I felt I would need or use, even within class of similarly-sized TVs. As you can imagine, options that I wanted to include would cost more than some, but without options that I didn’t want, those TVs would cost less, and I eventually settled on the right TV.
What I didn't know at the time was that I was paying for an option that I simply wouldn't use -- that we're all paying for an option that very few of us use. It's something called “ATSC” -- the “Advanced Television Systems Committee<http://en.wikipedia.
Unlike all of the other options, this is mandatory in every TV sold in the United States. But very few of us use the option, and that number is shrinking every year.
It's very simple -- if you're like me, you use your TV essentially as a monitor to convey signals processed through some other piece of hardware. Most commonly, people use a cable box or satellite receiver, nowadays hooked up to one of your TV's HDMI ports, to get their TV stations. Of course, a growing number of people are eschewing traditional cable or satellite entirely, and are using broadband content services like Apple<http://
Due to policies put in place during the “digital transition” in 2009, U.S. television equipment buyers are now paying what can essentially be considered a tax on every piece of equipment that contains a digital receiver, such as a modern cable box. This tax is basically the cost related to manufacturers paying the patent licensing fees that the Federal Communications Commission<http://
The practice of including patent licenses in the cost of products is not unique. Research and development costs are almost always included in the price of consumer goods. What is unique about this case is that the FCC is requiring the licensing of this particular standard, one which MPEG LA is not exactly giving away for a reasonable price.
In fact, according to a petition filed with the FCC by the Coalition United to Terminate Financial Abuses of the Television Transition, the royalty rate is $5 per unit. That may not seem like a lot, but as the price of televisions continue to drop, this tax makes up a larger percentage of the overall product cost. Making matters worse, a quarter of the individual patents within the ATSC standard have already expired, yet the license fee charged by MPEG LA remains unchanged. Similar licensing fees in Europe<http://
Now, $5 may not seem like a lot, but in the competitive marketplace of television sales, it actually can make the difference between two purchases that a consumer might make. I know from my own experience: We were looking at a handful of different TVs with slightly different options — for instance, choosing between a wifi-capable TV or one without it for a few dollars less (we chose the latter, since we can get streamed programming from either our Roku receiver or our Chromecast receiver). Had the next choice been between a TV with an ATSC tuner (and the commensurate $5 tax) and one without, I would have chosen the one without.
And that’s the most important thing, after all — the right of consumers to choose which options they feel they need. They certainly doesn’t need the federal government to make that choice for them, and have to pay $5 for the privilege.
Andrew Langer is president of The Institute for Liberty. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions for editorials, available at this link<http://
Attorney General Eric Holder and his contempt with upholding the Rule of Law needs to stop. It is time to Impeach Holder.more»
It has always the intention of the Obama administration to remake the American economy, and, in doing so, remake American society at large. Nowhere has this been more evident than in its use of executive branch power — through regulations, executive orders and task force operations — to target industries (and the segments of society that they serve) and bring them to heel to do what the administration wants.
President Obama only has a bit more than 2 years left to accomplish his most ambitious goals and much remains to be done. Among sectors targeted as ripe for transformation is education, especially secondary and post-secondary education. Despite their antimonopolistic sloganeering, liberals hate competition, especially when it comes to the struggle between traditional, state-run or nonprofit schools, and any other model of education, be it charter, parochial or for-profit. It is hard to conclude which model offends liberals more, but when it comes to secondary education, those who try to serve educational consumer needs by using a for-profit model draw special ire. So much so that the Department of Education has, for years now, been trying to stifle the growth of profit-making educational institutions, regardless of their effectiveness.
To liberals, the very word “profit” is taboo, and they’ve been working hard to come up with ways to punish educators who believe the for-profit model might have some real advantages. To get at these institutions, the president’s folks are currently proposing what they call “gainful-employment rules.” Under these regulations, a litmus test would be applied to allow regulators to grade schools on the basis of how much debt their students accrue compared with how much they earn for the first few years after graduation, as well as how many students repay their federal . Ideally, those schools that don’t meet an arbitrary debt-to-income ratio or have too many delinquent student borrowers could be shut down.
They’ve tried a version of this approach, but a federal judge literally called their first attempt to overregulate the educational institutions “arbitrary and capricious.” This is their second attempt now, and it is interesting to note that the White House and Secretary Arne Duncan have made it clear that traditional public and nonprofit colleges and universities won’t have to meet the new standards. They are being exempted in part because few of them would get a passing grade under these tests, which are clearly directed not at them, but at the competition.
To make matters worse, many of the president’s supporters in the Senate want to go further, much further. Ignoring the administration’s losses on this issue in court, Senate Democrats such as Tom Harkin of Iowa, Richard J. Durbin of Illinois, Christopher Murphy of Connecticut and Brian Schatz of Hawaii are pushing the Department of Education to be even more aggressive in tamping down on for-profit colleges.
Their motives are clearly ideological and based on a hostility to the very concept of for-profit education, but these efforts have potentially serious consequences that should concern us all. The idea that it is possible to judge value with such arbitrary tests is problematic at best. Harvard President Drew Faust, no friend of for-profit institutions, maintains that a college graduate’s earnings in a first job are a “poor proxy” for measuring an educational institution’s value, a sentiment echoed by the chancellor of the University of California at Berkeley, Nicholas Dirks.
Moreover, the regulatory-impact analyses done by the Department of Education in this proposal are woefully inadequate. Though understating the cost of regulation is standard operating procedure for regulatory agencies, in this case the cost estimates are almost laughable. Education estimated, for instance, that annual regulatory costs would be $236 million, with a paperwork burden of nearly 7 million hours.
Nearly a decade ago, the National Federation of Independent Business did a seminal study on the cost of federal paperwork, concluding then that federal paperwork costs on average $50 per hour to work through and fill out. Now, even if one assumes that these costs haven’t risen over the years since the study was completed, paperwork costs alone would run $350 million, far above the $236 million that the Department of Education estimates. Putting the paperwork in an hourly context, 7 million hours is the equivalent of 3,500 man years. One man, working 2,000 hours a year for 3,500 years, or 3,500 people working for a solid year, just on Department of Education paperwork.
The inability of many to comply with these new regulations will drive many out of business. This may make liberals happy, but it will narrow rather than widen the educational options available to tomorrow’s students. This means that it will cost jobs — both careers for students and jobs for those within these institutions.
The gainful-employment rule is a bad idea. At least it’s bad for those who will lose an educational option and for teachers who might provide them the education they seek. It may be good, however, for public and nonprofit institutions loath to compete with educational innovators as they continue to raise tuition to students while pursuing educational politically correct agendas that too often have little to do with or educating students for the real world after graduation.
Andrew Langer is president of the Institute for Liberty.