May 22, 2017

Comey Proved Himself Unfit to be FBI Director

What Trump did TBD.

Anonymous sources (natch) have leaked that former FBI Director James Comey wrote a memo after a meeting in February with the President quoting Trump as saying “I hope you can let this [an investigation of just-fired National Security Advisor Flynn] go”. Assuming that the leak is accurate and the memo exists, which seems likely since the sources are described as Comey’s friends and the ex-director hasn’t repudiated it, this tells us more about Comey than it does about Trump.

We don’t know if the President is accurately quoted  or not. We may never know. And, if he did say it, we don’t know without more context whether it constituted obstruction of justice.

If Comey just made this up, he is clearly not fit to be FBI Director.

But let’s assume Trump said what Comey says he said and Comey took it to be an attempt to obstruct justice. In that case Comey had a duty to report the statement immediately. But he didn’t. He just created a memo to be part of a file to be used if he ever had a dispute with the President. He got fired; out came the memo. It didn’t come out when he told Congress that the investigation hadn’t been interfered with. It came out a day or so after Comey’s former colleague and temporary replacement Andrew McCabe also testified that there had been no political interference with the probe. He must not’ve gotten the memo. That’s not a joke; shouldn’t Comey have left a copy of this memo for his successor?

J. Edgar Hoover was infamous for the files he kept on friends and enemies alike. The files arguably kept Hoover in power through the terms of six US presidents until he finally died in office. His name is on the FBI HQ; his practice of political blackmail should not be kept alive in the building.

The bipartisan hypocrisy around Comey has been incredible. Back in the Obama days, he fell out of favor with the White House for confirming that there is a “Ferguson” effect – an increase in murder rate attributable to police reluctance to police in a climate of extreme political hostility. Then Comey exonerated Hillary Clinton in the case of her email server, strangely taking on the role of a prosecutor, and he was back in favor with Democrats and out of favor with Republicans. Trump accused him of whitewash. Then he announced he was reopening the Hillary investigation because of documents found on Anthony Weiner’s laptop. Trump said Comey redeemed himself. Democrats excoriated him and called for his resignation. Then he quickly announced no new evidence. Trump accused him of whitewash again. In the end  Clinton accused Comey of costing her the election which, she said, she was on track to win before the grand reopening. Finally, Trump fired him and some Democrats hope that the firing and what’s in Comey’s memo file will be enough evidence for impeachment. Enough to make your head spin.

Comey and Trump can’t both be right but they can both be wrong. Comey’s unfitness for office doesn’t imply anything one way or the other about Trump. Unless the conversation was recorded, we’ll probably never know what the President actually said. None of this tells us anything about relations between the Trump campaign and Russia or, even more broadly, about Russian interference and attempted interference in our election. These are the most important issues and are what we have a special prosecutor for. Obstruction of justice is important as well; it brought Nixon down when he tried to cover up Watergate – it can also be an excuse for prosecutorial overreach. However these issues work out, the country is better off without James Comey as FBI Director.

May 16, 2017

Vermont Teachers Should Send Their Union to Detention

As most Vermonters know by now, the legislature is in extended session trying to deal with the issue of teacher healthcare. The position the Vermont NEA, the teachers’ union, has taken puts job protection for union staff ahead of the interest of the teachers, the students, and the taxpayers. Teachers should tell their union to back off.

All involved agree that, because of provisions in the Affordable Care Act (aka ObamaCare), the current health plans the teachers have all must be changed or they will be classified as “Cadillac Coverage” and penalized. The need to change to health care plans means that every Vermont school district is negotiating health care with its employees at the same time. This synchronization creates a unique opportunity to combine all health care coverage for teachers in Vermont public schools into a single large contract which the state will negotiate both with the NEA and with the insurance carriers rather than individual districts, of which we have hundreds, negotiating separately with the union and the insurance carriers. Since there are only two insurance carriers in Vermont, leverage in this negotiation is important.

Governor Phil Scott, who proposed the plan being debated, has estimated that savings will be over $76 million/year, partially because the new plan – to avoid being a Cadillac plan – will have higher deductibles and copays. Scott has proposed that roughly $50 million of that savings be used to fund Health Savings Accounts (HSAs) for teachers, who will be able to use these HSAs to cover the higher deductibles and copays. In this way the teachers are held harmless even though they are losing their Cadillac plans. “Held harmless” is pretty good; Blue Cross, the biggest of the two health insurers left in the state is asking for a 12.7% increase. Most private sector employers will have to pass most of whatever Blue Cross is eventually allowed onto their employees.

The remaining $65 million of ANNUAL savings will relieve pressure on the education fund, which is mostly funded by property tax revenue from sky-high property taxes. TBD whether this savings is used to take pressure off other education programs which might have to be cut without this savings or is used for property tax relief (or some degree of both).

So the education fund benefits. The taxpayers benefit. And the teachers keep very generous health benefits without having to pay more. What’s more both teachers and students benefit from having local school boards concentrate on local educational issues rather than the esoterica of healthcare What’s the problem?

The teacher’s union apparently isn’t focused on the very real benefit to its members or the taxpayers. It is incensed that they will no longer get to spend expensive staff hours negotiating with every school district in the state over healthcare; they will only get to negotiate healthcare once with the state. BTW, all other negotiations stay local. So the NEA is adamantly against this plan. And the NEA is a big campaign contributor.

To its credit, the Vermont Legislature despite its overwhelming majority of Democrats and Progressives, has not given the NEA the support it probably thought it would get. There were enough Progressive and Democrat votes in the Vermont House to give the plan a one vote victory until the House Speaker cast an unusual vote to create a tie and kill the bill. The Governor has threatened to veto a budget which does not accomplish the goals of the plan he proposed. It’s clear that there are not enough votes to override a veto; the legislature is still looking for a compromise.

Linda Joy Sullivan, a former public school teacher and one of the Democrats in the Vermont House who voted for the savings, wrote the following on vtdigger.com:

“What Gov. Scott recently asked my colleagues in the Legislature was simply to allow the state, with its superior bargaining power, to negotiate a better deal. I was a bit skeptical about whether we will achieve $26 million in savings, and I knew that any tax savings would not have directly reduced property taxes, but I could not see how it wouldn’t have improved our ability to secure quality health care – full health care benefits for our teachers – at a far better cost.

“From a business perspective, it’s a no-brainer. If the plan was to downsize health care coverage for teachers, that would be one thing. I was not hearing that – I heard instead that the proposals under consideration had the support of Vermont’s school superintendent association and are supported by actuarial analyses that seek to better match our spending to experience.”

All of us Vermonters, teachers included, need to be in contact with our legislators this week to make sure union staff cannot put their interests before the interests of teachers, students, and taxpayers.

May 12, 2017

Perpetrator of Fraudulent Vaccine Scare Speaking in Stowe

Should he be allowed to speak?

The most prominent speaker at a “Hope and Healing” event to be held next week in Stowe, VT is a despicable charlatan. Andrew Wakefield’s manipulation of test results to indicate a non-existent link between vaccines and autism made Time’s list of five great science frauds. More importantly, the hysteria he started and cynically exploits is partially responsible for a rise in preventable diseases. According to Time:

“…the General Medical Council in the U.K. revoked Wakefield’s medical license, citing ethical concerns over how he recruited the patients in the study as well as his failure to disclose that he was a paid consultant to attorneys representing parents who believed their children had been harmed by vaccines.[emphasis mine]”

Should he be allowed to speak? Yes; people who want to hear him have the right to do so. Free speech is not just for popular ideas.

Should he be speaking at Stowe High School, which, incidentally, does require its students to be vaccinated? That’s a tougher question but the answer is still Yes. The School is available for rent and this makes its auditorium an asset to the town outside of school hours. The school board should not be put in the position of deciding which opinions are allowed. Every opinion has opponents.

But what can we do to counter this harmful narrative?

  1. Don’t pay to go to the event. According to organizer Chiropractor Bradley Rauch as quoted in The Stowe Reporter the money earned from the conference will go first to speaker fees and expenses. In other words, if you buy a ticket, you are helping to fund Wakefield’s campaign of misinformation. The website for the conference “All profits will go to charity…” However, one of the organizations in the list of charities, Vermont Coalition for Vaccine Choice does not appear to be a charity. Its website does not say it is a 501(c)3 or that donation are tax deductibles. The coalition IS a cosponsor of the event. So actually at least part of the profits are going to the sponsors despite the claim that “All profits will go to charity…”.
  2. Be informed and help inform others. Bad ideas need to be countered with good ideas. I started this post with an ad hominem attack on Wakefield even though I generally deplore such attacks. However, it is relevant that his contribution to the study of autism (the subject he is speaking on) was a deliberate harmful fraud. The last part of this post is the argument for mandatory vaccination.
  3. Don’t go to Bradley Rauch for medical services. According to The Stowe Reporter story, he is planning to open a clinic in Stowe to treat autism. I’m not suggesting a boycott to punish him for his ideas. I am saying that he has demonstrated terrible medical and ethical judgment in his choice of speakers so I wouldn’t want him treating anyone I care about.

The argument for mandatory vaccination which you won’t hear at the conference.

We used to have periodic epidemics of polio, smallpox, rubella and other diseases. Huge numbers of people were either killed outright or left badly damaged. When I went to grammar school a long time ago, there was usually at least one classmate in permanent braces as a result of polio. Not true anymore. Because of vaccines, smallpox has been eradicated and we no longer have to vaccinate against it; polio is almost there.

So why can’t people just decide for themselves whether their children should be vaccinated? Two obvious reasons are that parents don’t have an inherent right to risk the life and health of their children and that, especially in a society where many health costs are socialized, everyone else will have to pay for the disease that could have been prevented. But let’s put those two arguments aside.

There are always some people who cannot be given a particular vaccine, either because of a general medical condition or because they’re allergic to the ingredients of the vaccine. So long as everyone who can get vaccinated does, the risk to those who can’t get vaccinated is very low

According to the Wrold Health Organization paper Vaccination greatly reduces disease, disability, death and inequity worldwide (which is also the well-documented source for other assertions in this post):

“’Herd protection’ of the unvaccinated occurs when a sufficient proportion of the group is immune. The decline of disease incidence is greater than the proportion of individuals immunized because vaccination reduces the spread of an infectious agent by reducing the amount and/or duration of pathogen shedding by vaccinees, retarding transmission.” [footnotes deleted but available via the link]

Those who can’t be vaccinated need herd protection. Those who diminish the herd effect by refusing vaccination for themselves and their children are putting those who can’t be vaccinated at deadly risk.

Most vaccines are not 100% effective, even if they are always administered properly, which, of course, can’t be the case. However, so long as there is sufficient herd protection, there is very little risk for those few whose shots didn’t take for one reason or another. However, if there is a large enough group who just don’t get vaccinated, then those individuals for whom the vaccine didn’t work are at great risk.

California used to have very liberal laws on refusing vaccination. NOT vaccinating became a fad among the nominally well-educated health-food-eating citizens in affluent Marin County. In 2015, only 84% of that County’s students entering kindergarten were fully vaccinated according to the San Francisco Chronicle in a story about the ensuing measles outbreak. “Last year there were 61 measles cases in California — the highest since the disease was declared eliminated in the United States in 2000. The state beat that number in the first month of this year.” California, seeing that there could easily be epidemics of more deadly diseases, has sensibly made it more difficult to avoid vaccination except for those who have a specific medical condition which would make a particular vaccination unsafe.

Part of the anti-vaccination hysteria comes from the falsified study by Wakefield. Because of the scare the article engendered, huge followup studies were done. That was easy because there is lots of vaccination. Absolutely no statistical or causal link has been found between any vaccination and autism. Nonetheless, the myth lives on.

The truth is that every vaccination does have some small risk. If it’s by injection, there’s a tiny chance of infection. There’s a very small chance that the vaccine, like anything else, can be contaminated. There’s an equally tiny risk that the recipient will have an undiagnosed allergy to the infection. Obviously new vaccines like the one for Zika have to be thoroughly tested and procedures can always be improved. We always must be aware new data can surface.

Ironically, as long as almost everyone else gets vaccinated, those who opt their families out of the very small risk of a tested vaccine get a free ride on the very herd protection they are compromising. Society can’t afford to let that happen. We can’t leave those who can’t get vaccinated or whose vaccine doesn’t work at risk. We can’t give preventable epidemics room to blossom. Some vaccinations must be mandatory. This is an example of a case where the needs of the society come before the needs of the individual and state compulsion is justified.

May 07, 2017

Why Government Subsidies Never Make Anything More Affordable

And why we can never get rid of them.

The chart from American Enterprise Institute could almost be this whole post. Costs

As you can see college costs have increased almost four times as fast as general inflation over the last twenty years. Four-year college has gone from being a stretch for middle income families to being affordable (at list price) by only the very rich. How can a product get priced out of reach of its customers? It takes government help.

Now It’s a laudable goal to make sure that everyone who wants to do the work can get a college education and prepare for better paying jobs than he or she would be able to get without a degree. So the US government provides grants and subsidized loans, both with a means test, and “unsubsidized” loans without a means test. I put “unsubsidized” in quotes because the interest payments on these loans don’t begin to cover the default rates and because no commercial lender would make these loans at these rates.

If this aid were available only to the most needy, it would not have had this distorting effect. But it’s hard to get votes for a program just for the needy, so aid for the middle class was added as well. Student debt has gone up about 400% after accounting for inflation in roughly same period according to Pew Research Center. To the young, loans on which they don’t have to make payments until after graduation are close to being grants. Colleges have no need to be frugal since parents no longer have to come up with the payments. In fact, in order to attract the students and the federal money that comes with them, college are in an arms race building fancier and more elegant dorms and rec centers as fast as they can. College costs have soared. Graduates are burdened with onerous debt. The extra money has made college LESS afforfable

How do we break this cycle of increasing subsidies pushing costs higher? Socialists say “make college free”. Of course that doesn’t reduce the cost, it only shifts it. And recipients of free tuition have even less reason to care about the actual cost of their education than those who must pay for it someday.

We will have to cut back on loans to the middle class; there will be not only cries of anguish but also real pain since college costs have ratcheted up to unaffordable.  College costs will come down in response to customer pressure; but this will also be painful. Colleges bonded to fund their luxury offers to students; a decrease in revenue will put some out of business.

It’s a lot easier to start an entitlement than to stop it. Does that sound like health care whose cost increase are also much above inflation? Stay tuned.

May 01, 2017

Internet Fast Lanes

You may be surprised at who has them.

The Internet Association - lobbying organization for Internet giants like Google, Amazon and Netflix – is adamant that it is necessary to apply of 1935 phone regulation (Title 2) to the Internet to assure that there are no premium “fast lanes”, that all bits are treated equally, that Internet access providers (ISPs) do not prioritize their own content over content from competitors.

Internet Association members sometimes say that they could actually afford to pay more for fast lanes but they are worried about the little guys, the startup, who may not be able to pay more and whose websites therefore won’t be as zippy as they need to be.  They’re worried about innovation. They’re worried about you.

In fact, however, the web giants like Google and Amazon have private networks which connect to the Internet in many locations. They have data caches (think of them as content warehouses) around the world. Their websites DO pop up faster than yours because their bits travel mostly on their private networks and avoid Internet backbone and interchange congestion. In other words, they have private fast lanes. You can't achieve this speed for your website unless you A) build a private network of your own (unlikely); B) host your website on Amazon or Google in which case they MAY share some of their private access network. I have hosted services on Amazon; they charge me more depending on how many locations I want my data served from. In other words, faster is more expensive on their network.

Conveniently these private fast lanes are specifically exempt from the 2015 FCC regulations which reclassified Basic Internet Access Service (BIAS) in a way which lets the FCC micromanage it and prohibit public “fast lanes”. The members of the Internet Association are “edge services” so unregulated.

From a technology PoV the ISPs could offer small customers premium transport which allows your site to compete better with Amazon. The 2015 regulations make that illegal. They protect Amazon and Google from competition both by you and by the ISPs – all in the name of “Net Neutrality”. Do you think this had anything to do with the fact that Google made a 180 degree switch? It lobbied for years to assure that the Internet was not treated like a telephone network. That was when telcos wanted regulation to protect themselves from competition. Now it’s the members of The Internet Association who would rather compete in the regulatory arena than in the marketplace.

It is true that Internet speeds are not what they could be, especially in rural areas. Part of that problem is that there relatively few Internet access providers.  But is there more concentration in Internet access than in search? I don’t think so. Should Google be regulated? No. But neither should they be able to use regulation to protect themselves from competition. Google correctly sees the ISPs as potential threats. They were once going to compete with them by offering Google Fiber. That would be good for all of us. But Google isn’t going to string fiber if it is cheaper to use regulation to protect themselves from competition.

The current regulations, which I think should be repealed, protect the members of the Internet Association from ISPs. Even more importantly, they protect the big Internet content providers, who own their own fast lanes, from the competition you might provide if you could rent a fast lane from an ISP when you’re still too small to have your own private network.

See also:

An Open Letter to My Friends at Google

Don’t Make the Internet Safe for Monopolies

Net Neutrality. What’s It All About?

Do you Want Comcast to Know Your Underwear Size?

April 28, 2017

An Open Letter to My Friends at Google

You run a fantastically successful business. You deliver search results so valuable that we willingly trade the history of our search requests for free access. Your private network of data centers, content caches and Internet connections assure that Google data pops quickly off our screen. Your free Chrome browser, Android operating system, and gmail see our communication before it gets to the Internet and gets a last look at what comes back from the Internet before passing it on to us. You make billions by monetizing this information with at least our implied consent. I mean all this as genuine praise.

But I think you’ve made a mistake by inviting the regulatory genie on to the Internet. Have you considered that Google is likely to be the next regulatory target?

The Internet and its many business have flourished for the last twenty years under the light regulatory touch that Google used to espouse in the early days of the Internet. It is just as true now as it was at the end of the 20th century that imposing regulations designed for monopoly telcos on the Internet will decrease competition, stifle innovation, and certainly not achieve “Net Neutrality”.

Twenty years ago it was the telcos who wanted regulation to protect them from innovative Internet competitors. With Google’s help, innovation was preserved. But in 2015 Google was a leader among companies which successfully lobbied the Federal Communication Commission (FCC) to end twenty years of bipartisan regulatory forbearance and declare that Internet access providers (ISPs) are common carriers under the telecommunications act of 1934 and should be regulated as such. Do you think Google needs regulatory help to fight off the ISPs as potential competitors? Once you meant to compete with them by building Google Fiber. We do need competition. Neither Google nor the telcos should be shielded from it.

When Congress cancelled a pending “privacy” regulation from the FCC earlier this year, which was based on this new regulatory authority, a misinformed congressman complained that he didn’t want Comcast knowing his underwear size. He apparently searched for underwear online and was then deluged with underwear ads. But you know that he got those ads because of his search history, not because his ISP was disassembling his packets. How long do you think it will before there is significant pressure in the US to stop the abuse the congressman claims to have suffered by regulating search providers? I think that would be a terrible idea and I’m sure you do as well.

How long do you think it will be before protestor signs says that a neutral Internet requires neutral search engines? Even if you protest that Google search IS neutral – just as the ISPs say they don’t favor their own packets – the protestors will say that Google is a profit-making enterprise so proactive regulation is needed. And shouldn’t a neutral Internet require neutral browsers? There are already stories that Google is planning to put code in Chrome which blocks some ads. Do browsers need to be regulated? What about email services which have all our private communications? What about mobile phone operating systems which see all our bits before they even get to the “evil” ISPs.

You at Google have shown your ability to learn and adapt. It’s probably too much to ask that you reverse your lobbying efforts again and support efforts to undo the unwise Internet regulation promulgated in 2015. But it might be a good idea to concentrate more on actually competing with ISPs in the marketplace rather than in in the regulatorium where you won’t be able to innovate either. We’ll all be losers if Google innovation is shutdown.

See excellent Boston Globe article Trump’s FCC can save the Internet — by doing nothing by Hiawatha Bray.

See also Don’t Make the Internet Safe for Monopolies, Net Neutrality. What’s It All About? and Do you Want Comcast to Know Your Underwear Size?

April 23, 2017

Don’t Make the Internet Safe for Monopolies

This week I’m going to Washington to argue against regulating Internet access as if it were phone service. Twenty years ago I was there for the same reason. My concern now as it was then is that such regulation will damage the economy and reduce opportunity by stifling innovation and protecting the current dominant players from the startups which would otherwise threaten them.

At that time the proponents of Internet regulation were most regional monopoly telephone companies, who were regulated themselves (and very comfortable living in a regulated environment). The then small Internet industry (including me) argued that startups were not monopolies and could not afford the batteries of lobbyists and regulatory compliance lawyers needed to survive in a regulated world. “Imagine,” we said, “if each new Internet app had to be approved by some commission or another”.

Fortunately Federal Communications Commission (FCC) Chair Reed Hundt, a Democrat appointed by Bill Clinton, and a majority of commissioners agreed with us. The Commission policy on Internet regulation became one of forbearance. The monopolists were right to worry. The Internet was disruptive. If they had won, there would be no such thing as Skype or Vonage; calls to China would still be $3.00 minute; and 800 numbers might still be more important than websites for shopping. Google, Netflix, Facebook, and Amazon wouldn’t be the companies they are today.

Hundt’s successor William Kennard, also appointed by Clinton, listened carefully to all arguments and continued the policy of benign forbearance. Innovation flourished. When Bush was elected,  Internet folk were afraid that his FCC appointees would be more responsive to telco lobbying. We could no longer argue that the Internet was a fledgling industry but could and did argue the public benefits of innovation and rapidly evolving business models. Michael Powell, Bush’s first appointee as FCC Chair, and the Commission debated and then issued the “Pulver Order” declaring that Voice over IP was not a telecommunications service. That meant in practice that the FCC, whose mandate only extends to telephony services, would have no reason to regulate the Internet.

The FCC did NOT regulate the Internet from then until now. However, in the waning days of the Obama administration, the FCC promulgated a regulation saying that Internet access is a telecommunications service (regardless of whether voice over IP is involved.). Therefor the FCC has the right to regulate Internet access as it used to regulate monopoly phone service. Big reversal.

Those who now want regulation are Google, Facebook, and other major Internet players. They are good marketers so this regulation is called “Net Neutrality”. Who could be against a neutral Internet where all bits are equal? Ironically it is the telcos and cable companies (ISPs) who are on the other side and against reregulation; they are the ones who will be regulated.

There are four major things wrong with the “Net Neutrality” regulations as promulgated:

  1. All users of the Internet as well as the economy itself will suffer if regulation is used to throttle innovation – that’s as true now as it ever was.
  2. This regulation protects the powerhouse incumbents – Google, Facebook et al – from effective and needed competition. It protects them on one side from rich ISPs (why?) and on the other side from would be new providers of Internet access (think mesh networks, access from drones, whatever) who won’t be able to satisfy the regulations made for the technologies they are obsoleting.
  3. There is probably no legal justification for the FCC regulating the Internet. FCC has jurisdiction over basic telecommunications service. They said the Internet isn’t such a service for years; just saying it is all of a sudden a basic telecommunications service doesn’t make it so.

Google may yet regret its call for regulation of any part of the Internet value chain. A Wall Street Journal story last week says that Google is working on an ad-blocking filter for its Chrome browser. Will the FCC next declare browsers a telecommunication service and require browser neutrality?  

With all due respect to many people I respect who support the “Net Neutrality” regulations, I’m as much against regulating the Internet now as I was 20 years ago although I no longer have any direct financial interest except as a consumer. I hope both that the legal challenge to this extension of the FCC’s reach will continue and that the current FCC will undo the harm that its immediate predecessors did and return to the policy which has so successfully supported economic growth and innovation for the last twenty years.

See https://www.bna.com/pai-engages-silicon-n57982087000/ for a Bloomberg story on this issue.

April 20, 2017

Net Neutrality. What’s It All About?

The fear is that your Internet Service Provider (ISP) will be able to determine what Internet content you get to access or at least make it more expensive or less convenient to access some content than other content. Most Americans get their fixed line Internet access from either a phone company or a cable company. Former phone companies like AT&T (owns DirecTV)  and Verizon (buying Yahoo) are increasingly in the content business, and cable companies like Comcast have always owned and controlled content.  Why wouldn’t an ISP favor their own content over that from Netflix or Amazon or YouTube? They could, for example, prioritize the packets which carry their own shows over packets from others; you would have a good experience watching content from the ISP and a lousy experience with content from others – constant freezes and stutters. Yuk!

So is this a credible threat? Do we need a law or regulation to protect us? Google and Amazon and Netflix think we do; they lobbied successfully at the end of the Obama administration to have the Federal Communications Commission (FCC) promulgate a regulation protecting “net neutrality” which essentially mandates that at least wireline ISPs treat all traffic equally and that the FCC gets to decide exactly what this neutrality means. Obviously these companies have a commercial interest in protecting themselves against “ discrimination” by ISPs who have ambitions to sell search and content. But an argument motivated by commercial interest doesn’t have to be wrong in terms of the public interest.

Not surprisingly the ISPs argue that their Internet access business, which has been unregulated so far, should remain unregulated. They say that there have not been proven instances of any such discrimination, that consumers would simply switch away from them if they interfered with customers’ content choices, and (somewhat contradictorily)  that they invested in their networks so they should be able to use them profitably. If they are regulated, they say, they won’t invest an Internet access will not improve. These arguments are also profit-motivated; but that doesn’t necessarily make them wrong from a public interest PoV. The now Republican FCC agrees with the ISPs and is getting ready to reverse the net neutrality regulation.

History tells us that regulation is the enemy of innovation (and usually the friend of monopolists). In the last fifty years of regulated telecommunication, the only innovations we saw were the dial tone and 800 numbers. Just compare the capabilities of your smartphone connected to a largely unregulated data network and your desk phone attached to the regulated phone network which can’t even text.

Internet pioneers lobbied AGAINST attempts to bring the Internet under common carrier regulation; the FCC under Democrats and Republicans agreed; the result was the tidal wave of innovation which brought us to where we are today. Interestingly it was then many of the telcos that wanted to regulate the Internet to prevent it from becoming competition. Good thing they lost or you wouldn’t be Skyping today.

The regulations promulgated last year do exactly what Internet companies, until recently, were against: they impose “common carrier” regulation on ISPs. The common carrier regulations were devised when phone companies were granted monopolies. They gave us some degree of protection (not much) against monopoly pricing and they gave the monopolies protection against competition.

So, if regulation isn’t the answer to potential predatory behavior by ISPs, what is? And what about the danger that ISPs will sell a history of everything we browse which I blogged about last week? Stay tuned.

April 17, 2017

A For-Profit Surgical Center is a Good Idea for Vermont

A group of local investors want to build a $1.8m surgical center in Colchester, VT for surgeons who prefer not to operate in a hospital setting, according to a story in VTDigger last week. Opening such a center, even when no public money is involved, requires a certificate of need from the Green Mountain Care Board. Vermont’s non-profit hospitals (there are currently no “for-profit” hospitals in the state) are urging the Board not to grant the certificate saying that it would result in an increase in health costs.

From the VTDigger article:

“The investors argue such centers save patients and insurance companies money because both Medicare and private insurers pay them less than hospitals for the same procedures. These types of facilities are called ambulatory surgical centers and are both licensed and regulated by the U.S. Centers for Medicare and Medicaid Services

“Christina Oliver, the vice president of clinical services at the University of Vermont Medical Center in Burlington, said the proposed facility is not needed because the hospital’s operating rooms and procedure rooms are working far below capacity. ‘We have open time available every day that is staffed but unused,’ she said.”

I am an admirer of and contributor to UVM Medical Center; but I think that the for-profit surgical center hospital should be allowed to open. The quality of care I've gotten at UVMMC has been excellent; once the hospital saved my life. But that doesn't mean that Vermont won't benefit from competition to keep medical costs down.

We will attract more doctors to the state if they have a choice of being in a wonderful research and teaching hospital like UVMMC or providing care in a smaller, more flexible organization.

There may be plenty of surgical operating rooms in Vermont, as Ms. Oliver said; but I know from experience that does not mean that minor non-emergency operations can be scheduled expeditiously. If a for-profit operation can provide faster care in these cases, that will be a help to many Vermonters.

We are not cost conscious medical consumers in Vermont because we have neither enough choice of providers nor transparent pricing to compare. The proposed center will offer both choice and transparency.

Finally, "for-profit" is not an epithet. A for-profit provider will fold if it does not offer something better than its non-profit competitors. There will be, and should be, quality regulations to assure that efficiencies are not achieved by cutting corners which shouldn't be cut.

It would take a lot to convince me to choose some other provider over UVMMC or Copley; they have set a high bar for quality. Nevertheless, prices are anything but transparent and waits for non-critical care do exist. Competition should be allowed.

The Green Mountain Care Board has a website for public comment. If you have an opinion on this issue – pro or con, please post it at http://gmcboard.vermont.gov/board/comment. Of course your comments are welcome here as well.

April 13, 2017

Do you Want Comcast to Know Your Underwear Size?

Congressman Michael Capuano (D, MA) complained on the House floor that he bought some underwear online and that he thinks that Comcast, his internet service provider (ISP), is selling information about his purchase. He was testifying against Republican legislation which prevents a Federal Communications Commission (FCC) regulation promulgated in the waning days of the Obama administration ostensibly to protect Internet privacy from going into effect. Trouble is the congressman doesn’t understand who is selling his undergarment preferences. It’s highly unlikely that it’s Comcast.

We’ve all had the same experience. You break your ballpeen hammer; you google ballpeen hammers; your search leads you to Amazon where you make a purchase. Immediately your online experience is framed by a flock of ballpeen hammers. You look at weatherunderground: rain tomorrow and ballpeen hammers. Check the local news: headline is arson under a banner ad for ballpeen hammers.

How does that happen, you ask?  Did my ISP spy on my search or my transaction with Amazon and then sell my information to the makers of ballpeen hammers? Is that what happened to the congressman and his underwear order? Nope. It was either Google or Amazon (or both) who “monetized” the information you gave them about your purchase intentions. Here’s how it works:

When you did your search, Google put a “cookie” – a snippet of information only Google and you can read – on your computer. Amazon put an Amazon cookie on as well. The cookies either contain the specifics of what you were searching for or an identifier which lets Google or Amazon retrieve information about searches done from your computer or by you if you happen to be signed on to Google or Amazon at the time.  

Now you go weatherunderground, Google or Amazon or both have bought ad space on the weatherunderground webpage. Their ads run in a “frame” on the webpage which means they have code in them which actually communicates with Google or Amazon and not with weatherunderground. This frame looks to your browser like it is running at Google or Amazon so it has access to the cookies which Google and or Amazon left behind. Aha. As fast as speeding electrons, Google or Amazon “know” that you will be interested in a chance to buy a ballpeen hammer so they give you that chance (I don’t know why Amazon apparently doesn’t know you already bought one). Up pops the hammer. The process is slightly more complex if you are on a different device, but the ballpeen ads can get to your smart phone as well as your computer.

As far as I know Google and Amazon don’t sell the information directly to purveyors of ballpeen hammers; but that’s only because this is not the best way for Google or Amazon to make money from the information. Amazon obviously gains if they can sell you something you want. Google makes most of its money by selling ads. In general they get paid when the ad is clicked on; so they make the most money by serving you an ad you’re likely to respond to. They’ve used the information to make you a source of profit. That’s not a sin, just a fact. You get free searches from Google in return for the information you give them. You pay low prices and get great choices and maybe free shipping at Amazon because they are so good at getting you to buy.

So why does the FCC want to regulate ISPs rather than Google and Amazon? Is that regulation a good idea? How should privacy be protected online? How can you protect yourself? Stay tuned to this blog (it doesn’t put cookies on your computer).

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