The NYT has a piece discussing efforts by Ford and GM to improve their quality. There is a chart accompanying the article showing the trend in complaints for the three automakers over the last decade. It shows a sharp drop in complaints by model year for both Ford and GM, while the numbers for Toyota remain almost flat.

The picture is somewhat distorted since it doesn't take account of sales. GM and Fords sales both fell by roughly one-third over this period, while Toyota's doubled. This means that Toyota also saw a sharp fall in complaints per vehicle, while the declines on a per vehicle basis for Ford and GM are not as steep as indicated by the graph.

--Dean Baker

The United States Department of Education 2010 National Educational Technology Plan (pdf) includes the following:

Open Educational Resources (OER) are an important element of an infrastructure for learning. OER come in forms ranging from podcasts to digital libraries to textbooks, games, and courses. They are freely available to anyone over the web.

Educational organizations started making selected educational materials freely available shortly after the appearance of the web in the mid-1900s. But MIT’s decision to launch the OpenCourseWare (OCW) initiative to make the core content from all its courses available online in 2000 gave the OER movement a credible start (Smith, 2009). Other universities joined the OCW Consortium, and today there are more than 200 members, each of which has agreed to make at least 10 courses available in open form.

Many of these materials are available not just to individuals enrolled in courses, but to anyone who wants to use them. The power of OER is demonstrated by the fact that nearly half the downloads of MIT’s OpenCourseWare are by individual self-directed learners, not students taking courses for credit (Maxwell, online presentation for the NETP Technical Working Group, 2009).

Equally important to the OER movement was the emergence of the Creative Commons, an organization that developed a set of easy-to-use licenses whereby individuals or institutions could maintain ownership of their creative products while giving others selected rights. These rights range from allowing use of a work in its existing form for noncommercial purposes to the right to repurpose, remix, and redistribute for any purpose.

Additional advances in our understanding of how to design good OER are coming out of the work of the Open Learning Initiative (OLI) at Carnegie Mellon University. OLI has been developing state-of-the-art, high-quality online learning environments that are implemented as part of courses taught not only at Carnegie Mellon, but also at other universities and at community colleges. The OLI learning systems are submitted to rigorous ongoing evaluation and refinement as part of each implementation. (For more information on OLI, see the Assessment section of this plan.)

The Department of Education has a role in stimulating the development and use of OER in ways that address pressing education issues. The federal government has proposed to invest $50 million per year for the next 10 years in creating an Online Skills Lab to develop exemplary next-generation instructional tools and resources for community colleges and workforce development programs. These materials will be available for use or adaptation with the least restrictive Creative Commons license. This work is expected to give further impetus to calls for open standards, system utilities, and competency-based assessments. (For more information on the Online Skills Lab, see the Learning section of this plan.)

The OER movement begun in higher education should be more fully adopted throughout our K-16 public education system. For example, high-quality digital textbooks for standard courses such as algebra can be created by experts and funded by consortia arrangements and then made freely available as a public good. Open textbooks could significantly reduce the cost of education in primary and secondary as well as higher education. Textbooks constitute a significant portion of the government’s K-12 budget as well as the student-borne cost of higher education.

Also see the plan’s sidebar on the California Free Digital Textbook Initiative, the first phase of which has been dominated (15 of 16) by CC licensed textbooks.

The plan also directly demonstrates effective reuse — it includes and properly attributes two CC-licensed illustrations.

Congratulations to the U.S. Department of Education and the OER movement!

The NYT's piece on Iceland's referendum on using public money to pay debts to foreign bank depositors failed to explain the real issues involved. During the boom, several Icelandic banks courted deposits outside the country, mostly in the UK and the Netherlands, by offering higher interest rates. The banks then used these deposits to finance a range of highly speculative investments.

As long the bubbles kept expanding, this model was hugely successful. However, when the bubbles burst, the value of the banks' assets collapsed and they had no ability to repay their depositors. This would have all been a private matter, except that the government insures bank deposits up to a certain level (like the FDIC in the United States). Iceland, as a matter of its treaty obligations with the European Union, is obligated to maintain a system of public deposit insurance which applies to both domestic and foreign depositors.

The issue here is whether private banks can effectively create enormous obligations (the money at stake would be equivalent to $6 trillion in the United States) for taxpayers. There was obviously an enormous regulatory failure on the part of the Icelandic bank regulators. International agencies like the IMF also played a role in failing to call attention to what were obviously very speculative investments. (Frederick Mishkin, a former Federal Reserve Board governor, did his part to promote the Iceland catastrophe, touting the great strength of its economy in a 2006 report. He does not appear to have faced any consequences as a result.)

It is also likely that some of the banks' actions involved fraudulent accounting practices if they concealed the extent of their true liabilities. The question then is whether the taxpayers or the depositors should bear the risk from fraudulent actions by banks. Arguments could be made in both directions, but this issue is never mentioned in the article.

It should also point out how the Iceland makes a mockery of anyone who claims to support leaving financial activities to the market. In almost all cases, actors in financial markets assume that governments will stand behind banks at the end of the day. Therefore when they say want the government to leave things to the market they are lying. They just want to be able to take risks with taxpayers money, without being fettered by regulations limiting the extent of these risks. In short, the finance boys want a free lunch, not a free market.

--Dean Baker

by Adam Thierer & Berin Szoka

We’re hoping that the Government Accountability Office (GAO) has made some sort of mistake, because it’s hard to believe its latest findings about the paperwork burden generated by Federal Communications Commission (FCC) regulatory activity. In late January, the GAO released a report on “Information Collection and Management at the Federal Communications Commission” (GAO-10-249), which examined information collection, management, and reporting practices at the FCC. The GAO noted that the FCC gathers information through 413 collection instruments, which include things like: (1) required company filings, such as the ownership of television stations; (2) applications for FCC licenses; (3) consumer complaints; (4) company financial and accounting performance; and (5) a variety of other issues, such as an annual survey of cable operators.  (Note: This does not include filings and responses done pursuant to other FCC NOIs or NPRMs.)

Regardless, the FCC told the GAO that it receives nearly 385 million responses with an estimated 57 million burden hours associated with the 413 collection instruments. A “burden hour” is defined under the Paperwork Reduction Act as “the time, effort, or financial resources expended by persons to generate, maintain, or provide information to a federal agency.” And the FCC is generating 57 million of ‘em! Even though we are frequently critical of the agency, these numbers are still hard to fathom. Perhaps the GAO has made some sort of mistake here. But here’s what really concerns us if they haven’t made a mistake.

Assuming the GAO got these numbers right, just think of the deadweight economic loss associated with all this paperwork, and think of how it will grow in months and years to come! Can you imagine how much the numbers have likely grown so far this year, with the agency generating so many new public notices, notices of inquiry, requests for information, and more?  And just think what the paperwork burden will look like once the National Broadband Plan and Net neutrality regulations kick in!  Oh my… The agency has already promised lots more notices will flow out of the National Broadband Plan to implement various portions of it.

In terms of the deadweight loss, go back to the numbers Adam cited in his essay last week asking, “Will the FCC’s Nat’l Broadband Plan Be “Full Employment for Lawyers”? As noted there, lawyers were about the only group that did fairly well thanks the FCC’s over-zealous regulatory ways in the post-Telecom Act period. Greg Sidak of Georgetown University Law School found that the number of telecom lawyers–as measured by membership in the Federal Communications Bar Association–grew by a stunning 73% in the late 1990s. That was largely driven by a 37% hike in FCC spending and a tripling of the number of pages of regulations in the FCC Record in the post-Telecom Act period. Sidak argued, “If one assumes (very conservatively) that the average income of an American telecommunications lawyer is $100,000, then the current membership of the FCBA represents an annual expenditure on legal services of at least $340 million.” And we all know that those lawyers were making a heck of lot more than just $100K (and billed even more), so Sidak’s estimates were ultra-conservative: The deadweight loss of all this legal activity was much greater.

Indeed, a very conservative estimate of hourly rates for Washington communications lawyers would be $200/hour, but even at that rate, 57 million burden hours would equate to a total cost of $11.4 billion. In fact, when major Washington law firms use “blended rates” to bill out the time of senior partners, junior associates, and paralegals working in teams on things like regulatory filings, the figure is more like $350-400 (if not more)—which would equate to a deadweight cost of $20-23 billion every year.  To put that staggering number in perspective, leaks about the National Broadband Plan indicate that the FCC might be planning on spending about that much to subsidize broadband deployment over a decade.

Or, to use another comparison, NASA’s 2010 budget is a mere $18.69 billion.  That’s in the same ballpark as what, according to the GAO’s man-hour estimates, the FCC’s reporting requirements cost U.S. industry every year.  As Wernher von Braun famously said about the Apollo program, which he led: “We can lick gravity, but sometimes the paperwork is overwhelming.”

So, “if we can put a man on the moon,” as they say, why can’t we do something about this paperwork burden so America’s communications, media, and high-tech providers can focus on actually providing better, faster, and cheaper service to consumers?

Porn compromises Pennsylvania county network, San Francisco revisits Google broadband.

Sorry to use the blog as a job board, but I wanted to let readers know that the Progress & Freedom Foundation (PFF) has a couple of positions we’d like to find good people to fill:

• Senior Economist: PFF is looking for a skilled economist (PhD-level preferred) with experience in the high-tech arena or network-related industries. Our senior economist would be responsible for assisting other PFF analysts on various projects and priorities, but would also be free to pursue other objectives.
• Vice President, Development & Outreach: PFF is looking for development director to oversee outreach to supporters and other third parties, and to help us grow the organization.
• President: Yes, you read that right! After less than 6 months on the job, I’m already tired of management and want to get back to full-time policy wonkery! If you know of someone who would make a great leader, has strong free-market credentials, and extensive experience in the field of high-tech policy and media/communications law, please let me know. I’m quite ready and willing to hand over the keys to someone else so I can spend all my time fighting the good fight to defend free minds, free markets, and free speech!

To apply, please send a resume and cover letter to Adam Thierer (athierer@pff.org). Or, if you have any ideas on good candidates, please let me know that, too.

San Francisco - The Electronic Frontier Foundation (EFF) filed a friend-of-the-court brief today urging a federal court judge to block two criminal statutes that unconstitutionally limit the free expression of millions of adults who use the Internet and other electronic forms of communication, bringing the threat of criminal sanctions for private, lawful speech.

At issue are provisions of federal law that require anyone who produces a visual depiction of sexually explicit expression to maintain extensive records -- including copies of drivers' licenses, the dates and times images were taken, and all URLs where images were posted -- and often force public disclosure of a creator's home address. Even more troubling, the regulations allow law enforcement warrantless entry into homes or offices in order to inspect the records that are supposed to be kept. While these statutes regulate the commercial pornography industry, they also likely apply to a staggering number of Americans who create and share images of themselves over social networks, online dating services, personal erotic websites, and text messaging.

"The plain language of the statute subjects ordinary Americans, who are using emerging communications technologies at an ever-increasing rate, to onerous record-keeping and inspection requirements for lawful speech. They could face up to five years in prison if they don't follow the statutory requirements to the letter," said EFF Senior Staff Attorney Matt Zimmerman. "Speakers who engage in private, expressive activity protected by the First Amendment should not be at risk of criminal sanctions for violating an overbroad statute that they likely know nothing about."

A coalition of artists, producers, distributors, and educators filed suit against the provisions last year, arguing that the law censored their artistic and educational work. In its amicus brief in support of the coalition filed today, EFF asked the judge to throw out the record-keeping regulations as an unconstitutional chill on adult free expression in the digital age.

"Digital cameras, camcorders, and the Internet make it easy to create and share lawful adult material in a wide variety of ways. Thousands of ordinary Americans are doing just that, only to find themselves subject to these record-keeping and inspection requirements," said EFF Civil Liberties Director Jennifer Granick. "This just doesn't square with the Constitution."

For the full amicus brief:
http://www.eff.org/files/filenode/fsc_v_holder/EFF%20Amicus%20Brief.pdf

For more on Free Speech Coalition v. Holder:
http://www.eff.org/cases/free-speech-coalition-v-holder

Contacts:

Matt Zimmerman
Senior Staff Attorney
Electronic Frontier Foundation
mattz@eff.org

Jennifer Stisa Granick
Civil Liberties Director
Electronic Frontier Foundation
jennifer@eff.org

A couple weeks ago the Google Books Settlement fairness hearing took place in New York City, where Judge Denny Chin heard dozens of oral arguments discussing the settlement’s implications for competition, copyright law, and privacy. The proceeding raised a number of very challenging legal questions, so Judge Chin’s decision, expected to come down later this spring, will surely be a page-turner no matter how he rules.

My work on the Google Books Settlement has focused on reader privacy concerns, which have been a major point of contention between Google and civil liberties groups like EFF, ACLU, and CDT. While I agree with these groups that existing legal protections for sensitive user information stored by cloud computing providers are inadequate, I do not believe that reader privacy should factor into the court’s decision on whether to approve or reject the settlement.

I discussed the merits of reader privacy concerns in an amicus curiae brief I submitted to the court last September. In short, I argued that because Google Books would earn a sizable portion of its revenues from advertising, placing strict limits on data collection (as EFF and others have advocated) would undercut Google’s incentive to scan books, ultimately hurting the very authors whom the settlement is supposed to benefit. While the settlement does have its share of privacy risks, these concerns are not unique to Google Books nor are they any more severe than the privacy risks surrounding products like Google search and Gmail. Comparing Google Book Search to brick-and-mortar libraries is inapt, and like all cloud computing providers, Google has a strong incentive to safeguard user data and use it only in ways that benefit users and advertisers.

While Google has a reasonably strong track record of preventing data breaches and accidental disclosure of data to untrustworthy parties, Google generally does not challenge court-approved criminal or civil subpoenas of data associated with its users. I didn’t properly articulate this in my amicus brief, in which I stated incorrectly that “Google has a history of vigorously resisting government data requests if it deems them invalid.” In fact, Google usually does not attempt to quash subpoenas, although it has done so at least once before (in 2006, Google successfully fought a request from the U.S. Department of Justice seeking logs containing millions of user search queries).

Upon receiving a subpoena of a user’s data, Google typically informs the user that his or her data will be handed over in 20 days unless the user successfully moves to quash the subpoena. Most other cloud computing providers have similar policies. In certain rare circumstances, however, subpoenas are issued in secret. In such cases, Google is barred from telling the user about the subpoena, so the user doesn’t have a chance to challenge it in court.

While Google’s policy for disclosing user data isn’t as protective of privacy as it could be, it is actually quite reasonable in light of the economic realities of cloud computing. Sure, Google could challenge all subpoenas it receives as a matter of course, as CDT and others have urged, but such a policy would be prohibitively expensive for a company like Google that likely processes tens of thousands subpoenas each year (Unfortunately, Google has refused to disclose how many subpoenas it receives, much to my chagrin). Most Google users aren’t even paying customers! Expecting Google to bear the burden of defending individual users — some of whom actually are criminals — from legal proceedings is just not fair.

Instead of trying to persuade Congress, regulatory agencies, and the courts to regulate Google and other online providers, privacy advocates should focus on the underlying deficiencies in U.S. privacy laws. Under the 1986 Electronic Communications Privacy Act (ECPA), many kinds of potentially sensitive user data can be obtained by government authorities with a mere subpoena, rather than a search warrant. Compounding this problem is the refusal of courts to extend Fourth Amendment protections to sensitive information stored in the cloud because of the seriously flawed “third party doctrine.” To remedy this, Congress should amend ECPA to strengthen privacy protections for sensitive data stored by remote computing service providers.

In the meantime, let’s not create burdensome new regulations on online data collection. As Berin, Adam, and others have documented with incredible thoroughness (1, 2, 3, 4), smart data mining has myriad benefits for consumers, and targeted advertising is among the most promising avenues for financing future content production.

Tampa-based county creates Facebook, Twitter pages and blog in hopes of better engaging public in budget cutting process.

Washington, D.C., tracks water assets to streamline inspections and aid firefighters in emergencies.

• Reforming the FCC

Event Video: Part 2 (video provided by NextGenWeb through UStream)

See Part 1 here, and find out more about our FCC Reform Conference here.

• Reforming the FCC

Event Video: Part 1 (video provided by NextGenWeb through UStream)

See Part 2 here, and find out more about our FCC Reform Conference here.