Voluntary market agreements not FCC should create incubators.

The Federal Communications Commission today issued a notice of proposed rulemaking as a first step toward creating an incubator program for disadvantaged groups that want to enter the television and radio broadcast industries. According to the Commission, “Such a program would seek to encourage new and diverse broadcast station owners by drawing on the technical expertise and/or financial assistance of existing broadcasters.”

The NPRM also seeks comment from the public on how best to structure and implement the program.

The State via the Commission has a monopoly on access to spectrum. It has the force of law behind this monopoly. It should, for the sake of bond holders, pursue policies that help increase returns on the spectrum that it licenses to private companies. The better broadcast companies perform i.e. attract listeners and views and sell advertisement, the more taxable income for the State and continued flow of income to bond holders.

I don’t see this incubator program doing that. It is a pure political move. It is designed to keep the barbarians aka social justice warriors from knocking down the gate. The Commission has been holding the warriors off since the Clinton Administration by not following through on recommendations to institute such programs. It appears now, with this NPRM, that they are trying to give the impression of progress on the issue of diversity.

They should save their strength.

Any incubation for future broadcast station owners can be done in the private sector. Potential and existing broadcast station owners can enter into voluntary agreements to exchange expertise and financial assistance in exchange for a piece of a minority owner’s action. It should be up to a potential minority owner to explain the economic and financial value that an existing broadcast station owner can glean from an investment in a minority-owned station or outright sale of an existing station to a minority-owned firm.

Think of the decision rule the British Empire imposed on itself when it decided to decolonize. The second world war drained the Empire of resources. Holding on to territories in Africa and the Caribbean was expensive, so they cut a deal with these protectorates. We’ll prepare you for independence and you’ll give us a piece of the economic action.

This is the model that existing broadcast station owners and potential minority-owned firms should enter. Where the existing owner wants to off-load a station and a minority firm shows it can bring value, then they can enter an exchange. The State via the Commission need not involve itself by establishing incubator programs.

Net neutrality’s transparency rules do nothing for Bitcoin

As transparent as Bitcoin’s underlying block chain process is for Bitcoin users, there is still a need for protecting the privacy of the user when moving Bitcoin from seller to purchaser. Current net neutrality rules on transparency may negatively impact the need for privacy.

Experts at Bitcoin.org warn the crypto-currency’s use to protect the IP addresses used during Bitcoin transactions. Including an IP address on a website or social network site may not be a good idea if maintaining anonymity is crucial. Once a Bitcoin address is used to receive a payment, the address becomes traceable along with all other transactions associated with the address.

Further, according to Bitcoin.org, since the currency’s users usually reveal their identity’s in order to receive goods or services (like a Klingon or Romulan starship decloaks before firing), Bitcoin addresses won’t remain fully anonymous.

Question is, as investment in Bitcoin and transactions using Bitcoin increase, why would the Federal Communications Commission pursue a net neutrality regime that includes an intrusive transparency requirement?

Current net neutrality rules require that broadband providers disclose certain details about network management including disclosures about congestion management practices and the types of traffic subject to those practices. Proponents of the transparency component of net neutrality rules argue that these rules protect consumers against misinformation about prices, services offered, and data speeds.

What isn’t discussed by net neutrality advocates is the slippery slope that transparency embarks on when it comes to Bitcoin. For example, as more consumers use broadband, and in particular mobile broadband to conduct Bitcoin transactions, should we put their anonymity at risk by requiring broadband provides disclose information about the data Bitcoin users send?

Bitcoin could become mainstream over the next ten years especially given its use of the blockchain. Should intrusive transparency rules be allowed to slow down this train?

The Atlanta “Black Slate” seeks to capture the Atlanta mayor’s office today

Mary Norwood and Keisha Lance Bottoms are heading for a run-off on 2 December if the polls hold out going in to today’s elections. Ms Norwood held the lead in the polls well into the late summer and early fall, but fortune has changed in favor of Ms Bottoms who has amassed a two percentage point lead over the woman who could potentially be Atlanta’s first white mayor since 1974.

Ms Bottoms’ change in fortune may be due in part to a surge in campaign donations. According to the Atlanta Business ChronicleMs Bottoms led all candidates in fund raising in October.

How much the “Vote the Black Slate” movement has contributed to Ms Bottoms’ surge is debatable. The desire on the part of Atlanta blacks, especially those living in the southwest sector of the city, is real to the point of palpable. While Ms Norwood’s amicable personality is pleasing to a lot of blacks (Full disclosure. I voted for her in 2009 partly for that reason), increase in support for Ms Bottoms is visible. Campaign signs supporting Ms Bottoms have sprouted up in many southwest Atlanta yards like grass after a solid rain.

If Ms Bottoms does come out the victor and continues current mayor Kasim Reed’s economic policies, her voters may find themselves experiencing further disappointment. I have lived in the southwest sector of Atlanta for over nine years. The wielding of political power via the vote has not brought poor blacks in the sector any more real capital or employment opportunities. Gentrification has brought young white couples into the neighborhood, but their capital may be spent elsewhere in the city as they head out to work in the morning and return in the evening. Their capital sees no value in the southwest.

The “Vote the Black Slate” movement may help boost the self esteem of Atlanta’s black elite. Another black mayor gives them something to talk about during homecoming games and cocktail parties. What it does for blacks with no capital is another issue.

All political systems get hacked

All political systems get hacked. If you understood your nation’s history you would understand that its coming into existence was the result of a hack. You are too focused on the technology used today. Every 4th of July you celebrate the men that committed the first hack of the system and even they expected their newly created system subject to continuous hacking.

The real question is why would anyone attempt to hack a political system unless they believed the allocation of “justice” was not sufficient? Politics is about allocation of power. Whether the hackers are a bunch of slave-holding white boys in 1776, black and Jewish civil rights leaders in 1963, women’s lib protesters in 1972, or white nationalists in 2017, someone or some group is always hacking your system.

Maybe you should take a closer look at your system. It’s like driving a car that breaks down every ten miles. Sooner or later you have to figure out why.

How does regulating Facebook optimize returns on resources?

Farhad Manjoo writing for The New York Times argued in a recent article for increased regulation of “The Frightful Five”; Amazon, Apple, Facebook, Google, and Microsoft. For Mr Manjoo, their increasing intrusion into personal privacy and growth in the retail sector market should raise concerns on the part of regulators.

My takeaway from Mr Manjoo’s article is that government is moving further and further away from the opportunity of being simply a fair allocator of capital to oppressively regulating its distribution to the point where growth in the value of capital is squashed.

In addition, the Frightful Five have no monopoly on natural resources. They do not control land or access to air or minerals. As demand grows for internet services so too does demand grow for electricity use of the part of internet companies. In an article for Forbes.com, Christopher Helman estimates that internet firms account for 1.8% of electricity consumed in the United States. On an annual basis, internet companies are spending $7 billion a year to consume 70 billion kilowatt hours per year of electricity.

And given their two percent contribution to total greenhouse gas emissions, companies like Google have been purchasing energy from renewable energy sources with a 2017 goal of going 100% renewable, according to a piece by Adam Vaughan for The Guardian.com. As a consumer, Google and other internet companies aren’t in the energy extracting and generation business, making them susceptible, like any other consumer, to the whims of energy companies that actually have a license to extract, generate, and distribute energy.

In terms of human resources they higher relatively few people compared to other large companies in different sectors. The data processing, hosting, and related services sub-sector, within which companies like the Frightful Five belong, employed 364,000 people in September 2017, according to data from the U.S. Bureau of Labor Statistics. This total represents approximately .23% of the approximately 156 million people employed in the United States.

What the Frightful Five are first and foremost are tax revenue generators. While not responsible for extracting and managing the United States’ natural resources, by employing 364,000 wage earners and providing platforms for the sale of goods and services including advertisement, internet companies are providing a tax revenue stream for the United States government that didn’t exist twenty years ago.

How much in taxes would the United States be willing to forego by regulating the profit centers of internet companies? For example, in 2016, Alphabet, the parent of Google, had tax expenses of $4.7 billion at a tax rate of 19%, while Microsoft posted tax expenses of $3.3 billion at a tax rate of 16.5%. Apple paid $15.8 billion in taxes at a tax rate of 25.8%.

As Congress considers a corporate tax overhaul and the impact reform may have on its coffers and the deficit, does Washington want to risk reducing the tax revenues that keep its bond holders calm?

Rather, a better scenario for bond holders would be for government not to interfere in the Frightful Five’s ability to generate taxable income. Since internet companies do not manage directly the United States’ natural resources via extraction or distribution, there should be less reason for regulating these entities.