Out of Control

The California Senate’s 33-4 vote Wednesday in favor of statewide cable franchising, alongside the Assembly’s 70-0 vote on the same bill in May, is nothing short of a mandate for regulatory reform and cable competition.

With the most populous state in the union giving a ringing endorsement to consumer choice, states where similar legislation is pending, such as Pennsylvania, or where it didn’t get out of committee this term, such as Florida, are likely to push ahead.

In the meantime, action like this in the states, especially where Democrats control the legislative apparatus (as they do in California), will put pressure on the U.S. Senate to bring pending telecom deregulation to the floor. Senate Democrats have been holding up the vote on the bill, which would create a national video franchising process, over network neutrality provisions. Delay much longer and a substantial component of this bill stands become moot.

The press, including this article in The San Francisco Chronicle, has attributed these state victories to telephone company lobbying, although the cable industry has been lobbying just as hard against reform. But it’s more than that. The same article shows how weak the arguments put forth by local municipalities have become. They’ve lost the revenue argument, as no franchise bill takes local cable revenue out of municipal hands. So while reform has sparked new investment in Virginia, Indiana and New Jersey, and already brought lower cable rates in states like Texas, California opponents were reduced to raising trivial complaints, such as the fact that AT&T’s IPTV deployment might require more “gray boxes” on street corners, which Christine Falvey, a spokeswoman for San Francisco's Department of Public Works, said might attract graffiti.

Once more, 33-4 and 70-0 in favor.

They both censor the Internet.

Culver City, Calif., is the first operator of a municipal wireless network to filter legal content and applications that the city finds objectionable.

The city has installed filtering software that blocks access to legal adult sites and, more significantly, prevents peer-to-peer file sharing. Ironically, municipal networks are often touted by activists who say commercial service providers are more likely to interfere with free access to Web content. Let the record show that the first U.S. ISP to censor Internet access was a muni network.

Plus, the guidelines for filtering are purely arbitrary. It is not as if they are blocking illegal sites. Instead, the city says it seeks to block “problematic content.” That could just as well as include sites like www.reason.org, which routinely criticize municipal broadband.

The decision to block porn sites might score a few points with the “family values” set, but Culver City’s decision to blcok P2P sites, which include Bitorrent, LimeWire and KaZaa, just to name three, is indefensible and more than likely, politically motivated. We can’t help but notice that Culver City is home to three major movie studios, who, in typical Hollywood fashion, have been railing against P2P while seeking ways to commercially exploit it. The Motion Picture Association of America and Culver City even collaborated on a press release praising the filtering decision.

As the studios no doubt draw a lot of water in Culver City, it’s easy to see why the local officials would easily yield to the slightest pressure to censor P2P, at least until the studios start buying up the sites. Of course, for the other 40,000 taxpaying residents who are footing the bill for the municipal operation, the town has made the service that much less competitive or desirable. This is another reason why muni networks are a bad idea.

As we mark the first anniversary of Hurricane Katrina's devastating landfall today, it is fitting that we look at the progress that has been made in rebuilding the region--and the lack of progress. As Harry Mount explains in a recent article for the UK's Daily Telegraph, there have been stark differences in the rebuilding effort between the public and private sectors:

[W]hile private business has flourished, public works have failed miserably. Schools are only just opening. University departments have been closed for good. Courtrooms don't have enough judges to deal with the renaissance of America's murder capital.

Mount continues:

This mismatch between private and public has nothing to do with shortage of public money; after Katrina, President Bush promised £58 billion ($110 billion) in federal aid for the victims. New Orleans and its crooked ways are partly to blame. Only this weekend, a pair of Bobcat excavators worth £50,000 ($95,000) were stolen from the Lower Ninth Ward, one of the hardest-hit areas of the city, where they were being used to build a memorial to the victims of Katrina.

But the chief culprit is a federal government clogged with bureaucracy and indecision, incapable of spending money even when it's got tons of the stuff.

The American government can just about arrange an orgy in a brothel -- fraudulent applications for Katrina aid were spent on champagne and prostitutes -- but it is hopeless when it comes to large-scale federal construction projects.

This paralyzing bureaucracy is not limited to Katrina recovery efforts, either. As Mount notes, the same maladies have impaired rebuilding efforts at the World Trade Center site as well.

In the five years since September 11, one building, 7 World Trade Centre, the third and least-known skyscraper to collapse that day, is the only one to have been rebuilt.

At 7 WTC, the site's leaseholder, Larry Silverstein, worked unencumbered by the attentions of government. As a result, the £350 million ($665 million), 52-storey tower went up this May without a hitch.

A couple of hundred yards from 7 WTC, Ground Zero is still a great big empty concrete tub.

Mr Silverstein owns the lease to the Ground Zero pit and the rights to rebuild all the space lost within it. But, while 7 World Trade Centre is outside the pit and entirely under his control, construction inside the pit is run by government, principally George Pataki, the outgoing governor of New York State.

We should take these lessons to heart when we consider options for rebuilding of the Gulf Coast, the World Trade Center site, and future disaster areas. It is not government planning, but market forces, that allow for the quickest, most appropriate, and most economical recovery of disaster areas. People and businesses will seek opportunities to invest their resources and offer their services where they are most needed--if only government will get out of the way and let them do it.

In a blog entry that addressed the broader problems of the FCC attaching conditions to mergers and consolidations, Randy May at the Free State Foundation specifically takes the commission to task over its demand in the Adelphia Communications break-up that Time Warner and Comcast, who are splitting the Adelphia properties, make regional sports channels in which they hold an interest available to unaffiliated service providers.

The FCC did not cite any antitrust law or any part of Section 47 of the U.S. Code to back this up. Instead, Chairman Kevin Martin adopted an extremely subjective rationale that local sports programming is a “must have.” In other words, he has declared that viewers have a right to watch home team sports on their cable systems, and securing that right falls within the purview of the FCC.

While not repudiating it, Martin’s colleague Michael Copps puts his finger on the problem that arises when regulators start arbitrarily declaring what channels are “must haves.” May writes:

The problematical nature of the agency making such content-based regulatory decisions is illustrated by Commissioner Michael Copps’ dissenting statement. He agrees [regional sports network] programming is “must have” but asks if it is the only such programming. “What if you only speak Spanish? Wouldn't a Spanish language channel be ‘must have’? How about local news? Children's programming?” Copps says “[w]e ought to be careful before starting down the slippery slope of determining what is and isn't ‘must have’ cable content.” He's right about that, of course. But, unfortunately Commissioner Copps’ preferred remedy apparently would be to impose common carrier-like “non-discrimination” requirements on cable operators and other broadband service providers as well. Right about the slippery slope. Terribly wrong remedy.

May goes on to discuss how such rules ultimately bump up against the First and Fourth Amendments. It is also worth adding how they interfere with the right to form voluntary contracts.

The crux of these disputes over channel carriage are about economics, usually over the cost the programmer demands from the cable company to carry the channel. Matters get more complicated when a cable company owns a share of a rival programmer. Moreover, negotiations, especially with regional programmers, tend toward brinksmanship and sometimes egos get involved more than they should—as they did in the fight in New York between Cablevision and George Steinbrenner’s Yes Network, which carries New York Yankees baseball games. The fact that Steinbrenner created the Yes Network in order to retain TV rights to the Yankees, which had previously been held by Madison Square Garden Network, a Cablevision subsidiary, lent greater animosity to both sides.

Viewers can take heart that both cable companies and programmers know it’s in their best interest to hammer out an agreement. Cable companies want to meet popular demand for local sports programming, especially as competitive alternatives, from satellite to IPTV to Web-based video streaming, proliferate. Meanwhile, programmers need the viewers cable systems provide, because more viewers drive more advertising.

This is all part of the rough and tumble of business negotiations. An unfortunate downside is that the public from time to time gets inconvenienced. Take management and labor negotiations for example. We’ve all had to deal with strikes. At the same time, our laws respect the right of collective bargaining, in which strikes, or threats of one, are recognized as a legal negotiating tactic. (There’s a difference when it comes to public welfare, which is why in most areas, police officers and firefighters are not allowed to strike. But I’m with May and the PFF’s Adam Thierer when they say its dubious to declare it a “right” to be able to watch the Tar Heels or the Blue Devils.)

It’s important to remember that despite their animosity, Yes Network and Cablevision reached an agreement on carriage. The FCC’s “must serve” puts gun to the head of the cable companies, forcing them to accept terms they might feel overcharge them (and by extension, their customers) or undervalue their participation. In any negotiation, one side always has the option to walk away. Good negotiators know how to leverage that option. The FCC’s “must serve” rule takes this leverage away.

P.S. One more thing, doesn't this "must have" doctrine fly in the face of the "a la carte" policy the FCC was pushing just a few months ago? So, according to Martin, cable companies should allow consumers the right to chose only they channels they want. At the same time, the he says there are are channels that everyone, by right, must have. Will someone reconcile this for me please?

From Camden, N.J., this outrageously noxious tale of eminent domain abuse and incompetence.

The state schools construction corporation seized a successful family-owned laundromat to build a school. Last March the school's "need" was so urgent they sent deputies to kick all the customers out one day and lock the doors and tell the owner the property was siezed.

Now more than six months later, the building sits dilapidated, no work on a new school has begun, and hapless owner hasn't even been paid the inadequate compensation owed him.

Retching hardly seems adequate.

And this is not a case of eminent domain to benefit a private party. At least if is for a government purpose, though the state clearly had no interest or intention in trying to buy the property legitimately or any nonsense like that. And the lack of accountability for taking care of the property owner, abusing the "urgency" mechanism, and failing to be able to actually do the project!

If you go back and look at the list of grievances listed in the Declaration, the list is long and clearly the Founder's were fed up. But a lot of what they suffered pales in comparison to egregious abuses like the owner of this laundromat has suffered. Our forefathers rebelled over stuff like this. It his high time we got really pissed of and beat our legislators into protecting us from this kind of abuse.

Word comes by way of the San Francisco Bay Guardian that the city’s Department of Telecommunications and Information Services (DTIS) has hired Columbia Telecommunications Corp. (CTC), a Maryland-based municipal broadband consultant group to explore the feasibility of a municipal wholesale fiber optic network.

This comes while the DTIS is already negotiating a private-public partnership with Google and EarthLink for a citywide wireless system, which, under terms of the contract, will include a free service component.

Municipal fiber is an idea that just won’t die. No matter how many times it fails, there are groups who believe that a city-owned system can deliver better service less expensively than commercial service providers.

Let alone that in less than one year, the private sector has a better track record than any municipality in getting cheap, even free, wireless service to more people in larger areas. Google already offers free broadband wireless in Mountain View, Calif. EarthLink serves Anaheim and will launch service next year in Philadelphia. Back in the Bay Area, MetroFi offers free wireless broadband service in Sunnyvale and Cupertino, plus has an agreement to serve Foster City. Meanwhile, the two erstwhile showcases for municipal ownership, Chaska, Minn., and St. Cloud, Fla., have had nothing but cost overruns and dissatisfied users.

We’ve heard it time and time again—regulators must be on guard against the power of the telephone and cable “duopoly.” The rationale behind the call for network neutrality and mergers such as AT&T-BellSouth and the absorption of Adelphia into Comcast and Time Warner Cable, has been the claim that the broadband “last mile” is a monopoly.

The Macon County Telegraph was among the latest to reflect this conventional, but incorrect, wisdom in an August 8 editorial (archive fee required) against the AT&T-BellSouth merger, writing that “The old AT&T behemoth will have returned, and quite frankly, there isn't another company that can stand up to it.”

A short “ConsumerGram” released by the American Consumer Institute may help turn that conventional wisdom on its ear. In an easily duplicated exercise, the ACI examined the financial data from the six major cable and phone companies (Comcast, Time Warner, Charter, AT&T, Verizon and BellSouth) and compared them to the five leading Internet software, applications and content aggegrators (Google, Microsoft, Yahoo, eBay and Amazon).

The phone and cable companies have been seeking deregulation, and have been widely decried as greedy and monopolistic. The content and applications companies have been demanding more regulation, arguing that policies like network neutrality will “preserve” the open environment of the Internet. Diverse groups from Moveon.org to the Christian Coalition have bought in to this—that the carriers are the Big Bad monopolists while the Googles and Amazons are, in the words of Larry Darby, former Chief of the FCC’s Common Carrier Bureau and a Senior Fellow for the ACI, “an assortment of garage-dwelling startups.”

Guess which group emerged the strongest, and with the most to gain from a regulatory regime that would prevent carriers from creating any viable economic model to allocate the bandwidth these companies will consume. Bottom line, the whole idea that Google, Amazon and Yahoo are struggling shoestring operations that need a set of regulations to be "protected" like baby chicks in an incubator is laughable.

Unwary consumers might reasonably take away from NN advocates a sense that the legislative battle separates firms with little market power from dominant firms with overwhelming market shares. Not so! Popular myth notwithstanding, most links in the Internet value chain are dominated today by large firms with substantial market shares.

• The “search” market is dominated by Google with market share in the 46% to 50% range.
Yahoo (circa 23%) and Microsoft (circa 11%) account for the most of the remainder.
• Microsoft dominates the operating and applications software market with substantial
shares in most of its submarkets.
• eBay’s share of the online auction market has been estimated at 85%.
• PayPal (an eBay sub) and Checkout (a Google sub) are dominant providers of “e-Payment”
services for domestic and international online commerce.
• The market for Internet access facilities is dominated by cable TV providers (53% or so) and telephone companies (41% or so), with satellites garnering about 3 million (6%).
However, according to ISP-Planet, individual firms have much smaller national shares.
Comcast has about 9%, AT&T has a bit over 7%, Verizon has nearly 6%, and Road
Runner has over 5%, while BellSouth and Cox Cable each have about 3% shares of the
national Internet Service Provider market. America Online is the leader with a 19%
market share.

The full ConsumerGram, complete with a telling chart showing sales, return on capital, stock price to cash flow and market cap, can be found here.

This is kind of funny, but a small piece of a larger problem. The US Coast Guard Academy recently used a government charge card to buy a home brewing kit...and then brewed and consumed some 532 bottles of beer. Courtest of us, the taxpayer.

According to Human Events, the brewery was made possible by a government charge card issued to an academy official responsible for “organizing social functions.” According to congressional testimony published last month by the Government Accountability Office, the official used the card to purchase a beer brewing kit and some ingredients and then “wasted government resources by brewing alcohol while on duty.”

One of my favorite quotes though suggests that by brewing the beer actually “provided the Academy with both cost savings and a quality product for official parties attended by cadets, dignitaries, and other guests of the Superintendent.” Upon closer review the Government Accountability Office calculated the cost to be more like $13 for a six pack...this sounds all too similar to other government cost comparison studies I've seen!

In jest, a colleague suggested that this is just another example of the government moving into competition with the private sector!

Apparently not privatized water.

Alex Tabarrok explains the United Church of Canada’s boycott; Thanks to Meredith for the heads-up.

Unless you have religious objections, check out our roundup of water privatization trends.

Related: How Privatization Quenches the Poor

Related: Water of Life

According to recent surveys, traffic congestion is near the top of residents’ gripe list in Denver and D.C. It’s the top gripe in Austin, Atlanta, some DC suburbs, Minneapolis-St. Paul, Portland, San Diego, San Francisco, and now Sacramento:

From the 2006 Sacramento State Annual Survey of the Region:

Sacramento region residents have some serious concerns regarding a wide range of issues, with traffic congestion on major roads topping their list. An overwhelming majority (94%) view traffic congestion as a problem, with 70 percent thinking it is a big problem and 24 percent considering it somewhat of a problem. Traffic congestion has remained at the top of Sacramento region residents’ list of concerns for the past five years …

Moreover, the concern for traffic congestion is widely shared by the general public and registered voters regardless of gender, racial background, and political party affiliation. In fact, when asked about several major issues facing the Sacramento region, respondents felt traffic congestion is more problematic than affordable housing (51%), quality of public education (46%), population growth and development (45%), air pollution (42%), and affordable health care (41%).

Press release here.

Full report here.

Related: Traffic Congestion No Longer Houston’s Biggest Problem

Come to think of it, wouldn’t it be great if there were an accessible new book that really dug into this issue and explained all the ways traffic congestion restrains our lives?

Verizon is drawing fire from the government of Muskegon County, Mich., because it won’t let a government-run telecommunications consortium use its poles to support a competing municipal network.

“This is a classic case of a project that has been developed for the common good going up against corporate self-interest,” Susan Meston, superintendent of the Muskegon Area Independent School District (MAISD) told The Muskegon Chronicle. Meston says the law requires Verizon to make pole attachments available to the school district.

But upon closer look, it’s not the school district itself that’s seeking attachment, but a private telecommunications consortium, Shoreline Fiber Network, in which MAISD is but one partner. The consortium also includes the county government, the county’s 911 operations center, two area community colleges and a local non-profit Internet service provider. Moreover, the intended purpose of the Shoreline Fiber Network is to create a private IP network, competitive to Verizon, to serve the consortium members. The promise is that it would save taxpayers money, although it is apparent now that a good deal of that savings--$300,000--was predicated on getting free use of someone else's property.

Verizon countered that MAISD was trying to finesse the pole law by arguing that the district's right of attachment extended to Shoreline Fiber Network. Michigan communications law, Verizon further maintained, expressly forbids “joint use” networks of this type. What's more, Verizon and MAISD apparently hashed out their dispute in a meeting with the Michigan Public Service Commission. The Chronicle does not report what the PSC said about it, if anything, but after the meeting, Shoreline elected not to pursue the pole attachment issue any further, but place its own poles.

This is good news for all, despite Meston’s whining about Verizon's “sabotage” and “corporate self-interest.” Although Verizon’s poles use public right-of-way, the poles themselves are Verizon property, and Muskegon learned that governments cannot simply claim that property just because they need it. Shoreline Network's plan may have indeed been, as Meston says, “a heartfelt way to save taxpayer’s money.” However, should I jack my neighbor’s car, I doubt my heartfelt intent to save gas money would win me much sympathy in court.

These days, any ruling that upholds the right of property owners should be applauded. You don’t need to look far in this blog to see how heated the issue is over what property a government may take in the name of a better tax base (eminent domain) or ecology (wetlands laws). The first quote in the Chronicle story comes from a Muskegon homeowner who declares “They [Muskegon County] should be able to put lines up on the poles because they need them.”

Let’s be careful before we cheer that thought. For all we know, there’s a private real estate developer who “needs” the land your house sits on.

An Ohio carpenters union targets contractors and property-management companies, which it says don’t pay carpenters a standard wage of $22.50 an hour, pick up health-insurance premiums or offer pension packages. So they picket these establishments and engage in all the usual activities: they holler, hold signs, and pass out fliers.

But union members don’t actually do the rabble-rousing themselves. They’re too busy working, so they outsource the jobs to low-wage workers:

The Ohio and Vicinity Regional Council of Carpenters has hired more than 160 central Ohioans who are down on their luck, homeless or between jobs.

Somehow the traditional union scorn for part-time, low-wage, zero-benefits jobs (not to mention outsourcing) disappears. The union hires these workers for 10 hours per week, at 8 bucks an hour, and apparently no benefits.

This isn’t the first time this has happened. In Henderson, Nevada the UFCW recently targeted Wal-Mart and outsourced the picketing duties. The temporary workers protested in 104 degree heat, earned 6 bucks an hour and received no benefits. The “exploited” workers inside Wal-Mart enjoyed higher pay, benefits, and air conditioning.

This kind of union outsourcing happens fairly often, says Jim Graham, a Whitehall councilman who oversees the carpenters council’s organizers.

"This really isn’t unusual. It’s been done in Baltimore, Denver, San Diego, Miami, Atlanta, Louisville and Indianapolis." [See Russell Roberts for more of the same.]

As the practice spreads, some people question whether the union’s tactics are any better than the companies it criticizes […]

"How can they justify paying just above minimum wage when they’re demanding more than $20 an hour for their members?" asked Dewey Phares, a 37-year-old carpenter from Hilliard who works at one of the picketed buildings on Capitol Square.

"Shame on them. They should look in the mirror."

To be fair the union is paying well over minimum wage, but to borrow a common union refrain: “You can’t support a family on 80 bucks a week!”

"We’re not taking advantage of anyone," Graham said.

"They’re giving people who are underemployed, unemployed or simply unemployable because of an addiction, disability, mental illness or other problem, a leg up," said Kent Beittel, executive director of the Open Shelter. "At the very least, our clients are making enough money for basic needs such as food. At the most, they’re saving enough money to move into apartments or getting enough experience to move to better jobs."

In a 1995 court case a group called ACORN gave a very good summary of why mandated wages are a bad idea:

According to ACORN, this adverse impact will be manifested in two ways: first, ACORN will be forced to hire fewer workers; second, its workers, if paid the minimum wage, will be less empathetic with ACORN's low and moderate income constituency and will therefore be less effective advocates.

BTW, as you may know, ACORN is one of the nation’s most outspoken proponents of living wage legislation.

More on that here; via Russell Roberts.

Ohio article here; thanks to my colleague Geoff for the tip.

My college Sam told me about this:

Carnegie Mellon Research Shows U.S. Cities Are Making Children Obese

PITTSBURGH Research by Carnegie Mellon University Associate Teaching
Professor Kristen Kurland demonstrates that urban neighborhoods lack
adequate space for physical activity and healthy food choices for
children, contributing to the high rate of childhood obesity. Her studies
recommend ways to modify cities' built environment and reduce the
tremendous costs of this growing problem.

This GIS map shows a five- and 10-minute walking radius of a school.
Combining vector and aerial data allows for a detailed analysis of the
physical environment.

Kurland leads an interdisciplinary team from Carnegie Mellon, Highmark
Insurance, the University of Pittsburgh Graduate School of Public Health
and the University of Pittsburgh Medical Center's Children's Hospital. In
an effort to better understand obesity in targeted areas, the team mapped
low-income urban neighborhoods, focusing on food sources, parks and
fields, sidewalk conditions, neighborhood amenities, and safety and
demographic information like race and income. The team also created
Geographical Information System (GIS) maps that show a five- and 10-minute
walking radius of a school.

The research reveals that the way cities are built influences children's
weight. Prominent factors include how much exercise they receive and what
food sources are nearby.

The study's "lack of space" point seems to square with a recent Aussie study, which found that your little wallaroo is less likely to be chunky if you have a big backyard.

But let’s not overlook the big-picture: other factors—income, education, values, self-control—are much more important than whether you live in the city or suburbs.

The Wall Street Journal says today that a report from CableLabs, the R&D consortium owned by the cable companies, suggests that Verizon’s fiber-to-the-premises (FTTP) may be better geared to handling future consumer bandwidth requirements than the hybrid fiber-coax platforms the cable industry currently uses.

The findings conclude that cable networks may have to upgrade their own networks with FTTP schemes and that such plans, while capital intensive, maybe the most cost-effective in the long run.

The report should serve as another wake-up call to groups doing their best to frustrate cable competition by opposing laws that ease franchise restrictions and allow phone companies faster entry into the market. We’ve already seen that when barriers to entry fall, consumers see lower prices and greater service availability . Now the cable industry, of all sources, is saying competition stands to bring consumers a better service experience.

Coming as it does from the opposition, it helps validate Verizon’s decision to pursue its $20 billion FTTP plan, although Wall Street and the business press expressed doubts as to whether it could generate the return to justify its investment. The company is seeing market uptake, however. For example, it has captured some 25 percent of the market in North Texas in less than a year.

CableLabs believes the technology’s true value will be apparent several years down the road, as on-demand video services from aggregators like YouTube and Google become more popular.

Often when scientists try to explain the value of biodiversity to the general public, they resort to hypotheticals like, “What if a rainforest plant contained the cure to cancer?” One that we might be hearing more of: “What if alligator blood was the cure for HIV?”

Tests at the Georgetown University Medical Center have reportedly found:

Alligator blood serum killed all 16 strains of bacteria exposed to it, while human blood serum killed only six. Among the eradicated bacteria were E. coli and strains that cause dysentery, salmonella, and strep and staph infections. Alligator blood also killed the herpes simplex virus and a strain of HIV.

That’s good news for people and for alligators alike.

While it appears that the alligator’s 230 million-year-old immune system is as formidable as its bite, the animals are more akin to the coalminers’ canary when it comes to chemical sensitivity. Reproductive abnormalities in alligators were an early indication of the endocrine-disrupting properties of some pesticides, fertilizers and other chemicals which leak into the alligators’ environment.

But alligators do have another thing going for them. In 1967 when the American alligator was listed as an endangered species, the Fish and Wildlife Service made the unusual decision to allow people to own and farm the species. Legal alligator farming succeeded where decades of hunting restrictions failed, and as a result the population is one of the very few species ever to be delisted under the Endangered Species Act.

The potential utility of alligator-based drugs will likely earn alligators a position on another short list: the list of animals, including the fruit fly, Norwegian rat and the mosquito that transmits malaria, whose genes are being sequenced for scientific research. If the company on this second list is any indication, alligators will be around for a long time yet.

I have new piece online:

Ease into the red Eames chair next to the fireplace, log onto a high-speed wireless connection and dine on your fruit and walnut salad. Where are you? You just might be at one of the new-look McDonald's that the company recently unveiled in certain markets. The kind of evolution Mickey D's has been going through has also reshaped many other suburban fixtures and the transformation may render many of the criticisms lobbed at suburbia outdated—that is, if they were ever accurate in the first place.

Whole thing here.

Consumer activists in Georgia are pressing the state Public Service Commission to block or attach conditions to the pending merger between AT&T and BellSouth. No doubt there’s a bit of home team support here—BellSouth is based in Atlanta and is a major Georgia employer. Still, commissions in 18 other states have approved the acquisition without conditions, and we hope Georgia sees it that way, too.

Objections can be seen in an op-ed by Jenette Foreman, a steering committee member of Southern Media Justice Coalition, and in an editorial in the Macon (Ga.) Telegraph (fee for use).

Both claim the merger means an end to competition and the re-emergence of the old AT&T monopoly that was dismantled in 1984.

Opponents forget that at the time of its break-up, AT&T not only monopolized local and long distance phone service, it monopolized the entire supply chain. Aside from an odd component or line card, Western Electric manufactured everything that went into the network.

Today’s AT&T buys from a wide variety of suppliers, including Georgia’s own Scientific-Atlanta (which is part of Cisco Systems, another major vendor to the industry). Scientific-Atlanta employs 7,700 people. As part of a $195-million contract announced last year, Scientific-Atlanta is building the innovative IP set top boxes used with AT&T’s IP video service, which the company will likely expand into the BellSouth region after merger is complete. That means more business for Scientific-Atlanta and its suppliers and more video options for Georgia’s consumers.

As for ending competition, that assertion ignores reality. Cable companies added almost 700,000 voice customers during the second quarter to reach a total telephony customer count of 6.4 million, according to this week’s IP Media Monitor (subscription required). Turnabout is fair play, as telephone companies provide video services to some 2 million.

The Third Circuit Court of Appeals has dealt another setback to the $125-million municipal broadband plan in Lafayette, La., ruling that the proposed bond issue violates a state law prohibiting the use of monopoly revenues to back competitive operations.

The decision mirrors a similar ruling in a lower court last year that forced Lafayette Utilities System (LUS) to overhaul its finance plan. Its current plan was upheld by a state district court. The appellate court issued its decision last Friday.

The decision marks the third time the LUS muni plan has lost in court. LUS now has the choice to appeal the decision to the Louisiana Supreme Court or re-do its finance plan yet again. It has been 13 months since voters approved a referendum to allow LUS to issue bonds to build a fiber optic system that would provide retail phone, cable TV and high-speed Internet services in competition with BellSouth and Cox Communications.

The bond issue, however, must comply with state law that prohibits utilities from pledging revenues from monopoly operations—electricity and water—to back loans used to fund entry into competitive businesses.

Proponents of the plan insist that BellSouth and Cox are using the courts to subvert the "will of the people," yet they continue to overlook the fact that LUS has now twice attempted to push through a bond ordinance that violates a state law it helped draft.

Coverage from Baton Rouge here.

This article in the the St. Louis Federal Reserve Review explores the question. It is an interesting, nay depressing, analysis. Sure, you can change some assumptions and get some different conlcusions. The one thing you can't really assume away is that we are on an inevitable collision course with either dramatic spending cuts (yay!) or dramatic tax increases (boo!).

New Jersey became the eighth state to pass a law authorizing statewide video franchising last Friday, following quick approval from the state legislature.

New Jersey Gov. Jon S. Corzine (D) signed legislation Aug. 4 that will allow new entrants to seek immediate approval to offer cable TV and multichannel services anywhere in the state. Without the law, new entrants, which are predominantly telephone companies seeking to provide video over their own networks, would have had to negotiate individually with some 566 municipalities.

Corzine was an early supporter of the bill, which he said would increase cable-TV competition and lower cable rates by making it easier for other companies to enter the market.

In response to concerns that the phone companies would chose to service only densely populated areas, the law authorizes the state Public Advocate to monitor build-out. The Board of Public Utilities also will issue regulations to enhance the state's ability to review the expansion of new franchises.

Philadelphia Business Journal coverage here.

New York Times coverage here.

Bottom-line: Seek out bad people, not bad objects.

After the recent thwarting of a terrorist plot, Bob Poole’s new study (published by Heritage) is even more significant:

Although well-intentioned, much of the effort to enhance aviation security since September 11, 2001, has done little to make the skies significantly safer. Despite large amounts of taxpayers’ money and pas¬sengers’ time, little has been accomplished that actu¬ally increases aviation security. The time has come for Congress to start over and mandate a new approach.

Read the whole study here.

Related: Reason’s Airport Security Research Center

Too bad it took a hurricane to offer students real choice over their education and an exit from failing schools in New Orleans. However, every urban district that suffers from years of failure might consider New Orlean's school restructuring model. Start from scratch and make the schools compete.

From the New York Times:

More than 40 other public schools are scheduled to open by mid-September for an estimated 30,000 students in what is planned as a rebirth of one of the nation's worst school systems, which had about 60,000 students before the storm. . . .

There are no geographic requirements in the revamped system. Any student, living anywhere in the city, can register for any school on a first-come, first-served basis or by lottery, placing schools in competition for students and state funding, which is based on attendance.

Stop blocking Wal-Mart.

An effort to boost the minimum wage faded in Congress, but the earth’s most evil entity moved ahead with its own pay hike:

Wal-Mart Stores is raising starting pay at about a third of its nearly 4,000 U.S. stores by an average 6 percent and introducing wage caps for the first time on each type of job in all stores, the company said Monday.

That’s what happens when you have to compete for labor:

The nation's largest private employer said the changes at its U.S. stores would help it remain competitive with other retailers and meet a need for workers and managers as it continues to expand.

WM spokesman John Simley says the changes help in two ways:

Higher starting pay makes Wal-Mart more attractive to new workers, and the wage caps give employees an incentive to work for promotions if they want to make more money.

WM’s current average full-time hourly wage is $10.11, well above the federal minimum wage of $5.15 and higher than any of the states' minimum wages. Yes by comparing average wages to minimum wages, we’re not making a direct apples-to-apples comparison.

But let’s also remember that, no matter the impression that Oprah gives, after a year on the job, the vast majority of minimum wage earners have gained enough skills and experience to command more than the minimum wage.

It’s a process that posturing politicians breeze over, but many low-skilled workers understand it.

Melvin Brown applied for work at a Wal-Mart in Oakland. He says: "You start low and aim high. First you gotta get your foot in the door."

BTW, some explanation for why figures for WM’s starting wages are harder to come by:

The retailer did not specify the new starting rates or give examples for the new pay caps. Simley said the numbers vary too much in local markets across the country to provide an accurate average figure.

Article here.

Related: Thomas Sowell sees a glimmer of hope.

Last week I mentioned a piece I wrote for the LA Business Journal. It’s now reprinted on reason.org:

If given the choice of living in today's LA or the Los Angeles of a generation ago, which would you choose? I'll stick with today's Southern California.

For the glass is half-empty crowd, let's start with the common complaints – many of which aren't as bad as they seem at first glance.

Take gas prices. As much as they hurt, UCLA researchers note that we pump a smaller portion of our incomes into our cars than we did in the 1980s.

What about LA's smoggy reputation and awful air quality? The California Air Resources Board finds the number of days that LA has exceeded the 1-hour ozone standard has dropped from 192 in 1975 to 75 last year—an impressive 61 percent drop.

And then there's the crime. Outsiders often regard LA as one giant playground for gangs, but the serious crime rate has been cut in half since 1980.

Whole thing here.

Related: We’re All Supermen Now

Forbes gives snapshots of various jobs that humans will eventually surrender to machines or, in the case of miners, bacteria:

Bacteria like Thiobacillus ferooxidans can be used to extract metal from ore. If there are further advances in the science of biomining, expect the guys with coal-darkened faces to take above-ground occupations.

Those of us who’ve fumbled our way through automatic checkouts at grocery stores won’t be surprised to find cashier on the list:

In fact, all jobs dealing with paper money, including bank tellers and toll booth operators, could be obsolete in two decades, as we rely more on credit and digital money.

Some other jobs on the list: CD store manager, construction worker, union organizer, and even the job so closely tied to outsourcing fears: call center rep.

Apparently, machines will also muscle out Maverick, Goose, Ice and other fighter pilots. Once again, The Simpsons was ahead of the times. Six years ago the military school Commandant (voice by Willem DaFoe) said this at a graduation ceremony:

The wars of the future will not be fought on the battlefield or at sea. They will be fought in space, or possibly on top of a very tall mountain. In either case, most of the actual fighting will be done by small robots. And as you go forth today remember always your duty is clear: To build and maintain those robots.

And how about Forbes slowly morphing into US Weekly? The "Hottest Billionaire Heiresses" list is here.

Taking a new direction in municipal wireless, the city of Boston is proposing the creation of a non-profit corporation to own and manage a citywide wireless network.

It represents something of a “third way” for muni wireless. After coming to terms with the failure rate of city-owned telecom networks, most cities have decided to award Wi-Fi contracts to ISPs such as EarthLink and MetroFi. If non-profits participate, they are usually part of the effort to bridge digital divide issues, as is the case in the Philadelphia plan.

Boston would differ from these. Under the plans issued earlier this week, the city would place the responsibility of raising the $16 million to $20 million need to fund the network on the shoulders of a private non-profit group, which would own the network. No commercial ISPs could have a stake (although they might be permitted to manage operations). At the same time, no taxpayer money would be used. The city would purchase services from the non-profit, which would be allowed to use city right-of-way.

It represents a bold move toward communitarian technology, and has received support from traditional supporters of the municipal movement, although many still believe (sigh) it would be better if local government owned the operation outright. But even Boston Mayor Thomas Menino had a good argument against this: a non-profit also assures independence from the city and continuity for the project. A future administration could let a city-owned system languish.

The plan triggered a lengthy series of talkbacks at muniwireless.com, as to whether the government can actually outperform the private or nonprofit sector in providing wireless services, notable because Marty Hahnfeld, senior vice president of marketing at SkyPilot Networks, a vendor of wireless mesh network technology to service providers makes points such as...

A point to consider: Today, there are fewer well funded efforts in the Muni WiFi service provider (builder/owner/operator) game than one would expect – why is this? The space is red-hot right? Why is the same private equity community which usually over-funds every tech trend with a chance being so careful? The reason is simple, the costs and risks associated with building, operating, and supporting networks are high and the ability to turn a profit doing requires a lot of know-how and efficiency. We learned this in spades between 1997-2002 with the CLEC implosion.

What makes this any less a risk when the city takes the role of owner of a single network? What happens when one of these networks needs subsidies 100-200% beyond the original budget forecast? Doesn’t that network then become subject to being “at odds” much the same as you cite on the private network scenario?

…without being called a telco shill.

Read the entire thread here.

Virginians face a traffic congestion problem that’s bad and getting worse, but they don’t want their taxes jacked up to pay for transportation improvements. Like folks in Denver, DC, Atlanta and elsewhere, they’re friendlier to tolls than taxes.

According to a new poll:

Fifty percent of statewide voters said that in general, they oppose the concept of raising taxes to improve transportation, and 39 percent said they favored it.

…
Statewide, voters seemed somewhat open to new tolls: 49 percent were willing to pay more to drive on interstates; 46 percent were not.

Article here.

Related: Geoff Segal explains how Virginia can get moving without hiking taxes.

Lonely hearts in Germany can no longer count on Wal-Mart hookups, because the Biggest Box is pulling out of Deutschland.

The reason? Customers decided they didn’t want it and it went away, a much more civilized process than what typically happens in the states where politicos, judges, or 51 percent of voters deny choices to others:

Wal-Mart said on July 28 it would exit Germany after eight years and $1 billion in losses, defeated by Aldi Group and privately-owned Lidl, homegrown discounters which rule the segment in Germany. The Bentonville, Arkansas-based chain is selling its 85 German stores to Metro AG, the country’s biggest retailer, for an undisclosed amount.

The German rout follows failure in South Korea. Wal-Mart in May sold its 16 stores there to Seoul-based Shinsegae Co, the country’s biggest discounter.

Even in the UK, where shopping habits and language are similar, the chain is struggling. Its Asda supermarket group trails market leader Tesco Plc, which gained 1.2 percentage points in market share in the past year, compared to just 0.1 percentage point for the folks from Bentonville. Tesco, with 31.5% of the British market, has almost twice Asda’s 16.6% share.

Article here.

Take heart, WM haters, the difficulty the giant retailer seems to have in appealing to different cultures may one day prove to be the factor that stops it from spreading everywhere.

Related: South Koreans Boot the Box