Bart Simpson shilling for Scientology

Via the Village Voice, a prerecord call promoting a Scientology event by Nancy Cartwright, the voice of Bart Simpson (and a Scientologist):

Netroots and telecom

There's a telecom panel at the Netroots Nation conference today on the subject of "Big Telecom: An Emerging Threat to Our Democracy?" The implied answer is yes, and it appears that every participant on the panel will be making that case. Here's the description of the panel:

Massive telecom companies control virtually all of our voice and internet communications these days—and new evidence shows a near-total lack of commitment to our democracy. AT&T has proposed filtering all content traveling on its network. Verizon tried initially to block NARAL's pro-choice text messages. Most telecom companies are fighting net neutrality. Can democracy survive an assault by those who control the tubes?

The panel members don't include anyone with any experience managing or operating an actual telecom network, but instead includes two people who have repeatedly demonstrated not only an ignorance of telecom law, technology, and policy, but who have misrepresented facts and failed to engage with the arguments of their critics, Matt Stoller and Timothy Karr (see posts on this blog in the "net neutrality" category). The closest person to a representative of a telecom is Michael Kieschnick of Working Assets, a company that is a reseller of long distance and wireless service on Sprint's network.

I agree with many of their positions--I don't think ISPs should be allowed to block websites on the basis of disagreement with content. I think ISPs should be transparent about their network management processes and filtering. Where I disagree with them is that they advocate that the FCC step in to regulate the Internet in a way that it has never had authority to do so before, and demand that network operators not be allowed to implement classes of service with different rates of charges, or even usage caps. Art Brodsky expresses the point which has also been made by Robb Topolsky of Public Knowledge, Timothy Karr of Free Press, and Matt Stoller:

In the name of "network management," some companies want to throttle down the use of legal applications, like BitTorrent which may, coincidentally, provide competition in entertainment programming. They want to impose usage caps across the board on all customers which would stifle innovation and curb the use of video (there's that anti-competitive meme again) without actually solving the problem of the so-called "bandwidth hogs." The way caps are being discussed now, they would only lead to higher prices and less usage for an industry that already charges more for less than most broadband providers around the world. Parts of our broadband industry may be the only sector in the world that wants to cut down the amount of its product it wants customers to use.

Brodsky's last sentence is clearly false--broadband is like a fixed-price all-you-can-eat buffet. All businesses want to maximize their profits by maximizing revenue and minimizing costs. When bandwidth is sold at a fixed cost in unlimited amounts, where a small number of users are consuming the majority of the service, it's in the business's interest to restrict those users or charge them more for what they consume in order to satisfy the rest in a cost-effective manner. The options are few--you can either restrict the "bandwidth hogs" in some way, charge them more so that they pay for what they use, or raise the price for everyone. These guys seem to advocate the latter approach, while I'm in favor of allowing all the options to be used in a competitive market. Where I disagree with Comcast's approach in issuing RST packets to block BitTorrent traffic is not that they did it, but that they were not transparent about what they were doing (and apparently didn't quite get it quite right--it should not have completely broken BitTorrent, but only slowed it down).

Brodsky's suggestion that Comcast has an interest in blocking BitTorrent because it provides competition in the entertainment space is absurd--they have an interest in blocking it because it's a very popular application which itself exploits Internet protocols in a way not anticipated by the designers in order to consume more bandwidth, getting around the congestion controls in TCP/IP by using multiple TCP streams. If BitTorrent traffic wasn't filling up the majority of Comcast's bandwidth, they'd have no interest in it, except when the MPAA and RIAA issue them subpoenas about their users infringing copyrights.

If the government prohibits the use of differential classes of service (which is already heavily used by private companies to give priority to applications within their enterprise which have requirements for low latency and jitter, such as real-time streaming audio and video, including Voice over IP) and requires that congestion be dealt with by building out infrastructure sufficiently that there will never be congestion no matter how many users max out their connectivity with BitTorrent, that will reduce competition by culling smaller companies out of the picture and making market entry more difficult. In any environment where a provider's upstream capacity is less than the sum of the capacity to every customer (and that's everywhere, today, and always has been), all-you-can-eat bandwidth is like a commons. The more that is available, the more the heavy users will consume, to the detriment of each other and the light users. Without setting caps and having tiered pricing or implementing technology that prioritizes packets and drops from the heavy users and from less-realtime-sensitive applications first (like BitTorrent), there are no incentives against consuming everything that is available.

I also think it's a huge mistake to have the FCC start regulating the Internet. FCC chairman Kevin Martin would no doubt love to place indecency standards and filtering requirements on Internet content. Once you open the door to FCC regulation of the Internet, that becomes more likely. And the FCC has been completely ineffectual at dealing with existing abuses like fraudulent telemarketing, illegal prerecord calls to residences and cell phones, caller ID spoofing, etc., already covered by statute and regulation. I'd rather see clear statutes that include private rights of action than entrust control of the Internet to the FCC. The FCC is a slow-moving bureaucracy, and AT&T and Verizon have the deepest pockets, the most lawyers, and the most personnel who have shuffled back and forth between government (including the NSA) and industry. That gives AT&T and Verizon the tactical advantage, and leads to less competition rather than more.

Which brings me to the warrantless wiretapping and telecom immunity issues, which Cindy Cohn of the EFF no doubt addressed on the Netroots Nation panel. I suspect I have little if any disagreement with her. I've long been a supporter of the EFF, as are many people involved in the management of ISPs. I strongly oppose telecom immunity for warrantless wiretapping, a complete abdication of Congress' responsibility to support the U.S. Constitution. But this shows the power of AT&T and Verizon. Not only did they get what they wanted, but the very infrastructure which was built to do this massive interception of traffic for the NSA and for law enforcement interception under the CALEA laws was built for them with assistance from government funds. All telecoms have to be compliant with CALEA (now including VoIP and broadband Internet providers), but the big incumbents who were most capable of affording it on their own got it at the lowest costs, while their competition was required to build it out at their own expense even if it never gets used.

But there are legitimate uses for deep packet inspection, for understanding the nature of the traffic on a network for management purposes, including tracking down security and abuse issues. Since it is in the hands of the end user to use encryption to protect sensitive content, I think use of DPI by network providers is reasonable for the purposes of providing better service in the same way that it's reasonable for a voice provider to intercept traffic for quality measurement purposes. It's also reasonable for interception to occur for "lawful intercept," but it should always require a court order (i.e., both executive and judicial branch approval) on reasonable grounds. The difficulty of obtaining wiretaps depicted in the television program "The Wire" is how it should be.

I've written a lot on these issues, much which can be found in this blog's Network Neutrality Index.

If any reader of this blog happens to have attended the Netroots Nation telecom panel or comes across a description of its content, please point me to it, as I'd like to see what was said. I don't have high hopes for the accuracy or reasonability of statements from Stoller and Karr, but I could be surprised, and the other panelists probably had interesting and important things to say.

(See my Blogger profile for the disclosure of my employment by Global Crossing, which is currently listed by Renesys as the #3 network provider on the Internet in terms of number of customers, ahead of AT&T and Verizon, behind Sprint and Level 3.)

UPDATE: The "Big Telecom" panel was live-blogged (dead, unarchived link: http://openleft.com/showDiary.do;jsessionid=C865142FFB85E14AAD27045B9A342B15?diaryId=7032"). Stoller's anecdote about the Bill of Rights on metal is referring to Dean Cameron's "security edition" of the Bill of Rights, which was also promoted by Penn Jillette.

Con artists in desperate need of money

Although I've gone for the last several years with extremely few illegal prerecord telemarketing calls, I've received three to my cell phone in the last three weeks, all scams. (I wonder how many of these people were working in the mortgage business until recently?) Two of them came from faked caller IDs that look like UK telephone numbers (starting with +44), but which appear to actually be from Florida, a popular location for all kinds of scammers. The first call, on January 30, came from 44-207-490-6113and was selling auto warranties, no doubt at far above market prices, and was phrased in such a way as to attempt to deceive the recipient into thinking they needed to renew an existing warranty that is expiring. When I got to a human operator and asked to be put on their do-not-call list, the woman hung up on me. I need to learn to be more subtle in my questioning to get more information from these con artists.

The second call, on February 12, gave caller ID of 866-526-9732, and said that I had won a no-catch, all-expenses-paid vacation for two, and asked me for my name and number so that I could be called and told where to pick it up. Unfortunately, it hung up on me while I was trying to provide a fake name and real phone number, so that I could identify the caller and sue them.

The third call, today, gave caller ID of 44-207-414-4370 and was offering a credit card deal to "reduce my interest rate." Again the wording expressed urgency about a limited-time offer and made it sound like it was with regard to a card I already hold. This time, I asked the human operator (after waiting quite some time to get one) what company he's with. I had to ask three times--he kept repeating his script about "any Mastercard or Visa," and I kept saying "no, what company are YOU with." Finally, he said "United Debt Aid," which is no doubt a fake name. I asked him to put me on their do-not-call list and again was hung up on as I was telling him he was working for a bunch of criminals. I didn't get a chance to ask for a written do-not-call policy from any of these three, but I'm sure they don't have them since they're violating the law in several ways already. Prerecord calls with advertising to cell phones are flat out illegal, just as prerecord calls with advertising to residential phones is illegal (without an existing business relationship, according to the FCC, which has incorrectly added an exception not present in the actual statute). So is falsifying caller ID information, so is failing to identify the business calling or on whose behalf the call is being made. So is failing to put me on their do-not-call list, and so is failing to send a written do-not-call policy upon request.

If anybody happens to come across more information that might identify who is behind these calls, let me know--I'd love to sue them.

UPDATE (February 25, 2008): I got another auto warranty one today, Caller ID said 442074791697 and it began "Your auto warranty has expired" and claimed they had been trying unsuccessfully to contact me via mail--two lies in the first two sentences. I pressed 1 to talk to a live operator, who immediately asked me for the year and make of my car. I asked what company is providing the warranty, and he hung up on me. Apparently any questioning at all is reason for these scammers to proceed to the next call recipient.

UPDATE (March 27, 2008): I received two more of these in quick succession--one on March 17 (auto warranty call from 505-217-2684) and one on March 19 (credit card rate reduction call from 305-654-1842).

ConsumerAffairs.com has a story about ripoff auto warranties sold by companies in St. Louis.

Verizon Wireless has filed a law suit against John Does to go after these auto warranty calls.

UPDATE (April 7, 2008): Another auto warranty one, from 305-672-6663.

I believe that at least some of these calls are coming from businesses run by former associates of Fax.com, a defunct broadcast fax and prerecord telemarketing business that received a $5,379,000 fine from the FCC in 2002 which was never collected, and was successfully sued by the D.C. law firm of Covington & Burling for $2.3 million in 2003, which I believe was also never collected. The legal system is not good at dealing with these sorts of criminals, because it's all being left to civil enforcement, when these are the kind of people who need to be thrown in jail.

UPDATE (April 10, 2008): Another from "Heather at account services," caller ID 561-482-7092, for credit card rate reduction. The human being I spoke with confirmed that she's in Boca Raton, FL--on a previous call the company was identified as "United Debt Aid" in Boca Raton.

UPDATE (August 11, 2008): There's a wealth of information about these calls and who's behind them at the Stopping Heather Forums.

Hate mail from a defender of telemarketing

Today I received the following email from John Martin of Phoenix (whose email address begins with "satguys01"), who was apparently set off by my web page reporting my record of lawsuits against telemarketers, which he came across about 30 minutes earlier while doing a Google search for "arizona telemarketing attorney" (could he be in need of one?):

Date: Sun, 28 Jan 2007 08:12:22 -0800 (PST)
From: John Martin
Subject: Get a life

You are just as bad as the telemarketers that call you.
Just like a scummy attorney that profits from filing
frivolous lawsuits. You raise the cost of doing business
for companies, raise taxes by overburdening the courts,
and therefore raise the cost of goods for consumers in the
marketplace.

What do you care? You made a dollar.

Telemarketing is critical for the economy to function. The
wheels would stop turning if there were no phones or business
conducted on them.

The Federal and State do no call list is just another angle
for the Fed and State to make a buck.

Just ask yourself, why is it legal for politicians to contact
and harass millions of citizens with automated messages and
call people on the so called do not call list? So its OK for
them to fund raise and get re elected (profit) using
unscrupulous methods. But a legitimate business offering
legit goods or services is restricted.

Are there Marketers that take advantage of people yes. Like
any other business there are bad apples. But most offer legit
goods and services.

Does your mailbox get full of junk mail? Do you watch
commercials on TV? or even now at the movies? Why not sue
them? Junk Mail does more damage to the environment than
anything else. But the US post service make money on it so
that will never stop.

Screen you calls, that's what caller id is for, hangup on
automated messages and telemarketers. And stop with the lame
lawsuits.  Do you really suffer any damages by listening to a
message or having a dialer hang up on you? Or are you just an
other greedy opportunist like you EVIL telemarketing
counterparts just out for a quick buck?

I sent the following reply:

From: "James J. Lippard" [my email addr]
To: John Martin
Subject: Re: Get a life
In-Reply-To: <400549.50780.qm@web62015.mail.re1.yahoo.com>

The difference, John, is that they are knowingly violating
the law, and I'm not.  None of my lawsuits have been
frivolous, which is why I have a 100% record of success.
I'm only raising the cost of business for companies that are
blatantly breaking the law; my impact on the courts is
negligible--I always offer to settle out of court for the
minimum statutory amounts before filing a lawsuit, and I
always file in small claims which minimizes the paperwork.
The money I collect is specified as damages in the statutes,
and serves not only to compensate me for the violations but
to act as a deterrent to further violations.  It has worked
pretty well--I don't get many such calls any more.

If you think the law is wrong, petition to have it changed.
But if you violate it, be prepared to get sued and to lose.

What's your interest that motivates you to send a nasty email
to someone you don't know?  From your email address, I would
guess that you're in the satellite dish resale business,
which is well known for its sleazy violations of
telemarketing law.

Are you a regular violator of the TCPA, John?

BTW, I have a nice life.  What kind of life do you have that
you seek enjoyment out of sending such an email as this?

For the record, I don't watch television commercials (thanks, TiVo!) and I'm also very opposed to spam (and much of my professional life in the Internet industry has been devoted to combatting it). We also don't go to see movies in the theater anymore except on rare occasion; we rent DVDs. I'm an advocate of permission-based marketing to individuals, not indiscriminate broadcast advertising.

Telecoms behind gay marriage--and UAT can help stop them

These recordings are from 2005, but comic Eugene Mirman received calls from a nonprofit that was recommending United American Technologies as a long distance provider because AT&T, MCI, and Sprint promote gay marriage. United American Technologies, by contrast, was billed as a "Christian-based telephone company," with a "Faith, Family, and Freedom" campaign. Apparently the nonprofit was using prerecorded calls, which asked you to press one if you oppose gay marriage.

Mirman really gets them going--they accuse MCI of running a child pornography website, and say that they aim to destroy the ACLU, for example.

These calls were all illegal under the Telephone Consumer Protection Act, even though they were initiated by a nonprofit, since these calls were clearly intended to advertise UAT. Prerecorded calls to a residence are illegal.

United American Technologies is based in Oklahoma. The calls came from "Faith, Family, and Freedom," a 527 organization created by Oklahoma Rep. Lance Cargill, who is now Oklahoma's Speaker of the House. There are more details about these calls in Wikipedia's entry on United American Technologies.

(Hat tip: The Two Percent Company.)

Phoenix mortgage fraud

The Arizona Republic has just caught on to the fact that there's a lot of mortgage fraud going on in Phoenix:

A wave of mortgage fraud is rippling through pockets of the Valley, inflating home values through scams called cash-back deals.

Left unchecked, cash-back deals cost homeowners and lenders millions of dollars and could erode confidence and values in Arizona's real estate market.

The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash. Neighbors may then discover home values in the area are exaggerated. Homeowners stuck with overpriced mortgages may never recover the difference. And lenders end up with bad loans that, in the long run, could hurt the Arizona real estate market, the largest segment of the state economy.

While the extent of the fraud is unclear, an Arizona Republic investigation into these cash-back deals found organized groups of speculators have bought multiple homes this way, leaving whole neighborhoods with inflated values. Add to these the individual deals done by amateurs who hear others talk about the easy money they made from cash-back sales.

State investigators and real estate industry leaders want more enforcement and greater public awareness to stop the spread of cash-back deals before the damage mounts.

"Mortgage fraud in the Valley has become so prevalent people think it's a normal business practice," said Amy Swaney, a mortgage banker with Premier Financial Services and past president of the Arizona Mortgage Lenders Association.

Under federal law it is illegal to misrepresent the value of a home to a lender. Everyone who is a party to the deal is subject to prosecution.

Felecia Rotellini is a Notre Dame law school graduate and former assistant attorney general who is now superintendent of the Arizona Department of Financial Institutions. Her agency regulates mortgage lenders, state banks and credit unions in the state. Alarmed by what she was hearing from lenders and real estate agents, she has just pulled together state and federal regulators to form an Arizona mortgage fraud task force.

"People need to understand these cash-back deals are illegal and stop," she said. "We are going after mortgage fraud."

I think this is likely to be too little, too late. When I was actively suing telemarketers using illegal prerecorded calls to residences in 2003, the worst offenders were mortgage brokers. In the process of going after some of them, I found signs that some of them were engaged in other illegal activities as well, such as defrauding other lenders, defrauding their customers, defrauding the IRS and Arizona Department of Revenue, and transferring assets between entities prior to filing bankruptcy to evade creditors. I found the Arizona State Department of Banking (now known as the Arizona State Department of Financial Institutions), which regulates mortgage brokers, to be completely uninterested in investigating--though they did send some warning letters after I won judgments against brokers, which prompted some of them to pay their judgments. They said that they did not have resources to investigate my claims of violations, even though I offered up specific areas of the law that they are supposed to enforce (they don't enforce the Telephone Consumer Protection Act or FCC regulations).

There's more on this subject at Ben Jones' Housing Bubble Blog.

UPDATE (January 22, 2007): Arizona Senator Jay Tibshraeny has introduced a bill making mortgage fraud a felony. But it's already criminal activity covered under current laws--adding more laws against it doesn't do anything to cause those laws to be enforced.

Deceptive and harassing Republican pre-recorded political calls

The Republicans have been hitting voters over the last week or so with repeated pre-recorded political calls beginning with the phrase, "Hi, I'm calling with information about ," which have fooled many recipients into thinking that they are being harassed by the campaign of that Democratic candidate. Some recipients have received dozens of repeated calls or more.

These campaigns are paid for by the National Republican Congressional Committee (NRCC) and have occurred in at least Illinois, New York, and New Hampshire. They've been partially stopped in New Hampshire after intervention by the state Attorney General--but only by discontinuing calls to voters on the national Do Not Call list.

One of the New York calls can be heard here (WAV file).

UPDATE: Here's a list of the twenty districts where these calls are occurring and which Democrats they are attacking. They're in California, Illinois, Florida, New York, Virginia, Kentucky, Georgia, Iowa, North Carolina, Connecticut, Kansas, New Hampshire, Wisconsin, and Pennsylvania.

UPDATE: The Democratic Congressional Campaign Committee has sent the National Republican Congressional Committee a cease and desist letter.

UPDATE (November 7, 2006): The New York Times and the Washington Post have covered the story. Michigan Representatives Conyers and Dingell have asked Attorney General Alberto Gonzales to investigate the issue.

Arizona Democratic Party funded anti-Munsil website

The chairman of the Arizona Democratic Party has admitted that the party gave $100,000 to the "Arizona Values Coalition" which funded the anti-Len Munsil website previously reported here. This comes after a denial by party spokesman Bart Graves on September 18. The site, which cost $1,250, has resulted in a payment of that amount to Munsil's campaign from the Citizens Clean Elections Commission.

Look, Democrats--use accurate information about Munsil to discredit him (of the sort that's on the Len Munsil Facts website), and do so openly, rather than using deceptively-named groups like the "Arizona Conservative Trust." If Munsil manages to come from far behind and win this election, the Democratic Party's actions will be partly to blame.

The Arizona Conservative Trust also paid for anti-Munsil pre-recorded telemarketing calls before the September 12 primaries.

Len Munsil Facts website

A Len Munsil-critical website has appeared. It states that it is "paid for by the Arizona Conservative Trust" and has received funding from the Arizona Values Coalition.

They've gone back to some of Munsil's State Press editorials to find Munsil railing against student protests against apartheid in South Africa, calling it a "madness ... afflicting college students around the nation."

So far, they are missing Munsil's position opposing the decriminalization of cohabitation and oral sex in Arizona.

UPDATE: Munsil has complained about the "Arizona Conservative Trust" to the Clean Elections Commission, and his campaign is questioning who the donors are supporting it. An Arizona Republic article quotes Republican sleazebag and Munsil campaign consultant Nathan Sproul saying, "Who are the donors who are funding this thing? ... They are engaging in a pretty offensive money-laundering operation."

Sproul, former head of the Arizona Republican Party and the Arizona Christian Coalition, runs Sproul & Associates, which engaged in voter registration scams in multiple states prior to the 2004 election. Sproul set up groups that would represent themselves as nonpartisan "get out the vote" organizations in order to get Republicans registered to vote and discard or deter Democratic voter registrations. In addition to supporting Munsil, he also has worked on campaigns for U.S. Rep. Trent Franks, a former Arizona legislator who was a single-issue (anti-abortion) candidate. Sproul has received significant funding from the Republican National Committee to engage in dirty tricks.

I agree with the Munsil campaign's statement that the name "Arizona Conservative Trust" is misleading and deceptive, especially if (as seems likely) there are Democratic Party members behind the effort. I also condemn the prerecord telemarketing pseudo-surveys that have been done ("push polls") regarding Munsil--it's a sleazy tactic.

Adler on federal environmental regulation

At the Skeptics Society conference on "The Environmental Wars," Jonathan Adler gave a talk on "Fables of Federal Environmental Regulation." Adler's talk made several points, the main ones among them being:

* Federal regulations tend to come late to the game, after state and local regulations or private actions have already begun addressing the problems. The recurring pattern is that there is an initial recognition of a problem, there's state and local regulation and private action to address it, and then there's federalization. I can add to Adler's examples the development of the cellular telephone industry, where private actors stepped in to allocate licenses through the "Big Monopoly Game" (a story told in the book Wireless Nation) when the FCC proved incompetent to do so itself; federal anti-spam legislation, which came only after many states passed anti-spam laws; and federal law to require notification of customers whose personal information has been exposed by system compromise (which still doesn't exist, though almost half the states now have some kind of hacking notification law). (In a related point, industries regularly develop products that completely sidestep federal regulations, such as the SUV, interstate banking, credit cards, money market accounts, and discount brokerages. The development of the latter financial products is a story told in Joseph Nocera's A Piece of the Action: How the Middle Class Joined the Money Class.)

* The causes of federal regulations are not necessarily the problems themselves, but are often rent-seeking by involved entities, which can create a barrier to other alternative solutions. Adler listed four causes of federal environmental regulations: increased environmental awareness (by the voters and the feds), increasingly nationalized politics (political action at a national level), distrust of states and federalism, and rent-seeking. He gave examples to illustrate.

* We don't see (I'd say "we tend not to see") environmental problems where we have well-defined property rights; the environmental problems occur in the commons (cf. Garrett Hardin's "The Tragedy of the Commons"). I disagree with making this an absolute statement since there are bad actors who disregard even well-established property rights (or liability rules).

Adler's intent was to raise skepticism about federal regulation on environmental matters on the basis of several points:

* History shows the problem already being addressed effectively in a more decentralized manner.
* Federal regulation tends to preempt state regulation, creating a uniform approach that doesn't allow us the benefits of seeing how different approaches might work--we can miss out on better ways of dealing with the issue.
* The rent-seeking behavior can produce unintended consequences that can make things worse or impose other costs.

While I'm not sure I agree with the implied conclusion that federal regulation is never helpful, I agree that these are good reasons to be skeptical.

The preemption issue in particular is a big one. The federal anti-spam law, CAN-SPAM, was pushed through after years of failure to pass federal regulations against spam after California passed a tough mandatory opt-in law. The federal law was passed largely through efforts by Microsoft and AOL (whose lawyers helped write it) and preempted state laws which mandated opt-in or any requirements contrary to the federal law. I don't think it's cynical to believe that preventing the California law from taking effect--which would potentially have affected online marketing efforts by Microsoft and AOL--was a major cause of the federal legislation passing.

The benefit of preemption is that it creates a level playing field across the entire nation, which reduces the costs of compliance for those who operate across multiple states. But it also reduces the likelihood of innovation in law through experimentation with different approaches, and reduces the advantages of local entities in competition with multi-state entities. It also prevents a state with more stringent requirements from affecting the behavior of a multi-state provider operating in that state, when the requirements get dropped to a federal lowest common denominator. As regulation almost always has unintended consequences, a diversity of approaches provides a way to discover those consequences and make more informed choices.

Another issue is that many federal regulations provide little in the way of enforcement, and the more federal regulations are created, the less likely that any particular one will have enforcement resources devoted to it. If you look at the FCC's enforcement of laws against illegal telemarketing activity (such as the prohibition on prerecorded solicitations to residential telephones, and the prohibition on telemarketing to cell phones), it's virtually nonexistent. They occasionally issue a citation, and very rarely issue fines to telemarketers who are blatantly violating the law on a daily basis. In this particular case, the law creates a private right of action so that the recipient of such an illegal call can file a civil case, and this model is one I'd like to endorse. I've personally had far more effect on most of the specific telemarketers who have made illegal calls to my residence than the FCC has. Federal laws and regulations can be effective when they are applicable to a small number of large players who can be adequately policed by a federal agency (but in such cases those large players tend to also be large players in Washington, D.C., and have huge influence over what rules get set) or when the enforcement is pushed down to state, local, or even private levels (e.g., using property or liability rules rather than agency-based regulation). Otherwise, they tend to be largely symbolic, with enforcement actions only occurring against major offenders while most violations are left unpunished.

The most effective solutions are those which place the incentives on involved parties to voluntarily come to agreements that address the issues, and I think these are possible in most circumstances with the appropriate set of property and liability rules. A good discussion of this subject may be found in David Friedman's book, Law's Order: What Economics Has to Do With Law and Why It Matters.

There seems to be a widespread illusion on the part of many people that many problems can be solved merely by passing the federal legislation, without regard for the actual empirical consequences of such legislation (or the actual process of how it's determined what gets put into such legislation!). From intellectual property law, to environmental law, to telecommunications law (e.g., net neutrality), good intentions can easily lead to bad consequences by those who don't concern themselves with such details. Friedman's book is a good start as an antidote to such thinking.

Hillary Clinton and Net Neutrality

Adam Thierer of the Cato Institute expresses his bafflement over why people have such faith that instituting government regulations to enforce net neutrality will result in beneficial protection for free speech, when historically Congress has shown little support for the principle. He points out the irony of Hillary Clinton calling for net neutrality in the name of protecting free speech, when she has on multiple occasions called for and supported government restrictions on free speech, including on the Internet. She supported the Communications Decency Act, most of which was overturned by the U.S. Supreme Court as unconstitutional. She supports regulation of video game content. She pushed the V-chip.

Does anyone really believe that the regulated Internet Hillary Clinton wants to see won't ultimately result in any new restrictions on freedom of speech? Especially since the net neutrality bills propose giving regulatory authority over the Internet to the FCC, the same agency that is more aggressive at fining broadcasters for "indecent" content than addressing telemarketing fraud?

New Hampshire election phone-jamming tied to White House and Republican Party

An Associated Press story:

Key figures in a phone-jamming scheme designed to keep New Hampshire Democrats from voting in 2002 had regular contact with the White House and Republican Party as the plan was unfolding, phone records introduced in criminal court show.

The records show that Bush campaign operative James Tobin, who recently was convicted in the case, made two dozen calls to the White House within a three-day period around Election Day 2002 as the phone jamming operation was finalized, carried out and then abruptly shut down.

The national Republican Party, which paid millions in legal bills to defend Tobin, says the contacts involved routine election business and that it was "preposterous" to suggest the calls involved phone jamming.

The scheme involved repeated hang-up calls from a telemarketing firm to the Democratic get-out-the-vote headquarters. The owner of the firm is under indictment for the scheme. Apart from Tobin, there have already been two other convictions in the case.

UPDATE: TPM Muckraker has more details on the calling records that show calls to the White House.

The ARM ticking time bomb

The last few years have seen a lot of creative financing to purchase homes as prices rose out of control, with a huge increase in the percentage of adjustable rate mortgages (ARMs) used by first-time home buyers in order to stretch the limits of what they could afford to buy. About 25% of all current mortgages in the U.S. are ARMs. Unfortunately, many of those who got them did not understand what they were signing up for, and one in five subprime ARM homeowners in West Virginia, Alabama, Michigan, Missouri, and Tennessee was more than 30 days late with a payment at the end of last year. The peak of ARM interest-rate resets will occur in 2007-2008, which leads one researcher to predict that up to 1 million of 7.7 million homeowners who took out ARMs in the last two years will end up losing their homes to foreclosure in the next five years, with banking losses of up to $100 billion--painful, but less than the S&L crisis.

The last time interest-only ARMs were popular was in the 1920's, when the fall of home prices caused many of those who had them to lose their homes. In the last few years, they've been pushed hard by sleazy mortgage lenders with things like illegal telemarketing calls and deceptive direct mail pieces that look like they're something important from your current lender, a refund check, or something else highly desirable or urgent in order to get you to open it.

More at Ben Jones' Housing Bubble Blog.