Microsoft Does Something Right?!?!

You know how when you install software, usually there’s a lengthy license that nobody ever reads? Don’t lie- you don’t read it either. Apple and iPhones are the worst, where they suggest that you read something like 56 pages of license on your iPhone. YEAH RIGHT.

Well, I just installed an update for Mac Office 2011 and here is the entire license:

MICROSOFT OFFICE FOR MAC 2011
PLEASE NOTE: Microsoft Corporation (or based on where you live, one of its affiliates) licenses this supplement to you. You may use it with each validly licensed copy of Microsoft Office for Mac 2011 software (for which this supplement is applicable) (the “software”). You may not use the supplement if you do not have a license for the software. The license terms for the software apply to your use of this supplement. Microsoft provides support services for the supplement as described at www.support.microsoft.com/common/international.aspx.

That’s it. And it’s simple to read, and its meaning is clear. Nice, eh? Of course I’m sure the main agreement is still very long (I don’t know– I didn’t have to agree to that since this is a corporate copy, lawyers probably did).

Tunnels, Infrastructure, and Stupid Governors (like that of New Jersey)

Here in Switzerland people may have noticed the news last month about the new 57km (35 mile) Gotthard Tunnel having been broken through from both sides. The Swiss are to be congratulated on their achievement, which by the way, cost $13 billion, but will shift huge amounts of freight from trucks and roads to rail, reducing CO2 emissions and fuel costs.

Meanwhile in New Jersey, Governor Chris Christie has cancelled a new rail tunnel project across the Hudson because, he claimed, it was over budget. Having lived in New Jersey for many years, of course it was it was going to be over budget, to say the least. But by most reports it wasn’t really that over budget, and the governor seemed to ignore many facts that were placed in front of him, forgoing $3 billion in federal aid.

Mayor Michael Bloomberg knows a deal when he sees one, being a business man. And so now he has proposed extending the Number 7 subway line across the Hudson to Secaucus, according to the this article in the Wall Street Journal. From a commuter perspective this would be second best, because it would mean yet another transfer to get to where one is going. Furthermore, the implications to PATH will have to be carefully studied. One wonders what it would take to combine PATH with the subway. A whole lot of downtime comes to mind, of course. I don’t even know if they use the same gauge track.

Anyway, it’s nice to see someone in America looking at infrastructure in a serious way.

Healthcare: 51 million people in U.S. now without health insurance!

NPR’s Morning Edition reports today that the numbers are the worst since the Census Bureau started keeping statistics in 1987. Take the poll: how are you insured?

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On States Suing over a National Healthcare Plan

I had a guest here this weekend who told me of one theory of why states might sue the federal government over portions of the Obama Healthcare Plan that requires individuals to buy insurance. The theory goes that the federal government is not authorized by any clause in the Constitution to force individuals to pay for healthcare. A plain and superficial reading of the Constitution would seem to support that. This leads to three questions:

Is ObamaCare constitutional?
If not, can it be made constitutional?
Who is doing the suing and why?

First, a caveat: I am not a lawyer. All lawyers: please chime in.

Is ObamaCare Constitutional?

Next, some Constitutional basics. The way our form of government works, each and every law that Congress passes must find some authorizing basis from within the Constitution, because the 10th Amendment of the Constitution clearly states:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

In other words, Congress has to find a basis for the law from within the Constitution. For the better part of three centuries, however, Congress has largely been able to get around this restriction through what has become known as the Interstate Commerce Clause (Article I, §8 Cl. 3):

[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

“Commerce among the several states” has been interpreted to mean, for instance, the ability of someone in New York to charge for access to its waterways. That was what Gibbons v. Ogden (22 US 1) in 1824. It’s largely the basis of how drug laws are authorized today by the federal government. Some people might say that this is a stretch of the clause, and that in fact requiring expenditures from individuals on health insurance would be even more of a stretch.

So what’s the logic in favor of the law? That has its basis in the theory of insurance. Here I will say that I am not an insurance expert, by the way. This much I know: a risk pool requires that everyone not make a claim at the same time, and the lower the likely percentage of claims over some period of time, the need for less money by the insurance companies to satisfy claims.

In the context of health care, if only old and sick people buy insurance, because they make up for the bulk of claims, the money required to pay out claims would require very high premiums, thus reducing any benefit to having insurance. On the other hand, if only healthy people bought into the system, since there would be very few claims, there would be no need for high premiums. Indeed, healthy people might not buy insurance at all, or very limited policies. In short, insurers can only sell health insurance to sick and old people if they have a group of otherwise healthy and young to reduce costs.

Does the decision of someone to not buy insurance in one state impact consumers in and companies in other states? If there exist risk pools that cross state boundaries, then the answer would appear to be yes. Otherwise it would seem the answer is no.

If ObamaCare is not constitutional, can it be made so?

Supposing the Supreme Court found mandatory premiums unconstitutional, what could the Congress and administration do to get around it? The tax system offers us one possibility. The 16th Amendment authorized Congress to tax us:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

One way the Congress could get around this would be to impose a tax that is the amount of a minimum premium, and then allow for a credit based on the costs expended on that premium. Loophole? Perhaps. But not the first.

Coming back to the Commerce Clause, the Congress probably could not have imposed a national speed limit without relying on highway funding. They probably could not themselves have prosecuted individuals for traveling over 55 or 65 mph. Instead they required the states to pass laws or face losing highway funding.

Who is doing the suing and why?

Ultimately if we look at the states that have filed suit, I’m sure we’ll see a distinctly Republican red tinge to them. For one thing, the strategy of Republicans has been to obstruct any Democrat initiative, no matter the harm that obstruction causes to individuals. Here, what possible benefit could individuals who are uninsured gain from not having health insurance? Today 45 million Americans don’t have a choice because they cannot take part in a well balanced risk pool, and hence cannot afford any coverage. Tomorrow even if they don’t have a choice on insurance, at least they’ll have some coverage.

Summary

In short, while considering the constitutional elements is interesting at an academic level, the officials doing the suing are harming the very people they are supposed to be serving. Perhaps voters should remember that.

Net Neutrality Deal near betwen FCC and Telcos?

Today’s Wall Street Journal reports that mega-telcos Verizon and AT&T are in discussions with senior staff of the Federal Communications Commission (FCC) over a compromise for enabling legislation for the FCC to regulate access to the Internet. This is no small deal. Chairman Julius Genachowski has made very clear for quite some time that he thought there was a need to provide for some form of net neutrality to protect customers against service providers, and to insure openness. Another thing is perfectly clear to everyone: the rules of the 1980s and 1990s certainly are antiquated.

However, one problem with net neutrality is that it can mean different things to different people. To some it might mean protection from service providers charging for services that they themselves do not provide. To others it might mean an inability for service providers to manage what they deem as excessive use of a shared resource (their network) by some consumers, as their cost models are all structured on the notion of over-subscription. That is– if everyone tried to use a vast amount of bandwidth at once, we would all get very little, and not those megabits/second in the advertisement.

Here are a few facts to think about when you hear the term net neutrality:

The tools service providers might use to give themselves some sort of market advantage are the very same ones they may need to use to protect consumers against denial-of-service attacks: it is in the average consumer’s best interest that bandwidth from rogue BoTs be limited. Differentiating between protection against BoTs and protectionism may prove difficult to regulators.
Bandwidth on the Internet is not the same as a phone call. If you’ve ever been in a disaster situation, such as an earthquake or a hurricane, you’ll remember that there may have been times when you picked up the phone and got no dialtone. That is not how the Internet works. Most applications make use of Transmission Control Protocol (TCP), which is designed to share whatever bandwidth there is. While voice and video require a minimum to function properly, even modern day tools like Skype & iChat AV can step down their use of bandwidth when they see quality degrading.
Most of us weren’t born yesterday, and it’s plainly obvious that there are very few telcos in the United States. The government has, since the passing of the Sherman Act in 1890, taken the position, with good reason in my opinion, that monopolies are bad, and that high levels of concentration are not good for consumers, either. Prosecution through that act as a means of redress, however, is a last resort, because…
Such prosecutions take years if not decades, are often at the whim of administrations, and often do not succeed. Three examples of arguably failed prosecutions include IBM, AT&T, and Microsoft. In the case of IBM, the U.S. dismissed the case when Ronald Reagan became president. AT&T is arguably a failed attempt, because we are very close to right back where we started. In the case of Microsoft, European regulators have provided far more oversight than our own Justice Department, perhaps in part due to the non-European nature of the company, but also due to a lack willingness to go further by the Bush administration. Hence it is better to nip a problem in the bud. This is one reason for the FCC to have a role.
At stake is not whether or not consumers will see a choice of service providers, but whether content providers and etailers, sites like mlb.com and Amazon will have a choice. Otherwise, we get to a two-sided market, where those who own the so-called eyeball networks also own the other end, providing an enormous price control lever.
Properly considered, network neutrality as a concept protects against the idea that you have to go to a service provider to implement new applications features in the network. This is the core strength of the Internt, but it’s not clear that regulation is needed. For one thing, I would hope that providers understand that new features and applications are in their best interests, since they get to sell more bandwidth, and perhaps even offer a few such features to their, and other, customers.

That’s what all the fuss is about.