Sunday, September 30, 2007

Green Mountain Falls vs. Evil Sprawl

The metropolis that is Green Mountain Falls boasts a population of 915 full-time residents and is located on U.S. highway 24 between Colorado Springs and Woodland Park. Mayor Pro Tem Dick Bratton stated that “In the past, the town hasn’t looked outside its boundaries. We haven’t been concerned about what’s happening around us.” Now residents are looking to prevent growth and are willing to go to great means to do so. The threat of sprawl is a battle to be fought on two frontiers as Woodland Park and Colorado Springs threaten to grow in Green Mountain Falls direction at any moment. Woodland Park has a planning area extending three miles south into Crystola where it has annexed land. Colorado Springs is currently attempting to expand up the mountain pass as developers are planning to build 55 homes near Chipita Park and 67 in Cascade, both just south east of Green Mountain Falls on Highway 24.

Town officials are looking into ways in which they can stop sprawl before it starts. They have hired a planning consultant to help them deal with the problem and are looking into annexing land surrounding the town in order to establish growth boundaries. Another method being considered is an intergovernmental agreement with El Paso County and other nearby towns to address the problems with a group effort.

Green Mountain Falls needs to annex nearby land and establish growth boundaries if they want to win the war on sprawl. Woodland Park and Colorado Springs are both embracing their growth and even planning for more in the future. The Mayor and town board seem to believe that growth or sprawl (or whatever you’d like to call it) is not inevitable and that no one will ever take notice of their peaceful mountain dwelling. I would assert that there is a certain group of people that don’t want one of the numerous tract homes that cover the eastern side of Colorado Springs. Some individuals won’t want a house that is identical to every other on the block and will be intrigued by the mountain living so close to Colorado Springs. These individuals will look up the pass to Cascade, Woodland Park and even Green Mountain Falls. Growth is inevitable and sprawl is coming.

Jordan Ford

Colorado Springs - Highway 24 Redevelopment

The City of Colorado Springs has recently been addressing the issue of widening Highway 24, heading west from downtown Colorado Springs to Manitou Springs. This area is the gateway to the mountains, attractions, Old Colorado City and Manitou Springs. The project is deemed necessary due to the increased traffic congestion along with areas along this roadway being in a 100-year flood plain. I have paid some attention to this issue through the local newspapers, however I attended a meeting last week and realized the apparant reason behind this project.

The widening of the highway will require in the exact words of the planners "taking" of land along the current roadway for redevelopment. The road will be widened and bridges and drainage improved to accomodate the current flood plain issues. The redeveloped land will then be parceled off and sold to the highest bidder. This will assist the local government in the costs of this project. I question what happens to the current property owners who are having their land "taken". Will be paid market value for their property as-is or as redeveloped? The answer is as-is as the redeveloped land will be further developed to accomodate strip centers, restaurants and potential for chain stores. I personally feel this is against what "west-siders" want with the redeveloped land. This redeveloped land will be more densely zoned to generate a higher tax base for the City of Colorado Springs in the future. It will not allow some current "mom and pop" businesses to relocate to this area as land rent and property values will increase with the property improvements.

I feel the highway project is necessary for future growth in this area, however some businesses and property owners will be driven from this area. I asked the question at this meeting - "What do you mean by redeveloped"? he answer I was provided said that new business or developers would come in to oversee this portion. I can only hope that the West-Side and Manitou Springs will push to keep their unique nature and not allow large box stores or retail to overtake this "redeveloped" land. The west-side is an area where people live who don't want this type of business in their backyard. I don't look at this as economic growth, rather reallocation of tax base to this area, when they can shop 3 miles away on 8th Street. I realize it is a process of change, yet sometimes change is not a good thing.

Bicycle Tax Fund

The 2007 Colorado Springs budget outlines a 115,000 dollar budget for "providing a funding source for bikeway improvements throughout the city." The source of revenue is a sales tax on the purchase of all new and used bicycles.

This is a good example of a continual distortion of local knowledge because of intervention. I have no doubt that the group of morons that came up with a bicycle tax thought it would be a great idea BIKES ARE SUPERDUPER AFTER ALL!!! but what it really demonstrates is an almost repulsive ignorance of basic human interaction. Furthermore, these oh-so sagacious legislators expose their flippant attitude to an individuals liberty.

What is the optimal amount of bikeways in a city? Most people with an IQ north of Quasimodo realize you cant answer the question in a concrete quantifiable number of units. Apparently though, there happens to be an optimal amount. The idea is that we can maintain more bikeways (a good thing) with this source of revenue (bike tax). However, what it does it create a change in the price of bikes and bikeways. People who previously owned bikes now get this bikeway for a reduced price since they don't burden the bike tax. Because of these manipulations in prices, prices lack the same "knowledge communicating" efficacy they previously had in a natural system. Ergo, distortions in the use of bikes, bikeways, their substitutes, inputs, complements; in a word, everything in the economy, is shifted ever so slightly away from efficient (in the proper sense of the word) allocation.

Furthermore, what a simple minded "tax and allocate" and its nonchalant use shows is a lack of respect for other persons property on the part of its advocates. What it means is that, the government of Colorado Springs knows how to use the money of people who buy and sell bikes than the people themselves. Taking money to pay for unwanted projects is no less theft.

How to Help Skinny Ethiopians

An article in the Denver Post, written on September 29, 2007, is titled: Hunger to do good helps Ethiopian kids. During this interview Noel Cunningham, a local entrepreneur and restaurant business owner, helped buzz his own program that aims at helping the "unfortunate" of Ethiopia. Cunningham's program,"Quarters for kids", collects money from high school students and donates them to needy Africans. The program also attempts to impress the value of the US dollar and their own economic "fortune" into their minds. I find this article to be inconsistent with an effective means of helping "unfortunate" Ethiopians.

Cunningham says, "In Ethiopia, here's the significance of a dollar: A quarter will buy breakfast, a quarter will buy lunch, a quarter will help pay for education, and a quarter will help to pay for a school uniform and shoes." Giving for the sake of giving, with no expectation of return or gain, is fine. Nevertheless, I suggest that this seemingly harmless act of giving money to Ethiopians is the wrong way to create positive economic improvement. Two specific arguments support this thesis: First, giving money or food to African countries does nothing to solve the most basic economic problem in the region: corrupt/predatory government. Second, charitable donations do more than quench hunger pain, they also quench the fire for change that is needed for African economic and political upheaval. If hungry Ethiopians want change badly enough, THEY must fight it themselves.

Instead of promoting programs that mask instead of create real change, the American people are perpetuating a growing problem. Government should allow economic freedom for the success of all African entrepreneurs. If young risk-taking Africans feel as though their investments will be left to the guns of militant militia, there will be little growth! Allowing Africans to feel the pains of hunger, help fight predatory governments, and providing economic and business education, will allow a country with an abundance of resources to drastically increase its GDP and quality of life.

It may seem harsh to promote an idea that says, "Don't give!" Yet, giving a hand "up" is always better than a hand "out".

Friday, September 28, 2007

A City Within the Springs

A city within the Springs
A huge new subdivision kicks off growth on Colorado Springs' east side


This article highlights the debut of Colorado Springs' newest community and prominant example of sprawl: Banning Lewis Ranch, located on the northeast side of Colorado Springs. After years and years of awaiting zoning approvals, the 24,000 acre property is finally breaking ground. The developers are promoting a picture perfect reality.

"That's why you'll find things like tree-lined streets and open-rail fences. Natural green spaces and feathery wild grasses. A new community center complete with pools and ball fields. The new Banning Lewis Ranch Academy, a K-8 charter school. And beautiful new homes in a variety of architectural styles, displaying rich character and neighborhood crafting. All interconnected by a network of trails and footpaths. It's the kind of place you just don't find much anymore. (banninglewisranch.com)"

This new community is promising much more than just a place to live, potential buyers are paying for small town living in the midst of city chaos. With a high emphasis being placed on 'small', prepare to pay for schools, parks and other commuity features like coffee schops and movie theaters; all within walking distance from home. Local trails and exercise centers that invite the community to come and get to know each other; enjoy a fresh breath of Colorado air, as long as you dont mind sharing that fresh breath with the dozen otehr neighbors scrambling for that same 'Leave it to Beaver' lifestyle. The houses will also follow suit with the small scene, the average size home for this community will be 2,400 sq ft. According to Colorado-Springs-realestate.com, the average size home for this area is closer to 3,200 sq. ft; however, at a starting price of about $220,000 are you really getting the most bang for your buck or are you being swept away by sprawl?

Wednesday, September 26, 2007

America’s Addiction to Cheap Money and the Resulting Effects on Sprawl

America seems undoubtedly addicted to cheap money, since 1984 the Federal Funds rates has not gone above 10% and has spent the majority of that time below 6%. The current rate, 4.75, is still lower then LIBOR, which is the rate that most of the rest of the developed world borrows at. There has also been a trend developing, the spread between the Fed Funds rate and the LIBOR rate has been widening. Although there has recently been a small correction down in the LIBOR rate, the spread and the trend still exist. This means that most every other developed country realizes that this rate is too low to sustain without dramatic inflation and other consequences.

In a supply and demand world, however, these low rates have been a blessing to our economy and real estate. Being one of the primary drivers of our economy, real estate values have seen large appreciation values in the past 20 years. This is due in part to people making more money then they were 20 years ago and wanting to have a bigger house, but with such low interest rates it is possible for people to demand more expensive houses then they could have otherwise afforded. This has not only caused an increase in property values inside the city, but also in the suburbs, leading to some people moving even farther away from the center of the city.

Sprawl is, among other things, the outward expansion instead of the upward growth of a city. This is undoubtedly being caused by our addiction to cheap money. Since 1984, rates have dropped from their highs and stayed relatively low, this is where we get into the supply and demand issue. Since price of money had been falling people have been spending more (Americans on average spend more then they make) and with a house being the most expensive good that most people buy, home prices have been greatly effected by this increase in demand. With the low price of money more people have been demanding newer, bigger, nicer houses, resulting in higher prices and greater appreciation of house values. This higher demand has lead to people moving to where they could build the same house for cheaper, the suburbs. People will even move out to a small town just outside the city and commute in to work (i.e. Monument, CO). But now, as the two cities have grown together, even they have a small suburb developing, Flying Horse. Good or bad, sprawl is happening and is due, in part, to the low interest rates.

The demand supply equation is out of balance in this case, although the housing supply has reacted accordingly to demand, the money supply has not. It is being kept at low levels to feed our addiction. This is not just one person’s opinion, but the majority of the world also agrees with me. This can be seen from exchange rates (found at finance.yahoo.com) and the dollar’s weakening value compared to other stable currencies. For example one US dollar is now worth one Canadian dollar, where as just five years ago, it was worth almost 1.6 Canadian dollars. There has also been a steady trend in this direction, not just in Canadian dollars but also in Euros, Yen and other major currencies. This shows that other people around the world see the inflationary potential that keeping a borrowing rate this low has.

Tuesday, September 25, 2007

Blogging Assignment Illustrated

If you want to see a couple of examples of what I'm looking for with your blogging assignments, then you might take a look at this post of mine as well as this post by a former student.

Sunday, September 23, 2007

Hitler youth buttons

Last Thursday U.S District Judge Joseph A. Greenaway Jr. sided with two kids from New Jersey saying the kids can wear buttons featuring a picture of the Hitler youth to protest a school uniform policy.
The students had been threatened with suspension last fall for wearing the buttons and the students parents then proceeded to file a federal lawsuit claiming the district violated the children's free speech rights. The Judge also added that the students could not distribute the buttons.
When deciding this case the Judge cited a 1969 case in Iowa involving students who wore black armbands to protest the Vietnam war, saying students have the right to express themselves as long as it is not disruptive to the work and discipline of the school.
This case seems to be a classic example of organizations that possess a little bit of power going crazy. I am thrilled the kids won. I don't agree with the hitler youth, but threatening to suspend students because they were wearing buttons is a clear violation of the 1st amendment.
This case also shows how the students parents were useing the coercive power of government to get what they wanted. Normall I am aginst people trying to use government to get their way but in this case the parents were just protecting their kids right to free speech.
It is good to see that the judges in Washington don't screw up all the time.

Saturday, May 12, 2007

Stormwater bills are public, after all

I have paid my storm water bill. Is it a tax? Well, I'm not sure. Many think it is and if it turns out it is, then we should vote on it. The city says no, but this article tells how a lien can be put on your house if the bill is not paid. Now, when I received my bill, I was suspicious. Here I am, paying my property taxes, when I get a bill out of nowhere. The bill says that if I do not pay the bill, the city will put a lien on my house. So, using the knowledge I did in class, I analyze the bill.

If I enter into a contract with a lender, such as my mortgage company, then they can use government's coercive force to enforce the contract. But what contract did I enter into with the city concerning storm water runoff? This is a classic case of governments coercive power. I agree with those who see this as a tax. In Colorado, we have to vote on new taxes- we didn't vote.

My next question is why didn't we vote on it. The city says it doesn't have the money to do the projects concerning storm water and runoff. My first question is why? Is this a new problem that has surfaced? Why hasn't the city been planing for this for years, why such the urgency. The answer, I believe, is the city does not know how to budget. Can the city really tell us this came as a surprise?

The city has not taken into account if there is any actual runoff form the property to the city drains. There is no mention in the bill I received to contest if I were saving any run off of rain. And another thing, what if there is a drought and there is no run off, then what are we being charged for. Probably the reason it was not introduced as a tax might be because there is not a efficient amount of run off. If this goes to the Colorado Supreme Court (if challenged), I would hope that they have a corrective state of mind in deciding the case.

I also think this issue will coincide with the issue before the state right now concerning the new education bill- many think it is a new tax, supporters (like the storm water bill) disagree. I suppose the courts will decide.

Wednesday, May 09, 2007

Burrowing increases. fed out of touch?

And article on Yahoo recently posted that comsumer borrowing in the month of march rose at an annual rate of 6.7 percent. this shows good growth after a slight slump in the first quarter this year.

This sounds to me like the fed is out of touch, after a year of holding the target rate constant, they recently announced that they are continuing to hold the target rate constant. This seems out of touch with the economy.

The article in Yahoo claimed that the high consumer borrowing is remarkable, due to high prices and rates. For this reason and the fact that the first quarter had been week, (growth around 1.3 percent) the fed should have been lowering the rate. It would have helped last quarter and strengthened the consumer spending that had been strong in march, making it potentially even stronger.

Senate Panel approves higher required feul economy

The nationwide fleet fuel economy required for cars and truck has been increased by the Senate Commerce Science and transporation rom 25 to 35 miles per gallon.

"This is not a perfect bill, but I think we have reached a stage where most parties would say this is fair," said Sen. Daniel Inouye. My problem with this is that if "most parties" involved would be ok with this, and I am assuming that "most parties" he means businesses and firms who are in the transportation industry. If this is true and if businesses could easily comply with these standards then competition would have already induced them to have done this already.

If this bill is to improve the industry, then it is just a regulation that will do more harm than good, reducing the number of cars that can be sold, since, now we have both fuel efficient and non- fuel efficient cars in the market. The higher requirments won't dramatically increase the number of efficient cars, just dramatically reduce the number of innefficient cars.


The only way this bill would work is if it is INTENDED to reduce the number of cars one the road. this however does not seem to be what the bill's intended consequence is. It seems like they are trying to turn the innefficient cars being produced, into efficient ones, but if all cars could be efficient already, then they already would be.

Thursday, May 03, 2007

Imus suing CBS

As many of us may remember Don Imus was somewhat recently fired for his comments about the Rutgers basketball team. Well now Don Imus is suing CBS for 40 million dollars which was the amount of his contract that he was left unpaid due to him being fired. Imus and his lawyer are filing a breach of contract, citing a specific part of his contract, "Imus' services were "unique, extraordinary, irreverent, intellectual, topical, controversial." Now I must make clear that I do not agree with what Imus did but the 1st amendment does guarantee freedom of speech and even if what he says does offend others, this was acknowledged in his contract. So again, although I do not agree with what Imus has done, after looking at his contract and the 1st amendment I would side with Imus in a court case and would award him his 40 million.

On a side note. Personally I think contriversial topics are the best to discuss and need to be addresed and I beleive that everybody is offended by something and as long as you market your talk to show to be offensive you should be able to discuss these topics. Look at the howard stern show, he was donig all sorts of crazy things, but that was expected becasuse it was the howard stern show. Personally I would not have fired Imus.

Tuesday, May 01, 2007

Senate Discusses Overhauling PDUFA Act; Disincentive to Investment.

The Senate has been recently debating the possibility of overhauling the FDA. It would do this by amending and extending the Prescription Drug User Fee Act created in 1992. The Act was originally created to defray the costs the FDA incurred while reviewing prescription drugs. The FDA's proposal to Congress would have the drug industry pay $393 million in annual fees (Bridges, Associated Press). This spending would go to new drug and food safety measures. It would include provisions to ensure the safety of child drugs and devices as well as the safety and effectiveness of drugs currently on the market. The renewal of the Act also promises to make the approval process of drugs more quick and predictable. The provisions set forward however, do not allow for the importation of drugs nor generic drug approvals (all facts, from attached link, Andrew Bridges, the Associated Press).

This is sort of a grey area of market failure. There is market failure, but it may protect consumers to an extent. It creates a barrier to entry through government licensing, therefore violating perfect competition. It also violates the PC model by heterogeneous products and asymmetrical information. Generic drug companies and foreign companies have been left out of the new provisions so far. This renewal and amendment to the PDUFA Act was brought to the Senate by the FDA itself. There may be rent seeking on the part of the FDA and possibly the large drug corporations. The FDA can not act efficiently, so it seeks legislative coercion for additional aid. The larger drug corporations may not necessarily be too adversely affected by the increased costs, but may benefit from reduced competition. Although the Act promises to cut costs the FDA incurs by reviewing drugs, the Act is still economically inefficient. It seems to limit competition in the prescription drug market. It also promises to make the approval process faster by introducing more legislation into the drug industry.

Monday, April 30, 2007

High-Speed Police Craziness

In a case dated April 30, 2007 the Supreme Court decided that police are now able to use force in a high-speed pursuit to stop an individual that is driving recklessly from harming others. The 8-1 decision in Scott v. Harris No. 05-1631 that gives police extended powers during high speed pursuits was not found to be a violation of the Fourth Amendment. This amendment gives an individual the right to be free from unreasonable searches. Justice Scalia said that this decision by the court holds true “even when it places the fleeing motorist at risk of serious injury or death.” Deputy Scott had hit the car that the 19-year-old Harris was driving. Harris lost control of his vehicle. He is now paralyzed and has attempted to sue. Since the Fourth Amendment was not violated he cannot sue for damages.

Harris was being chased because he was speeding. I know that the job of the police is supposed to be to protect all people. I wonder though, how well are they protecting all people if they are including themselves in the high-speed chase over speeding tickets? Could more people possibly be harmed from police forcing drivers off of the road for crimes such as a speeding ticket? Could the outcome not have been perhaps an extra fine of some sort for Harris? I’m kind of torn over this case. I want the police to be able to protect me, but at the same time I want my rights protected and not to see a police chase every time someone goes speeding down the highway. The courts have decided to give the police force more police power in order to “protect the people.” I just wonder where it ends. Hopefully it won’t go beyond this point.

Saturday, April 28, 2007

Large Acres of Land Selling to the Rich

For the very rich billionaires and the millionaires there is a new fad of buying up open land in the US. Brad Kelley has almost 800,000 acres of land that he is purchasing for ranching. There are others, like Roxanne Quimby, who buy forest landfrom logging companies and open land used for ATV trails, and plan to use it as conservation land. It seems the rich are beginning to do the opposite of what Americans were doing in the early 19th century, of preserving the land and maintaining it not selling.

It seems that most of the private property owners are protecting the land from development, not preparing it to be sold to developers. If we consider economic prosperity of this effort, it clearly support the right of private property. It is also a good example of the corrective state involving preservation of land and natural resources. Maybe this fad will catch on.

As James Madison stated in his Essay on Property in 1792, "Government is instituted to protect property of every sort; as well that which lies in the various rights of individuals, as that which the term particularly expresses. This being the end of government, that alone is a just government which impartially secures to every man whatever is his own". So how is the Government going to react to these land purchases? Will they press for more eminent domain to take over the land to sell and make a profit, keep it as a public use? Even though it seems most of the private landowners will protect it. How will the Supreme Court react when faced with a case for the Takings Clause that has no grounds? Will they redefine takings and public use language again to come up with a public purpose policy? Or will they agree with common sense and let the private property remain private without government intervention?

Friday, April 27, 2007

Hmmmm Can she do that?!

In early April of 2007 House Speaker Nancy Pelosi went over to the Middle East to conduct foreign policy. The concern that myself as well as author Frank Salvato has is that the Constitution does not authorize the Speaker of the House to conduct foreign policy in the manner in which Pelosi did. That power is strictly delegated to the Executive Branch of government. As Salvato writes “this isn’t to say that Congress doesn’t have any authority over the formulation of US foreign policy, it certainly does.” Article 2, section 8 is the part of the Constitution that gives Congress the power to regulate commerce with foreign nations, States, and Indian Tribes. However, Salvato notes that it is Article 3, Section 2 that authorizes the President to make treaties, appoint Ambassadors, Judges of the Supreme Court, etc. Congress has the power to regulate business in the US and foreign nations and the President has the ability to appoint individuals to represent the US in foreign affairs.

Knowing all of the information presented above leads me to ask why the Speaker of the House thought it was appropriate for her to go over to the Middle East. She took an oath to uphold the Constitution of the United States. So why, then would she even take this step? Some have suggested that this is an attempt by Congress to undermine President Bush or for Congress to overpower the Executive Branch period. I guess that it doesn’t really matter why she chose to do it. The point is that the Constitution clearly leaves that area of foreign policy to the Executive Branch. It is the choice of the Secretary of the State to go to foreign countries for diplomatic reasons, not the choice of Nancy Pelosi. I agree with author Frank Salvato that this situation has created a constiutional crisis.

Abortion battle...Again.

The supreme court has recently upheld the 2003 partial birth abortion ban act. The decision was 5-4 in favor of the laws constitutionality. The Democrats are appalled, the Republicans applaud. Several people are arguing that the decision would have gone the other way if O'Connor will still on the bench. The dissent argued that the main problem with the law was that it does not allow any exceptions for medical reasons. President Bush said the prohibition "represents a commitment to building a culture of life in America. Today's decision affirms that the Constitution does not stand in the way of the people's representatives enacting laws reflecting the compassion and humanity of America," The article also seems to take offense to the conservative nature of the court and repeatedly points out that two members of the majority were nominated by Bush.

Personal feelings aside I believe that the court has made the wrong decision. The court has turned over Roe v. Wade. Obviously, as it has proven several times, the court has no respect for precedent. The country is founded on the principles of life, liberty and the pursuit of happiness. Of course there is the age old argument, does a fetus have a right to life? Are they people until they are born? At what point do they become people. Either way there is no statement in the constitution that can be used to justify banning abortion.

For me personally I am in favor of banning partial birth abortion. I would support a medical stipulation to the ban. Still, I am not sure that there would be no awareness of health risks that far along in a pregnancy. This is causing a paradox for me between liberty and morals. Who's to say that anyone has the right to tell someone whether or not they can have an abortion. I do not know if one could say that an abortion causes negative externalities and therefor justifies government interference. If we could say that it was a negative externality to the fetus then the solution would be to tax abortion, it seems like a strange solution but maybe it is the correct one. There seems to be no concrete answeres to these questions. It seems that whoever has the power of the White House determines which way this law will go. We will continue to see laws on abortion change.

Thursday, April 26, 2007

Slacking of the ropes

A recent article in the New York Times said that the Occupational Safety and Health Administration (OSHA) was leaving many of its regulations to be regulated by the industry. This article was about workers that worked in a microwave popcorn plant who started getting sick after the popcorn manufactures added and additive that gave the popcorn a more buttery taste. The workers were complain about the action not being taken saying someone needs to be monitoring the health and safety of the workers basically that if OSHA does not do it than no one will, since the beginning of the Bush administration OSHA has issued the fewest standards in its history. While reading this article I could not stop thinking about a case we talked about in class Holden v. Hardy. In this case the Court dealt with the unhealthy working conditions in the mine. The miners did not like the new regulations that were placed on them, so they filed suit. The only thing different about this is that government is not using its coercive power to regulate--some people are asking them to regulate it. To me the government is doing the right thing. Letting not only the industry control the regulations but also the market. The industry is not being coercive by forcing people to work in such conditions that it endangers their health. The workers have entered into a contract voluntarily. I also do not see any externalities. The workers received higher wages for working in the part of the factory that mixed the additives together. Though they did not know the risk associated with this type of work the manufacturers did not either. The workers were part of a market transaction with the higher pay.
I also believe their is some rent seeking behavior on behalf of the industry. Some of the biggest industries that OSHA regulates gave more than $630 million in political contributions since 2000, with more than half going to Republicans.

Tuesday, April 10, 2007

Cablevision appeals network DVR ruling

Cablevision appealed a case recently that prohibited the company from rolling out their next-generation digital video recorder in NY. The new recorder would dramatically increase the rate at which the company could distribute DVR capabilities. Essentially, the new system would allow any household with a cable box to record their favorite show and play it on their computer later. The system would allow any cable subscriber access to DVR technology without expensive equipment installations. The Hollywood studios that successfully sued Cablevision claimed that they filed the suit in order to prevent additional broadcasts of their programs. However, the real reason probably lies in the fact that DVR owners can fast forward through commercials when watching their recorded programs. Obviously, if subscribers can fast forward through commercials then the companies that buy spots during shows will be less inclined to spend top dollar on commercials that people aren’t going to watch. Hollywood studios would lose money and therefore are probably trying to protect their pockets.

Legally, Cablevision should be able to rollout their new product without any interference from the New York government. That is, NY should not be able to prohibit the production and selling of any product. The only question is whether the new recorder violates the liberties of any specific person or group. For the most part, I think not. I believe that 99% of the people who use the system will just be watching the shows that they missed or re-watching the shows that they enjoyed the most. However, since the new system would allow people to put the programs on their computer, there is a significant probability that the television shows could end up on a website (You-Tube?). Again though, this is not the major concern for Hollywood studios. They don’t make their profits from individual consumers. Rather, they make their billions from the companies who buy commercial time. So, while the case and the ruling seem correct, there seems to be a case of rent-seeking involved. Either way, I think that the courts decided correctly in protecting the television studios that could possibly go out of business if a system like that was provided to such a large number of consumers.