The Senate's Finsta Problem

from the that's-now-how-it-works dept

Earlier this year we wrote about Senator Richard Blumenthal's viral "finsta" debacle in which he asked a Facebook executive to "end Finsta" as if (1) it was a product, or (2) it was "endable." Some people pushed back on the mocking of Blumenthal, noting that he (or at least his staffers) actually understood what "finsta" meant, since he had given an accurate description earlier, and his staff had set up a fake Instagram account, pretending to be a young girl to see what happened. However, as we and others noted, if he actually understood "finsta" that made his demand to "end Finsta" even worse, because it meant he was calling for an end to anonymity on Instagram, which would have huge problems -- especially for more marginalized people or those at risk, who have very good reasons for not using their real names on social media.

Of course, rather than learning from that debacle, Senators across the board seemed to see it as an opportunity to score some media headlines when they dragged in Instagram CEO Adam Mosseri to testify in yet another one of the Senate's pointless, grandstanding "big tech bad" hearings last week. Senator Blumenthal brought back his finsta. On the other side of the aisle, both Senators Marsha Blackburn and Mike Lee rolled out their own finstas. And all of them were shocked, shocked, shocked, to find that sometimes they didn't like what the algorithm recommended to them.

Except, as an article at the National Journal highlights, this little game of gotcha doesn't make much sense and is not how good research is actually done.

Joshua Tucker, a co-director of the NYU Center for Social Media and Politics, said Senate staff don’t have the time or training to make broad inferences about how teens experience Instagram.

“In a sense these [fake accounts] are useful, because they are surfacing things that can happen on the platform,” Tucker said. “But it’s this leap from ‘it can happen’ to ‘this is prevalent, this is common’—that’s when you need the more sophisticated research design.”

Tucker called it “ironic” that lawmakers are deploying these fake accounts in hearings, given ongoing concerns from Blumenthal and others that “finstas” are a menace and the fact that creating such accounts violates Instagram’s terms of service.

“These are exactly the types of protections that we are asking Congress to provide to researchers—to protect researchers who want to do research, who want to go about and find out how these platforms work, to protect them from being attacked by companies for violating terms of service,” Tucker said.

But, rather than handing access to actual researchers who can determine whether or not there's a problem -- and if there is a problem how big or how prevalent it is -- Senators are instead pushing out garbage science. That is, they're pushing anecdotal examples based on a single case set up in a way specifically designed to try to get the outcome they want.

Not surprisingly, when journalist Brendan Bordelon pointed all this out to Blumenthal's office, it was dismissed in Blumenthal's typically dismissive manner:

The Connecticut Democrat shrugged off the idea that there’s something ironic about his creation of a fake account, given his concerns about “finstas” generally.

“I think it’s justified to be illustrative and then disclosed, and nothing done with it,” Blumenthal said. “It’s not like we set it up to exist for any length of time. We set it up to see what happened, and then we shut it down.

“If I were analogizing it to law enforcement, it’s a little bit like having somebody work undercover,” he said.

It's a misleading anecdote, and for someone who claims to be so concerned about misinformation, you'd think that Blumenthal would be careful not to create more of it.

And... that's not even getting into the point that all of these Senators broke Instagram's terms of service, and according to some interpretations of the law, that means they violated the CFAA. It seems like it would be a hell of a lot more productive to fix that, rather than freaking out about the other stuff.

Filed Under: anonymity, finsta, kids, marsha blackburn, mike lee, richard blumenthal, terms of service
Companies: instagram

The Papas and the Pappas: Burger Joint Rebrands Over Trademark Dispute

from the no-good-deed dept

We're going to keep repeating this until it becomes common knowledge: trademark law is designed to keep the public from being confused as to the source of a good or service, not as some mechanism for businesses to lock up language in a competitive marketplace. In other words, if there is no risk of customer confusion, trademark laws very rarely come into play in terms of disputes or infringement.

Which brings us to Papa's Burgers in Texas and its announcement that it will be changing its name and branding.

So, a company that has existed as Papa's Burgers for 8 years is changing its name due to a C&D notice. So what's going on here? Well, the company decided to finally get around to trademarking its name but was advised by its counsel that there was another large restaurant group that had a similar name. That company was Pappas Restaurants, which operates a wide swath of venues, such as Pappas Bros. Steakhouse, Pappas Seafood House, and, yes, Pappas Burger.

Due to the that input from counsel, Papa's Burgers owner Robert Walker sent a letter to Pappas Restaurants explaining his respect for their business and his intention to trademark his business name. Kind of a nice thing to do. His reward for that was receiving the C&D notice.

Counsel advised Walker that he can fight the trademark since it's a one-letter difference and a different city, but that it could be very costly - upwards of $25,000 just to start the process.

The second option is to rebrand. A difficult decision Walker said, because the restaurant has already received so many public accolades in the nearly 9 years it's been open.

Note that last bit: Papa's Burgers has been operating for 9 years. The C&D notice sent by Pappas Restaurants doesn't say that the company should not use the name in new restaurants; it insists it stops using its name entirely. Except surely Pappas Restaurants would have already heard about all of this and sent a C&D long ago if there was any reason to think there would be public confusion here. And, yet, the company only fired off a C&D once Walker informed them that his business exists and that he planned to file for a trademark. That sure seems to indicate that any worry about customer confusion is unwarranted, no?

Unfortunately, that is now a moot point. Papa's Burgers is changing its name as a result of all of this. Because trademark bullying works.

Filed Under: burgers, likelihood of confusion, papa, trademark
Companies: papa's burgers, pappas restaurants

Banks, ISPs Increasingly Embrace 'Voice Print' Authentication Despite Growing Security Risk

from the this-probably-won't-go-well dept

While it's certainly possible to sometimes do biometrics well, a long line of companies frequently... don't. Voice print authentication is particularly shaky, especially given the rise of inexpensive voice deepfake technology. But, much like the continued use of text-message two-factor authentication (which is increasingly shown to not be secure), it apparently doesn't matter to a long list of companies.

Banks and telecom giants alike have started embracing voice authentication tech at significant scale despite the added threat to user privacy and security. And they're increasingly collecting user "voice print" data without any way to opt out:

"despite multiple high-profile cases of scammers successfully stealing money by impersonating people via deepfake audio, big banks and ISPs are rolling out voice-based authentication at scale. The worst offender that I could find is Chase. There is no “opt in”. There doesn’t even appear to be a formal way to “opt out”! There is literally no way for me to call my bank without my voice being “fingerprinted” without my consent."

The U.S. has generally been extremely lax on privacy and security legislation and oversight, generally opting for baseline requirements that companies at least be transparent about their security and privacy practices, and provide users with working opt out tools. But time and time again neither are really adhered to. Eventually our lack of any meaningful privacy rules for the internet era will culminate in a privacy scandal that makes past scandals look like a grade school picnic. And with companies increasingly prioritizing convenience and simplicity over security and common sense, that day could arrive sooner than we think.

The rush toward voice authentication tech is particularly problematic given the quick rise of automated deepfake systems and the growing trove of user voice data available online. With parades of online creators, and smart televisions and other gadgets hoovering up voice data (and frequently failing to secure or encrypt it), availability of this data is ballooning. As are examples where faking a user's voice has been used for significant thefts. What happens when voice print authentication is adopted at scale, and exploitation of that trend becomes automated by robocall scammers already running amok? Nothing good.

Using voice authentication to secure your finances (or much of anything notable) is, at its base, already very much a hit or miss proposition:

If you figure voice deepfake tech will only get cheaper and better over time, you can also figure replacing passwords and pins with voice authentication isn't a great idea in a country already drowning in robocall scams. Yet we're apparently doing it anyway:

"Again, society must adjust to the following reality: It’s become easy for anyone to spoof the voices of others who have public recordings of them talking (very common). Therefore, companies (especially banks) should not be using this as a @#%!ing way to log into accounts! You would think this is SIMPLE-enough for corporate America to understand, but alas, here we are."

At the very least informed users should have the ability to opt out of voice data collection, yet in many cases they can't even do that. It's yet another example of why the nation needs at least some kind of baseline privacy rules that at an extreme minimum mandates that both data collection and security options should be transparent, and users should always retain opt out control. Baseline privacy legislation should also include meaningful penalties and accountability for the very long line of companies that view consumer privacy and security as an annoying afterthought.

Given this would cost a large number of politically powerful industries money we're not going to do any of that. Instead, we're going to continue to embrace the current paradigm: a few badly crafted state privacy proposals and a generalized apathy on the federal level. Surely that will work out well, right?

Filed Under: banks, security, voice authentication

Senate Inches Closer To Providing Free Access To PACER

from the years-late-but-better-than-never dept

Might a free PACER finally be on the horizon? For years, activists and a handful of Congressional reps have attempted to strip the fees from PACER, the federal court system's antiquated database that provides online access to court documents.

The antiquation doesn't begin with the fees. The system is outdated and hasn't improved much over the years, despite the fact that PACER regularly turns a profit. PACER looks and performs like a holdover from the 1990s. The UI is its own barrier to entry. The search function barely functions, vacillating between drawing a blank or producing several pages of irrelevant search results.

And that's where the fees kick in. PACER operates like a library copy machine, charging users $0.10/page for everything. Search results and dockets are treated like they're being printed out at the central PACER desk. Useless search results are $0.10/page. So are dockets, which may or may not contain the documents. These fees add up before users even locate the documents they're looking for. Those documents are also $0.10/page to download in PDF form, putting price on ones, zeroes, and the fractions of cents needed to generate, store, and transmit the documents.

The US Courts System has blown PACER profit on in-court niceties like new TV screens and furniture. Almost none of the millions PACER generates has gone towards improving PACER itself or lowering access fees. The federal court system has argued it will cost billions to overhaul PACER and provide free access to users.

But according to the Congressional Budget Office investigation and former government technologists, the actual outlay for an improved, free PACER is much less. The CBO says free access would only cost about $1 million a year. Technologists estimate the overhaul would only cost $10-20 million and require less than $5 million a year to maintain.

These facts helped push a bill mandating free access to PACER through Congress late last year. But that's only half the battle. And it's the far easier half of the battle. The Senate still needs to create and pass its own version, meld that with the House of Representatives offering, and drop a cohesive bill on the President's desk.

Well, we're one step closer to that happening, as Nate Raymond reports for Reuters.

A U.S. Senate panel on Thursday advanced a bipartisan bill that would overhaul the federal judiciary's PACER electronic court record system and make the downloading of filings free for the public through the elimination of costly fees.

The Senate Judiciary Committee voted to send the Open Courts Act of 2021 to the full Senate for its consideration after adopting an amendment that provided for additional funding and addressed the judiciary's concerns on technical issues.

The panel approved the measure on voice vote without any recorded opposition, and in a sign of the bill's support, nearly all of the committee members elected to co-sponsor the legislation by the end of the hearing.

The Administrative Office of the US Courts is still pretending this is far too expensive to accomplish. According to its statement to the Senate, it remains committed to modernizing PACER (which clearly isn't true) and thinks it will run out of money if people who've already paid once for the creation and storage of these documents aren't forced to pay again for access to them.

The Senate bill [PDF] would force the court system to do the thing it pretends it's been doing for years: overhaul the outdated PACER system. To help pay for these initial costs, high-volume users (those accessing more than $25,000 in dockets and documents quarterly) would still be charged PACER fees. For everyone else, it would be free.

The bill is still a few steps away from passing but free access to PACER is closer than it's been in years. And there's really no reason the government needs to continue charging taxpayers for access to documents they've already paid for. One wonders why the federal courts are so resistant to this change, considering the only thing at stake here is other people's money. Free access will still be taxpayer-funded. All this means is the court system won't have as large a slush fund to spend on office furniture and TVs -- items that do nothing to improve public access to court documents, which was the point of PACER all along.

Filed Under: congress, courts, fees, pacer, transparency

Birds Aren't Real, And Kids Are Not So Susceptible To Conspiracy Theories (Their Parents On The Other Hand...)

from the birds-aren't-real dept

Back in high school, I read Robert Anton Wilson/Robert Shea's Illuminatus! Trilogy back-to-back with Umberto Eco's Foucault's Pendulum, and ended up being amused and fascinated at the intersection of conspiracy theories and pranksters. If you're unaware, both books satirize the nature of conspiracy theories. Soon after I picked up a copy of Re/Search's Pranks! book, which, to this day, is on my book shelf between a copy of the Mondo 2000 book and The Book of the SubGenius (with a copy of the tiny Loompanics yellow version of Principia Discordia sitting next to them). Soon after reading those, I got to college, and thanks to the wonders of the internet (and Usenet in particular) discovered a group of somewhat merry internet pranksters who dubbed themselves "The Flat Earth Society" -- as a purely ironic group who enjoyed the mixture of absurdity, satire, pranking, with an appreciation for the occasional conspiracy theory worth mocking (I'm still in touch with some people from that group decades later, again, thanks to the internet).

That's all preamble to note that I not only recognize, but really appreciate what's going on with a group of Gen Z pranksters, who cooked up a rather brilliant satirical conspiracy theory, better known as "Birds Aren't Real," which has been making the rounds for a while now, and only was officially "exposed" as a prank in a thoroughly delightful NY Times article last week.

The events were all connected by a Gen Z-fueled conspiracy theory, which posits that birds don’t exist and are really drone replicas installed by the U.S. government to spy on Americans. Hundreds of thousands of young people have joined the movement, wearing Birds Aren’t Real T-shirts, swarming rallies and spreading the slogan.

It might smack of QAnon, the conspiracy theory that the world is controlled by an elite cabal of child-trafficking Democrats. Except that the creator of Birds Aren’t Real and the movement’s followers are in on a joke: They know that birds are, in fact, real and that their theory is made up.

What Birds Aren’t Real truly is, they say, is a parody social movement with a purpose. In a post-truth world dominated by online conspiracy theories, young people have coalesced around the effort to thumb their nose at, fight and poke fun at misinformation. It’s Gen Z’s attempt to upend the rabbit hole with absurdism.

It seems that every generation needs this kind of thing -- and it's often driven by young folks (correctly) mocking older folks for various moral panics about different conspiracy theories. We see it again, and again. The Stuff You Should Know podcast just recently had an episode all about SINA, the "Society for Indecency to Naked Animals" which was a very similar style prank in the late 1950s, early 1960s.

In each case, these tend to be efforts by younger folks mocking this or that moral panic by older folks -- who always cloak the moral panic in a desire to "protect the children," even as the moral panics themselves seem frequently to come out of conspiracy theories or nonsense that the older folks fall for, and many of the younger folks see through. It's hard not to identify with this kind of thinking:

Most Birds Aren’t Real members, many of whom are part of an on-the-ground activism network called the Bird Brigade, grew up in a world overrun with misinformation. Some have relatives who have fallen victim to conspiracy theories. So for members of Gen Z, the movement has become a way to collectively grapple with those experiences. By cosplaying conspiracy theorists, they have found community and kinship, Mr. McIndoe said.

“Birds Aren’t Real is not a shallow satire of conspiracies from the outside. It is from the deep inside,” he said. “A lot of people in our generation feel the lunacy in all this, and Birds Aren’t Real has been a way for people to process that.”

Or as someone notes later in the article:

Mr. Gaydos added, “If anyone believes birds aren’t real, we’re the last of their concerns, because then there’s probably no conspiracy they don’t believe.”

To me, though the clear take away from this is that, yet again, the kids are alright, and will continue to be alright. And for all of the "but think of the children" moral panics we will experience over and over again, the kids will figure out ways to process and deal with those moral panics in the best way possible for them, figuring out the best ways to deal with the impossibilities of the world, and making the best of what may seem like a bad situation.

Count me as all in as saying "birds aren't real."

Filed Under: birds aren't real, conspiracy theories, pranks, protect the children, satire, social media

Court Tells MyPillow CEO That Allegedly Dating An Actress And Buying Her Alcohol Isn't Defamatory

from the insulted-by-being-linked-to-attractive-people dept

MyPillow CEO/election fraud conspiracy theorist Mike Lindell apparently understands defamation law about as well as he understands cybersecurity, social media, and election machine operation. Lindell will be learning more about defamation law as he defends himself against voting machine manufacturer Dominion which has sued him (and a bunch of other Trumpists) over his alleged defamation.

But we'll see if he learns anything from this other lawsuit -- one he filed after the Daily Mail published an article claiming he pursued a relationship with 30 Rock actress Jane Krakowski. Now, most people would not feel insulted after being romantically linked to an actress, but this apparently bothered Lindell so much he decided to sue over it.

There's no defamation there says the New York federal court handling Lindell's complaint. The ruling is short, punchy, and instructive, although the court is dealing with a student especially resistant to learning lessons from stupid mistakes. (via Courthouse News Service).

The decision [PDF] says nothing in the Daily Mail's article, which alleged Lindell and Krakowski had a nine-month relationship during which Lindell sent her gifts like bottles of champagne, even approaches defamation, no matter how much Lindell would like to construe it otherwise.

Lindell immediately informed the Daily Mail the romance never happened. So did Krakowski. Both denials were included in the article. Even if the article was false, it wasn't defamatory and it contained denials that would allow readers to draw their own conclusions about the Mail's claims, which were allegedly supplied by friends of the actress.

But Lindell's main problem isn't his alleged relationship with the sitcom star. No, he's far more bothered by the implication that he -- a clean and sober recovering drug user and alcoholic -- would deign to buy alcohol for other people, even as a gift.

On a more abstract level, Lindell claims the Article disparaged his moral character. He maintains he is a recovering alcoholic who would never buy alcohol or "foist" it on other people, including Krakowski. To the contrary, Lindell is a Christian who "is piously devoted to his religious faith, his family, civic involvement and charity." Thus, he would never "engage in any sort of scandalous" or secret romantic relationship.

As a result of the Article, Lindell asserts his reputation "in the field of addiction recovery as well as in religious communities" has been damaged. He also claims the Lindell Recovery Network "has only been able to associate with a handful of churches," and that an unnamed "Christian broadcaster" told the Recovery Network that "churches may be pulling out" because of the Article.

While there are many reasons entities might want to distance themselves from Lindell, given his complete abandonment of rationality, it seems unlikely this article would have that effect. It never suggested Lindell was consuming alcohol. And Lindell was divorced at the time, so he was free to pursue companionship without running afoul of God's laws or whatever.

The court says this is ridiculous. It also notes there are far more serious allegations in the Daily Mail article but none of those appeared to have bothered Lindell.

Lindell does not challenge several provocative assertions in the Article. The Article describes Lindell as a "beleaguered 'Stop the Steal' Trump champion" who faces dozens of legal actions for his claims about election fraud and a fake COVID-19 cure, and for false advertising related to his pillow company. It goes on to state Lindell's "apparent enthusiasm for martial law" has caused retailers to drop his pillow products.

Nope, Lindell wanted to argue about actresses and alcohol. None of this rises to the level of defamation, says the court.

Even assuming the romance never happened, the above description would not defame Lindell. Dating an actress-secret or not-would not cause "public hatred," "shame," "ridicule," or any similar feeling towards Lindell. Both Lindell and Krakowski are unmarried adults, and Lindell's alleged actions typify those of a person in a consenting relationship. [...] New York courts require a publication to "impute[] serious sexual misconduct" to be defamatory per se. The Article does not mention sexual conduct at all, let alone serious sexual misconduct.

[...]

Lindell has provided no support for the proposition that gossip about a typical monogamous relationship could be "reasonably susceptible" to defamatory meaning.

The alcohol angle isn't any better, even given Lindell's background as a recovering alcoholic.

Inferring a step further, Lindell claims the Article still defamed him because he would never buy alcohol or "foist" it on other people after recovering from his own addiction. But whatever Lindell's personal history with addiction, buying alcohol for a dating partner would not reasonably expose him to "public hatred," "shame," or "ridicule." The purchase of alcohol is a legal and ordinary act. If even more problematic depictions of alcohol consumption, such as underage drinking or alcoholism, routinely fail to qualify as defamatory in New York courts, surely no reasonable reader could find it offensive to exchange champagne or other bottles of liquor as gifts between romantic partners.

That ends Lindell's attempt to wring money out of the Daily Mail for suggesting he dates women and buys them gifts. Lindell may still be on the hook for the Mail's legal fees as well. New York's anti-SLAPP law is operative here, even though the Daily Mail, for whatever reason, never bothered to file a counterclaim. The suit has been dismissed (without prejudice, meaning Lindell can waste more of his money trying this again), but the court points out fee-shifting isn't automatic. So Lindell's legal reps have at least one more visit to court ahead of them to respond to the Mail's demand for fees, which will, presumably, be arriving shortly.

Being personally offended isn't the same thing as being libeled. This is a distinction far too many plaintiffs fail to grasp. Unfortunately, their misunderstanding of the law (deliberate or mistaken) can still be expensive for those they sue. And, as the court points out in a footnote, fee-shifting isn't guaranteed. Federal courts can (and often do) decide state law doesn't apply at the federal level. And that makes this case yet another data point in favor of a federal anti-SLAPP law -- one that will deter bogus lawsuits all over the nation, rather than just in certain states.

Filed Under: defamation, free speech, jane krakowski, mike lindell
Companies: mypillow, the daily mail

Daily Deal: PlayStation Plus 5-Year Subscription Stackable Code Bundle

from the good-deals-on-cool-stuff dept

Take your PlayStation experience to the next level with PlayStation Plus! Connect with an enormous online community of gamers to compete in PS classics like Star Wars: Battlefront, Uncharted, and many more. If that's not reason enough to pull the trigger, the subscription also delivers an epic monthly collection of free games, in a library that is constantly expanding. Topped off with exclusive discounts, this membership pays for itself on day one. This bundle includes 5 separate one year subscriptions which can be stacked to give you 5 years of service or can be shared with friends and family. The bundle is on sale for $219. Use the code Green20 to get an additional 20% off.

Note: The Techdirt Deals Store is powered and curated by StackCommerce. A portion of all sales from Techdirt Deals helps support Techdirt. The products featured do not reflect endorsements by our editorial team.

Filed Under: daily deal

Turkey's Dictator Erdogan, Who Has Sued Thousands Of Critics, Jailed More, Now Claims That 'Social Media' Is A 'Threat To Democracy'

from the takes-one-to-know-one dept

In the past we've pointed out how western politicians' attacks on social media are only serving to play into the hands of authoritarians around the globe, justifying their crackdowns on free speech and critics. And that doesn't seem to be slowing down any time soon. The latest is Turkey's President repeating the exact lines that US/EU politicians have been using to slam social media as "dangerous to democracy" in order to justify even more draconian crackdowns on speech and the press in his country.

We've written about Turkey's President Recep Tayyip Erdogan for years -- mostly covering his regular attacks on free expression. Erdogan has sued thousands of people for "insulting" him online. Even more serious is his regular practice of jailing journalists by falsely calling them terrorists. He's also lead aggressive campaigns to ban any website that portrays him in an unflattering light.

So, you'd think that maybe US/EU politicians might recognize the problems of someone like Erdogan using their own words to further push his agenda. This weekend, Erdogan announced that social media is a "threat to democracy" and pushed for new laws that would criminalized "fake news" being spread on social media.

“Social media, which was described as a symbol of freedom when it first appeared, has turned into one of the main sources of threat to today’s democracy,” Erdogan said in a video message to a government-organised communications conference in Istanbul.

He added: “We try to protect our people, especially the vulnerable sections of our society, against lies and disinformation without violating our citizens’ right to receive accurate and impartial information.”

I mean, that sounds nearly identical to claims made by people like Senators Amy Klobuchar, Josh Hawley, Elizabeth Warren, or Ted Cruz. Of course, there is no actual democracy in Turkey right now, and Erdogan is just using these claims to justify even greater suppression of speech that criticizes him. As we've highlighted over and over again hate speech laws always turn into a mechanism for the government to punish people they don't like.

As the article notes, Turkey has already moved to have much great control over social media companies, and this new move will ratchet up the pressure:

Turkey passed a law last year requiring social media platforms that have more than 1 million users to maintain a legal representative and store data in the country. Major social media companies, including Facebook, YouTube and Twitter, have since established offices in Turkey.

The new legislation would make the dissemination of “disinformation” and “fake news” criminal offences punishable by up to five years in prison, according to pro-government media reports. It also would establish a social media regulator.

It seems like those US social media companies may want to reconsider their local offices.

But, even more to the point, US and EU politicians going out of their way to exaggerate and slam social media as a "threat to democracy" might want to think a bit more about how their words are being used, almost verbatim, as a justification around the globe to suppress free speech and political criticism.

Filed Under: censorship, democracy, hate speech, recep tayyip erdogan, regulations, social media, turkey

Austin The Latest City To Try And Impose A Netflix Tax

from the gimme dept

Hungry to boost municipal budgets, a growing roster of states and cities have spent the last five years or so trying to implement a tax on Netflix, Hulu, and other streaming services. Sometimes (like in Chicago) this has involved expanding an existing amusement tax (traditionally covering book stores, music stores, ball games and other brick and mortar entertainment) to online streaming. Other times this has involved trying to leverage existing cable TV laws or ordinances to try extract their pound of flesh from Netflix. In both, it involves taking rules written for the physical world, and applying them to the internet. Often haphazardly.

That's what's happening in Austin, where the city just joined a growing Texas lawsuit trying to force Netflix to pay the same taxes as local cable providers. Texas law allows cable and video providers to deliver cable TV via publicly-owned utility poles on public land in exchange for remitting 5% of gross revenue to the municipality. So the argument has generally been because Netflix bits technically travel over those same lines, they should also be responsible for paying that tax:

"Streaming services such as Netflix, Hulu and Disney+ have their content moved through those lines, but they do not pay the fees imposed on traditional cable TV providers. Austin officials say they should.

The Austin City Council voted last week to join the coalition lawsuit against streaming providers. It often depends on state law and local guidelines, but such efforts often don't go very well. Georgia, Indiana, Ohio and Nevada have all pursued similar efforts, and most of them have found themselves bogged down in elaborate legal fisticuffs for trying to apply laws generally written for different technologies and different eras to the modern streaming world.

Cable TV providers generally have a physical presence in the towns and cities they serve. Employees live in these areas, climb physical poles in these areas, and do tech support calls in these areas. By contrast, a company like Netflix may have little to no real physical presence in a town (outside of maybe some CDN hardware at an internet exchange point or regional ISP), so demanding they pay a tax under laws designed decades ago for different technologies often proves logically and legally unsound.

Netflix argued as much last January, making it clear the costs would be passed on to consumers:

"These cases falsely seek to treat streaming services as if they were cable and internet access providers, which they aren’t. They also threaten to place a tax on consumers that the legislature never intended, and we are confident that the courts will conclude that these cases are meritless."

I suspect a lot of municipalities will continue to struggle to make progress here. Older franchise agreements and state laws in a lot of states exempt any service that doesn't have significant local physical infrastructure. A mish mash of local court rulings means there's not a whole lot of federal precedent on this stuff, but eventually this debate is going to wind its way to the Supreme Court, where the efforts could easily be swatted down by an over-arching federal ruling.

Filed Under: austin, franchise fees, netflix tax, streaming, taxes, texas
Companies: disney, hulu, netflix