Tim Wu Joins NY AG's Office In Shaming 'Abysmal' Cable Broadband ISPs

from the stating-the-obvious dept

Last fall, we noted how New York Attorney General Eric Schneiderman's office had launched an investigation into awful broadband service quality. In and of itself that was nothing particularly interesting (especially given Schneiderman's history of grandstanding), though what made the inquiry of note is the office's hiring of Tim Wu, the Columbia Law professor who first coined the term "net neutrality" back in 2002. With Wu as the AG's "senior lawyer and special adviser," Schneiderman sent letters to NYC area broadband incumbents Verizon, Cablevision and Time Warner Cable -- questioning whether they actually deliver the speeds they advertise.

So far this inquiry doesn't appear to have culminated in much of anything beyond a recent letter sent to Charter CEO Tom Rutledge (pdf) warning him that he needs to dramatically improve the "abysmal" service offered by one of the company's recently acquired properties, Time Warner Cable. According to the AG's letter, tests conducted by volunteers show that Time Warner Cable connections consistently fail to achieve advertised data rates:

"The results we received from Time Warner Cable customers were abysmal. Not only did Time Warner Cable fail to achieve the speeds its customers were promised and paid for (which Time Warner Cable blamed on the testing method), it generally performed worse in this regard than other New York broadband providers. In short, what we have seen in our investigation so far suggests that Time Warner Cable has earned the miserable reputation it enjoys among consumers. Overcoming this history will require more than a name change; it will require a fundamental revolution in how Time Warner Cable does business and treats its customers.

This, of course, is not really a new revelation. Limited competition historically leaves large ISPs with no incentive to seriously upgrade infrastructure or customer support, resulting in the cable companies most of us know and love. And while the letter promises Charter's CEO the NY AG's office will "be in touch soon to propose next steps," the AG hasn't really offered a solution so far. And the letter comes just as New York State joins federal regulators in approving Charter's $79 billion acquisition of Time Warner Cable and Bright House Networks, a deal most consumer advocates warn simply creates another Comcast with the size, scope and power to ensure broadband remains marginally competitive at best.

While the AG's office appears to have used a relatively simple speed test to collect the data, a far more comprehensive study by the FCC last year (using custom-firmware embedded routers in user homes) found that roughly 10% of Time Warner Cable customers got less than 80% of their advertised speeds during prime time, 15% received 80 to 95% of their advertised speeds, while 75% got more than 95% of advertised speeds. That's not perfection, but it doesn't really rise to the level of "abysmal," either.

In fact, that same FCC study found that the majority of the ISPs measured do consistently deliver advertised speeds, and since the FCC began conducting these studies -- some ISPs have even taken to offering a little more than what's advertised to avoid public shaming of this type. The problem with the AG's inquiry is that, historically, speed hasn't really been as large of an issue as horrible customer service, sneaky misleading fees and high prices, the last two of which federal and state regulators have a long, proud history of completely ignoring. And unless the AG has some magical way to address a lack of competition in the market, harsh letters stating the obvious may not really accomplish all that much.

Filed Under: broadband, eric schneiderman, new york, shaming, speeds, tim wu
Companies: cablevision, time warner cable, verizon

NY Governor Announces App Version Of State's 'See Something, Say Something' Program

from the swipe-left-to-report-as-potential-terrorist dept

Seizing on a terrorist attack halfway around the world, the governor of New York has vowed to make his state safer by adding more bodies to the NYPD's overstuffed counterterrorism units and, as is the style of the time, introduced an app that will allow any New York resident to report anyone with a camera near a public building, bridge, tunnel, parked car, or power line.

"See Something, Send Something" allows anyone to capture suspicious activity as a photo or written note and send the information to the New York State Intelligence Center. From there, the tip will be reviewed and if relevant, sent to the appropriate law enforcement agency. Public service announcements promoting the campaign will be played at DMV offices and service areas along state highways.

By using the app, which can be downloaded for free for iPhone and Android phone users, there is no worry about who to send the tip to or what phone number to call—users can simply send a photo of the suspicious activity using their device’s camera, by choosing a photo from its library, or sending a written note. It also includes information on what to look for and when to report suspicious activity. The service is already available in Colorado, Louisiana, Ohio, Pennsylvania and Virginia.

The governor's press release reminds New Yorkers that the app is for reporting of suspicious people/objects/actions only and very definitely not for criticizing the government's terrorist hysteria or regaling local DHS Fusion Centers with an assortment of dick pics.

In order to keep the app focused on safety, users should report only suspicious behavior and situations (e.g., an unattended backpack or briefcase in a public place) rather than beliefs, thoughts, ideas, expressions, associations, or speech unrelated to terrorism or other criminal activity.

Well, good luck with that.

The office also reminds users that no matter how often they send messages about the suspicious Muslim listening to ISIS instructions on his headphones with ever-increasing amounts of exclamation points/capital letters, it will never result in local law enforcement instantly arriving to "control the scene."

The app does not replace 911 and should not to be used for someone needing immediate police action or to report an emergency.

Not included in the press release is any disclaimer or warning that "immediate police action" may result in serious injury or death, even (or especially) if impending injury/death is what's hoping to be prevented by the summoning of law enforcement.

The governor's office also links to recommended reading material to better inform would-be See-Senders about the warning signs of potential terrorist activity.

Terrorist cells have been known to record and monitor activities, taking pictures and making drawings.

ALSO: new parents, artists, people with excessive amounts of time on their hands, public sector employees, everyone who possesses a smartphone, etc.

A clarifying note inside the app that will probably be read by no one adds some cautionary wording not found on the NY DHS website.

Taking pictures or video of facilities, buildings, or infrastructure in a manner that would arouse suspicion in a reasonable person…All reporting on photography should be done within the totality of the circumstances.

But acting as an extra set of eyes for a city that has millions of them -- some even located in human skulls -- doesn't just help fight the War on Terror. It also helps fight the War on… Fire.

Being observant supports homeland security and fire prevention efforts.

If nothing else, the app comes highly recommended by someone who watches a lot of cable news programming.

This App was on Cnn, Cnbc, Msnbc.. Due to IsIs we have to do all we can to protect ourselves

The app itself has been around since January 2013. Despite that, it's apparently still only usable in six states. And there seems to be no information available on how many suspicious activity reports the app has generated, much less if it's actually resulted in any attacks prevented.

What it is, though, is "something," the favorite activity of politicians looking to capitalize on tragic events. My Mobile Witness is nothing more than "Do Something: the App." It gives those who feel they need a direct line to local DHS offices something to do with their idle fingers/paranoia and gives the state's top legislator something to say in the wake of the Paris attacks. Everybody wins… except maybe those who are accosted/arrested for whipping out their sketch pad within eyeshot of a public structure.

Filed Under: andrew cuomo, neighbors, new york, overreaction, say something, see something, send something, spying, surveillance, terrorism, trust

Can You Defame Someone By Directly Creatively 'Quoting' Them? New York Court Says You Can.

from the the-64-character-question dept

The Daily, a short-lived, iPad-only "newspaper," may be in the process of setting a defamation land speed record: 64 characters.

The defamation lawsuit, which just survived The Daily's motion to dismiss, revolves around the following statement -- half of a comment tweeted by the plaintiff, New York DJ Rashad Hayes.

I was gonna start shooting in the air, but I decided against it.

There's a lot of context surrounding this quote, but it was removed (and recontextualized) by The Daily Holding.

DJ Rashad Hayes was an employee at a club where two recording artists -- Drake and Chris Brown -- participated in a bar brawl over Rihanna, Brown's periodic girlfriend and assault victim. Bottles were thrown. Fists were thrown. And, after it had all died down, Hayes -- who was not at the club that night -- engaged in Twitter discussions about the event, delivering the following tweet as a joke:

I was gonna start shooting in the air, but I decided against it. Too much violence in the hip-hop community.

The Daily covered the bar brawl for its iPad subscribers. It decided to use Hayes' tweet to liven up the story. First, it stripped away half the tweet. Then it stripped it of its context, divorcing it completely from some jokey Twitter trash talking between friends and hip hop fans.

Finally -- and most damningly -- it completely recontextualized Hayes' tweet by turning it into a statement made by someone actually present at the club on the night of the brawl.

On June 15, 2012 the Daily posted a news article about the altercation, titled "Ri-Ri's Rumble," which included the following statements:

" So we're sitting in there. Me, a couple of others, Chris,' eyewitness DJ Rashad Hayes said. Drake comes in and keeps eyeballing the table.'

"Perhaps to show he didn't care that Drake had hooked up with his ex — or to flaunt the fact that he's rekindled his romance with her — Brown sent a bottle to Drake's table. Drake sent it back with a note, a witness told the New York Post. It read, I'm f***ing the love of your life [Rihanna], deal with it.'

"And then things erupted. As rappers Maino and Meek Mill looked on, Brown and Drake's entourages threw bottles and fists throughout the club. I was gonna start shooting in the air but I decided against it,' Hayes said."

Not only did the iPaper recast a tweet as an eyewitness statement, but it also allegedly made up every other quote from Hayes it included in its article.

Specifically, plaintiff alleges that defendants falsely identified him as a witness who made the statement: "So we're sitting in there. Me, a couple of others, Chris . . . Drake comes in and keeps eyeballing the table," when he never made any such statement to anyone. Plaintiff further alleges that the article implied that he had stated, "I was gonna start shooting in the air but I decided against it" to a reporter in seriousness, when that statement was only a tweet he made in jest. Further, plaintiff alleges that he was not at WIP on the night of the fight and that by failing to publish his full tweet, the Daily changed it from one eschewing violence, to one that made it look as if plaintiff were a "gun-toting psychopath with an itchy trigger finger."

Hayes claims the article resulted in him being banned by the club and ended negotiations for a permanent position as a DJ.

The Daily claimed it could not be held liable for publishing Hayes' "own words," even considering the removal of context. It also claimed the quotes it allegedly made up were not libelous.

The court agreed with part of its argument.

With respect to the first alleged defamatory statement (" So we're sitting in there. Me, a couple of others, Chris,' eyewitness DJ Rashad Hayes said. Drake comes in and keeps eyeballing the table.'" [boldface omitted]) and the allegedly fabricated portion of the second statement ("And then things erupted. As rappers Maino and Meek Mill looked on, Brown and Drake's entourages threw bottles and fists throughout the club." [boldface omitted]), neither the language, nor the implication that plaintiff was a witness to the incident, are libelous on their face, meaning that the complained of words are not commonly understood to subject a person to public contempt or ridicule. Stated another way, the import of this statement is innocent on its face since it merely conveys that plaintiff was sitting at a table observing his surroundings; even if false, this statement is not defamatory.

As for the "own words" defense, the court says context matters, even when directly quoting someone.

Courts typically compare the complained of language with the alleged truth to determine whether the truth would have a different effect on the mind of the average reader. Although it is conceded that defendant accurately quoted plaintiff's own words from Twitter, that does not necessarily mean that the statement could not have produced a worse effect on the mind of a reader than the truth as alleged by plaintiff. A reader could read the alleged defamatory statement in the context of the rest of the article and think that plaintiff was actually present in the club, prepared to shoot a firearm; whereas, a reader of plaintiff's isolated statement on Twitter may not have the same impression. In this unique case, the context of the two versions of the same statement is crucial.

[...]

Even if we were to adopt the "own words" defense, we find that it would not apply here where a comparison of the two statements reveals the potential for them to have different effects on the mind of the reader.

To that end, the court denies The Daily's motion to dismiss. Hayes is instructed to enter a "show your math" pleading for special damages -- something more specific than the $3,000,000 he argued he was owed (without support/documentation) in his original complaint.

So, the truth/"own words" isn't an infallible defense to defamation accusations. However, the truth in this case wasn't the whole truth. And the "own words" were stripped of their original context and injected into an entirely (and allegedly entirely fabricated) narrative. So, the normal defamation accusation defenses remain solid. The Daily just went out of its way to severely damage its own safety valves.

Filed Under: chris brown, context, defamation, drake, new york, quoting, rashad hayes

NY Attorney General Shuts Down Daily Fantasy Sports Sites, Because Grandstanding

from the here-we-go-again dept

We've talked a lot in the past about how various state Attorneys General love to grandstand in ways where they get headlines that they can hold up to claim they're "protecting the public from evil corporations," even when there's no legal basis for it. Usually it's for the sake of the headlines, because most state Attorneys General use their office as a stepping stone for Governor or Senator. In the last few years, the "pick on high profile company x" plan has involved a lot of internet companies -- because they're in the news so much. And, now, New York's Attorney General Eric Schneiderman has declared daily fantasy sports sites like FanDuel and Draft Kings to be illegal and ordered them to stop accepting users in NY.

As you probably know, daily fantasy sports sites (specifically those two) have exploded in popularity in the last year or so, mostly based on something of a loophole in anti-online gambling laws in the US. When those laws were passed, at the demands of the casino business (and bizarrely attached to a bill about protecting our ports), there was an exception for "fantasy sports." At the time, of course, this meant fantasy sports leagues where you joined for the full season, or at least something along those lines. Then Fan Duel (which started out in Scotland as a prediction market for betting on the news) realized that it could make a sort of "daily" fantasy sports league that was legal under these rules, and Draft Kings followed a couple years later. With their explosion in popularity, it's no surprise that they'd start receiving regulatory scrutiny. Indeed, Congress and the Justice Department have both kicked off investigations of these sites in the past couple of months.

It wouldn't surprise me at all to find that both sites will soon face much stricter regulatory control. That's the nature of the game, especially when it involves something that, if not "gambling" certainly feels like gambling to many policymakers, and the supporters of moral panics. Of course, rushing in to regulate will almost certainly cause problems, blocking off potential innovations in this field that could be much better for all involved.

And thus, NY's Eric Schneiderman enters the fray, reinforcing his reputation as someone willing to attack internet platforms that most users love, just because of a few small incidents of potential abuse. In this case, he's basically cut off these two platforms without any sort of court ruling.

"It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country," Mr. Schneiderman said, adding, "Today we have sent a clear message: not in New York, and not on my watch."

I recognize that some people can have serious problems with gambling that can create problems in their lives -- but many more are able to enjoy gambling for what it is. And it's kind of bizarre for Eric Schneiderman to declare "fantasy sports" gambling when he represents the state where Wall Street exists -- which involves significantly more "gambling" than anything coming out of two internet companies that many people seem to like using. People aren't being "fleeced" when they willingly participate in one of these daily fantasy sports sites. If there are -- as Schneiderman suggests -- misleading ads about the likelihood of winning or the amounts people can win, take issue with that, rather than shutting down the whole thing.

In the meantime, doing a big grandstanding rush job to shut these sites down to get all the headlines, without the benefit of a careful review and thoughtful understanding of the issues at play just seems like Schneiderman, once again, reminding innovative startups that New York is not welcoming for such innovation.

Filed Under: daily fantasy sports, eric schneiderman, gambling, innovation, new york, regulations, tech
Companies: draftkings, fanduel

With Tim Wu's Help, New York AG Launches Belated Investigation Into Whether ISPs Intentionally Slowed Netflix

from the looking-for-the-silver-bullet dept

A little more than a year ago you might recall that everybody's Netflix performance was in the toilet and the mega-ISPs were being blamed for it. In short, companies like Cogent, Level3 and Netflix all claimed large ISPs like Verizon had intentionally let their peering connections to some other networks saturate, contributing to sluggish Netflix streams. The goal, claimed Netflix and friends, was purportedly to make an extra buck by eliminating the long-standing practice of settlement-free peering, forcing Netflix to pay for direct interconnection to ISP networks if they wanted performance to return to normal.

Except here's the thing: once the FCC's net neutrality rules were passed, all of this double-dipping behavior magically and suddenly stopped. Ports mysteriously unclogged, new mutually-beneficial contracts were signed, Netflix streaming performance returned to normal, and the threat of a regulator actually doing its job now had everybody getting along famously. Our long, dark buffering Netflix nightmare appeared to be at an end.

So it's a little odd for New York Attorney General Eric Schneiderman to announce only just this week that he's launched an investigation into interconnection and streaming performance issues. Schneiderman recently hired net neutrality godfather and Columbia law professor Tim Wu as a temporary "senior lawyer and special adviser." It's now clear why. On behalf of the NY AG, Wu has sent letters sent to NYC incumbents Verizon, Cablevision and Time Warner Cable (pdf) demanding huge swaths of documents related to last mile performance and interconnection:

"This Office is concerned that, for reasons substantially within Verizon’s control, consumers may not be experiencing the speeds advertised. In particular, we are concerned that those paying for premium options, for various reasons mainly related to interconnection arrangements, may not be experiencing proportional increases in experienced speeds. Our concern is that the impact of technical and business decisions made at the point of interconnection between Verizon and other networks may affect end-to-end throughput. In this respect, we are specifically concerned about disruptions to the consumer experience caused by interconnection disputes, and also the possibility that interconnection arrangements may in some instances render irrelevant any benefit of paying for a “premium” option."

Here's the problem. While available evidence from MLAB (pdf) and a generation of bad behavior may certainly suggest companies like Verizon were up to no good, it's not yet possible to definitively prove it with the data we currently have. That data shows this congestion was tied to business policy and not network limitations, but how exactly do you prove Verizon didn't adequately upgrade key hardware to intentionally create congestion? It's unlikely a company as clever as Verizon or Comcast would have acknowledged the anti-competitive potential of such a decision in a memo or PowerPoint presentation.

Perhaps Wu thinks such a silver bullet exists and he can find it. And sure, such proof would certainly be helpful should the FCC's net neutrality rules be struck down in court early next year and it's left to other regulators to hold the mega ISPs to account for bad behavior. On the flip side, with Verizon not very popular in New York right now, this could just be a not-entirely uncharacteristic attempt by Schneiderman to see his name in very bright lights, with the AG coming to the public's rescue only after the threat has already passed.

Filed Under: broadband, congestion, eric schneiderman, interconnection, new york, tim wu
Companies: at&t, netflix, time warner cable, verizon

Federal Judge: Profanely Insulting An Entire Town On A Speeding Ticket Is Protected Speech

from the f#*@-yeah dept

Do you remember Willian Barboza? No? He was the un-creative but quite profane young man who, upon being pulled over for speeding the laughably-named Liberty, New York, mailed in his ticket and fine with these wonderful words of wisdom scrawled across the top.

Fine, so Barboza isn't exactly Robert Frost. Still, his admittedly vulgar etchings probably weren't reason enough for the city to refuse his payment and subsequently charge him with harrassment under a horribly unconstitutional law. The city went that route anyway, though, and the matter went before a court, where the judge dismissed the charges against Barboza, as his profanity upon the ticket was obviously protected speech. I had thought that was the end of the story. I was wrong.

Shortly after that, Barboza, with the help of the New York Civil Liberties Union and attorney Stephen Bergstein, filed a lawsuit against the town of Liberty, assistant district attorney Robert Zangla and the two officers who arrested Barboza. The suit alleged that the arrest had violated Barboza's First Amendment right to free speech.

Barboza's attorneys argued that officials in Liberty had seriously misinterpreted New York's aggravated harassment statute. The statute says it's against the law for a person to "harass, annoy, threaten or alarm” someone "by telephone, by telegraph, or by mail, or by transmitting or delivering any other form of written communication." But Seibel said Thursday that what Barboza wrote, "though crude and offensive to some, did not convey an imminent threat and was made in the context of complaining about government activity," and therefore did not violate the statute.

And, frankly, it's hard to argue with his attorneys. The wonderful thing about free speech is that the speech is free even if the listener doesn't like it. The city's attempt to twist a harrassment law into the kind of pretzel that allows it to silence the criticism of government or law enforcement was deplorable and not befitting a town that takes the name of Liberty. As a person who relies on language some might find salty in order to make or emphasize a point, it would be a travesty to have to wonder whether simple expression might result in arrest and jail time. I, frankly, can't think of anything more un-American.

The judge hearing Barboza and the NYCLU's case agreed with them completely.

Judge Cathy Seibel said that prosecutors and police in Liberty, New York, violated Willian Barboza's civil rights when they arrested and prosecuted him for writing "Fuck your shitty town bitches" on a ticket he received in 2012. The judge stated that Zangla is liable for damages because he violated Barboza’s clearly established constitutional rights, but that the two police officers are not liable because Zangla instructed them to make the arrest. Seibel also ruled that Liberty will have to stand trial for failing to train police officers regarding the First Amendment.

Perhaps we should be getting the primary schools Zangla went to involved as well, because First Amendment protection is elementary school civics class stuff. Regardless, it's a win for all of us salty-mouthed bastards.

Filed Under: first amendment, free speech, liberty, new york, speeding ticket, willian barboza

NYC Judge: Taxis Must Compete With Uber, No Matter The Medallion Industry

from the bravo dept

If violence is the last refuge of the incompetent, as Issac Asimov's delightful line in Foundation tells us, then perhaps desperate lawsuits are the last refuge of the disrupted industry. There is simply no better example of this than the many groups affiliated with many city's taxi services and their many lawsuits against Uber. We've seen this dance play out in the past, with the disrupted industry flailing away in court, attempting to get the government and/or the law to protect its own business interests rather than competing with a disruptive newcomer. It almost never ends well for the old guard.

But it isn't just taxi companies themselves who have attempted to get into this mix against Uber. Take a case brought in Queens, for instance, in which Melrose Credit Union joined others in an effort to force Mayor de Blasio and New York's Taxi Commission to ground Uber on its behalf. Melrose Credit Union has most of its loan portfolio tied into medallion purchases, lending money to taxi companies in order that they could pay the once-expensive medallions. The problem, obviously, has been that taxis aren't making as much money as they used to because Uber is displacing them. As a result, taxi companies and drivers can't make enough to pay back the loans, the loans are defaulting, and Melrose Credit Union is freaking the hell out. They told as much to Queens Supreme Court Justice Alan Weiss. Weiss, as it turns out, was less than impressed.

“Any expectation that the medallion would function as a shield against the rapid technological advances of the modern world would not have been reasonable,” he wrote. “In this day and age, even with public utilities, investors must always be wary of new forms of competition arising from technological developments.”

In other words: compete or die. And those really are the options, no matter what other legal actions might be taken or verdicts rendered. The fact is that the progress of technology will indeed march on and will create more efficient ways of performing within any given industry. Attempting to stem that flow with trumped up legal actions and proclamations of the industry's destruction would only work in the short-term, if at all. In this case, the court ruled that de Blasio and the Taxi Commission aren't required to keep Uber drivers from picking up customers. And why should they be? If the public wants the service, Melrose Credit Union would deny them that service on the argument that it will lose money? Judge Weiss wasn't having that.

Judge Weiss made clear that that’s not his concern. “It is not the court’s function to adjust the competing political and economic interests disturbed by the introduction of Uber-type apps,” he wrote.

Indeed it isn't, nor is it the court's function to countermand the Taxi Commission's stance that Uber rides are pre-planned rides, instead of hailed fares off the street, and therefore don't require a medallion. If medallions become less valuable, that's a problem for the medallion money-men to endure, not the public.

Filed Under: cabs, competition, disruption, innovation, lawsuits, loans, medallions, new york, taxis
Companies: melrose credit union, uber

Court Orders Halt To New York Law Demanding Online Access To Pawn Shop Acquisition Records

from the best-I-can-do-is-a-couple-of-lawsuits-for-your-heavily-used-general-warrant dept

Pawn shops -- like scrap metal dealers and junkyards -- are "closely regulated" businesses. What this means is they are compelled to track acquisition information and make it available for law enforcement to view without a warrant. The nexus of these businesses to criminal activity is undeniable. But that doesn't necessarily mean everything law enforcement demands, it gets. Some demands exceed the diminished Fourth Amendment protections afforded to these businesses.

The "closely regulated" language comes from the US Supreme Court. In a decision affecting a New York junkyard owner, the Supreme Court found that:

A business owner's expectation of privacy in commercial property is attenuated with respect to commercial property employed in a "closely regulated" industry. Where the owner's privacy interests are weakened and the government interests in regulating particular businesses are concomitantly heightened, a warrantless inspection of commercial premises, if it meets certain criteria, is reasonable within the meaning of the Fourth Amendment.

A decision in the New York Supreme Court (People v. Keta) seemingly went against the US Supreme Court's precedent. It narrowed the broad exceptions to the Fourth Amendment somewhat, with the presiding judge (Vito J. Titone) noting:

"Our responsibility in the judicial branch is not to respond to these temporary crises or to shape the law so as to advance the goals of law enforcement, but rather to stand as a fixed citadel for Constitutional rights."

But "advancing the goals of law enforcement" still seems to be the goal. Officers are free to inspect acquisition records without a warrant, as well as seize stolen goods in plain sight, but most other actions (including searches of safes, etc.) still require additional paperwork.

In order to expedite police inspections of pawnbrokers, New York legislators passed a law making it even easier for law enforcement check in on "closely regulated" businesses.

RCNY §21-03(a) and (b), §21-04(a) and (c), §21-07(a)-(f), and § 21-08, promulgated as a result of Local Law No. 149 require pawnbrokers and dealers in second-hand merchandise to create electronic transaction records and upload the same to a web-based electronic transfer service designated by the NYPD known as Leads Online, who then makes those records available to the NYPD.

Because this law compels (sort of…) the upload of information to a database that can be accessed at will by law enforcement and other entities, it does not conform to the standards set by the NY Supreme Court's Keta decision.

[T]he foregoing statutes fail to prescribe limits for the review of the records required to be disclosed and, in fact, in requiring the daily disclosure of those records seem to vest with the NYPD the unbridled discretion which even the court in Glenwood TV, Inc., would invalidate a statute authorizing warrantless searches (103 AD2d, 322, 330).

[...]

Specifically, at this stage, it is hard to fathom how the foregoing statutes - bereft of any standards on the frequency of searches, setting virtually no limit on how said searches will be conducted and thus, conferring unfettered discretion upon the defendants suffer from the very afflictions the court in Keta held afflicted VTL § 415-a(5) - can, in light of their facial unconstitutionality born by this record, be constitutionally applied.

The court mentions the "means to an end" approach the NYPD is rather fond of. Simply having on-demand, warrantless access to on-site inspection of "closely regulated" businesses' records wasn't enough. It wanted to enjoy the same privileges without leaving the office. Now, these "inspections" -- along with others permitted under the same set of statutes -- have been halted until further notice.

This compelled database of acquisition information is the centerpiece of another lawsuit against the city and the NYPD. It appears from the allegations made in this suit that the NYPD expresses a certain irritation with those that don't opt-in to the online database. (The law requires creation and storage of electronic records, but does not actually mandate the use of Leads Online by affected businesses, stating only that "such electronic record may include real-time sharing or accessing of such records in an electronic format and/or through use of an internet website designated by the police commissioner.")

Plaintiff here alleges that Defendants have “effectively singled out Gem from other pawnbrokers and secondhand dealers and have done so with malice and bad faith.” (Am. Compl. ¶ 152.) Plaintiff further alleges that pawn brokers who choose not to use Leads Online are subject to additional onsite inspections for “administrative purposes,” and that Plaintiff has experienced continual visits to its stores, warrantless searches, holds on jewelry, criminal summonses and over all harassment. (Id. ¶¶ 36–133.) Defendants raise no argument as to this element of Plaintiff’s selective enforcement equal protection claim, instead relying on the fact that the NYPD is permitted to perform administrative inspections. The Court finds that Plaintiff’s detailed description in its Amended Complaint of the actions taken beyond mere administrative inspections, including various in-store visits from the NYPD, statements made to Gem employees, subsequent requests for jewelry holds, and the seven misdemeanor summons received, (see id.), are adequate to demonstrate at the pleadings stage a malicious or bad faith intent to injure Plaintiff. The Court therefore finds that Plaintiff has stated a plausible claim for violation of the Equal Protection Clause and Defendants’ motion to dismiss is, therefore, denied.

This lawsuit was filed before Local Law 149 was passed and enacted, suggesting there was a pre-legislation push by the NYPD to move these records to an online database. As of this point, the lawsuit is still ongoing, having survived the city's motion to dismiss.

The codes cited in the lawsuit don't specify anything more than the sort of records to be maintained. In accordance with the new law, these records are to be maintained electronically, but nothing specifically mandates the use of an online database.

As the court sees it here, this demand to participate in the online collection of these records -- which can be perused at the sole discretion of law enforcement officers and others with access to the database -- falls dangerously close to being a "general warrant." Compelled production of records during periodic inspections and/or suspicion of illegal activity is one thing. Providing at-will "inspections" with no corresponding guidelines turns "close regulation" into a prime fishing spot for law enforcement, who will no longer be participating in periodic inspections and searches, but rather trolling databases simply because they have unfettered access to the information.

Obviously, this has its parallel in the recent incident involving Motel 6's faxing of guest information to local law enforcement nightly. Motels and hotels are businesses that are subject to routine inspection of collected records, but nothing about this sort of regulation demands proactive measures on the part of the businesses involved, other than the collection and maintenance of the required records. The rest is dependent on law enforcement not abusing these privileges, which wander outside the protections of the Fourth Amendment -- supposedly in the "public interest," i.e. fighting crime.

The necessary limitations -- and there are only a few -- are subverted by instantly-accessed, central collections of this information. The Supreme Court may have lowered the Fourth Amendment standards for these businesses, but New York's highest court stills sees at least a minimal amount of privacy implications in this sort of regulation. These are in place to help law enforcement combat theft, but these noble ends are not a justification for "by any means necessary" approaches.

Filed Under: new york, pawn shops, police, records, surveillance

NYC Taxi And Limo Commission Looks To Regulate All Ride Hailing Services

from the because-that's-how-innovation-works dept

Whatever you might think of Uber in terms of its attitude and practices (and, really, people feel this weird need to rant on about such feelings, but that's unrelated to the point of this post -- so no need to tell everyone), you can't really deny that it has truly revolutionized the way that many people are able to get around in a variety of metropolitan areas. And Uber and its various competitors have done this by building a better system that is much more convenient and easy to use, and actually using much more realistic market forces, rather than doing silly things like artificially limiting the number of taxi medallions to keep taxi services scarce and expensive.

Of course, the old beneficiaries of the system, have hit back any way they can. As we've written repeatedly, various cab companies and bureaucrats seem to go out of their way to attack such ride sharing services. The typical go-to claim from those hating on ride hailing services is that because they're less regulated, they're more subject to fraud and abuse or unsafe driving conditions. There is, however, little evidence to back that up. While there are some anecdotal stories of bad ride hailing drivers, we're already seeing innovative ways to deal with that. For example, in India, Uber recently added an emergency button to its app, which would directly alert police if a rider was in trouble.

In short, what we've seen is that, through innovation, competition and (most importantly) an abundance of information, a better overall result can occur. The reasons for many taxi regulations in the past was because of clear information asymmetry: taxi drivers could (and frequently did) screw over passengers, because there was basically no recourse. There was no way for a rider to know if the driver was safe or not, and (more importantly) no real way for that rider to then warn future passengers. But ride hailing services changed that in a big way by flipping the equation, and allowing a good way to rate drivers and to create incentives for those drivers to do a good job. It's not perfect, but, frankly, my own experience in using Uber and Lyft has been that the overall experience has been much, much better than using a traditional cab.

In New York City -- a place where cabs have long been limited by its famous medallion system -- there's been a struggle to deal with this innovative change. Just last year, we wrote about the Taxi and Limousine Commission declaring Lyft to be illegal. And, a few months ago, a NYC politician proposed a bill that would require the TLC to create its own Uber-like app. Because, apparently, innovation works by having the government mandate another part of the government copy an innovative company?

Either way, the TLC is now looking to go even further, in proposing new rules that say that basically any ride hailing app should be fully regulated by the NYC TLC and including a bunch of conditions that really don't seem necessary. Some of them just seem like relics from a previous era that are there because they were there in the past. It's difficult to see why that makes any sense. And then there are new requirements that also seem bizarre. Like this:

The website and/or smartphone application must provide Passengers, upon request, with an estimate of the total fare, inclusive of all fees and any price multiplier or variable pricing policy in effect, for the ride.

I can see how that would be a nice feature to have, but should it be required by the government? If Uber doesn't provide that and Lyft does, then isn't that just a competitive advantage for Lyft? And, really, do existing taxi systems already do that beyond a driver tossing out a random estimate off the top of his head on how much it will cost to go somewhere?

Then there's something really concerning: buried in the rules is the idea that drivers can only work for one provider at a time. I've seen many drivers that work for both Lyft and Uber (and sometimes others as well). Specifically, the rules have a "one device" rule -- saying drivers can only use a single device at a time, but many drivers that I've seen who work for multiple services have separate devices (and some, like Uber, will offer to rent you a special phone just for being an Uber driver, if you don't want to/can't use your own phone).

A Base Owner must not dispatch a For-Hire Vehicle that is equipped with more than one electronic device in addition to the dispatch equipment required by the Vehicle’s affiliated Base...

Again, I'm sure the TLC would argue that this is for safety reasons. Elsewhere in the document it suggests that by arguing that this single device cannot be handheld:

a For-Hire Vehicle may be equipped with one electronic device that is used to accept dispatches from a Base or FHV Dispatch Application, provided that that the device is mounted in a fixed position and not hand-held and use of the electronic device is limited to either voice or one-touch preprogrammed buttons or keys while the Vehicle is in motion.

And, sure, you can reasonably worry about the driving safety of someone who has multiple such devices, though I've seen plenty of drivers with two or three phones lined up in a way that seems perfectly reasonable.

The more glaring concern here, though, is that such a rule basically locks in the incumbents and harms the upstarts. If a driver can't drive for Uber and a new ride hailing startup, they're likely to just stick with Uber, and the upstarts get cut out. That's a problem. Even if that's not the intention, it's these kinds of regulations that all too often lock things in so that incumbents stay in power, while startups are blocked.

Furthermore, just the idea that any new service in this space has to now go and plead with the TLC to get "licensed" is going to slow and limit the opportunities for new and innovative players in this space. Uber got to where it was by building a useful service, not having to ask local bureaucrats for permission every time. The next generation of companies looking to reinvent the space won't be so lucky -- and that may mean we all suffer.

Filed Under: new york, new york city, regulations, ride hailing
Companies: lyft, sidecar, uber