Netflix customers will get faster and more reliable access to streaming video after Netflix agreed to pay cable and broadband giant Comcast in exchange for direct connection to Comcast’s network. But while the deal solves customers’ sluggish streaming issues, Lauren C. Williams noted at ThinkProgress.org (2/25), it reveals how little Internet service providers (ISPs) are doing to keep up with a rapidly changing Internet.
Netflix’s traffic jam occurred largely because Internet providers’ networks can’t handle the amount of bandwidth required by the video streaming consumers. But with only a few major providers dominating a mostly unregulated market, ISPs such as Verizon, AT&T and Comcast haven’t been pushed to expand their networks to fit demand.
Paid video streaming services like Netflix have surged in popularity, streaming over 5 bln hours of media, according to the company’s 2013 third quarter earnings report. Netflix’s 33 mln account holders make up over a third of all streaming activity. Despite this growth, ISPs have not expanded their networks to accommodate these consumers nor built the necessary infrastructure needed to handle large volumes of streaming.
Instead, ISPs will share each others’ networks when needed, a practice called peering. ISPs say online streaming services like Netflix take up a lot of bandwidth and put a huge strain on their networks. And it takes money to build out the infrastructure to match increasing demand, Jeff Silva, a telecom analyst at Medley Global Advisors, told NPR.
But most Internet providers are growing — Comcast’s stock rose 15% by the end of January, according to a recent shareholder report. The issue is lack of market competition.
Cable companies have merged with many of the ISP companies nationwide, shrinking the number of options available to American Internet users. When Comcast bought Time Warner for $46 bln in February, it was only the largest merger. Since consumers who are unhappy with their Internet speeds usually can’t switch to a competitor with better quality service, these companies have no incentive to change their current model of high prices and slow speeds.
This market setup is unique to the US. Overall, Americans roughly pay twice as much as users in other countries for slower Internet. For example, New Yorkers pay $70 a month on average for less than 20 megabits per second (mbps), while South Koreans pay around $28 a month for a connection that is four times as fast.
In addition to few competitors, ISPs face little regulation on how they can distribute access. The FCC deregulated Internet companies in 2002 to allow for the development of more high-speed access. But the result has been most Internet providers swallowed up by cable companies, they don’t have to offer fast access as a default.
Net neutrality rules were one attempt to correct that, but after a recent court decision threw out the existing rules, the future of open Internet access is murky. Absent any structure, pay-for-access deals between Internet providers like Comcast and services like Netflix may become more common. And without firm regulations or net neutrality rules, Internet providers truly have no incentive to build faster networks
UNION PROTESTS GOP INTERFERENCE IN VW ELECTION. After a narrow and devastating loss at the Chattanooga Volkswagen plant (2/14), the United Auto Workers has asked the National Labor Relations Board to set aside the election results because of “a firestorm of interference” from outside groups and politicians, including Sen. Bob Corker (R-Tenn).
Labor board officials will now have to consider whether the statements by lawmakers interfered enough to potentially sway votes and taint the election. Volkswagen workers eventually voted 712-to-626 against UAW representation. The board could essentially order a do-over, Dave Jamieson reported at HuffingtonPost.com (2/22).
It’s possible Germany-based Volkswagen could agree with the union, guaranteeing that the results are set aside and a new election is ordered. If not, that would leave the board to decide whether there’s merit in the union’s appeal. If the board sets aside the election results and orders a new one, it would almost certainly be assailed by Republicans in Tennessee, as well as in Congress.
After the union vote, the head of VW’s works council in Germany told German newspaper Sueddeutsche Zeitung that the automaker would hesitate to expand in the US South.
“I can imagine fairly well that another VW factory in the United States, provided that one more should still be set up there, does not necessarily have to be assigned to the South again,” said works council leader Bernd Osterloh.
“If co-determination isn’t guaranteed in the first place, we as workers will hardly be able to vote in favor” of building another plant in the right-to-work South, Osterloh added.
Osterloh’s characterization of the union vote as jeopardizing potential growth at the Tennessee plant, and across the South, contrasts with what Sen. Bob Corker (R-Tenn.) was saying before the balloting. Corker suggested a vote in favor of unionization would hinder VW’s growth.
“I’ve had conversations today and based on those am assured that should the workers vote against the UAW, Volkswagen will announce in the coming weeks that it will manufacture its new mid-size SUV here in Chattanooga,” Corker said before the vote. (HuffingtonPost.com)
JOE THE PLUMBER NOW SAM THE AUTO WORKER. Remember Joe the Plumber, the right winger who became famous in 2008 when he argued with then-presidential candidate Barack Obama about why he had to pay more taxes if he earned more than $250,000? (Obama told him, “I think when you spread the wealth around, it’s good for everybody.”) Well, now he’s Sam the Auto Worker.
It turned out that Joe’s real name is Sam Wurzelbacher and he was an unlicensed plumber making nowhere near $250,000, but he enjoyed his moment of celebrity, as John McCain invited him to accompany him on the campaign trail. In 2012, Wurzelbacher unsuccessfully challenged US Rep. Marcy Kaptur (D-Toledo).
During the congressional campaign, Wurzelbacher opposed the bailout from the federal government under President Obama that allowed Chrysler to survive. Wurzelbacher said it was government overreach, Lee Papa, also known as “The Rude Pundit,” noted (2/25). Kaptur beat Wurzelbacher by 50 points, 73% to 23%.
In February Wurzelbacher landed a union job at a Chrysler plant in Toledo.
Wurzelbacher claims he has no problem with “private unions” if that’s what workers want, but his blog celebrated that workers at the VW plant in Chattanooga, Tenn., voted down unionizing and receiving the benefits that would bring.
“See, Wurzelbacher, the self-professed good and loyal conservative, is eating of the fruits of liberalism and refusing to acknowledge it,” Papa wrote. “What’s he getting as a UAW member at Chrysler? ... The 2011 contract, good for 4 years, includes higher hourly wages for new employees, yearly bonuses, profit sharing, and cheap medical care. Oh, and the right to strike. As a UAW worker, Wurzelbacher will have security in a way that he has never had in his life. All because progressive workers and politicians fought together to make sure he could have that security.”
SENATE FINANCE GETS LIBERAL HEAD. The Senate Finance Committee, which has jurisdiction over taxes and other major spending programs, might be the most powerful committee in Congress, and Danny Vinik claims it has become a lot more liberal now that Sen. Ron Wyden (D-Ore.) is in charge. Writing at NewRepublic.com, Vinik notes that Sen. Max Baucus, the conservative Democratic chairman of the Finance Committee who broke ranks with fellow Dems to help President George W. Bush pass huge tax cuts and the Medicare drug benefit, quit the Senate in February to become ambassador to China, allowing Wyden to move up to head Finance.
“By any reasonable standard, Wyden is a bona fide liberal — a staunch believer in universal health insurance, a more progressive tax code, and greater public investment,” Vinik wrote. “And unlike most of his predecessors, he’s not in the pocket of Wall Street. In 2012, Americans for Democratic Action and the Service Employees International Union each gave Wyden a rating of 95%. The conservative group FreedomWorks gave him a zero.” Wyden has angered some Democrats with his attempts as bipartisan compromise — such as his efforts to craft a Medicare reform plan with House Budget Chairman Paul Ryan in 2011, undercutting Democratic efforts to convince voters of Ryan’s extremism.
On tax reform, Wyden wants to tax investment income closer to ordinary income, though not necessarily at the same rates. He wants to increase the standard deduction, and simplify both the Child Tax Credit and Earned Income Tax Credit. In addition, his agenda calls for the creation of a new investment account for all Americans at birth.
On Fast Track Trade Authority, unlike Baucus, who was one of the staunchest advocates for giving the White House trade promotion authority, Wyden opposes it — as do many other Democrats, including Reid.
On health care, Vinik noted that some progressives are concerned that Wyden is one of the sponsors of the Better Care, Lower Cost Act, which attempts to move Medicare away from the fee-for-service payment scheme. It would give providers more skin in the game with patient care, allowing them to capture more of the savings, but also risk facing greater costs.
RAND PAUL THROWS STONES AT CLINTON. Sen. Rand Paul (R-Ky.) seems determined to dredge up the 20-year-old scandal over President Clinton’s relationship with Monica Lewinsky, apparently oblivious to his own warped history with a woman he reportedly abducted in a college prank.
Speaking to an NBC reporter about Clinton’s plans to campaign in Kentucky for Democratic Senate candidate Alison Lundergan Grimes in her bid to unseat Senate Minority Leader Mitch McConnell, Paul said “it concerns me ... I think workplace violence is a serious thing. ... If the president of your network had relations with a 20-year-old girl who was there from college, I think the president of your network would be fired. ... If that’s what Bill Clinton, you know, did multiple times, really they ought to be concerned about, you know, being associated with him.”
Jed Lewison noted (2/25) that Paul is embellishing the facts, saying that Lewinsky was a girl when she was a woman (aged 22, not 20, as Paul has repeatedly claimed). Paul also claimed that Lewinsky was a college student when she was a college graduate, and suggested that Clinton had “multiple” similar affairs without providing any evidence.
One possible explanation is that Paul was conflating Clinton’s story with his own sordid past: In 2010, when Paul was running for the Senate, GQ reported that Paul and a friend at Baylor University who were members of the NoZe Brotherhood, a secret society that was notorious for pranks on campus, in 1983 (when Paul was 20), visited a female student who was on Baylor’s swim team with Paul. According to the woman, who requested anonymity because she is a clinical psychologist, “He and Randy [Paul] came to my house, they knocked on my door, and then they blindfolded me, tied me up, and put me in their car. They took me to their apartment and tried to force me to take bong hits. They’d been smoking pot.” After the woman refused to smoke with them, Paul and his friend put her back in their car and drove to the countryside outside of Waco, where they stopped near a creek. “They told me their god was ‘Aqua Buddha’ and that I needed to bow down and worship him,” the woman recalls. “They blindfolded me and made me bow down to ‘Aqua Buddha’ in the creek. I had to say, ‘I worship you Aqua Buddha, I worship you.’” She added, “They never hurt me, they never did anything wrong, but the whole thing was kind of sadistic. They were messing with my mind. It was some kind of joke.”
The woman later confirmed the story for the Washington Post, but clarified that she did not consider it a kidnaping and treated it as a hazing incident. She ended relations with Paul and his friends, but she did not want her name used because she feared complicating Paul’s Senate run could expose her to danger.
Paul left Baylor in the summer of 1984 without a bachelor’s degree when Duke accepted him in its School of Medicine.
OBAMACARE TOPS 4M SIGNUPS. The Obama administration announced that 4 mln Americans have signed up for health plans through the Affordable Care Act’s insurance exchanges with five weeks remaining in the primary enrollment period, which closes at the end of March, HuffingtonPost.com reported (2/25).
“With individuals and families enrolling in coverage every day, we continue to see strong demand nationwide from consumers who want access to quality, affordable coverage,” read a statement from the administration to HuffingtonPost.com. “Consumers are shopping and enrolling in plans on HealthCare.gov every day; system error rates are low and response times are consistently less than half a second. Our call center has handled more than 12 million calls so far and is open 24/7 to assist consumers in English, Spanish and more than 150 languages.”
The figures do not include the millions of Americans who have signed up for Medicaid in 25 states that have accepted federal assistance to expand the program to cover the working poor who are below the poverty level. Republican leaders in 25 states have rejected Medicaid expansion, leaving 5.8 mln working poor with few health care options. Since the ACA did not anticipate that states would reject the fully-paid Medicaid expansion, it did not provide the subsidies to help those below the poverty level buy insurance through the exchanges.
Those working poor won’t be penalized for not buying insurance under the ACA, as those earning above the poverty level will, but researchers at Harvard Medical School and the City University of New York estimate that between 7,115 and 17,104 of the working poor will die due to lack of access to health care in the opt-out states (see “Thousands will die from Medicaid opt-out,” Dispatches, 3/1/14 TPP).
GOP HEALTH ‘FIX’ WOULD CAUSE 1M TO LOSE INSURANCE. A Republican “fix” to the Affordable Care Act would reduce the number of people receiving employment-based coverage by 1 mln, the Congressional Budget Office reported (2/25).
HR 2575, which the House Ways and Means Committee advanced in February, would alter the definition of full-time employment from 30 hours a week to 40 hours a week and exempt more businesses from penalties for not offering employer-based insurance or lower the overall penalty burden. Under existing law, employers with more than 50 workers pay a penalty if their full-time employees (defined as working an average of 30 hours a week) receive subsidized coverage in the law’s health care exchanges.
CBO concluded that the GOP proposal would lead to the very same problems Republicans have identified in Obamacare. HR 2575 would reduce the number of people receiving employment-based coverage by 1 mln, increase “the number of people obtaining coverage through Medicaid” or the health care exchanges by between 500,000 and 1 mln, and raise the budget deficits by $73.7 bln. The ranks of the uninsured would also grow by “less than 500,000 people.” (ThinkProgress.org)
COLO. POT SALES EXCEED EXPECTATIONS. Colorado’s legal marijuana market is far exceeding tax expectations, as it is now projected to raise $98 mln in sales and excise taxes next year, from sales expected to reach $610 mln, according to Gov. John Hickenlooper (D). He plans to spend much of it on a campaign to prevent substance abuse and steer youngsters away from trying weed. State officials had predicted marijuana sales would generate $70 mln in tax revenue from $400 mln the cannabis industry projected when voters approved the pot taxes in 2012, the Associated Press reported (2/19).
The first $40 mln in tax revenue from legal weed sales are earmarked for school construction, but Hickenlooper, who opposed pot legalization and advised other states not to follow Colorado’s lead, proposes to spend $45.5 mln for youth use prevention, $40.4 mln for substance abuse treatment and $12.4 mln for public health. The governor also proposed a $5.8 mln, 3-year “statewide media campaign on marijuana use,” presumably highlighting the drug’s health risks. The state Department of Transportation would get $1.9 mln for a new “Drive High, Get a DUI” campaign to tout the state’s new marijuana blood-limit standard for drivers. He also proposed $7 mln for 105 beds in residential treatment centers for substance abuse disorders.
Washington state is preparing to legalize marijuana this summer and a dozen other states are considering proposals to legalize pot sales, including Alaska, Arizona, California, Delaware, Hawaii, Maine, Maryland, Massachusetts, Montana, Nevada, New York, Oregon, Rhode Island, Washington, D.C., and Vermont, HuffingtonPost.com reported.
Lincoln Chafee, independent governor of Rhode Island, recently said on HuffPost Live that “the revenue [from legal marijuana sales] is enticing for all governors.” He added, “With all the bad weather we’ve had back home and all the potholes, we ought to have the revenue go to infrastructure — ‘pot for potholes.’”
Nationwide, one recent study projected a possible $10 bln legal marijuana industry by 2018.
Meanwhile, the Justice Department has drawn up guidelines for banks to do business with marijuana shops but banks are still wary of dealing with the new industry (see “Now the banks are ruining pot!” by David Dayen, page 20). The Denver Post reported (2/19) that banks holding commercial loans on properties that lease to Colorado marijuana businesses say they don’t plan to refinance those loans when they come due. Bankers say property used as collateral for those loans theoretically is subject to federal drug-seizure laws, which makes the loans a risk.
“Our policy of not banking marijuana-related businesses and not lending on commercial properties leased by marijuana-related businesses is based on applicable federal laws,” Wells Fargo spokeswoman Cristie Drumm told the Post.
HOUSE GOP OPPOSES IRS LIMITS ON PACS. House Republicans voted (2/26) to delay efforts by the Obama administration to restrict political activities of non-profit groups seeking tax-exempt status. The bill, which passed 243-176, would delay for one year proposed Internal Revenue Service regulations developed in the wake of disclosures last year that the IRS had questioned non-profit groups on the right and the left before the 2010 and 2012 elections.
After the Supreme Court’s Citizens United decision in 2010 allowing unfettered political spending by companies and unions, campaign expenditures by “social welfare” groups mushroomed. Between the 2008 and 2012 elections, it tripled to $254 million, according to the nonpartisan Center for Responsive Politics.
In November, Treasury and the IRS issued draft regulations that would limit the political activities of groups that fall under section 501(c)4 of the tax code, which are supposed to be civic leagues and and other groups “operated exclusively for the promotion of social welfare.” The proposed regulations have attracted more than 98,000 public comments — a record, according to the IRS.
Republicans accused the Obama administration of trying to legalize the targeting of conservative groups. “This is a government that is seeking to silence the voices of groups that disagree with them,” said Rep. Kevin Brady, R-Texas, although the IRS also targeted progressive groups that appeared to be involved in political activity.
Democrats said the bill is little more than an election-year ploy by Republicans to rally the party base and it is unlikely to pass the Senate. They note that final regulations probably wouldn’t be issued for at least a year, anyway, the Associated Press reported (2/26).
GOP DEMAGOGUING ON MILITARY BUDGET. For a long time, the Republican Party has decided to ride the tiger of right-wing extremism to electoral victories and total Washington gridlock, Andrew Sullivan noted at Dish.Andrew Sullivan.com (2/25). “The real action on the right side of the aisle has been on the far right, with each new anti-Obama movement and eruption out-doing the last in terms of upping the ante. Shock-jocks have defined the message, aided and abetted by key leadership figures. And so, in the latest manifestation, we have the former vice-president, Dick Cheney, telling Sean Hannity, “I think the whole thing [proposed cuts to the military budget] is not driven by any change in world circumstances, it is driven by budget considerations. He would much rather spend the money on food stamps than he would on a strong military or support for our troops.”
Sullivan notes, “So a former vice-president is out there, saying the president prefers to spend money on food stamps than on ‘support for our troops.’ He could have made an argument why he thinks we should maintain the stratospheric levels of defense spending that have been in place since 9/11; he could have argued that the US needs to maintain the ability to fight two major land wars simultaneously in perpetuity. He could have said a lot of things. But he decided to accuse the commander-in-chief of not supporting the troops and actually wanting to keep people in poverty. There is this belief out there that Republican extremism comes from the base and not the elites. But Cheney proves otherwise.”
Hayes Brown noted at ThinkProgress.org (2/25) that over 900,000 veterans are among those who depend on Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps.
Kevin Drum at MotherJones.com added, “There’s more to this. You might disagree with Obama’s priorities, but Cheney’s claim is based entirely on the notion that Hagel and Obama are proposing military cuts. But they aren’t. Hagel proposed a change in force structure that would lead to a smaller Army, but his overall budget proposal is $115 bln more than the current sequester levels demanded by Republicans. Hagel is going to have plenty of fights on his hands, but mainly because he wants more money, not less.”
Hagel will run into a buzzsaw, Drum said, because (a) he wants a bigger budget and (b) he wants to cut a bunch of wasteful spending that’s near and dear to every congressman whose district might be affected. Cutting the size of the Army is just one small part of the whole package.
“Naturally this is the part that Fox News focuses on and that Dick Cheney demagogues. But keep one thing firmly in mind: Even though it’s declined from its Iraq/Afghanistan peak, our military budget is still far larger than it was in 2000. Congress has made it clear that it wants further cuts, and in this case at least, Obama and Hagel are the ones fighting against the cuts. In his current proposal, Obama is asking for more money than current sequestration levels. He’s not cutting the military. Compared to what Congress asked for, he’s expanding it.”
OHIO CUTS EARLY VOTING THAT IS KEY TO BLACK TURNOUT. Ohio Secretary of State Jon Husted (R) has followed through on promises to restrict voting opportunities in his state. The change, announced 2/25, eliminates extended early voting hours on weekdays, the final two days before Election Day as well as Sunday voting, a day typically important to African-American voters because churches use it to turn out votes.
The early voting period is vital to the elderly, low-income voters, and anyone else with limited means to get to the polls, not to mention that it cuts down on election-day long lines and chaos. MSNBC notes that in 2008, black voters made up 56 percent “of all weekend voters in Cuyahoga County, Ohio’s largest, even though they made up just 28% of the county’s population.”
Husted’s announcement comes on the heels of other Ohio initiatives to suppress turnout. The Ohio Legislature recently passed two bills that eliminates an entire week of early voting and ends the practice of mailing absentee ballots.
Husted, known for vote suppression, similarly tried to cut Sunday voting hours in the 2012 presidential election. A federal appeals court intervened, concluding that the directive would mean “thousands of voters who would have voted during those three days will not be able to exercise their right to cast a vote in person.’” (ThinkProgress.org)
From The Progressive Populist, March 15, 2014
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