Italian law requires domestic movies hit theaters before they stream


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France isn’t the only country particularly wary of streaming services. Italian Culture and Tourism Minister Alberto Bonisoli recently unveiled a law that would require all Italian-made movies to show in theaters before they reach Netflix, Prime Video and other streaming providers. It also formalizes a 105-day delay between the theatrical and streaming releases, although that can be shortened to ‘just’ 60 days if a picture either shows in fewer than 80 theaters or has fewer than 50,000 viewers in its first three weeks.

Bonisoli wasn’t shy about the reasoning: it’s meant to “protect theaters,” which he contended “need films that can guarantee an income.” Italian media industry figures, such as Agis’ Carlo Fontana, have claimed that streaming services represent “unfair competition.”

This isn’t necessarily as harsh as the French law, which requires a three-year wait between a theatrical premiere and availability on streaming services (although it doesn’t require a theater debut like Italy does). However, the goal is ultimately the same: it’s an attempt to guard a traditional approach to movie-going (and the businesses that depend on this) against disruption. Whether or not it works is another matter. Italy’s mandatory buffer may prevent domestically-made movies from going directly to Amazon or Netflix, but it won’t necessarily persuade audiences to visit the theater — they might just wait until they can watch a production at home for no extra cost.

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How cities can fix tourism hell

A steep and rapid rise in tourism has left behind a wake of economic and environmental damage in cities around the globe. In response, governments have been responding with policies that attempt to limit the number of visitors who come in. We’ve decided to spare you from any more Amazon HQ2 talk and instead focus on why cities should shy away from reactive policies and should instead utilize their growing set of technological capabilities to change how they manage tourists within city lines.

Consider this an ongoing discussion about Urban Tech, its intersection with regulation, issues of public service, and other complexities that people have full PHDs on. I’m just a bitter, born-and-bred New Yorker trying to figure out why I’ve been stuck in between subway stops for the last 15 minutes, so please reach out with your take on any of these thoughts: @Arman.Tabatabai@techcrunch.com.
  

Well – it didn’t take long for the phrase “overtourism” to get overused. The popular buzzword describes the influx of tourists who flood a location and damage the quality of life for full-time residents. The term has become such a common topic of debate in recent months that it was even featured this past week on Oxford Dictionaries’ annual “Words of the Year” list.

But the expression’s frequent appearance in headlines highlights the growing number of cities plagued by the externalities from rising tourism.

In the last decade, travel has become easier and more accessible than ever. Low-cost ticketing services and apartment-rental companies have brought down the costs of transportation and lodging; the ubiquity of social media has ticked up tourism marketing efforts and consumer demand for travel; economic globalization has increased the frequency of business travel; and rising incomes in emerging markets have opened up travel to many who previously couldn’t afford it.

Now, unsurprisingly, tourism has spiked dramatically, with the UN’s World Tourism Organization (UNWTO) reporting that tourist arrivals grew an estimated 7% in 2017 – materially above the roughly 4% seen consistently since 2010. The sudden and rapid increase of visitors has left many cities and residents overwhelmed, dealing with issues like overcrowding, pollution, and rising costs of goods and housing.

The problems cities face with rising tourism are only set to intensify. And while it’s hard for me to imagine when walking shoulder-to-shoulder with strangers on tight New York streets, the number of tourists in major cities like these can very possibly double over the next 10 to 15 years.

China and other emerging markets have already seen significant growth in the middle-class and have long runway ahead. According to the Organization for Economic Co-operation and Development (OECD), the global middle class is expected to rise from the 1.8 billion observed in 2009 to 3.2 billion by 2020 and 4.9 billion by 2030. The new money brings with it a new wave of travelers looking to catch a selfie with the Eiffel Tower, with the UNWTO forecasting international tourist arrivals to increase from 1.3 billion to 1.8 billion by 2030.

With a growing sense of urgency around managing their guests, more and more cities have been implementing policies focused on limiting the number of tourists that visit altogether by imposing hard visitor limits, tourist taxes or otherwise.

But as the UNWTO points out in its report on overtourism, the negative effects from inflating tourism are not solely tied to the number of visitors in a city but are also largely driven by touristy seasonality, tourist behavior, the behavior of the resident population, and the functionality of city infrastructure. We’ve seen cities with few tourists, for example, have experienced similar issues to those experienced in cities with millions.

While many cities have focused on reactive policies that are meant to quell tourism, they should instead focus on technology-driven solutions that can help manage tourist behavior, create structural changes to city tourism infrastructure, while allowing cities to continue capturing the significant revenue stream that tourism provides.

THOMAS COEX/AFP/Getty Images

Yes, cities are faced with the headwind of a growing tourism population, but city policymakers also benefit from the tailwind of having more technological capabilities than their predecessors. With the rise of smart city and Internet of Things (IoT) initiatives, many cities are equipped with tools such as connected infrastructure, lidar-sensors, high-quality broadband, and troves of data that make it easier to manage issues around congestion, infrastructure, or otherwise.

On the congestion side, we have already seen companies using geo-tracking and other smart city technologies to manage congestion around event venues, roads, and stores. Cities can apply the same strategies to manage the flow of tourist and resident movement.

And while you can’t necessarily prevent people from people visiting the Louvre or the Coliseum, cities are using a variety of methods to incentivize the use of less congested space or disperse the times in which people flock to highly-trafficked locations by using tools such as real-time congestion notifications, data-driven ticketing schedules for museums and landmarks, or digitally-guided tours through uncontested routes.

Companies and municipalities in cities like London and Antwerp are already working on using tourist movement tracking to manage crowds and help notify and guide tourists to certain locations at the most efficient times. Other cities have developed augmented reality tours that can guide tourists in real-time to less congested spaces by dynamically adjusting their routes.

A number of startups are also working with cities to use collected movement data to help reshape infrastructure to better fit the long-term needs and changing demographics of its occupants. Companies like Stae or Calthorpe Analytics use analytics on movement, permitting, business trends or otherwise to help cities implement more effective zoning and land use plans. City planners can use the same technology to help effectively design street structure to increase usable sidewalk space and to better allocate zoning for hotels, retail or other tourist-friendly attractions.

Focusing counter-overtourism efforts on smart city technologies can help adjust the behavior and movement of travelers in a city through a number of avenues, in a way tourist caps or tourist taxes do not.

And at the end of the day, tourism is one of the largest sources of city income, meaning it also plays a vital role in determining the budgets cities have to plow back into transit, roads, digital infrastructure, the energy grid, and other pain points that plague residents and travelers alike year-round. And by disallowing or disincentivizing tourism, cities can lose valuable capital for infrastructure, which can subsequently exacerbate congestion problems in the long-run.

Some cities have justified tourist taxes by saying the revenue stream would be invested into improving the issues overtourism has caused. But daily or upon-entry tourist taxes we’ve seen so far haven’t come close to offsetting the lost revenue from disincentivized tourists, who at the start of 2017 spent all-in nearly $700 per day in the US on transportation, souvenirs and other expenses according to the U.S. National Travel and Tourism Office.

In 2017, international tourism alone drove to $1.6 trillion in earnings and in 2016, travel & tourism accounted for roughly 1 in 10 jobs in the global economy according to the World Travel and Tourism Council. And the benefits of travel are not only economic, with cross-border tourism promoting transfers of culture, knowledge and experience.

But to be clear, I don’t mean to say smart city technology initiatives alone are going to solve overtourism. The significant wave of growth in the number of global travelers is a serious challenge and many of the issues that result from spiking tourism, like housing affordability, are incredibly complex and come down to more than just data. However, I do believe cities should be focused less on tourist reduction and more on solutions that enable tourist management.

Utilizing and allocating more resources to smart city technologies can not only more effectively and structurally limit the negative impacts from overtourism, but it also allows cities to benefit from a significant and high growth tourism revenue stream. Cities can then create a virtuous cycle of reinvestment where they plow investment back into its infrastructure to better manage visitor growth, resident growth, and quality of life over the long-term. Cities can have their cake and eat it too.

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FCC approval of Europe’s Galileo satellite signals may give your phone’s GPS a boost

The FCC’s space-focused meeting today had actions taken on SpaceX satellites and orbital debris reduction, but the decision most likely to affect users has to do with Galileo . No, not the astronomer — the global positioning satellite constellation put in place by the E.U. over the last few years. It’s now legal for U.S. phones to use, and a simple software update could soon give your GPS signal a major bump.

Galileo is one of several successors to the Global Positioning System that’s been in use since the ’90s. But because it is U.S.-managed and was for a long time artificially limited in accuracy to everyone but U.S. military, it should come as no surprise that European, Russian and Chinese authorities would want their own solutions. Russia’s GLONASS is operational and China is hard at work getting its BeiDou system online.

The E.U.’s answer to GPS was Galileo, and the 26 (out of 30 planned) satellites making up the constellation offer improved accuracy and other services, such as altitude positioning. Test satellites went up as early as 2005, but it wasn’t until 2016 that it began actually offering location services.

A Galileo satellite launch earlier this year.

Devices already existed that would take advantage of Galileo signals — all the way back to the iPhone 6s, the Samsung Galaxy S7 and many others from that era forward. It just depends on the wireless chip inside the phone or navigation unit, and it’s pretty much standard now. (There’s a partial list of smartphones supporting Galileo here.)

When a company sells a new phone, it’s much easier to just make a couple million of the same thing rather than make tiny changes like using a wireless chipset in U.S. models that doesn’t support Galileo. The trade-off in savings versus complexity of manufacturing and distribution just isn’t worthwhile.

The thing is, American phones couldn’t use Galileo because the FCC has regulations against having ground stations being in contact with foreign satellites. Which is exactly what using Galileo positioning is, though of course it’s nothing sinister.

If you’re in the U.S., then, your phone likely has the capability to use Galileo but it has been disabled in software. The FCC decision today lets device makers change that, and the result could be much-improved location services. (One band not very compatible with existing U.S. navigation services has been held back, but two of the three are now available.)

Interestingly enough, however, your phone may already be using Galileo without your or the FCC’s knowledge. Because the capability is behind a software lock, it’s possible that a user could install an app or service bringing it into use. Perhaps you travel to Europe a lot and use a French app store and navigation app designed to work with Galileo and it unlocked the bands. There’d be nothing wrong with that.

Or perhaps you installed a custom ROM that included the ability to check the Galileo signal. That’s technically illegal, but the thing is there’s basically no way for anyone to tell! The way these systems work, all you’d be doing is receiving a signal illegally that your phone already supports and that’s already hitting its antennas every second — so who’s going to report you?

It’s unlikely that phone makers have secretly enabled the Galileo frequencies on U.S. models, but as Commissioner Jessica Rosenworcel pointed out in a statement accompanying the FCC action, that doesn’t mean it isn’t happening:

If you read the record in this proceeding and others like it, it becomes clear that many devices in the United States are already operating with foreign signals. But nowhere in our record is there a good picture of how many devices in this country are interacting with these foreign satellite systems, what it means for compliance with our rules, and what it means for the security of our systems. We should change that. Technology has gotten ahead of our approval policies and it’s time for a true-up.

She isn’t suggesting a crackdown — this is about regulation lagging behind consumer tech. Still, it is a little worrying that the FCC basically has no idea, and no way to find out, how many devices are illicitly tuning in to Galileo signals.

Expect an update to roll out to your phone sometime soon — Galileo signals will be of serious benefit to any location-based app, and to public services like 911, which are now officially allowed to use the more accurate service to determine location.

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SpaceX gets FCC approval to add 7,518 more satellites to its Starlink constellation

SpaceX’s application to add thousands of satellites to its proposed Starlink communications constellation has been approved by the FCC, though it will be some time before the company actually puts those birds in the air.

Starlink is just one of many companies that the FCC gave the green light to today at its monthly meeting. Kepler, Telesat, and LeoSat also got approval for various services, though with 140, 117, and 78 satellites proposed respectively, they aren’t nearly as ambitious in scale. Several others were approved as well with smaller proposals.

SpaceX officially applied to put these 7,518 satellites into orbit — alongside the already approved 4,409 — back in March of 2017. Last month the FCC indicated it planned to approve the request by circulating a draft order (PDF) to that effect, which it today made official.

These satellites would orbit at the extremely low (for satellites) altitude of around 340 kilometers — even lower than the 550-kilometer orbit it plans to put 1,584 satellites in from the other group.

Low orbits decay quickly and satellites may only last a couple years before they burn up. But being closer to the Earth also means that latency and required power for signals is considerably lower. It requires more satellites to cover a given area, but if managed properly it’ll produce a faster, more reliable connection or augment the system in areas where demand is high. Since SpaceX has only launched two test satellites so far, this is more or less theoretical, though.

The satellites would also be using V-band radio rather than the more common Ka/Ku band often employed by this general type of service, which as it points out will keep those popular bands unclogged as satellite numbers multiply.

Launches of the new system should begin some time next year if the new management at Starlink wants to keep their jobs. It would take quite a long time to get enough satellites into orbit that the service would work even in barebones fashion, but it isn’t bad going from idea to minimum viable product in a handful of years, when that MVP has to be hundreds of satellites actually in space.

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What the FDA’s restriction of e-cig flavors means for Juul

FDA Commissioner Scott Gottlieb has revealed his plans to combat underage use of e-cigs and nicotine, which has grown 78 percent among high school students from 2017 to 2018.

The commissioner today announced a plan that would remove all flavored electronic nicotine delivery system products — with the exception of tobacco, mint, menthol, or non-flavored products — from any store where children under the age of 18 can see them.

So what does this mean for Juul, a company that reached a $10 billion valuation 4x faster than Facebook and currently owns more than 70 percent of the e-cig market?

One result is that Juul Labs is likely now just as desperate for minors to quit vaping as the FDA. The commissioner has made it abundantly clear that if he doesn’t see a significant decrease in underage use, he’s willing to pull the plug on the e-cig industry.

“I could take more aggressive steps,” Gottlieb said in a written statement. “I could propose eliminating any application enforcement discretion to any currently marketed ENDS product, which would result in the removal of ALL such products from the marketplace. At this time, I am not proposing this route, as I don’t want to foreclose opportunities for currently addicted adult smokers. But make no mistake. If the policy changes that we have outlined don’t reverse this epidemic, and if the manufacturers don’t do their part to help advance this cause, I’ll explore additional actions.”

Yes, it seems remarkable that we may live in a world where cigarettes, the country’s leading cause of preventable death, are available at grocery stores but e-cigarettes, which are said to be 95 percent less dangerous, are illegal.

But that’s exactly what might happen if the government, e-cig manufacturers, and consumers don’t work together to end underage use of nicotine.

Though some critics would argue otherwise, Juul has maintained that it never intended to sell to minors. Which doesn’t change the fact that the company’s revenue is largely dependent on the nicotine addicted as a category.

The American economy was essentially created upon the back of Big Tobacco. And 50 years ago, the industry got away with marketing to young people and creating several generations of addicted adults to what may have been the most successful consumer product ever. To say that it was lucrative would be an understatement. It still is.

Fiscally, would Juul enjoy being the next Philip Morris? Undoubtedly. But it would rather be the next Nicoderm CQ or Nicorette than be illegal. Hell yes! Right now, the company is still hanging in there. But the only way to prevent the company from being officially banned in the U.S. is to find a way to get kids to stop vaping.

For this reason, Juul Labs is going a few steps further than the FDA’s new policy. Not only is the company removing non-tobacco flavors from convenience stores or other stores where people under 18 can shop, but it’s also removing all non-tobacco flavors from vape shops and age-restricted specialty stores. From here on out, the only place to buy Cucumber, Creme, Fruit and Mango (the most popular flavor) Juul pods is on the Juul website.

The company will also increase its secret shopper program from 500 visits/month to 2,000 visits/month at the more than 90,000 stores where Juul products are sold.

Juul’s plan, announced Tuesday, also includes removing the company’s Instagram and Facebook channels, and limiting its Twitter account to non-promotional information.

Alongside cracking down on flavored ENDS products, Gottlieb is also looking into banning combustible menthol cigarettes and all flavored cigars from the market. Mint and menthol ENDS products could also be on the chopping block.

“I’m deeply concerned about the availability of menthol-flavored cigarettes,” said Gottlieb in a written statement. “I believe these menthol-flavored products represent one of the most common and pernicious routes by which kids initiate on combustible cigarettes.”

Not only does the masking effect of menthol make combustible menthol cigarettes more attractive to youth, but Gottlieb went on to say that “they exacerbate troubling disparities in health related to race and socioeconomic status” and “disproportionately and adversely affect underserved communities.”

For these reasons, the FDA is taking a hard stance on menthol combustible cigarettes and flavored cigars, a move that will surely mobilize big tobacco in yet another battle in their decades-long war against regulators. Until restrictions can be enforced on these combustible products, however, the FDA is allowing menthol and mint flavored ENDS products to be sold in convenience stores as well as vape shops.

But Gottlieb will be keeping a close watch on it:

“I’m also aware that there are potentially important distinctions even between mint- and menthol-flavored e-cigarette products,” he wrote. “I’m particularly concerned about mint-flavored products, based on evidence showing its relative popularity, compared to menthol, among kids. So, I want to be clear that, in light of these concerns, if evidence shows that kids’ use of mint or menthol e-cigarettes isn’t declining, I’ll revisit this aspect of the current compliance policy.”

In response to the FDA’s announced plan, a Juul Labs spokesperson had this to say:

Commissioner Gottlieb has made it clear that “preventing youth initiation on nicotine is a paramount imperative.” As we said earlier in the week, the numbers tell us underage use of e-cigarette products is a problem that requires immediate action. That is why we implemented our action plan. We are committed to working with FDA, state Attorneys General, local municipalities, and community organizations as a transparent and responsible partner in this effort.

The FDA statement, which is more than 4,000 words, thoroughly explains that the agency is trying to strike a balance between ensuring adult smokers have an alternative through ENDS and protecting a generation of young people from becoming addicted to nicotine.

In light of the FDA’s opposition to menthol, Gottlieb addresses the distinction between allowing menthol/mint and tobacco flavored ENDS into convenience stores opposed to other flavors:

This distinction among flavors seeks to maintain access for adult users of these products, including adults who live in rural areas and may not have access to an age-restricted location, while evidence of their impacts continues to develop. It also recognizes that combustible cigarettes are currently available in menthol in retail locations that are not age-restricted. This approach is informed by the potential public health benefit for adult cigarette smokers who may use these ENDS products as part of a transition away from smoking.

As far as online sales go, the FDA is looking to ensure that all flavored ENDS products sold online go through a rigorous age-verification process.

Gottlieb also addressed the potential for new products to reverse the growth of underage ENDS use, and said that the agency would work to make the application review process more efficient.

“In the coming months, CTP plans to issue additional policies and procedures to further make sure that the process for reviewing these applications is efficient, science-based and transparent,” said Gottlieb. “We’ll also explore how to create a process to accelerate the development and review of products with features that can make it far less likely that kids can access an e-cigarette.”

Juul Labs has briefly discussed its vision for a next-generation e-cig, which the company has been working on for a year. The device would incorporate Bluetooth, letting users monitor and control their nicotine intake. However, Bluetooth might also allow for geofencing to prevent kids from using the product at school, as well as a smartphone-based lock that would only allow the Juul to be used by someone who has verified they’re over 21.

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Tech giants take seats on Homeland Security’s new supply chain task force

Homeland Security’s supply chain task force is finally off the ground..

The public-private coalition, set up earlier this year, now has representatives from more than two dozen companies and industry groups signed up to help the government try to combat risks faced by tech companies from threats in the supply chain.

Called the ICT Supply Chain Task Force, government officials hope to better understand to address security issues with global technology supply chains and make recommendations. By collaborating, the group aims to better understand the risks that companies face from industrial espionage, government interference, and other cybersecurity issues that could pose a threat to U.S national security.

One of those new members is Cisco’s Edna Conway, chief security officer for its global value chain. She told TechCrunch that enterprises and governments “can no longer effectively identify, defend against and mitigate the risks across that global value chain in isolation.”

She, like others, have called for a group effort to tackle the threats they face.

The task force couldn’t come soon enough. Although the government has long known of supply chain threats, the group’s official formation comes in the aftermath of Bloomberg’s controversial claims that Chinese intelligence had infiltrated the server hardware supply chain that with tiny chips. Bloomberg’s claims have been largely debunked — or not proven to the standard that many have called for. But it doesn’t diminish the long-known threat that the U.S. electronics and data industries face.

By working together, the task force aims to to create policy recommendations that would incentivize businesses to buy hardware and software directly from original vendors and vetted resellers to reduce the risk of having an unknown, untrusted third-party in the mix. One of the end goals is to ensure that only the trusted vendors, which stick to a strict set of criteria laid out by the task force, will be qualified to bid for contracts.

“Cisco brings to the task force this collaborative spirit, a deep understanding of the operation of global ICT value chains and my expertise in shifting security and risk from ‘limiting damage’ to key enabler of business differentiation,” said Conway.

Cisco joins other tech giants and major telcos at the table, including Accenture, AT&T, CenturyLink, Charter, Comcast, CTIA, CyberRx, Cybersecurity Coalition, Cyxtera, FireEye, Intel, ITI, IT-ISAC, Microsoft, NAB, NCTA, NTCA, Palo Alto Networks, Samsung, Sprint, Threat Sketch, TIA, T-Mobile, US Telecom and Verizon (which, as a reminder, owns TechCrunch).

They will be joined by representatives from Homeland Security, the Defense Dept., the Justice Dept., the Treasury, and the Office of the Director of National Intelligence, among others in government.

Homeland Security under secretary Christopher Krebs said that by bringing together representatives from the public and private sector, the task force has “a unique ability to confront today’s challenges by sharing information across government and industry in real-time and developing the ability to better plan for the risks of the future.”

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Amazon did exactly what it should have with its HQ2 process

I love my colleague Jon Shieber, he’s a great guy. But his arguments against Amazon’s HQ2 process are just wrong, and are part of an increasingly poisonous atmosphere around employment growth and prosperity in America.

Our normally-scheduled analysis of AI and semiconductors will (hopefully) restart tomorrow.

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A tale of three arguments

Shieber’s pointed argument yesterday falls in line with the wider debate about gentrification and the steep inequality of today’s digital economy. “Amazon played everyone involved in the process: the governments that pandered to it and the media that covered it (including us),” he wrote. “Now it looks like the residents of these communities that will have to live with their new corporate neighbor are going to be left to pay for it.”

Shieber sees essentially three problems with Amazon’s HQ2 process and announcement:

  1. Amazon’s wealth drives its corporate power, which forces governments to do its bidding by applying to its reverse RFP process.
  2. The incentive packages lined up by NYC and Northern Virginia are a form of corporate welfare that would be better used for everyday citizens, plus Amazon would have come anyway.
  3. Amazon is not-transparent about its data or process, even while it collected data from hundreds of city governments.

Let’s take a look at that analysis.

Cities win and lose

In the normal world of economic development, cities post potential projects as Requests for Proposals (RFPs) and then wait for applications to come in, read through them, and select a winner. This is the process that New York City went through recently in selecting a group of firms to operate its new cybersecurity initiative. It’s reasonably transparent, and it is theoretically meritocratic, urban machine politics aside.

Increasingly though, companies have learned that cities will come far and wide to fight for jobs. In fact, rather than bidding for projects and having city governments or their economic development agencies select winners, companies can propose projects, have cities bid, and then the CEO can make the call. I call this a “reverse RFP.”

Almost three decades ago, United ran a reverse RFP process for the creation of a $1 billion maintenance facility which ended up being a fight between Oklahoma City and Indianapolis. As The Oklahoman wrote at the time: “United Airlines on Wednesday chose Indianapolis as the site of its $1 billion aircraft maintenance center, making Oklahoma City a loser in the race for what some termed the biggest industrial development project of the decade.” Sound familiar?

Last year, Foxconn extracted up to $4.8 billion in subsidies from Wisconsin as part of a process to build a new display manufacturing plant. And of course, Amazon ran its very public process over the past months.

Shieber wrote:

That Amazon felt comfortable enough to flip the script and instead have cities bid for the largesse of a corporation was galling enough. The fact that cities across America actually did the company’s bidding was proof of just how feckless, toothless, and seemingly powerless government at every level in this country has become.

Here’s the thing: Amazon is its own entity. It can make decisions for itself, in any way it chooses. Typically, corporate offices expand based on the personal decision of the CEO, maybe with some feedback from the board. When Square launched a customer operations office, it chose St. Louis, where its CEO Jack Dorsey is from. Such decisions get made every day with little input from cities.

Instead, Amazon opened that process up. It allowed cities to apply and provide information on why they might be the best location for its new headquarters. Maybe the company ignored all of the applications. Maybe it only ran the process to collect data. Maybe it just wanted the publicity. Maybe all of the above, and more. Regardless, it allowed input into a decision it has complete and exclusive control over.

Are cities “feckless” for applying? Should cities avoid competing tête-à-tête for jobs? Of course not. Cities compete every single day for individuals to move in, for small businesses to start, for federal tax funding. That competition is fundamentally a force for good, since it disciplines cities to make their residents — and future residents — happy. That’s one reason why Americans approve their local governments at 70%, and Congress remains mired in the single digits.

Amazon’s process hopefully woke up a number of slumbering city governments to the reality that their hometowns are not relatively as attractive as other cities.

Jobs and incentives

Photo: Chris Hepburn/Getty Images

Much of the ire over the Amazon announcement yesterday originated from the company’s combined multi-billion dollar incentive packages that it received from NYC and the DC metro. Amazon is already one of the wealthiest companies in the world, so why then does it need further incentives that divert tax dollars from other worthy causes?

As Shieber wrote:

As housing prices climb in Queens for rentals, cooperatives and condominiums, the neighborhood’s existing residents will likely be unable to afford the higher property prices. They’ll be moved out and essentially Amazon will be paying for infrastructure upgrades likely to be enjoyed solely by the company’s employees — again, at the expense of the broader tax base.

The challenge to that line of reasoning, which was common in many of the arguments against the HQ2 process, is failing to look at economic development holistically as a system. Opponents spend too much time focused on the tax receipts from income from new Amazon employees versus incentives, and not nearly enough time on all the spillover effects that will take place in these two regions.

These spillover effects are at the heart of agglomeration economies. With Amazon’s arrival, more software engineers will locate to NYC. They will start companies, join other tech firms, and expand the vitality of the community. As Edward Glaeser argues convincingly in his book The Triumph of the City, density of talent matters enormously for the success of the city. Amazon thickens the market for tech talent, and that is a huge win for both NYC and DC.

For a concrete example, Cornell Tech officially launched last year on NYC’s Roosevelt Island, which is located one subway stop from the proposed Amazon headquarters. What will the opening up of Amazon mean for the future of that new campus and its graduates? Does Cornell Tech have a better shot now at being a leading university in the computer sciences? Will more talent be drawn to Cornell Tech and ultimately into the NYC economy because of this co-location? It’s really hard to know or quantify, but the answer is almost certainly not zero.

Besides the lack of focus on spillovers, there is also this anti-gentrification line though that always grates on me. If Amazon’s plans are realized, it will deliver thousands of six-figure jobs into the city. As Enrico Moretti notes in his own book The New Geography of Jobs, it is exactly these sorts of jobs with high incomes that drive the economic vitality in cities. Killing the economy may be one way to lower housing prices, but it is a pretty foolish one.

Plus, I think there is a massive scale problem in people’s analysis of the incentives. Amazon’s incentive package for New York comes out to $1.5 billion or so. As a cost comparison, the East Side Access rail project, for instance, costs $3.5 billion a mile. New York’s incentive package is about 2,300 feet of rail, or roughly the distance between 2nd Ave and 6th Ave.

Tech jobs are bringing new wealth to cities, and obviously there are huge challenges with housing prices and affordability. But what a luxurious problem to have.

Transparency

The final point is about transparency and political decision-making. Shieber writes:

The question is less about whether Amazon’s decision to site its satellite offices in certain cities will be a boon to those cities. Instead, it’s whether the residents who already live there should be able to have a say in whether or not Amazon can come in and reshape their cities in radical ways.

But the residents in these cities did have a say — they elected mayors and governors to steer their cities and create widespread wealth. Hundreds of those elected leaders thought it prudent to apply for Amazon’s reverse RFP and sell their cities as great places for jobs.

If voters hate economic development incentives, then they can vote for politicians that will dismantle these programs. But the reality — which should be obvious — is that voters like jobs and income and employment. And they want their cities to compete and win the opportunity to bring large corporate offices to their cities, sometimes at a relatively high cost.

I frankly would love to see a more bottoms-up approach from cities around economic development, but there are frankly limits on how much the government can help small businesses. Plus, the math is often terrible — small businesses may create some local wealth, but they don’t create the kind of high-paying jobs that drive economies.

Ultimately, Amazon’s HQ2 process is a microcosm of larger forces, of technology, inequality, and democracy. The arguments against the reverse RFP are often just arguments for much broader structural change. That’s fine, but ultimately counter-productive from the municipal viewpoint. Cities aren’t going to lead the charge around structural reform — that has to happen at the federal level, and possibly even at a global context to be effective. Just ask Seattle about its city headcount tax and why Amazon might be looking at a second headquarters in the first place.

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Prolific swatter and bomb hoaxer who broke up FCC’s net neutrality vote pleads guilty

It was a dramatic moment during the FCC’s net neutrality proceedings last December when the Commission’s public meeting was abruptly evacuated and bomb squads moved in — all while thousands watched on the live stream. The person who called in that threat has just entered a guilty plea to that and numerous other crimes, including a SWAT hoax that killed a man last December.

Tyler Barriss is a Kansas resident who has racked up dozens of charges of swatting, calling in bomb threats and other “pranks” that have proven to be anything but.

Swatting is the practice of calling the police and convincing them a dangerous armed person is at a given address in order to provoke an aggressive response by police or SWAT officers — a response that can be disastrous or fatal.

The latter was the result of one particular call Barriss made in December of 2017. He had done it like he’d done many others, for a favor or for money — this time sending the police to the former home of an acquaintance’s Call of Duty rival. The officers shot and killed the current resident of that home, and Barriss — who made no secret of his involvement — was arrested shortly afterwards. It had only been about a year since he was released from prison for similar crimes.

Today Barriss, who was 25 when he was arrested in January, pleaded guilty to a number of charges that had been filed under a variety of jurisdictions. Among them was the bomb threat called in to the FCC, but the sheer variety of schools, malls and homes he threatened, as documented in an indictment, is disturbing.

In simultaneously depressing and haunting Twitter conversations disclosed during the trial, Barriss and his target are seen exchanging direct messages, sparring over each other’s cred and making light of the swatting attempt.

Barriss had in fact called the cops, and convinced them to show up to the address Gaskill had given.

And Gaskill soon found out that his attempt to troll Barriss had resulted in a man’s death:

All three were charged with various crimes, but Barriss with his long, well-documented history of swatting and bomb threats, was the clear priority. The terms of his guilty plea aren’t documented yet but it would be hard to get away from significant time in prison even if he managed to dodge half of the charges he faced.

It’s a sad story from start to finish, but at least the bad guy didn’t get away.

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Senators urge FTC to look into shady ad practices in apps for kids

For us jaded adults, the long-running trend towards making apps and games free to download but stuffing them with paid options is just an annoyance or perhaps a logical progression of the business model. But kids haven’t developed our cynicism and wariness of manipulation — and they’re getting targeted nevertheless. Several Senators have asked the FTC to look into the ugly practice of monetizing kids’ apps.

“We write regarding the manipulative marketing practices by apps designed for children,” write Senators Ed Markey (D-MA), Tom Udall (D-NM), and Richard Blumenthal (D-CT) in their letter (PDF). “Children should be able to entertain themselves and play without being bombarded by promotional messages, which young people may not be able to accurately assess and identify as marketing.”

The letter comes in the wake of a study released last month that found that some 9 out of 10 apps and games aimed at kids contained advertising. Educational, free, paid, didn’t matter — ads in some form or another were everywhere.

This should surprise exactly no one; It isn’t exactly a new problem. For one thing, we’ve been hearing about kids buying in-game currencies like crystals and Smurfberries for years — so often that app store providers have had to take serious action against it.

For another, kids today (like kids of yesterday) are already swimming in advertising and to some it may seem strange to single out a smartphone game when YouTube, traditional TV, and other forms of media are rife with marketing laser-focused on the valuable minor market.

But of course just because we’ve encountered it before doesn’t mean we’ve solved it. And what the Senators are saying is that especially in the case of kids’ apps, these practices we have in many ways gotten used to may qualify as “unfair and deceptive” under the FTC’s definitions, and as such warrant investigation:

The report includes evidence of children’s games disguising advertisements and making advertisements integral to games themselves; games using characters to coerce children into making in-app purchases; children’s apps being marketed as ‘free,’ when those apps actually require additional spending in order to play; and children’s apps marketing themselves as educational, when they are in fact saturated with advertising.

Any action by the FTC, should it opt to look into this, would take quite a while to come to fruition. However, a public letter such as this is no doubt intended as a warning in itself to those employing shady tactics. Perhaps they’ll heed it before the FTC forces them to.

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How issues of microtransit, congestion and parking are closing in on cities

Earlier this week in a new experimental newsletter I’ve been helping Danny Crichton on, we briefly discussed transit pundit Jarrett Walker’s article in The Atlantic arguing against the view that ridesharing and microtransit will be the future of mass transit. Instead, his thesis is that a properly operated and well-resourced bus system is much more efficient from a coverage, cost, space, and equality perspective.

Consider this an ongoing discussion about Urban Tech, its intersection with regulation, issues of public service, and other complexities that people have full PHDs on.  I’m just a bitter, born-and-bred New Yorker trying to figure out why I’ve been stuck in between subway stops for the last 15 minutes, so please reach out with your take on any of these thoughts: @Arman.Tabatabai@techcrunch.com.

From an output perspective, Walker argues that by operating along variable routes based on at-your-door pick ups, microtransit actually takes more time to pick up fewer people on average. Walker also gives buses the edge from a cost and input perspective, since labor makes up 70% of transit operating costs in a pre-autonomous world and buses allow you to service more customers for the price of one driver.

“The driver’s time is far more expensive than maintenance, fuel, and all the other costs involved.  In almost every public meeting I attend, citizens complain about seeing buses with empty seats, lecturing me about how smaller vehicles would be less wasteful. But that’s not the case. Because the cost is in the driver, a wise transit agency runs the largest bus it will ever need during the course of a shift. In an outer suburb, that empty big bus makes perfect sense if it will be mobbed by schoolchildren or commuters twice a day.”

But transit is not solely an issue of volume and unit economics, but one of managing public space. Walker explains that to ensure citizens don’t use more than their fair share of space, cities can either provide vehicles that are only marginally bigger than a human body, i.e. bikes and scooters, or have many people share large-scale vehicles, i.e. mass transit. Doing the latter through a mass fleet of on-demand microtransit solutions, Walker argues, increases congestion and makes it harder to manage scheduling and allocate infrastructure.

While the article offers an effective comparison of unit economics and acts as a useful primer on the various considerations for city transit agencies, some of the conclusions are a bit binary.  The discussion is a bit singular in its focus of microtransit as a replacement of public transit rather than an additive service and doesn’t give much credit to the trip planning and space management capabilities of many microtransit services, nor changes in consumer expectations towards transportation.

But despite some of the gaps in the piece, Walker highlights two ideas that spill over to some broad areas that have caught my interest lately: Tolls and Parking.

Tolls

Photo by Michael H via Getty Images

“To succeed, microtransit would have to help people get around cities better, not just make them feel good about hailing a ride on a phone. Full automation of vehicles, if indeed it ever arrives, might solve the labor problem—although it would put thousands of drivers out of work. But the congestion problem will remain.”

Like many, Walker argues that ridesharing aggravates city traffic rather than alleviates it.  Even though ridesharing’s long-term impact on traffic is widely contested, nearly everyone agrees that a solution to urban congestion is desperately needed.

What’s interesting is that regardless of the discourse that surrounds them, trends in US tolling mechanisms seem to suggest American cities may be moving closer to congestion pricing methods.

As an example, solutions to congestion are top of mind behind the New York state election that saw Democrats taking control of both state legislative houses. Though it seems like the argument resurfaces every few years, the elections have brought renewed debate over the possible implementation of congestion pricing in New York City.  In essence, congestion pricing is a system where drivers would pay higher prices for using high-traffic streets or entering high-traffic zones, allowing cities to better dictate the flow of drivers and reduce congestion.   

Outside of the obvious political tension created by effectively implementing a new tax, some lawmakers have pushed back on the effectiveness of a congestion pricing policy, with some arguing that it can aggravate income inequality or that a policy addressing construction and pedestrians, rather than vehicles, would have a bigger impact on traffic.

However, over the past year or so, an increasing number of states have been rolling out highway tolls that are priced dynamically, instead of using traditional fixed-price tolls. The exact drivers behind the toll prices vary, with some cities charging prices based on traffic conditions and others charging varying prices for the use of express and HOV lanes.

Several new technologies and companies have also made it easier for local governments to implement more sophisticated, adjustable toll pricing or congestion fees at a much lower cost. In the past, congestion pricing systems around the world have required physical detection systems that can be extremely costly to implement.

Now, companies like ClearRoad are helping governments use a wide range of connected vehicle technologies to establish and collect road usage pricing from any location without the need for physical infrastructure. Oregon is one geography working with ClearRoad to manage its new opt-in road usage program where the state is able to calculate drivers’ usage of certain roads and their gas consumption, and then reimburse them for gas taxes they’re paying.

So even though people are still screaming at each other in state capitols, it seems like we may be closer to seeing congestion pricing in major cities than we think. And while executing these programs can be difficult and painfully slow (often needing to satisfy city regulations and tax laws forty layers deep), if these smaller-scale programs we’re seeing in the US are actually effective, congestion pricing may be a solution to plug chunky budget gaps, better finance infrastructure projects and replace lost gas tax revenue in an electric vehicle future.

Parking

In his piece, Walker goes back to some basic principles of urban design, highlighting that at their core, functioning cities come down to how millions of people share a comparatively tiny amount of space.  

Walker explains that city dwellers that travel with cars and solo rideshare trips rather than with large-scale shared transit are effectively taking up more than their fair share of public space.  While the argument is made in the context of ridesharing and congestion, the same idea applies to the less-discussed impact mass-transit ridesharing can have on city parking.

At least in the near-term, certain cities have seen ridesharing actually increase vehicle usage rather than reduce it (a claim rideshare companies dispute), resulting in an even wider gap between the supply and demand for available parking spots.  And if people are using ridesharing but still choosing to own cars regardless, in an indirect fashion, they are similarly reducing the stock of available parking space by more than their fair share.

And while it makes sense that rideshare vehicles should receive a larger portion of the parking stock, given that it serves more passengers, the use of available parking by these vehicles can and has caused tension with local residents that have to store their cars further away.

There are companies like the mobility-focused data platform, Coord, that are working on tools geared towards helping cities and citizens more effectively allocate and plan parking strategies for the future multi-modal transportation network. And theoretically, ridesharing should reduce the number of vehicles in search of parking in the long-term. But at least for now, the impact on parking congestion is just another unintended consequence that weakens the argument for ridesharing as mass transit.

And lastly, some reading while in transit:

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