The Law is for Little People

Elon Musk just tweeted that if his workers vote to unionize, they will lose their stock options.

I'm really not sure how much value the stock options would be to the shop floor workers, they will be locked up well past when they are worthless, much as it happened in the Dot Com bust, but still his threat is a direct violation of the NLRA, which prohibits penalizing workers for exercising their labor organizing rights:

The United Auto Workers has been Elon Musk’s target for days of derision on Twitter, and his posts may open Tesla Inc. up to trouble with U.S. labor regulators.

………

The UAW, which is actively trying to organize Tesla’s California assembly plant, has fired back with tweets of its own. But the more consequential outcome from the spat on the social-networking service may come in the form of unfair labor practice allegations made to the National Labor Relations Board, according to Wilma Liebman, who led the agency during the early years of the Obama administration.

Musk posted earlier this week that nothing was stopping Tesla employees in Fremont, California, from voting to join a union. But, he wrote, “Why pay union dues & give up stock options for nothing?” Liebman read this as a warning that the company would take away workers’ stock options if they succeeded in organizing the factory.

Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare.

— Elon Musk (@elonmusk) May 21, 2018

“If you threaten to take away benefits because people unionize, that’s an out-and-out violation of the labor law,” Liebman, who’s done legal work for the UAW in the past, said in an interview.

This, is, as the saying goes, black letter law, and, if the expected complaint is filed, I would expect the NLRB to take some sort of action.

Ironically enough Trump's NLRB might be more likely to take action than the Obama's, because the Trump administration is less enamored with Silicon Valley than was the Obama administration, though I would not expect much beyond a stern warning.

Why, "F%$# the Cable Companies," Is Such a Good Campaign Slogan

Because they are really horribly awful entities:

While people remain exclusively fixated on the telecom industry's attacks on net neutrality, the reality is companies like Comcast, Charter, AT&T and Verizon are busy trying to eliminate nearly all federal and state oversight of their businesses. And while deregulation has its uses in healthy markets as part of an effort to protect innovation, you may have noticed that the telecom market isn't particularly healthy. As such, the end result of eliminating most meaningful regulatory oversight without organic market pressure in place is only likely to make existing problems worse.

This battle is getting particularly heated on the state level. After the Trump administration dismantled net neutrality and consumer privacy protections, states began flexing their muscle and attempting to pass their own privacy and net neutrality rules. ISP lobbyists, in turn, tried to head those efforts off at the pass by lobbying the FCC to include (legally untested) language in its net neutrality repeal "pre-empting" states from being able to protect broadband consumers in the wake of federal apathy.

And in the wake of the net neutrality repeal, companies like Charter (Spectrum) are trying to claim that states have no legal authority to hold them accountable for failed promises, slow speeds, or much of anything else.

For example, Charter is already trying to use the FCC net neutrality language to wiggle out of a lawsuit accusing it of failing to deliver advertised speeds. And the New York Public Service Commission also recently stated it found that Charter has been effectively lying to regulators about meeting conditions affixed to its $89 billion acquisition of Time Warner Cable and Bright House Networks. As part of the deal, Charter was supposed to deploy broadband to a set number of additional homes and businesses, but regulators found (pdf) several instances where Charter actively misled regulators.

Last week Charter replied to these allegations by again claiming that states have no authority over them. As part of that effort the company is already citing the FCC's preemption language buried in its net neutrality repeal:

Seriously.  If Democrats are running for office, and not mentioning this sh%$, they, and their high priced consultants, are engaging in political and electoral malpractice.

We Need a Death Penalty for Corporations

Case in point, Wells Fargo:

Some employees in a Wells Fargo unit that handles business banking improperly altered information on documents related to corporate customers, according to people familiar with the matter.

The behavior again raises questions about Wells Fargo’s risk-management practices and controls. The bank has been sanctioned in recent months by federal regulators for problems in these areas and as a result can’t grow its balance sheet.

The employees in Wells Fargo’s so-called wholesale unit, which is separate from its retail bank, added or altered information without customers’ knowledge, according to the people familiar with the matter. The information added varied from social security numbers to addresses to dates of birth for people associated with business-banking clients, the people said.

………

The behavior took place in 2017 and early 2018 as Wells Fargo was trying to meet a deadline to comply with a regulatory consent order related to the bank’s anti-money-laundering controls, the people said. The employees were also working to get documents in order prior to new requirements from another regulator for disclosures related to proof of beneficial ownership of businesses, the people added.

Wells Fargo became aware of the behavior in recent months from employees, the people said. After investigating, the bank discovered the behavior wasn’t an isolated incident, the people added. The bank is still investigating the matter, one of these people said.

………

The altering of information within the business-banking division of Wells Fargo, which serves small firms with annual sales ranging from $5 million to $20 million, comes as the bank is continuing to grapple with the fallout from the sales-practices scandal that erupted in September 2016. That involved bank employees fabricating information to open as many as 3.5 million accounts without customers’ knowledge or authorization.

The phrase, "Rotten to the core," applies here.

If there is a company who is as unequivocally merited its erasure from the universe, it is Wells Fargo.

To paraphrase Pat Boone, Wells Fargo should, "Be displayed publicly and have all of his fingers and toes broken, and then publicly executed," as a warning to other miscreants.

F%$# Them

I am, of course, referring to Amazon and Starbucks, which are manifesting petulant butt-hurt over a tax bill which results directly from their impact on Seattle:

Amazon has threatened to move jobs out of its hometown of Seattle after the city council introduced a new tax to try to address the homelessness crisis.

The world’s second-biggest company has warned that the “hostile” tax, which will charge firms $275 per worker a year to fund homelessness outreach services and affordable housing, “forces us to question our growth here”.

Amazon, which is Seattle’s biggest private sector employer with more than 40,000 staff in the city, had halted construction work on a 17-storey office tower in protest against the tax.

Pressure from Amazon and other big employers, including Starbucks and Expedia, had forced councillors to reduce the tax from an initial proposal of $500 per worker. The tax will only effect companies making revenue of more than $20m-a-year.

The tax is expected to raise between $45m and $49m a year, of which about $10m would come from Amazon.

………

“We are disappointed by today’s city Council decision to introduce a tax on jobs,” said Drew Herdener, an Amazon vice-president. We remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”

………

Campaigners said the company should be forced to take financial responsibility for Seattle’s cost of living, which has forced many families on to the streets. There are almost 12,000 homeless people in Seattle region, equating to the third-highest rate per capita in the US. Last year 169 homeless people died in Seattle. The city declared a state of emergency because of homelessness in late 2015.

………

Politicians from 50 other US cities wrote an open letter to Seattle council in a show solidarity with the councillors attempt to tackle Amazon’s impact on the city.

“By threatening Seattle over this tax, Amazon is sending a message to all of our cities: we play by our own rules,” the letter said.

Starbucks had also fought against the tax, with its public affairs chief, John Kelly, accusing the city of continuing to “spend without reforming and fail without accountability, while ignoring the plight of hundreds of children sleeping outside”.

These guys have been driving the cost of living up in Seattle, and aggressively fighting any sort of taxes to address this issue, and somehow or other, it's everyone else's fault.

F%$# them, and f%$# all the capitalist ubermenschen who have their hands out for public subsidies.

A Message about Negative Externalities to the Competitors for HQ2

One of the things that is never considered when large firms try to extort subsidies is the fact that with additional jobs, they bring additional costs, and when you give into blackmail, the costs outweigh any benefits.

The good people of Seattle, who have learned about the downside of being a one industry town from the travails of Boeing in the 1970s, and now the Seattle City Council has voted unanimously to institute a head tax on large firms in order to pay for the costs that they impose on everyone else:

Following months of debate, raucous protests, and a threat from Amazon to erase 7,000 jobs from Seattle, the City Council on Monday voted to pass a head tax to fund housing and homelessness services.

The tax, which passed unanimously, is nearly half the size that four city council members originally proposed in April. Under the plan, Seattle would collect $275 per employee from businesses grossing more than $20 million in annual revenue, or about three percent of the businesses in the city.

The tax is projected to bring the city about $45 million of new annual revenue in its first year, according to a spending plan prepared by council staff. Under the legislation, council members would have the option of renewing the tax after five years.

Now the bill heads to Mayor Jenny Durkan’s desk. In a statement, she says she plans to sign the legislation. "This legislation will help us address our homelessness crisis without jeopardizing critical jobs," Durkan said.

The tax proposal represents a compromise between city council members who aimed much higher—$500 per employee to raise $75 million—and their colleagues who believed the initially proposed rate would be too costly for businesses. Mayor Durkan fell in the latter camp. Late last week, she put her support behind a $250 per employee tax.

Amazon achieved market dominance with a deliberate strategy of tax avoidance, its treatment of employees is horrific, and Jeff Bezos has aggressively campaigned against anything resembling an income tax, meaning that he has to a been a major cause of the problem, and a major impediment to any potential solution.

My position is to tell Amazon to go f%$# itself, though I do understand how most politicians would not find this a good campaign strategy.

Enough with paying off parasite billionaires in the vain hope that they will scatter a few crumbs before us.

They Have Made this Error Before

Repeating the short-sighted decisions made by US auto makers the last time gas prices were Ford has decided the future is trucks and SUVs, and so will be abandoning conventional passenger cars.

Sounds like the, "Small cars equal small profits," mentality that nearly destroyed auto makers in the 1970s and again in the 1990s, after oil prices spiked:

Ford Motor Co. said Wednesday it will stop investing in sedans in North America, bowing to U.S. drivers’ seemingly never-ending zest for crossovers and pickup trucks.

Ford  shifted focus on “building a winning portfolio” of vehicles, by which it meant no more of its slow-selling sedans at least for North America.

U.S. drivers have gravitated to SUVs and pickup trucks for years, thanks in part to these vehicles’ relative fuel economy improvements and price drops. Many car buyers also report enjoying the high-riding seating position of an SUV or pickup truck.

“Ford realized it can’t be everything to everyone, and in today’s market that could be OK,” said Jessica Caldwell, an analyst with Edmunds. “The key to success is focusing on where your customers are and where your strengths lie, and for Ford doubling down on trucks and SUVs could be just what the brand needs.”

The move isn’t without risk, however. Ford is willingly alienating some of its car owners and conceding market share in segments that, while declining, are still relevant to some buyers, she said.

When, and it's always when, gasoline prices spike again, those people trading in Ford trucks and SUVs for more efficient vehicles will not be able to find those new vehicles at their Ford dealer, and so loyal customers will go somewhere else.

They are repeat their historical mistakes, over, and over, and over, and over again.

Even by the Standards of Trump, This is Unbelievably Stupid

Donald Trump has a plan to lower drug prices in the United State.

Basically, he wants to force other countries to pay more, and then big pharma, out of the goodness of its heart, will lower prices in the USA, because the drug companies will only take as much money as they need, and won't waste it on excessive executive compensation or stock buybacks.

I'm not sure if they are being stupid, or if they think that we are this stupid, but in either case, the level of idiocy buggers the mind:

President Trump, poised on Friday to unveil his strategy to lower prescription drug prices, has an idea that may not be so popular abroad: Bring down costs at home by forcing higher prices in foreign countries that use their national health systems to make drugs more affordable.

On Tuesday, Mr. Trump rebuffed his European allies by withdrawing from the Iran nuclear deal. Threatened tariffs on steel and aluminum have strained relations with other developed nations. And now the administration is suggesting policies that could hit the pocketbooks of some of America’s strongest allies.

“We’re going to be ending global freeloading,” Mr. Trump declared at a meeting with drug company executives in his first month in office. Foreign price controls, he said, reduce the resources that American drug companies have to finance research and develop new cures.

The White House Council of Economic Advisers fleshed out the idea three months ago in a report that deplored the “underpricing of drugs in foreign countries.”

The council said that profit margins on brand-name drugs in the United States were four times as high as those in the more regulated markets of major European countries and Japan. The United States, it said, needs to “address the root of the problem: foreign, developed nations, that can afford to pay for novel drugs, free-ride by setting drug prices at unfairly low levels, leaving American patients to pay for the innovation that foreign patients enjoy.”

Most of pharma research funding already comes from the governmet and big pharma spends more on advertising and marketing than they do on research, but, according to Trump and his Evil Minions^™, the problem is that they can't rape consumers hard enough.

Great googly moogly.

Once Again Proving that High Finance Can Destroy Everything

In this case, it's Univision that they have run into the ground:

This is the story of how corporate raiding, complacency, excess, and incompetence are gutting a media company that matters to tens of millions of people. It’s not a novel story, and perhaps not even scandalous by the standards of corporate opulence: A shark-obsessed boss, millions wasted on consultants, and an executive who insisted on publishing softcore porn are more embarrassing buffoonery than insidious greed. The main problem—the billions in debt the company ran up in the process of its owners buying it and weighing it down—is practically routine in media and beyond; that doesn’t make it any less infuriating.

This company is Univision, which until recently obligingly filled the role of absentee stepfather to Gizmodo Media Group, our employer. Now, Univision’s business is struggling, and GMG has suddenly found itself under a very watchful eye.

Once upon a time, Univision, an American broadcasting operation aimed primarily at Spanish speakers in the United States, was a tremendous golden goose laying tremendous golden eggs: It made incredible amounts of money and had to do essentially nothing for it other than run programming produced by Televisa, a Mexican broadcasting operation. The fairy tale ended long ago. Univision has been in decline for years, thanks to a disastrous private equity buyout finalized in 2007; an aging audience; a burdensome program-licensing deal with Televisa; competition from Telemundo and Netflix; layers of overpaid and useless middle management; and a general failure to position itself for a digital future.

………

From routine human resources f%$#ups to vastly overselling the prospects of an IPO whose ultimate doom this March precipitated the company’s current cost-cutting spree, Univision has been deeply mismanaged and is in the midst of making huge cuts that have, among other things, already claimed vast swaths of Univision Noticias—the most vital newsgathering operation serving the Spanish-speaking community in the U.S.—and Fusion Media Group. Consultants from Boston Consulting Group, who have reportedly recommended budget cuts of up to 35 percent in some parts of the company, have been combing through the books for months, and more than 150 people have been laid off so far. Plenty more cuts are pending (Univision president of news Daniel Coronell reportedly described them as “catastrophic” to his newsroom), including at GMG, the staff of which fears the newsroom may be cut by up to a third by the end of June, perhaps as part of a broader pivot toward video and branded content. What is happening to the company is not ultimately a failure of editorial or even executive management, though: If Univision was a mammoth whose failure to adapt slowed it down, it was private equity investors, consumed by the thought of turning their riches into more riches, who brought it down and bled it dry.

(emphasis mine)
You'll notice a pattern: Company has problems, or potential problems, takes said company private with other people's money, bleeds it dry, and leaves bleached bones.

Rinse, lather, repeat:

In 2007, a consortium including Texas Pacific Group, Thomas H. Lee, Madison Dearborn, Providence Equity, and Saban Capital took Univision private for $13.7 billion. These firms—executives of which still shape Univision’s board—borrowed heavily to finance the deal, saddling their new prize with more than $10 billion of debt. According to an FCC filing, each firm holds between 20.6 and 7.1 percent of Univision’s equity, and between 27.3 and zero percent of the voting interests. Thomas H. Lee, the only firm with no voting rights, has no official members on Univision’s board, but two of THL’s employees, James Carlisle and Laura Grattan, are listed as Univision board observers in their company bios; Univision would not say if the firm had appointed members to the board or who they were. Univision, for its part, declined to answer questions about the board, while all the involved firms either declined to comment or did not respond to questions about their involvement with Univision.

Leveraged buyouts such as the ones by which these companies acquired control of Univision were common in the years leading up to the financial crisis: Investors borrow a huge amount of money to purchase a company and then make that company responsible for paying back the debt. The amount of borrowing required is often large relative to a company’s earnings. This relationship—known as leverage—is used to gauge whether a company is likely to be able to pay back its lenders. The financial world commonly measures this through the ratio of “debt to EBITDA,” or earnings before interest, taxes, and depreciation and amortization of various assets. (The finance industry’s inscrutable jargon is a feature, not a bug. Just think of this ratio as a company’s debt compared to how much money it makes each year.)
Univision’s ratio, estimated at 12.5-to-1, made it highly leveraged even by the standards of the pre-crisis boom period. (In 2013, Obama administration regulators would urge banks to limit companies’ leverage to roughly half this level to reduce the risk of default.) Still, in 2007—when the company maintained a tight grip on the then-swelling U.S. market for Spanish-language media, and before media enterprises came to be viewed as dead investments—Univision found itself in a position of relative strength.

One of the reasons that we see this is because our regulatory and tax regimes subsidize such behavior.

As to a fix, on the mild side are things like changing the bankruptcy code to allow for private equity management fees, and all paid received by executives in excess of $1 million a year to be clawed back.

On the more severe side, and I think that this might be necessary, completely eliminating the deductability of interest payments would be a good thing.

I am sure that there is a middle ground, but I want to fiddle while Wall Street burns.

I Don't Often Express Admiration for the Indian Justice System, But………

The recent ruling by the Indian Supreme Court saying that seeds cannot be patented is good for the Indian people, and not just because it is bad for Monsanto:

In an another legal blow to Monsanto, India's Supreme Court on Monday refused to stay the Delhi High Court's ruling that the seed giant cannot claim patents for Bollgard and Bollgard II, its genetically modified cotton seeds, in the country.

Monsanto's chief technology officer Robert Fraley, who just announced that he and other top executives are stepping down from the company after Bayer AG's multi-billion dollar takeover closes, lamented the news.

………

Monsanto first introduced its GM-technology in India in 1995. Today, more than 90 percent of the country's cotton crop is genetically modified. These crops have been inserted with a pest-resistant toxin called Bacillus thuringiensis, or Bt.

Citing India's Patents Act of 1970, the Delhi High Court ruled last month that plant varieties and seeds cannot be patented, thereby rejecting Monsanto's attempt to block its Indian licensee, Nuziveedu Seeds Ltd., from selling the seeds.

Because of the ruling, Monsanto's claims against Nuziveedu for unpaid royalties have been waived, as its patents are now invalid under Indian law. Royalties will now be decided by the government.

Indian environmentalist Vandana Shiva, who is known for her fierce activism against corporate patents on seeds, called the top court's move a "major victory" that opens the door "to make Monsanto pay for trapping farmers in debt by extracting illegal royalties on BT cotton."

Of the various extensions of IP, none is more concerning, and more unethical, than the expansion of patents to abrogate the rights for farmers to replant their own seeds.

Well, this is Profoundly NOT Reassuring

It appears that the robot Uber than ran down and killed a pedestrian saw the woman, but ignored her, because it had been programmed to.

Basically, Uber's self-driving software is so crappy and has so many false positives that it was programmed to ignore actual human beings.

Uber is still Uber:

Uber has concluded the likely reason why one of its self-driving cars fatally struck a pedestrian earlier this year, according to tech outlet The Information. The car’s software recognized the victim, Elaine Herzberg, standing in the middle of the road, but decided it didn’t need to react right away, the outlet reported, citing two unnamed people briefed on the matter.\

The reason, according to the publication, was how the car’s software was “tuned.” 

Here’s more from The Information:

Like other autonomous vehicle systems, Uber’s software has the ability to ignore “false positives,” or objects in its path that wouldn’t actually be a problem for the vehicle, such as a plastic bag floating over a road. In this case, Uber executives believe the company’s system was tuned so that it reacted less to such objects. But the tuning went too far, and the car didn’t react fast enough, one of these people said.

Let me translate this into English:  Uber put a 4000 pound death machine on the road with software that was incapable of determining the difference between a plastic bag and a human being.

This is not just reprehensible, it might very well be criminal.

More of This

A group of "Techno Anarchists" in New York City have set up a mesh network to allow for broadly available low cost broadband:

It's a promise that seems almost too good to be true: super-fast internet that's cheap, and free of the contracts and hassles that come with major service providers.

That's not a pipe dream for Brian Hall, it's his goal.

The lead volunteer behind the community group NYC Mesh aims to bring affordable internet with lightning-quick downloads to everyone in New York, one building at a time.

"Our typical speeds are 80 to 110 megabits a second," Hall says, pointing out that streaming something like Netflix only requires about 5 Mbps.

CBC News joined him one afternoon on a roof in the Brooklyn neighbourhood of Greenpoint. Hall was installing the latest addition to the mesh network that will deliver his vision.

The worksite is one of the group's latest customers, a converted warehouse that houses a video production company. The regular commercial internet providers were going to charge tens of thousands of dollars to get them online.

NYC Mesh took on the job for a small installation fee of a few hundred dollars and a monthly donation.

Mesh networks explained

So what is a mesh network?

Picture a spiderweb of wireless connections. The main signal originates from what's called the Supernode. It's a direct plugin to the internet, via an internet exchange point — the same place Internet Service Providers get their connection.

The signal from the supernode, sent out wirelessly via an antenna, covers an area of several kilometres.

From there, a mesh of smaller antennas spread out on rooftops or balconies receive that signal. They're connected to Wi-Fi access points that allow people to use the internet.

Each supernode can connect thousands of users.

And the access points talk to the others around them, so if one goes down for some reason the rest still work.

"Mesh networks are an alternative to standard ISP hookups. You're not provided with an internet connection through their cable, but through — in our case —Wi-Fi networks," says Jason Howard, a programmer and actor who's helping with the latest installation.

NYC Mesh bought an industrial-strength connection to the internet right at an Internet Exchange Point (IXP), in this case a futuristic-looking tower in downtown Manhattan. It's the same place that internet service providers (ISPs) like Verizon and Spectrum connect to the internet, accessing massive amounts of wired bandwidth.

NYC Mesh then installed an antenna on the roof of the IXP. That became the supernode, the heart of its mesh network.

From there it beams out and receives Wi-Fi signals, connecting to receivers on rooftops spread through the East Village and Chinatown, and across the river into parts of Brooklyn.

I am generally dubious of techno-libertarian solutions to problems, I tend to favor regulation and public ownership, but this seems to be doing pretty well, though one does have to wonder about how well it might scale as its popularity increases.  (New York City is a perfect laboratory for investigating these issues)

I would think that the use of directional antennas would allow broader usage, if just by providing geographical separation between the data streams when frequency separation is no longer available.

In any case, anything that discommodes the incumbent telco and cable providers is to my mine an independent good.

How the Sharing Economy Makes Our Lives Better

A study by the New York City Comptroller has shown that Airbnb led to significant rent increases in New York City:

Airbnb’s growing influence caused rents to increase significantly in tourist areas and gentrifying neighborhoods in Manhattan and Brooklyn, where the majority of the company’s rentals are concentrated, according to a report released on Thursday by the city comptroller’s office.

In Manhattan’s Hell’s Kitchen and Chelsea neighborhoods and the Midtown Business District, which accounted for about 11 percent of all Airbnb listings in New York City in 2016, average monthly rents increased by $398 between 2009 and 2016, of which $86, or 21.6 percent, was a result of Airbnb’s presence, the report said. In Greenpoint and Williamsburg in Brooklyn, the study said, rents went up 18.6 percent in those years because of Airbnb listings.

Airbnb makes it easy to rent apartments to tourists, taking units off the market for full-time residents, the report said.

“For years, New Yorkers have felt the burden of rents that go nowhere but up, and Airbnb is one reason why,” the city comptroller, Scott M. Stringer, said in an interview. “It’s just simply supply and demand. Fewer apartments to rent means higher prices, and that’s the Airbnb effect.”

The report said that Airbnb’s influence cost New Yorkers $616 million in additional rent in 2016 as a result of price pressures.

The term for this is negative externality, the imposition of a cost on a third party not directly involved in the transaction.

It's the same as the trucker polluting your air, or the dry cleaner who dumps his chemicals down the drain.

In this case, Airbnb and its "Hosts" make money, and everyone else pays for it, to the tune of about $1000.00 a year in added rent. 

Cuck Fomcast

There is a reason why Comcast is consistently one of the most despised businesses in the United States.

Case in point, the cable giant is refusing to upgrade lines for customers fho don't shell out big bucks for cable TV in addition to internet service:

As we've often noted, Comcast has been shielded from the cord cutting trend somewhat thanks to its growing monopoly over broadband. As users on slow DSL lines flee telcos that are unwilling to upgrade their damn networks, they're increasingly flocking to cable operators for faster speeds. When they get there, they often bundle TV services; not necessarily because they want it, but because it's intentionally cheaper than buying broadband standalone.

And while Comcast's broadband monopoly has protected it from TV cord cutting somewhat, the rise in streaming competition has slowly eroded that advantage, and Comcast is expected to see see double its usual rate of cord cutting this year according to Wall Street analysts.

Comcast being Comcast, the company has a semi-nefarious plan B. Part of that plan is to abuse its monopoly over broadband to deploy arbitrary and unnecessary usage caps and overage fees. These restrictions are glorified rate hikes applied to non competitive markets, with the added advantage of making streaming video more expensive. It's a punishment for choosing to leave Comcast's walled garden.

But Comcast appears to have discovered another handy trick that involves using its broadband monopoly to hamstring cord cutters. Reports emerged this week that the company is upgrading the speeds of customers in Houston and parts of the Pacific Northwest, but only if they continue to subscribe to traditional cable television. The company's press release casually floats over the fact that only Comcast video customers will see these upgrades for now:

"Speed increases will vary based on the Xfinity Internet customers' current speed subscriptions. Those receiving the speed boost will benefit from an increase of 30 to 40 percent in their download speeds. Existing Xfinity Internet and X1 video customers subscribing to certain packages can expect to experience enhanced speeds this month."

As is usually the case, Comcast simply acted as if this was all just routine promotional experimentation (an argument that only works if you're unfamiliar with Comcast's other efforts to constrain emerging video competition):

Comcast is, using the immortal words of Douglas Adams, are, "A bunch of mindless jerks who'll be the first against the wall when the revolution comes."

This Guy Just Cost Himself a Billion Dollars on Principle

WhatsApp founder and CEO Jan Koum has left the company and Facebook over its policies which would reveal customer data:

The billionaire chief executive of WhatsApp, Jan Koum, is planning to leave the company after clashing with its parent, Facebook, over the popular messaging service’s strategy and Facebook’s attempts to use its personal data and weaken its encryption, according to people familiar with internal discussions.

Koum, who sold WhatsApp to Facebook for more than $19 billion in 2014, also plans to step down from Facebook’s board of directors, according to these people. The date of his departure isn’t known.

………

The independence and protection of its users’ data is a core tenet of WhatsApp that Koum and his co-founder, Brian Acton, promised to preserve when they sold their tiny start-up to Facebook. It doubled down on its pledge by adding encryption in 2016. The clash over data took on additional significance in the wake of revelations in March that Facebook had allowed third parties to mishandle its users’ personal information.

………

Koum’s exit is highly unusual at Facebook. The inner circle of management, as well as the board of directors, has been fiercely loyal during the scandals that have rocked the social media giant. In addition, Koum is the sole founder of a company acquired by Facebook to serve on its board. Only two other Facebook executives, Zuckerberg and Chief Operating Officer Sheryl Sandberg, are members of the board.

………

Acton left the company in November. He has joined a chorus of former executives critical of Facebook. Acton recently endorsed a #DeleteFacebook social media campaign that has gained force in the wake of the controversy over data privacy sparked by Cambridge Analytica, a political marketing firm tied to the Trump campaign that had inappropriately obtained the private information of 87 million Facebook users.

………

WhatsApp executives were comfortable sharing some data with Facebook to measure who was using the service, according to the people. But they opposed using WhatsApp’s data to create a user profile that was unified across Facebook’s multiple platforms, which also include Instagram and Facebook Messenger, and that could be used for ad-targeting or for Facebook’s data-mining.

………

Another point of disagreement was over WhatsApp’s encryption. In 2016, WhatsApp added end-to-end encryption, a security feature that scrambles people’s messages so that outsiders, including WhatsApp’s owners, can’t read them. Facebook executives wanted to make it easier for businesses to use its tools, and WhatsApp executives believed that doing so would require some weakening of its encryption.

Here is the link about him leaving a 10 figure payday on the table.

I'm not sure if it's really possible to make privacy profitable without charging users, but you sure as hell can't do it at Facebook.

You Had Me at, "Bulldoze the Business School"

Martin Parker, a former professor at a business school, is suggesting that business schools should be shut down:

Visit the average university campus and it is likely that the newest and most ostentatious building will be occupied by the business school. The business school has the best building because it makes the biggest profits (or, euphemistically, “contribution” or “surplus”) – as you might expect, from a form of knowledge that teaches people how to make profits.

Business schools have huge influence, yet they are also widely regarded to be intellectually fraudulent places, fostering a culture of short-termism and greed. (There is a whole genre of jokes about what MBA – Master of Business Administration – really stands for: “Mediocre But Arrogant”, “Management by Accident”, “More Bad Advice”, “Master Bullsh%$ Artist” and so on.) Critics of business schools come in many shapes and sizes: employers complain that graduates lack practical skills, conservative voices scorn the arriviste MBA, Europeans moan about Americanisation, radicals wail about the concentration of power in the hands of the running dogs of capital. Since 2008, many commentators have also suggested that business schools were complicit in producing the crash.

Having taught in business schools for 20 years, I have come to believe that the best solution to these problems is to shut down business schools altogether. This is not a typical view among my colleagues. Even so, it is remarkable just how much criticism of business schools over the past decade has come from inside the schools themselves. Many business school professors, particularly in north America, have argued that their institutions have gone horribly astray. B-schools have been corrupted, they say, by deans following the money, teachers giving the punters what they want, researchers pumping out paint-by-numbers papers for journals that no one reads and students expecting a qualification in return for their cash (or, more likely, their parents’ cash). At the end of it all, most business-school graduates won’t become high-level managers anyway, just precarious cubicle drones in anonymous office blocks.

These are not complaints from professors of sociology, state policymakers or even outraged anti-capitalist activists. These are views in books written by insiders, by employees of business schools who themselves feel some sense of disquiet or even disgust at what they are getting up to. Of course, these dissenting views are still those of a minority. Most work within business schools is blithely unconcerned with any expression of doubt, participants being too busy oiling the wheels to worry about where the engine is going. Still, this internal criticism is loud and significant.

I would highly suggest that you click through and read the rest of the article.

Faster, Better, Cheaper

An uptick in exports has led Saab to increase spending on its Gripen E program:

Strengthening interest in the Gripen E has prompted Saab to accelerate its investment in the programme, with the step to include the introduction of enhancements intended to heighten the product's attractiveness to prospective buyers.

"Due to the strong interest in Gripen E/F, Saab has now accelerated the pace of investment to develop the system for future exports," the company disclosed in a quarterly results announcement on 26 April.

Chief executive Håkan Buskhe describes the measure as relating to "industrialisation, and also some key development on features for the export market". While he declines to identify specific updates, he notes: "There are things that will enhance the product that we have seen during the development time for the Gripen E." This process began for launch customer the Swedish air force in 2013.

Buskhe says Saab received fresh interest in the new-generation fighter from several undisclosed nations during the first three months of this year. The company cites a long list of prospective customers for the type, including Austria, Bulgaria, India and Slovakia.

Saab will deliver its first production examples of the Gripen E to Sweden and export buyer Brazil next year and the nations will receive a combined total of 96 examples up to 2026. Buskhe says the level of interest being shown in the product is consistent with previous forecasts of a total production run of at least 400 units.

The Gripenis less than half the size, and less than half the direct operating costs, of its competitors, while being (at least) nearly as capable in terms of everything but payload and range.

It's been on budget, and on schedule, and (unlike the F-35) nations have the information to incorporate their own weapons into the aircraft.

It's not surprising that it's doing well:  It's in a very similar position to that of the Mirage III in the 1960s.

Medical Data Point of the Day

It turns out that the average American birth costs more than the recent delivery of Prince William and Princess Catherine's 3^rd child at a luxury private hospital in London.

That hospital serves champagne and has an extensive wine list, and it still costs about the same as an average delivery in the USA:

………

Yet the price of delivering the new prince, who is fifth in line to the British throne, was probably slightly less than that of an average American baby. In 2015, the Lindo Wing charged £5,670 ($8,900) for 24 hours in a deluxe room and a non-Caesarean delivery. A survey in the same year by the International Federation of Health Plans found that the average fee for such a delivery in the United States was $10,808. ………

God bless our market driven health care system.

End Stage Looting by an Ayn Rand Fan

About a year and a half ago, I observed how the hedge fund operator who is running Sears according to the principles of Ayn Rand is running the venerable retail institution into the ground.

After many years of mismanagement and looting, he is now looking to buy its remaining assets at a cut-rate price.

To use Ayn Rand's language, he is a looter, not a creator:

Edward S. Lampert, the chief executive of Sears, offered on Monday to buy real estate assets and the Kenmore brand from the troubled retailer in what would be his latest attempt to save it.

In a letter to the Sears board, Mr. Lampert, whose ESL Investments hedge fund owns a controlling stake in the company, said ESL would be also be willing to buy the retailer’s home-services and its appliance-parts units.

Any deal involving Sears and Mr. Lampert is complicated by his dual roles running both the retailer and the hedge fund, which is also a major Sears lender.

………

In his letter to the board, Mr. Lampert offered to pay Sears $500 million for the home-services and appliance-parts units, but did not mention a price for the Kenmore brand or the real estate. He noted that the company had been trying to sell the assets for nearly two years, but had failed to find other buyers.

He failed to find another buyer because he has completely destroyed the company.

I will leave it to the reader to determine whether this is because he indented to drive its value down so that he could snap up its parts for a song all along, which is a fairly typical hedge fund behavior, or if he was simply wedded to a philosophy (Objectivism) which is completely antithetical to a business that actually makes, or does, something of value.

Sing It, Brother

I wholeheartedly agree that the world of deceptive user agreements used to arbitrarily punish customers 6 pounds of sh%$ in a 5 pound bag:

Mark Zuckerberg says it doesn't matter how creepy and terrible his company is, because you agreed to let him comprehensively f%$# you over from asshole to appetite by clicking "I agree" to a tens of thousands of words' worth of "agreements" spread out across multiple webpages; when questioned about this in Congress, Zuck grudgingly admitted that "I don’t think the average person likely reads that whole document." But as far as Zuck is concerned, it doesn't matter whether you've read it, whether you understand it, whether it can be understood -- you still "agreed."

Facebook is far from the worst offender: Paypal has been cutting off the accounts of users who signed up before they were 18, which violated their 50,000+ word ToS (spread across 21 web-pages!); it doesn't matter if those users are now well over the age of consent, more than a decade later, their failure to read all those terms is a hanging offense.

The self-replicating plague of bullsh%$ "agreements" is finally getting a reckoning, as users wake up to the fact that companies were actually serious when they said that they expected hold us to these absurd legal documents. What's more, the looming spectre of the EU General Data Protection Regulation, with its mandate for plain language agreements that users have to understand, is calling into question whether it's possible to even have a business that can only exist if users agree to terms that put the US tax-code to shame.

That is to say, businesses are being told that they are obliged to obtain detailed, informed consent to every single term in their contracts before they can start interacting with their users. The businesses say that undertaking such a process could take hours and that no one would ever use their services if a precondition for their usage is to actually understand what they're giving away.

To which the EU answers: exactly.

The EU is doing the right thing here.  (I cannot believe that I just said that)

Seriously, the ecology of the commercial internet resembles nothing so much as a petty bunco operation.

Not Enough Bullets

We have good news, and bad news.

The good news is that researchers have determined that an anti-cancer drug, Imbruvica (ibrutinib), was just as effective, with fewer side effects, at lower doses.

It would also save money for patients, or it would have if the drug maker had not tripled the cost of the drug in response:

A group of cancer doctors focused on bringing down the cost of treatments by testing whether lower — and cheaper — doses are effective thought they had found a prime candidate in a blood cancer drug called Imbruvica that typically costs $148,000 a year.

The science behind Imbruvica suggested that it could work at lower doses, and early clinical evidence indicated that patients with chronic lymphocytic leukemia might do just as well on one or two pills a day after completing an initial round of treatment at three pills per day.

The researchers at the Value in Cancer Care Consortium, a nonprofit focused on cutting treatment costs for some of the most expensive drugs, set out to test whether the lower dose was just as effective — and could save patients money.

Then they learned of a new pricing strategy by Janssen and Pharmacyclics, the companies that sell Imbruvica through a partnership. Within the next three months, the companies will stop making the original 140-milligram capsule, a spokeswoman confirmed. They will instead offer tablets in four strengths — each of which has the same flat price of about $400, or triple the original cost of the pill.

………

Just as scientific momentum was building to test the effectiveness of lower doses, the new pricing scheme ensures dose reductions won't save patients money or erode companies' revenue from selling the drug. In fact, patients who had been doing well on a low dose of the drug would now pay more for their treatment. Those who stay on the dose equivalent to three pills a day won't see a change in price.

“That got us kind of p---ed off,” said Mark J. Ratain, an oncologist at the University of Chicago Medicine who wrote about the issue in the Cancer Letter, a publication read by oncologists. “We were just in the early stages of planning [a clinical trial] and getting it organized, and thinking about sample size and funding, and we caught wind of what the company was doing.”

Pharma execs are, "A bunch of mindless jerks who'll be the first against the wall when the revolution comes."

I'm just saying.