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<title>Techdirt. Stories filed under &quot;taxpayers&quot;</title>
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<image><title>Techdirt. Stories filed under &quot;taxpayers&quot;</title><url>http://www.techdirt.com/images/td-88x31.gif</url><link>http://www.techdirt.com/</link></image>
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<pubDate>Fri, 23 Mar 2012 12:24:00 PDT</pubDate>
<title>Feds Finally Realize That AT&#038;T Has Been Enabling Scammers To Abuse IP Fraud... Financed By Taxpayers</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20120323/02570318219/feds-finally-realize-that-att-has-been-enabling-scammers-to-abuse-ip-fraud-financed-taxpayers.shtml</link>
<guid>http://www.techdirt.com/articles/20120323/02570318219/feds-finally-realize-that-att-has-been-enabling-scammers-to-abuse-ip-fraud-financed-taxpayers.shtml</guid>
<description><![CDATA[ We first wrote about IP Relay fraud all the way back in <a href="http://www.techdirt.com/articles/20040916/1244228.shtml">2004</a>, when it was pointed out that a huge percentage of calls using this system were fraudulent, and the telcos were doing nothing to stop it, because they were profiting at the taxpayer's expense.  If you're unfamiliar with the system, IP Relay has a good <i>intention</i>: to help hearing impaired people communicate -- allowing them to send text-based messages to phone numbers, which are then read by operators.  In order to fund this service, the FCC pays telcos an astounding $1.50 per minute on such calls.   Scammers, however, quickly realized that this was a way to make free, almost totally anonymous, calls.  And the telcos had every incentive to encourage <i>any</i> usage, scammy or not, since it meant they got paid (from taxpayers).
<br /><br />
The fact that all of this was obvious eight years ago but it was only just now that feds decided to <a href="http://www.dslreports.com/shownews/Government-Sues-ATT-for-Millions-in-IP-Relay-Fraud-118940" target="_blank">sue AT&#038;T for abusing the system</a> is pretty incredible.  To be fair, the FCC passed rules in 2008 that required telcos try to register users to verify who they were (to take away some of the anonymity of the system).  The key issue with this lawsuit is the claim that AT&#038;T <i>intentionally</i> implemented an authentication system that wouldn't work.  In other words, it purposely scammed taxpayers out of a ton of money:
<blockquote><i>
The United States alleges that AT&#038;T violated the False Claims Act by facilitating and seeking federal payment for IP Relay calls by international callers who were ineligible for the service and sought to use it for fraudulent purposes.   The complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&#038;T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States.   The complaint further contends that AT&#038;T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&#038;T&#8217;s call volume.   The government&#8217;s complaint alleges that AT&#038;T improperly billed the TRS Fund for reimbursement of these calls and received millions of dollars in federal payments as a result.
</i></blockquote>
As Karl Bode at Broadband Reports notes, if you start doing the math, the claim that this is about "millions of dollars" may be a "severe under-estimate."  We're talking about 95% of all of these calls, done for many years, being fraudulent, with AT&#038;T having no incentive to cut them out, and scammers having tremendous incentive to use the service as well.  Again, all of this done with taxpayers footing the bill.  While AT&#038;T definitely deserves scorn for allegedly purposely choosing to set up a bogus registration system, a ton of blame has to go to the government for letting all of this happen for so damn long, and not recognizing just how much AT&#038;T was fleecing taxpayers for under the system (not to mention all of the scams this probably helped enable).<br /><br /><a href="http://www.techdirt.com/articles/20120323/02570318219/feds-finally-realize-that-att-has-been-enabling-scammers-to-abuse-ip-fraud-financed-taxpayers.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20120323/02570318219/feds-finally-realize-that-att-has-been-enabling-scammers-to-abuse-ip-fraud-financed-taxpayers.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20120323/02570318219/feds-finally-realize-that-att-has-been-enabling-scammers-to-abuse-ip-fraud-financed-taxpayers.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>took-'em-long-enough</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20120323/02570318219</wfw:commentRss>
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<pubDate>Thu, 18 Aug 2011 13:30:00 PDT</pubDate>
<title>CBO Says PROTECT IP Will Cost Taxpayers Over $10 Million Per Year To Censor The Internet</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20110818/13083415590/cbo-says-protect-ip-will-cost-taxpayers-over-10-million-per-year-to-censor-internet.shtml</link>
<guid>http://www.techdirt.com/articles/20110818/13083415590/cbo-says-protect-ip-will-cost-taxpayers-over-10-million-per-year-to-censor-internet.shtml</guid>
<description><![CDATA[ The Congressional Budget Office (CBO), who tries to estimate the cost to taxpayers of all new laws proposed by Congress has put out its report on the PROTECT IP Act, noting that it will <a href="http://www.cbo.gov/ftpdocs/123xx/doc12391/s968.pdf" target="_blank">cost taxpayers $47 million</a> (pdf) from 2012 to 2016.  Specifically, the CBO notes that the Justice Department would have to go out and hire 48 new people (22 special agents and 26 support staff) to act as Hollywood's censor police -- and that the annual cost will run about $10 million.  Separately, the CBO notes that outside of the cost for taxpayers, the law would certainly impose costs on a variety of tech companies, by placing liability and requirements on them in regards to sites picked by Hollywood and the Justice Department to censor (you know, sites like that bastion of "piracy," the Internet Archive, which Hollywood has already put on its <a href="http://www.techdirt.com/articles/20110620/01370314750/universal-music-goes-to-war-against-popular-hip-hop-sites-blogs.shtml">evil pirates list</a>).  However, it does not estimate that additional cost on those companies, since it will depend heavily on "future judicial proceedings."<br /><br /><a href="http://www.techdirt.com/articles/20110818/13083415590/cbo-says-protect-ip-will-cost-taxpayers-over-10-million-per-year-to-censor-internet.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110818/13083415590/cbo-says-protect-ip-will-cost-taxpayers-over-10-million-per-year-to-censor-internet.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110818/13083415590/cbo-says-protect-ip-will-cost-taxpayers-over-10-million-per-year-to-censor-internet.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>why-are-we-doing-this-again?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20110818/13083415590</wfw:commentRss>
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<pubDate>Mon, 16 May 2011 08:44:08 PDT</pubDate>
<title>Bill Clinton Thinks The Internet Needs A Taxpayer Funded Ministry Of Truth</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20110513/17343214271/bill-clinton-thinks-internet-needs-taxpayer-funded-ministry-truth.shtml</link>
<guid>http://www.techdirt.com/articles/20110513/17343214271/bill-clinton-thinks-internet-needs-taxpayer-funded-ministry-truth.shtml</guid>
<description><![CDATA[ Now, it's certainly true that the so-called "fourth estate" -- the press -- often isn't very good at fact checking.  They're especially bad at fact checking politicians, and the popular "view from nowhere" often means that rather than pointing out where a politician has lied, they feel that as long as they give "the other side" equal time, they've done their job.  However, do we really need a federal fact checking agency?  That appears to be the opinion of former President Bill Clinton <a href="http://www.politico.com/news/stories/0511/54951.html" target="_blank">who suggested such an agency would be a good use of taxpayer money</a>:
<blockquote><i>
"Let's say the U.S. did it, it would have to be an independent federal agency that no president could countermand or anything else because people wouldn't think you were just censoring the news and giving a different falsehood out," Clinton said.
<br><br>
"That is, it would be like, I don't know, National Public Radio or BBC or something like that, except it would have to be really independent and they would not express opinions, and their mandate would be narrowly confined to identifying relevant factual errors" he said. "And also, they would also have to have citations so that they could be checked in case they made a mistake. Somebody needs to be doing it, and maybe it's a worthy expenditure of taxpayer money."
</i></blockquote>
But why would that be a worthy expenditure of taxpayer money, when others are already trying to do that?  We have operations like <A href="http://www.factcheck.org/" target="_blank">FactCheck.org</a> and <a href="http://www.politifact.com/" target="_blank">Politifact</a>, both run by respected operations, and both of which have done pretty well from what I've seen.  Of course, this sort of thing could also already be considered part of the GAO's mandate, as it's pretty well respected for not falling for political spin in its reports, but for digging in and getting things right.  Of course, that hasn't stopped much of the government from ignoring the GAO's position on things.<br /><br /><a href="http://www.techdirt.com/articles/20110513/17343214271/bill-clinton-thinks-internet-needs-taxpayer-funded-ministry-truth.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110513/17343214271/bill-clinton-thinks-internet-needs-taxpayer-funded-ministry-truth.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110513/17343214271/bill-clinton-thinks-internet-needs-taxpayer-funded-ministry-truth.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>politifact-not-good-enough-for-you?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20110513/17343214271</wfw:commentRss>
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<pubDate>Fri, 17 Sep 2010 00:08:48 PDT</pubDate>
<title>How Much Did The Pointless OiNK Raid Cost UK Taxpayers?</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20100916/11000311041.shtml</link>
<guid>http://www.techdirt.com/articles/20100916/11000311041.shtml</guid>
<description><![CDATA[ As you may recall, a few years back, UK authorities <a href="http://www.techdirt.com/articles/20071023/132158.shtml">took down OiNK</a>, a popular BitTorrent tracker site -- and only after taking down the site did they realize that OiNK's admin, Alan Ellis, didn't appear to have done anything illegal.  After testing out a few legal theories, prosecutors finally tried <a href="http://www.techdirt.com/articles/20080601/1756051285.shtml">"conspiracy to defraud" the music industry</a> -- a crime that sounds suspiciously like <a href="http://www.techdirt.com/articles/20071004/163314.shtml">felony interference of a business model</a>.  Of course, years later, Ellis was found <a href="http://www.techdirt.com/articles/20100115/1051307772.shtml">not guilty</a>, since he didn't actually break any laws.
<br /><br />
So how much did this entertainment-industry driven mess cost UK taxpayers? Well, police refused to release that information for a while, claiming that it "could undermine any ongoing and future investigations and cause potential damage to the criminal justice process."  Uh, right.  About the only way it would do that is when people realized how much money was being wasted on bogus investigations.  Eventually, however, it came out that the investigation itself cost about &pound;29,000 -- including &pound;7,800 on overtime (OiNK after dark?) and &pound;4,300 on "travel and subsistence."  Of course that doesn't even get into what the actual trial cost taxpayers, which I'm sure is many times greater than that.  And, as plenty of people predicted at the time of the raid, none of it mattered, because others stepped in to replace OiNK in no time flat.  Perhaps, next time, the police can spend a little more money to realize that they had no case.  Or, maybe, not spend the money at all, and let the entertainment industry focus its efforts on actually adapting to a changing market place.<br /><br /><a href="http://www.techdirt.com/articles/20100916/11000311041.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20100916/11000311041.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20100916/11000311041.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>if-they-spend-more-do-they-get-it-right-next-time?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20100916/11000311041</wfw:commentRss>
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<pubDate>Mon, 25 Jan 2010 09:14:00 PST</pubDate>
<title>Intuit Lobbying The Government To Make It More Difficult To File Your Tax Returns</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20100124/1836527884.shtml</link>
<guid>http://www.techdirt.com/articles/20100124/1836527884.shtml</guid>
<description><![CDATA[ A fascinating article points out that the government could make the process of filing your tax returns significantly easier by simply sending you pre-filled out forms of what they know (basically what's been sent in from your employer(s)) so that you could just take the pre-filled form, check it over, make any additions or changes as necessary and submit it.  Apparently, many places that have done this have had great success with it.  But it's not happening in the US <a href="http://www.nytimes.com/2010/01/24/business/24digi.html" target="_blank">in large part due to heavy lobbying from Intuit</a>, who fears (perhaps correctly) that this would put a big dent into its tax preparation software business.  Of course, that's not how Intuit puts it.  The company first claims that this functionality is "already available" (it's not) and that it is a "conflict of interest for government to be both tax collector and tax preparer."  However, that is also inaccurate.  No one is asking the government to be the tax preparer, but just to share the information it already has so that individuals aren't forced to rebuild the info themselves.  As one person quoted in the article notes, it's "as if Visa sent customers a blank piece of paper, requiring that they assemble their receipts, list their purchases -- and pay a fine if they forget one."  So, everyone, thank Intuit for making tax season that much more frustrating.<br /><br /><a href="http://www.techdirt.com/articles/20100124/1836527884.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20100124/1836527884.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20100124/1836527884.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>isn't-that-special</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20100124/1836527884</wfw:commentRss>
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<pubDate>Tue, 16 Sep 2008 09:03:00 PDT</pubDate>
<title>Hey, Didn't Taxpayers Pay For Those Patents NASA Is Auctioning Off?</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20080915/1859022278.shtml</link>
<guid>http://www.techdirt.com/articles/20080915/1859022278.shtml</guid>
<description><![CDATA[ <a href="http://stuckinthecube.blogspot.com">ReallyEvilCanine</a> writes in to let us know that Ocean Tomo, the <a href="http://www.techdirt.com/articles/20070507/013659.shtml">patent auctioning</a> company has worked out an agreement to <a href="http://www.gcn.com/online/vol1_no1/47153-1.html" target="_new">auction off a package of 25 NASA patents</a> covering things like signal processing, GPS for spacecraft and sensor technologies.  Ocean Tomo <i>always</i> presents itself as somehow creating value from patents, but always seems to ignore how its version of creating value often means significant value <i>lost</i> to actual innovators.  In this case, there's an even bigger question: didn't taxpayers pay for those patents by funding NASA?  So why is some company now going to benefit from them, while locking the public out?  In effect, the public is paying twice (at potentially inflated prices) for these inventions.  Yet, you won't hear that from Ocean Tomo or the press reports about this auction, which note: 
<blockquote><i>
"Creating a market for patented technology funded by NASA benefits both the government and the commercial sector that will take advantage of it."
</i></blockquote>
That leaves out the taxpayers who funded this in the first place <i>and</i> is simply incorrect.  It <i>harms</i> the commercial sector by making them pay again for something.  If NASA wanted to benefit the commercial sector, it could have placed those patents in the public domain, so that the commercial sector could compete to do something useful with them, thereby spurring on competition and more innovation.<br /><br /><a href="http://www.techdirt.com/articles/20080915/1859022278.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20080915/1859022278.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20080915/1859022278.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>i-thought-so</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20080915/1859022278</wfw:commentRss>
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<pubDate>Mon, 7 Apr 2008 11:49:59 PDT</pubDate>
<title>No, Google Did Not Fleece Taxpayers Out Of $7 Billion</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20080404/180724761.shtml</link>
<guid>http://www.techdirt.com/articles/20080404/180724761.shtml</guid>
<description><![CDATA[ We've talked about Scott Cleland <a href="http://www.techdirt.com/articles/20080131/003825134.shtml">before</a>.  He's a "telecom analyst" who has a <a href="http://mediacitizen.blogspot.com/2007/02/sock-puppet-redux.html">reputation</a> for <a href="http://www.techdirt.com/articles/20061022/220402.shtml">stretching</a> the truth as far as it can go in order to contort himself into making telcos look good and anyone opposing the telcos look bad.  <a href="http://www.techliberation.com/archives/043565.php">Jim Harper</a> points us to Cleland's latest, where he <a href="http://www.precursorblog.com/node/701" target="_new">accuses Google of "fleecing taxpayers" out of approximately $7 billion</a> with its actions in the recent <a href="http://www.techdirt.com/articles/20080320/164029600.shtml">700 MHz auction</a>.  He notes Google's <a href="http://www.nytimes.com/2008/04/04/technology/04auction.html?ex=1364961600&#038;en=394f0b8dd93512fd&#038;ei=5090&#038;partner=rssuserland&#038;emc=rss&#038;pagewanted=all">admission</a> that it was only in the auction to push the bid over the threshold requiring any service on the network <a href="http://www.techdirt.com/articles/20070710/142339.shtml">to be open</a>.  This isn't a surprise.  It was widely assumed that Google would merely bid up to the threshold, knowing that if it could buy the spectrum at that price, that would be great, but if someone else got it and the network was then required to be open, that was great too.  So this is hardly a shocking admission on the part of Google.
<br /><br />
Cleland then compares the prices of the other blocks of spectrum available (those that didn't have open access rules) and does a back of the envelope calculation that the average price per MHz was noticeably higher on the closed access spectrum than the open access spectrum.  From that point, he jumps to the conclusion that the C block (the open access block) was significantly underpriced because (he claims) telcos valued it less since it was open.  Of course, there are all sorts of problems with this.  He determines the amount of the underbidding by merely averaging the % difference in the A and B blocks to the C block -- but it's a massive difference.  The A block was 50% higher and the B block was 250% higher.  He then just averages that to 150%.  Yet, anyone who bothered to actually think about it (rather than look for a weapon with which to bash Google) would note that this calculation is quite dubious.  Beyond the "small sample size" problem, the very difference in price-per-MHz in the A and B blocks should make it clear that there are <i>many other reasons</i> why the price would fluctuate having absolutely nothing to do with whether the network was open or closed.  To assign the entire blame to that makes no sense whatsoever and ignores the realities of what these different blocks of spectrum were good for.
<br /><br />
Next, Cleland tries to spin this story as Google illegally swiping $7 billion from taxpayers -- since this entirely mythical $7 billion would have gone into the treasury, which will now have to make it up from taxpayers.  On top of that, he suggests (totally incorrectly) that the only real beneficiary of the open access rules would be Google for its Android offering.  Except... not quite.  He's ignoring (conveniently) the other half of the equation.  The open access rules benefit plenty of other companies beyond Google (in fact, any company that wants to take advantage of those rules), and will likely lead to much greater innovation and new and valuable businesses and services, that will likely generate much more tax revenue for the government than the totally mythical $7 billion.  But Cleland decides to ignore all that inconvenient information in order to make an entirely bogus claim against Google.<br /><br /><a href="http://www.techdirt.com/articles/20080404/180724761.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20080404/180724761.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20080404/180724761.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>bad-math</slash:department>
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