November 2007

I’d like to commend the new report from Rob Atkinson and ITIF, Boosting European Prosperity Through the Widespread Use of ICT. The report finds that information and communications technology (ICT) is essentially the vitamin D for supporting the kind of productivity growth that stimulates economic prosperity.

It prescribes 5 five healthy principles for European policymakers to promote greater ICT into their daily lives:

1. Integrate ICT into all industries instead of just focusing on replacing lower productivity industries;
2. Use tax incentives and tariff reductions to spark ICT investment;
3. Support early stage research in emerging ICT areas;
4. Encourage basic computer and Internet skills;
5. Dismantle laws and regulations that protect offline incumbents  from online competitors.

However, as it is Europe we’re dealing with here, let me caution policymakers against turning these principles into industrial policy–particularly #s 2, 3 and 4.

I can envision enterprising advocates pushing–through legislation and regulation–open source and open standards as the solution for creating incentives for greater ICT uptake. Not that there’s necessarily anything wrong with open source/standards. I just have a problem with using politicized, and not market, forces to advantage some business models over others. I’ve discussed this before in previous postings on the European Commission’s flawed study on promoting the use of Free / Libre / Open Source Software (FLOSS) in the European Union.

The cell phone industry serves as a good case study on the long-term innovative effects of prescribing a a universal technology standard.

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The big news this week in communications policy circles was the hullabaloo at the FCC over cable regulation. FCC Chairman Kevin Martin suffered a major setback in his attempt expand regulation of the video marketplace when he failed to get the votes he needed to impose new mandates on cable TV operators. Specifically, Chairman Martin was seeking to breath new life into an arcane provision of a 1984 law–the so-called “70/70″ rule–that would have given him much greater regulatory authority over the day-to-day dealings of the cable market.

But the war certainly isn’t over. The day after losing that skirmish, Chairman Martin made it clear he would be pursuing other forms of regulation for the cable sector, including an arbitrary 30% ownership cap on the reach of any cable operator. And the Chairman’s crusade for a la carte mandates on cable will no doubt continue since it has been on his regulatory wish list for some time now, and many other groups support his efforts.

These cable TV regulatory proposals have always been fueled by the same two arguments: (1) cable TV operators have a stranglehold on market entry by new video providers and, (2) because of that, media diversity has suffered. For example, the New York Times editorial board opined this week that: “Twenty-five years ago, cable carriers promised to provide consumers with a wealth of new programming options. Today, the carriers and their packages of unwanted channels are obstacles to choice.” This is the same logic that animates Chairman Martin’s crusade against cable and the efforts of his pro-regulatory allies, most of whom are radical Leftist media critics.

But that logic is dead wrong.

Video marektplace choice and integration

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Ed Felten has announced a workshop at Princeton’s Center for Information Technology Policy called “Computing in the Cloud.”

“Computing in the cloud” refers to the trend toward online services that run in a Web browser and store users’ information in a provider’s data center. Examples include webmail services such as Hotmail and Gmail, online photo sites such as Flickr, social networks such as Facebook and Myspace, office suites such as Google Docs, markets such as eBay, and many more.

This is an important subject and the workshop looks like it will explore some very interesting issues. Among them is the increasingly outdated doctrine that information held by third parties cannot be the subject of Fourth Amendment protection. (The problem was summarized well by Julian Sanchez on TechDirt a few days ago.)

Here’s my problem: The Internet is not a cloud! It is a network of telecommunications providers and Internet service providers that have legal commitments to one another and to end-users. I’m concerned with talk of the Internet or computing as happening in a “cloud” because this could be used to deny the rights and responsibilities of each actor in the network.

Clouds drop water as rain at random across the earth. The Internet should not do that with data, and we shouldn’t talk about it as a thing that could.

Techdirt points to this story on a Chinese programmer who’s been arrested for developing an add-on to instant messaging software. I should state my biases up front: if using unauthorized software is a crime, they should come and get me, because I use Adium (and before that Fire and Gerry’s ICQ) for my instant messaging needs. It sounds like this guy’s product is the Chinese version of Adium, which means that in this respect China’s copyright laws are even more screwed up the those in the United States.

I am, however, a little bit puzzled about the exact detail of what he did and what laws he’s accused of breaking. From the article:

China has the world’s second-biggest Internet market after the U.S., with more than 160 million users, and it is a thriving market for such add-ons. Coral QQ has about 40.6 million users, according to Chinese computer-science publication Pchome.

Tencent first complained to Mr. Chen in late 2002, saying Coral QQ violated its copyright and warning him to stop distributing it. He did. Mr. Chen then devised a noninvasive “patch” on the program — a separate piece of software — that would run concurrently with QQ on a user’s computer and modify it as the two went humming along. In 2003, he resumed offering Coral QQ.

In 2006, as it became increasingly apparent that Coral QQ was only growing in popularity, Tencent filed a 500,000 yuan ($68,000) lawsuit alleging copyright infringement against Mr. Chen and won a judgment for 100,000 yuan, which Mr. Chen paid. In early August, Tencent complained to the police in Shenzhen, where it has its headquarters, and on Aug. 16 Mr. Chen was detained. Tencent said Mr. Chen was “making illegal profits and infringing on Tencent’s copyright.”

I’m not sure I’m reading this right, but it sounds like at one point he was distributing a modified version of the QQ client. That’s a plain case of copyright infringement and so Tencent was well within their rights to object to that. However, it sounds like more recently he’s been writing independently-created code that modifies the QQ application. While the exact legal arguments would depend on the details of what it’s doing, this would generally not be considered copyright infringement in the United States.

The Sklyarov arrest did a great deal of good in terms of highlighting the problems with the DMCA and galvanizing the geek community. I engaged in my first anti-DMCA activism the week after his arrest, when I attended a protest at the Minneapolis courthouse. If Shoufu’s actions are indeed as innocuous as Sklyarov’s were, this arrest should increase awareness in China of the threats that overly-restrictive copyright law can pose to programmers’ freedom.

As I mentioned yesterday, James Gattuso and I penned an editorial for National Review this week about the growth of FCC regulation and spending in recent years. In the op-ed, we also noted that, “For whatever reason, a disproportionate number of these [new regulatory proposals] have been aimed at cable television, so much so that press and industry analysts now speak of Chairman Martin’s ongoing ‘war on cable.’”

Today, the editors at National Review have chimed in with an editorial of their own on the issue entitled, “Pulling the Cable on Martin’s Crusade.” Specifically, the editors address what most pundits believe really motivates the Chairman’s crusade against cable: His desire to force cable companies to offer consumers channels on “a la carte” basis in an effort to “clean up” cable TV. “Martin should abandon this particular crusade,” the NR editors argue. “While we are sympathetic to parents’ desire to get the channels they want without having to buy access to racier fare, using economic regulation to restructure an industry is the wrong approach.” They continue:

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Some of the best video on the Interne is Mr. Deity, a blasphemous but wickedly funny series of shorts about religion and politics. It started out as a independent viral video series, but was signed by Sony to promote their new Crackle video-sharing site last year. I was recently excited when they launched their second season; they’ve been releasing a new video every couple of weeks.

But if you click the link above, you’ll be hard pressed to find the latest video. It’s “Mr. Deity and the Voicemail,” Episode 3 of Season 2. It’s inexplicably #7 in the list of the dozen or so episodes released so far. Even more inexplicably, if you search on Google for “mr deity,” you’ll be hard pressed to find either the Crackle Mr. Deity link or a link to the latest episode. The top hit is the pre-Crackle Mr. Deity home page, which hasn’t been updated in month and gives you no hint that the second has started. The next link is a YouTube video of the first episode, with again no hint that a new season has started. Crackle finally makes an appearance in the third slot, but the Mr. Deity home page doesn’t appear on that search page and is way down the list of Google results on Crackle. Finally at #4, we get the unofficial fan blog, which actually gives you one-click access to the latest episode. And at the very bottom of the first page, we see that Digg has pointed to the latest episode. In other words, the only sites that give you ready access to the newest episode are sites not run by Sony or the Mr. Deity team.

The Yahoo results are even worse: Crackle didn’t even crack the top ten. To It’s credit, Microsoft’s Live Search actually does include the Mr. Deity Crackle page as its seventh result.

This is an amazing degree of incompetence. Sony has presumably invested a significant amount of money producing this content, to say nothing of creating their video-sharing website. Yet they can’t even get the official Mr. Deity page to show up on the first page of Google search results for “Mr. Deity.” Compare that to, say, our podcast, which is the top hit for “Tech Policy Weekly” without us having made any explicit efforts to improve our search engine ranking.

You shouldn’t even need SEO help to come up as the top search result for your own product’s name. But if for some reason you’re not coming up as the top result, it’s worth investing a bit of money in making that happen. Especially if the whole point of producing the product was to drive web traffic to your video-sharing site. By the same token, One I get to the Mr. Deity Crackle page, the latest episode should be at the top of the list and prominently marked so I can grab it without having to wade through a long, randomly-organized list of videos.

I really don’t get it. These companies are investing millions of dollars to build these sites, yet they seem unable to get even the most obvious details right. Any halfway competent consultant should be able to point out these problems and explain how to fix them. So why are they so broken?

The Honorable Peter Hoekstra has taken to the august (virtual) pages of National Review to further muddy the waters of the debate over Joe Klein’s column. It would take a lot more time than I’ve got to untangle all the distortions and obfuscations of his arguments, so let me just jump to his particularly egregious concluding paragraphs:

It’s hard to imagine General Eisenhower going to court to ask for permission to conduct the D-Day invasion on the off-chance Americans might be on the beaches of Normandy. Yet this is exactly what Democrats want to force Admiral McConnell to do to conduct terrorist surveillance.

At the end of the day, we should be honest that this is not a legal debate, but a political one. It highlights the fact that Democrats believe that lawyering-up foreign intelligence to guard against every imagined or potential civil-liberties concern is more important than ensuring that we have the full capability to conduct quick and effective surveillance of foreign al-Qaeda targets in foreign countries. I’ll welcome that debate anytime.

Now, in the first place, absolutely no one is proposing that the FISA court have jurisdiction over wiretapping activities that occur overseas. If the US Army wants to tap an Iraqi cell phone tower, or if the CIA wants to tap an underseas optical cable outside of the US territorial waters, neither the current FISA law nor any proposed changes would require court oversight of those activities. So the Eisenhower hypothetical is a total non-sequitur. Unless General Eisenhower somehow needed to tap American phone lines in order to carry out the D-Day invasion, none of the bills under consideration would have had any effect on his activities.

He says he’s worried about the ability to “conduct quick and effective surveillance of foreign al-Qaeda targets in foreign countries.” But the only time the Restore Act would require judicial scrutiny of “surveillance of foreign al-Qaeda targets in foreign countries” is when that surveillance requires ordering American telecom companies to install wiretaps on American soil, and when one end of that communication is likely to be on American soil. That’s a tiny fraction of our foreign intelligence-gathering activities, and so the Restore Act would place a correspondingly small burden on the executive branch.

Finally, when Hoekstra talks about “lawyering-up foreign intelligence,” he neglects to mention that every single proposed bill, the Restore Act included, expands the executive branch’s ability to engage in warrantless surveillance and restricts the courts’ oversight role compared to the status quo. Nobody is “lawyering up” anything. The debate is between Democrats who support only modest reductions in judicial oversight and a White House that is demanding the complete emasculation of judicial oversight of domestic-to-foreign eavesdropping.

This is just a quick follow-up to the post I made earlier in which I mentioned the new editorial James Gattuso and I penned for National Review about the growth of FCC regulation and spending in recent years. A few people asked me where we got the numbers we used in the piece regarding the growth of the FCC’s budget over time. Here are the relevant numbers and a graph charting that growth. The numbers can all be found in the the FCC’s annual budget reports.

Next time some pro-regulatory advocate says that the agency is engaged in “radical deregulation” or something absurd like that, show them these numbers. There’s still a whole lotta regulatin’ going on over there!
FCC Budget Chart
FCC Budget Graph

This week in National Review Online, Cesar Conda and Lawrence Spivak ran an editorial entitled “Kevin Martin’s Pro-Market FCC,” arguing that the current FCC has generally been deregulatory and free market-oriented. Today, James Gattuso and I have set the record straight regarding just how off-the-rails this current FCC has really gone…
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November 29, 2007

TV Train Wreck
Martin, markets, and the potential for regulatory disaster.

By James Gattuso & Adam Thierer

Like cops shooing away onlookers at the scene of an accident, Cesar Conda and Lawrence Spivak argue (“Kevin Martin’s Pro-Market FCC”) that there’s no reason for conservatives to be concerned about the Federal Communications Commission (FCC). Under Chairman Kevin Martin, they say, the FCC has been “characterized by a consistent pro-entry/pro-consumer welfare mandate, the very hallmark of economic conservatism.”

In other words: “Just move along. Nothing to see here.”

Despite Conda and Spivak’s exhortations, however, there is much for the curious crowd to see in the train wreck that is the FCC. The most recent derailment began earlier this month, when Martin leaked plans to invoke an obscure provision of the Communications Act, and to assert nearly unlimited powers to regulate cable television if more than 70 percent of households subscribe to cable.

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Time’s “Correction”

by on November 28, 2007 · 2 comments

Wow. Here, in its entirety, is Time’s “correction” to Joe Klein’s error-ridden column on the Restore Act:

In the original version of this story, Joe Klein wrote that the House Democratic version of the Foreign Intelligence Surveillance Act (FISA) would allow a court review of individual foreign surveillance targets. Republicans believe the bill can be interpreted that way, but Democrats don’t.

Glenn Greenwald gets this exactly right:

Leave aside the false description of what Klein wrote. He didn’t say “that the House Democratic version of the Foreign Intelligence Surveillance Act (FISA) would allow a court review of individual foreign surveillance targets.” He said that their bill “would require the surveillance of every foreign-terrorist target’s calls to be approved by the FISA court” and “would give terrorists the same legal protections as Americans.” But the Editor’s false characterization of Klein’s original lie about the House FISA bill is the least of the issues here.

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