June 2011

My colleague Cord Blomquist brought to my attention this amazing info-graphic, which depicts the stunning volume of activity unfolding every 60 seconds online. [Click on the image to enlarge it.] It appears the graphic was created by Go-Globe.com, a web design firm, although I’ve not been able to find the original. [Update: The folks at Go-Globe got in touch with me and sent me the original link. Thanks Go-Globe!] Cord found it in this collection of “35 Cool Infographics for Web and Graphic Designers.”  I find this graphic especially interesting because it helps bolster the work I’ve been doing lately with Jerry Brito about the challenges faced by information control regimes. [See our recent essays on the topic: 1, 23, 4, 5.]  Most recently, I put together a list of “Some Metrics Regarding the Volume of Online Activity” but I’d been searching for a really excellent visualization to help tell this story and this is probably the best one I’ve ever seen. Absolutely amazing numbers.

I enjoyed this Wall Street Journal essay by Daniel H. Wilson on “The Terrifying Truth About New Technology.”  It touches on many of the themes I’ve discussed here in my essays on techno-panics, fears about information overload, and the broader battle throughout history between technology optimists and pessimists regarding the impact of new technologies on culture, life, and learning. Wilson correctly notes that:

The fear of the never-ending onslaught of gizmos and gadgets is nothing new. The radio, the telephone, Facebook — each of these inventions changed the world. Each of them scared the heck out of an older generation. And each of them was invented by people who were in their 20s.

He continues:

Young people adapt quickly to the most absurd things. Consider the social network Foursquare, in which people not only willingly broadcast their location to the world but earn goofy virtual badges for doing so. My first impulse was to ignore Foursquare—for the rest of my life, if I have to.

And that’s the problem. As we get older, the process of adaptation slows way down. Unfortunately, we depend on alternating waves of assimilation and accommodation to adapt to a constantly changing world. For [developmental psychologist Jean] Piaget, this balance between what’s in the mind and what’s in the environment is called equilibrium. It’s pretty obvious when equilibrium breaks down. For example, my grandmother has phone numbers taped to her cellphone. Having grown up with the Rolodex (a collection of numbers stored next to the phone), she doesn’t quite grasp the concept of putting the numbers in the phone.

Why are we so nostalgic about the technology we grew up with? Old people say things like: “This new technology is stupid. I liked (new, digital) technology X better when it was called (old, analog) technology Y. Why, back in my day….” Which leads inexorably to, “I just don’t get it.”

There’s a simple explanation for this phenomenon: “adventure window.” At a certain age, that which is familiar and feels safe becomes more important to you than that which is new, different, and exciting. Think of it as “set-in-your-ways syndrome.”

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Last week the Senate Commerce Committee passed–with deep bi-partisan support–the Public Safety Spectrum and Wireless Innovation Act.

The bill, co-sponsored by Committee Chairman Jay Rockefeller and Ranking Member Kay Bailey Hutchison, is a comprehensive effort to resolve several long-standing stalemates and impending crises having to do with one of the most critical 21st century resources: radio spectrum.

My analysis of the bill appears today on CNET. See “Spectrum reform, public safety network move forward in Senate.”

The proposed legislation is impressive in scope; it offers new and in some cases novel solutions to more than half-a-dozen spectrum-related problems, including: Continue reading →

The Supreme Court will be issuing its opinion in the case Brown v. Entertainment Merchants Association any day now (TLF’s previous coverage is here). The case was previously known as Schwarzenegger v. Entertainment Merchants Association, but Mr. Schwarzenegger has been trying to stay out of court of late. I was just sent a draft of the statement that the Eagle Forum Education & Legal Defense Fund, which filed an amicus brief in the case, is planning to release if the decision goes its way. The Eagle Forum Education & Legal Defense Fund was founded by Phyllis Schlafly.

[Not really. This is a joke (but the quotes are true).]
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Have you heard about 3D printing yet? Bre Pettis, founder of Makerbot, a company that sells a $1300 home 3D printer, was Wednesday night’s guest on the The Colbert Report. And back in April, Public Knowledge kicked off what’s sure to be a long public debate over the legal and policy questions raised by 3D printing with a half-day conference here in D.C.

Also called “additive manufacturing,” 3D printing is the process of “printing” a three-dimensional object layer-by-layer with equipment that’s not much different from ink-jet printers. Combine 3D printing with 3D scanning and you’ve got the first real step towards something that seems at first like total science fiction: A Star Trek replicator.

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This morning, the Federal Communications Commission (FCC) released its eagerly-awaited “Future of Media” report. The 475-page final report is entitled, “The Information Needs of Communities: The Changing Media Landscape in a Broadband Age.”  [Here’s a 2-page summary and the official press release.]  The report is a bit overdue; the effort was supposed to be wrapped up late last year. Comments in the proceeding were filed over a year ago. Here are some of the major ones. Also, here is the 80-page monster filing that I submitted with my former PFF colleagues Berin Szoka and Ken Ferree.

Quick refresher… Federal policymakers have been taking a greater interest in the health of media and journalism in recent years. In 2009, the Senate held hearings about “the future of journalism,” and Senator Benjamin L. Cardin (D-MD) introduced the “Newspaper Revitalization Act,” which would allow newspapers to become tax-exempt non-profits in an effort to help them stay afloat. In 2010, the Federal Trade Commission hosted two workshops asking “How Will Journalism Survive the Internet Age?” and also released a staff report on “Potential Policy Recommendations to Support the Reinvention of Journalism.” (As I noted here and here, the FTC was blasted for that report and quickly backed off the issue. The agency has since gone radio silent on the issue.) The FCC also launched its “Examination of the Future of Media and Information in a Digital Age” in 2010, and today’s report wraps up their work on this front.

My first reaction after scanning the FCC’s final report is one of relief. For those of us who care about the First Amendment, media freedom, and free-market experimentation with new media business models, it feels like we’ve dodged a major bullet. The report does not recommend sweeping regulatory actions that might have seen Washington inserting itself into the affairs of the press or bailing out dying business models.

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A couple of news items this week have vindicated some opinions I’d previously expressed here, and they’re all about Apple, so how can I can pass up the opportunity to note them, right?

A while back [I wrote](http://techliberation.com/2010/11/04/how-closed-is-apple-anyway/) that as long as iOS devices had a standards-compliant browser, innovation would be safe:

>Apple has come under fire by some supporters of an open internet and open software platforms such as Jonathan Zittrain and Tim Wu, who argue that Apple’s walled garden approach to devices and software will lead us to a more controlled and less innovative world. In particular, they point to the app store and Apple’s zealous control over what apps consumers are allowed to purchase and run on their devices. Here’s the thing, though: Every Apple device comes with a web browser. A web browser is an escape hatch from Apple’s walled garden. And Apple has taken a backseat to no one in nurturing an open web.

This week comes word that the Financial Times, unhappy with having to give Apple a 30% cut of it’s subscription revenues, [has dropped its iOS app in favor of a web app](http://www.macrumors.com/2011/06/07/financial-times-wont-give-apple-a-cut-drops-ios-for-web-app/). Read the story; it’s quite interesting. As far as I can tell, the web app, written in cutting edge HTML5, is as good as the native app.

The second piece of news is that [Apple has quietly backed down](http://www.macrumors.com/2011/06/09/apple-reverses-course-on-in-app-subscriptions/) from its controversial requirement that an in-app newspaper or magazine subscription be the “same price or less than it is offered outside the app”. “Apple also removed the requirement that external subscriptions must be also offered as an in-app purchase.”

What this tells me is that the market works, and when companies make boneheaded moves, they can’t force users or publishers to go along with it by sheer will. Back when the subscription issue was blowing up I wrote that [Apple did not have the market power](http://techliberation.com/2011/02/21/is-apples-digital-subscription-plan-good-or-bad-for-consumers/) to make this stick:

>Digital publishing is very much a contestable market. I hardly need to point out that the day after Apple’s announcement, [Google made public](http://news.cnet.com/8301-17938_105-20032217-1.html) its own very competitive subscription service. And while the iPad is ahead of the game right now, Android tablets are only now beginning to hit the market. If [declining iPhone market share](http://thenextweb.com/apple/2010/02/01/iphone-shedding-market-share-increasingly-competitive-market/) is any indication, Android will nip at Apple’s heels in the tablet space as well. And let’s not forget other formidable (and somewhat-formidable) competitors in the likes of HP’s WebOS, Microsoft-Nokia, and RIM.

Let’s now talk about the real threat to app innovation. There’s news today that Apple has finally [caved in to political pressure](http://bits.blogs.nytimes.com/2011/06/09/apple-will-reject-d-u-i-checkpoints-apps/) from members of Congress and banned DUI checkpoint apps from the app store. RIM had already complied, and Google has yet to respond. You can see, though, how apps are more susceptible to nanny state meddling than to monopolization.

The day many had expected is finally here. This Reuters headline says it all: [Senators seek crackdown on “Bitcoin” currency](http://www.baltimoresun.com/business/sns-rt-us-financial-bitcoitre7573t3-20110608,0,1767151.story).

The main target of Sens. Chuck Schumer and Joe Manchin is Silk Road–the [online illicit drug bazaar](http://gawker.com/5805928/the-underground-website-where-you-can-buy-any-drug-imaginable) run via the TOR network–but bitcoin, the currency of choice on Silk Road, is also in their sights. (Also, Sens. Roy Blunt and Claire McCaskill [are also getting in on the action.](http://www.fox2now.com/news/ktvi-missouri-lawmakers-want-to-shut-down-drug-dealing-website-20110607,0,2162224.story)) In [a recent letter](http://pastebin.com/VurF7dgr) Schimer and Manchin have asked the DOJ and DEA to shut down Silk Road, and “seize” the website’s domain. More to the point, in his press conference, [which you can watch here](http://www.wpix.com/videobeta/f76e263d-8ab3-4028-bf42-1b18c3eb9b5d/News/RAW-VIDEO-Sen-Schumer-On-Silk-Road), Schumer said that bitcoin is “an online form of money laundering used to disguise the source of money, and to disguise who’s both selling and buying the drug.”

As the DOJ and DEA plan a response and this issue develops, I though I’d offer some initial thoughts:

– Bitcoin is digital cash, and like any form of cash, it can be used for good or for ill. Because, like all cash, it is largely anonymous, it will be used by persons looking to evade official scrutiny. This could be contributing anonymously to unpopular causes like Wikileaks, but it could also mean buying drugs online. We don’t ban hard to trace paper cash because we understand that there’s nothing inherently bad about it; it’s what people do with it that’s can be problematic. Bitcoin should be treated the same way.

That said about what I think ought to be, what’s really interesting is what will be regardless of normative values. That is, can Silk Road and bitcoin “cracked down”?

– The federal government is no doubt going to go after Silk Road. This sets up another “natural experiment” like [the one presented by LulzSec taking bitcoin donations](http://techliberation.com/2011/06/03/bitcoin-silk-road-and-lulzsec-oh-my/). Given that the site exists as a [.onion an anonymous hidden service](http://en.wikipedia.org/wiki/.onion) via TOR, will the feds be able to find who’s behind it and shut it down? We’ll see. They certainly won’t be able to “seize the domain” as Schumer and Manchin’s letter suggests. If a year from now the site is still operating, will we be able to say that government does not “[possess any methods of enforcement we have true reason to fear.](http://www.wired.com/wired/if/declaration/)”

– If the federal government seeks to go after bitcoin, it won’t be able to take down the network. That’s just impossible as far as I can tell. The weakest link in the bitcoin ecosystem, however, are the exchanges, like Mt Gox. These allow you to trade your bitcoins for dollars and vice versa. At this point, there’s not a lot you can buy with bitcoins, so the ability to trade them to a widely accepted currency is important.
According to Gavin Andresen, the lead developer of the bitcoin project, Mt Gox “is careful to comply with all anti-money-laundering laws and regulations.” I’d love to know more about this. As far as I can tell, we know very little about who runs Mt Gox and how they comply with the law.

– Even if the federal government is able to shut down Silk Road and exchanges like Mt Gox, we will quickly see others take their place. Silk Road will be supplanted by another anonymart ([to use Kevin Kelly’s phrase](http://www.kk.org/thetechnium/archives/2011/06/the_stealthy_an.php)), and we’ll see a replay of the drug war we know too well from meatspace. As for exchanges, we’ll see new ones pop up, likely in jurisdictions with liberal banking laws, and it will be interesting to see if Congress tries to make it illegal for financial institutions and payment processors to deal with them, just as they’ve made it illegal to deal with offshore online casinos. What I hope we’ll see emerge is a properly licensed and legally compliant domestic exchange that is as committed to fighting money laundering as Citibank. That would certainly help test bitcoin’s legality. This [great paper by Reuben Grinberg](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1817857) that gives me hope that, for now at least, there’s nothing inherently illegal about trading bitcoins.

Facebook announced yesterday that it had finished most of the global roll-out, begun in the U.S. last December. Now ZDNet reports that European Privacy regulators are already planning a probe of this. Emil Protalinski writes:

“Tags of people on pictures should only happen based on people’s prior consent and it can’t be activated by default,” Gerard Lommel, a Luxembourg member of the so-called Article 29 Data Protection Working Party, told BusinessWeek. Such automatic tagging “can bear a lot of risks for users” and the group of European data protection officials will “clarify to Facebook that this can’t happen like this.”

No doubt our friends at the Extra-Paternalist Internet Cops (EPIC) will jump into the fray with another of their many complaints to the FTC, dripping with outrage that Facebook has “opted us into” this feature. But what’s the big deal, really?  Emil explains how things work:

When you upload new photos, Facebook uses software similar to that found in many photo editing tools to match your new photos to other photos you’re tagged in. Similar photos are grouped together and, whenever possible, Facebook suggests the name(s) your friend(s) in the photos. In other words, the square that magically finds faces in a photo now suggests names of your Facebook friends to streamline the tagging process, especially with the same friends in multiple uploaded photos.

Lifehacker explains how easy it is for Facebook users to opt-out of having their friends seeing the automatically generated suggestion to tag their face (as Facebook did  in its own announcement):

  1. Head your Privacy Settings and click on Customize Settings.
  2. Scroll down to the “Suggest Photos of Me to Friends” setting and hit “Edit Settings”.
  3. In the drop-down on the right, hit “Disable”.

See the screenshots here. So, in short: The feature that’s upsetting the privacy regulationistas is a feature that saves us time and effort in tagging our friends in photos we upload—unless our friends have opt-outed of having their photos auto-suggested.

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Wired’s Brian Chen writes today about the “damage” caused to Apple’s competitors and there own developers by products announced at yesterday’s WWDC keynote, making several claims that are bit dubious, the most suspect of which was this claim about Apple’s new cloud-focused trio:

Now, here’s why iCloud, iOS 5 and Lion pack such a deadly punch against so many companies: Together, they strengthen Apple’s lock-in strategy with vertical integration.

While I don’t doubt that Apple is indeed going to deal a very deadly punch to many competitors with their version of cloud computing for consumers, I think using the term “lock-in” is going to far.  True lock-in would mean driving consumers down a one-way street where their data can’t be moved to another platform (think Facebook prior to late last year) or driving up switching costs through cancellation fees ala the telecom industry.  Apple, on the other hand, is offering consumers a truly compelling user experience, not holding them hostage.

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