December 2004

Greg Aharonian, Editor/Publisher of the Internet Patent News Service–and one of America’s leading intellectual property experts–has just filed a major lawsuit challenging the constitutionality of software copyrights. In his complaint to the U.S. District Court’s Northern California Circuit, Aharonian details the adverse impact of vague software copyright laws and decisions.

This is an important development worth monitoring very closely. I encourage you to take a close look at the complaint here. Also, you can keep track of further developments on this case on Greg’s excellent webpage here.

Stay tuned, much more to come on this. This has all the makings of a historic intellectual property case.

P.S. I edited a book a few years ago (CopyFights: The Future of Intellectual Property in the Information Age) that included several essays debating the merits of software and business method patents. If you’re interested, click here.

And, because you UNE-buffs can’t get enough of this stuff, this excellent article by Randy May of the Progress and Freedom Foundation appears on National Review Online today…

Heritage just released this article on the upcoming UNE vote by the FCC:

Telecom Competition Rules: D©j  Vu All Over Again?
by James L. Gattuso
WebMemo #621
December 14, 2004

On December 15, the Federal Communications Commission is expected to vote on regulations requiring telephone companies to lease, or “unbundle,” parts of their networks to competitors. The FCC has adopted rules on this subject three times since 1996, and all three times the rules have been struck down by the courts as overreaching.

On this fourth try, the FCC needs to get it right. This means limiting mandatory unbundling rules to markets where competition otherwise could not feasibly exist. Importantly, any such determination should take into account competition from new communications services, such as wireless and Internet telephony. The result would benefit consumers, as well as avoid an embarrassing fourth defeat for the FCC in court… (read the rest)

While sex on television may get more headlines for the FCC, its more important work may be the most arcane: telephone regulation. But it’s not without drama–the Commission is scheduled to vote on its new, improved unbundled network element rules this Wednesday. All reports indicate the debates within the FCC are intense, and no one really knows what the final order will look like. The good news is that the rules will almost certainly be scaled back (as all but ordered by the D.C. Circuit).

But how much? Here the question gets fuzzy. On some important issues, the indications are not good. For example, the market for “high-capacity” loops is one of the most competitive in the industry–with Bells outpaced by CLECs in many areas, and even being challenged by cable companies. Yet rather than declare success and sweep controls away here, the commission is looking at rather timid relief. UNE requirements would not only be lifted in areas where the density of lines is enough to support competition, but where there is a certain number of actual facilities based competitors. The problem, of course, is that this could be a self-defeating prophecy, as the availability of cheap UNEs discourage others from putting facilities in those areas. Perhaps worse, the test could be applied on a builing-by-building area.

In other words, downtown areas would be examined building-by-building to see whether there are competitors lines coming in. This seems a recipe for a regulatory quagmire–with CLECs and LECs fighting over buildings one at a time at the FCC and in the courts over which has whose lines installed. One imagines platoons of FCC officials digging around in basements on the lookout for stray wires and telltale circuits.

Instead of this Fallujah approach, the FCC should lift UNEs in areas where competition has been shown to be economically possible–perhaps based on line density alone, then get out of the way.

Will airline passengers soon be able to use their cellphones while in flight? Perhaps. The FCC announced today that at its meeting next week it would consider changing its rules to “facilitate” cellphone use in aircraft. This is welcome news. The phone ban was imposed in the early 1990s due to concerns that the then-new wireless technology would interfere with vital onboard safety equipment. However, in the years since, researchers have been able to come up with little or no evidence of a problem. Rather than protect safety, some say, the prohibition has merely served to protect firms that offer seatback phones.

Of course, not everyone will be looking forward to freer phone use in flight. Who, after all, will want to share an aisle with Chatty Charlie during their next 12-hour flight to Tokyo? Still, there’s a big difference between allowing cell phone use and requiring it. If telephones look to be enough of an annoyance to enough passengers, smart airline managers will move quickly to restrict them. One can even imagine “quiet” areas in the cabin, much as Amtrak now offers “quiet” cars. No government rules are required to solve this problem.

Still, its hard to imagine air travel without the familar warning when its time to put away “all cellular telephones and other electronic equipment.” Scientifically justified or not, it has become a ritual of air travel for many, somewhat comforting in its predictabilty. But traditionalists need not worry. If they want ritual, they can always watch the cabin crew demonstrate how to use a seat belt, as required by the FAA’s rules.

The Heritage Foundation’s weblog yesterday posted a good piece yesterday questioning the way Pew’s recent report on P2P was (mis)reported in the news. If you haven’t seen it, Jim Harper’s excellent post yesterday on the same topic is also worth a look.

Yesterday’s news that IBM sold its PC division to Lenovo got me all sentimental. I worked at IBM’s PC support headquarters in Research Triangle Park, NC for a bit about ten years ago, back when IBM was going through some turbulent times. The future of the mainframe business was definitely looking grim, but its PC division – the future of computing – had already lost its dominance in the PC market and was struggling to sell its OS/2 operating system. And I remember some jaded folks there that blamed IBM’s fall (at least partly) on an obscure proprietary technical feature called MicroChannel (MCA) – an example of how a closed standard can be bad for business.

IBM had reached 40% market share by 1985. But its open (non-IP protected) architecture meant that the PC was easily “cloned.” According to this site, Compaq was “the first with an 80386-based machine in 1986. IBM attempted to re-establish control over the PC platform in 1987 with a homegrown replacement for the DOS operating system, OS/2, and the introduction of the PS/2 based on the proprietary MicroChannel architecture. Neither had the desired effect. By 1995, IBM’s share had fallen to 7.3% behind Compaq at 10.5%, and in 2003, IBM (6%) was a distant third behind Dell (16.3%) and HP (16.9%).” What is a bus? (interface between a computer’s CPU and its expansion cards and their associated devices – MCA was 32 bit, ISA was 16 bit).

The problem, as this site documents, was that MCA, while technologically superior to the industry standard ISA bus, was not what the market demanded.

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Using a computer makes a kid less able to compute. Or so one study says. An article in The Register reports on a study that finds students who use computers in school do worse than their computer-less peers in math and reading.

From the article: “The researchers suggest two theories to explain their findings. One is ‘ability bias’ – that it might be that teachers do not want lower-ability students to use computers. The other theory proposed is that students who use computers frequently do so at the expense of traditional learning methods.”

This is from the FCC’s page on the E-rate (the Gore tax, the part of the universal service tax for school and library technology funding):

“Welcome to the FCC’s informal education page. Technology has great power to enhance education. The FCC is working to bring every school and library in America into the information age. Join the dialogue to help spread the benefits of technology to schools and libraries nationwide.”

Perhaps the benefits of technology are not as great as people or the FCC think.

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Next year, the Supreme Court will (as Reason’s Jeff Taylor puts it) “decide if your cable modem is really a telephone.” TechWeb has the story.

On the legal merits, it seems like it could easily go either way. I’m not a lawyer, but it’s hard to see how cable broadband is any different from DSL broadband. They’re technically similar and they’re marketed in identical ways; the only difference is the physical characteristics of the cable that carries the data. It’s hard to see how that’s a reasonable basis for distinguishing the two.

On the other hand, in policy terms, the people who want to impose the byzantine DSL regulations on cable have some pretty idiotic arguments:

“If the Supreme Court rules against Internet open access, cable companies will be able to block content at will for political or financial reasons, and deny the public the ability to choose among competing Internet providers,” he said. “The outcome of this case will–quite literally–determine the future of the Internet as we know it.” MAP is a public-interest telecommunications law firm.

Uh huh. If I wanted a new ISP, could switch to DSL or an analog modem tomorrow. I could cancel and get Internet access from the coffee shop down the street. In a few years, I’ll likely have the option to switch to fiber optics, wireless broadband, or satellite data services. Yet knowing all this, these guys think my cable company is going to piss me off by trying to tell me what web sites I can visit or what protocols I can use? Any company that did that would see a large segment of its customer base flee to competitors.

I’m not sure if it would be kosher for the Supreme Court to do it, but someone has got to cut both cable and DSL loose from traditional telecom regulations. Just the competition between those alone (I’d be fine with a rule that says no cable company can buy the local DSL provider and vice versa if that would make people more comfortable) will ensure there’s broadband competition in all major markets, and if anything, deregulation will increase competition by encouraging the build-out of new facilities like fiber optics. So the idea that the federal government needs to micro-manage this market to ensure competition is silly. If the Supremes won’t give us deregulation, Congress should. I certainly don’t want the FCC to start treating my cable modem like a telephone.

It’s essential to understand that the Internet is an agreement among users. That can be a little mind-blowing to everyone who thinks that it is a thing requiring some form of external, top-down, public-law-style regulation.

Here’s an anonymous post inspired by the ICANN meeting now underway, obviously by someone who gets it. There are details on which I differ (like the ITU), but on the whole it’s good enough to declare twangily: “Wish I’da Wrote This.”