A story linked from Drudge describes a new service that Google is offering: saved search history. Create a Google login, and the search service will keep track of all your searches, as well as the results that you’ve clicked-through to access. Anyone who has used Westlaw or Lexis-Nexis will find the idea familiar–those services have offered it for years.

Reaction, however, has not been uniformly positive. Once again the privacy wingnuts (so said to distinguish them from from people with legitimate concerns about privacy) are all worked up:

“It’s really a bad idea,” said Dixon, executive director of the World Privacy Forum. “If you need to keep track of your past searches, I recommend using a notebook. It would be a lot more private and a lot less risky.”

Had Google or any other operator of a web server some kind of malicious intent, it could keep track of every page you access on its servers and every search term you send to it. If you’ve ever sent them your email address or some other personally identifying information–then bingo, they’ve got you! For better or worse, this is the way that computer networks work, barring those that employ extremely complex, unreliable, and slow misdirection technologies. Dixon might as well caution users to stay away from the Web altogether, because the privacy implications are about the same as Google’s new service.

Still, she is right that some people don’t like like to divulge any information at all, ever, whether they’re using a computer network or boarding an airplane. At least in the case of Google, as opposed to boarding a flight, these people have options: they can choose not to use the search history service, not to use Google at all, or even not to use the Internet, period.

But the people who harbor such concerns are clearly on the fringe; the success of online services testifies to that. These are the sort of people who exclusively use anonymous proxies to access the Internet and send all their email encrypted. The really radical ones live “off the grid” altogether and pay for everything in cash. These are not normal computer users–who do take their privacy seriously but have proven more than willing to divulge certain bits of information when there is a payoff to doing so. All of us make that compromise every day when we access the Internet.

So Dixon is right that some people might want to think twice about Google’s search history service. Normal users, however, will probably make their decision based solely on whether it’s useful to them. And that’s the way it should be, that users get to choose what they’re willing to accept.

What this episode reinforces, though, is that privacy “advocates” like Dixon don’t really speak for normal users but for the paranoid. Whether their paranoia is legitimate–who’s to say? But the next time that privacy advocates come out calling for government controls on innovative technologies–a regular occurrence–remember that their concerns are likely far different from yours and those of most users.

As I mentioned in a previous post, cellphone television is coming and that raises the interesting question of whether cellphone censorship will follow.

The New York Post has a short article today about the new race to develop a standard for cellphone video transmission. The article quotes Neil Strother, an analyst with In-Stat, a Scottsdale, Ariz., tech research firm, saying: “It’s a technology that’s here. But I think it’ll be about four years before it becomes mainstream.”

So cellphone video is coming quicker than anyone expected and the question now is whether the government will attempt to expand “indecency” regulations to cover it, much as they are currently trying to do for cable and satellite television.

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[[cross-posted from PFF Blog]]

Verizon announced yesterday that it has struck a major deal with NBC Universal to carry all of NBC’s 12 cable networks on Verizon’s new fiber lines. This comes on the heels of Verizon penning deals with cable giants Discovery Communications and Liberty Media’s Starz Entertainment Group to carry the networks produced by those programmers. Now that they’ve got their foot in the door in a major way, expect Verizon to sign waves of programmers up for carriage on their new fiber networks.

Let’s step back for a moment and think about this. Verizon–one of the nation’s largest and most respected telecom operators–is about to become a full-fledged multichannel video operator. Since the mid-90s, telecom operators have been trying to figure out the best way to bust into the video market, but the numbers (or the technology) just didn’t work out right. Now the stars are aligned properly and telcos like Verizon are itching to jump into this market to justify the billions they are investing in those speed-of-light fiber systems. More importantly, the telcos know they have to do this NOW to stop the further hemorrhaging of customers to cable operators, which can now offer a communications “triple play”: voice, video, and data–all over a single line with a single bill.

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A few weeks ago, video rental giant Blockbuster announced it was abandoning its effort to acquire rival Hollywood Video after Federal Trade Commission (FTC) antitrust officials made it clear they would likely block the deal.

As I mentioned in a post prior to that announcement, this represents a classic example of how backward-looking antitrust policy can be at times. In particular, rarely has a case gotten the “relevant market” for purposes of market power analysis so completely wrong.

The idea that Blockbuster and Hollywood Video only compete against each other is absolutely absurd. To make that claim, antitrust officials are essentially arguing that the relevant market in this case is a niche of a niche of a niche. That is, apparently they believe that the relevant market here is:

(a) the market for video programming;
(b) in which you rent the video programming;
(c) in which you rent the video programming on a piece of tangible plastic;
(d) in which you get in your car and drive to a store to rent the video programming on a piece of tangible plastic.

This is just crazy. Is that really the relevant market in a world in which 85% of all households subscribe to cable and satellite television services and have access to a 500-channel universe of video programming? On those cable and satellite networks, consumers can also gain access to dozens of a la carte video-on-demand (VOD) movies and programs.

The Internet is also increasingly offering an array of video download services, including the popular Movielink.com site. An article on page B1 of today’s Wall Street Journal also mentions how many Bell companies are preparing to roll out IPTV (Internet protocal TV) services with their new fiber networks.

And how about Netflix, which has single-handedly upended this entire business and forced the traditional vendors to abolish late fees? And even if your relevant market is just the good old tangible plastic video store, don’t you think WalMart has a bearing on market price? After all, there are bins of DVDs at WalMart that include new movies for less than $10 bucks. Hell, why rent when you can own for almost the same amount of money?

Don’t these other providers and technologies count as competitors? Why not? As Mr. Spock would say, this is highly illogical.

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So I drove over to CompUSA late last night for a special 10-till-Midnight sale. (Yes, I’m that big of a dork… but hey, I needed a new laptop and they had some good sales).

When I walked through the door, there was a mob standing around a giant bin fighting each other for a chance to grab one of the DVD players inside. After the commotion died down and all of the DVD players were picked over, I went over to see what the big deal was. Incredibly, CompUSA was selling brand new progressive scan DVD players for $29.99.

Now to explain to you how incredible this was to me, you have to understand that I’m one of those idiots called an “early adopter.” Yes, I’m the guinea pig who buys every new technology right out of the gates for outrageous prices just so I can be the first kid on the block with the hot new toy in town. Back in 1993, I was one of the first people to buy Onkyo’s hot new laser disc player–you remember those old discs that were as big as LP records and that you had to flip them over to continue to watch even short movies? Well, I threw down $1000 bucks on one of those suckers. It was rendered obsolete by the rise of DVDs just a few years later, and yes, I bought one of the first DVD players to hit the market too. This one was around $1000 bucks as well. And later this year I plan to throw down even more insane amounts of cash to be one of the first to grab a Blue-Ray high-def DVD player. So I’m not just the sucker that’s born every minute, I’m a reborn sucker every few years. The industry loves spend-happy idiots like me.

So, anyway, there I am in CompUSA late last night staring at the empty big of $29 DVD players and thinking to myself just how amazing that was. Not just because I paid so much more for my first one a few years ago, but also because of how fast the market had brought the price of these devices down below the cost of a good steak at Morton’s. (I had had a steak at Morton’s earlier in the day that cost $34 bucks. It was the cheapest one on the menu!)

Moreover, at a price of $29, that means that DVD players are now almost as inexpensive as the DVDs that they play! In fact, on a rack right next to this bin of $29 DVD players was a stack of “Lord of the Rings” special edition DVDs that actually cost more than the DVD players. (Also, in another bin, CompUSA was selling brand new LCD computer monitors for $120 bucks. Insane!)

Am I the only person that finds this absolutely amazing? I wonder what all those people who complain about a “digital divide” in this country would say about this.

P.S. Proving yet again what an idiot I am, I bypassed all the great sales on sub-$800 computers last night and shelled out over $2000 bucks on a state-of-the-art new Toshiba multimedia laptop. I’m sure the same model will be selling in a bin next year for $400 bucks. Somewhere in Tokyo, an account executive is laughing about people like me right now.

Kyle McSlarrow is, by all accounts, a good guy. I even voted for him when he ran unsuccessfully for Congress in my district a few years ago. It was a tough district, against a tough incumbent. That political challenge, however, was nothing compared to the challenges he now faces as cable’s man in Washington. The industry is threatened with regulation on numerous fronts–local governments are fighting for the right to regulate its Internet and telephone services, the new FCC chairman is talking of regulating cable tiering, and Congress is pushing to extend indecency censorship to cable.

Faced with these threats, McSlarrow–in his opening speech at NCTA’s recent annual convention–argued favor of regulation. Moments after making the case for minimal regulation of cable as it moves into the telephony business, saying that “we must avoid reflexively applying the traditional rules of the road” to this new service, he turned around and called for reflexively applying the traditional rules of the road to telephone companies who want to provide video. Specifically, he said, should be “required to make service available to all residents.” NCTA’s VP was even more direct, saying providers “must abide by certain social obligations, including building out entire communities, and not red-lining or cream-skimming.” (Reported in Tech Daily, April 13).

Such requirements, of course, have long discouraged new entrants into cable, and could end prospects for telco’s to provide video. Since telco franchise areas don’t track cable franchise areas, imposing these requirements could add billions to the cost of telco video, making it cost-prohibitive.

NCTA of course, knows that. But the strategy will likely boomerang. By arguing for regulation in this case, it will only encourage politicians to wield a stronger regulatory hand in other areas too–to cable’s detriment. Moreover, if potential competition to cable is thwarted, cable loses its best substantive argument against regulation of its business.

Of course, NCTA’s inconsistency is nothing new in Washington. As anyone who’s followed telecom lobbying for more than a week or so knows, industry lobbyists routinely argue for policies that help them gain a “fair advantage” over their rivals. It’s probably too much to expect industries to support free-markets policies (however rational) when it conflicts with their self-interest. But it is puzzling to see them supporting policies that will end up hurting them.

[cross-posted from the PFF blog]

Last week, Philadelphia released its long-awaited blueprint for a municipal wi-fi project called “Wireless Philadelphia.” This week, Tom Lenard and I have released two studies outlining our reservations about the Philly proposal and municipalization more generally. Here’s Tom’s paper, and here’s mine.

First let me provide a summary of the Philly muni proposal and then outline my specific reservations about the plan.

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I Want My MA-TV

by on April 11, 2005

Or so says some guy in an article on the latest bipartisan efforts to extend broadcast speech restrictions to cable and satellite TV. It’s up over at AFF’s Brainwash online mag.

Deep link.

I attended the Open Source Business Conference in San Francisco this week and was impressed to see that the community I once regarded as mostly a bunch of socialists has morphed into a capitalist-loving crew. Here’s my column for more details.

Who competes with whom in today’s communications world? Most policymakers today are just now coming to grips with the fact than old-fashioned wired telephones compete with wireless telephony, and that broadcast TV stations compete with cable and satellite providers. But maybe they should be thinking even more broadly. As reported Wednesday’s Financial Times, BBDO–the world’s third largest ad agency–says that cellphones and other wireless devices may soon overtake television as the biggest advertising medium. Andrew Robertson, BBDO’s CEO, says that the increasing ability of consumers to avoid TV commercials–combined with the tremendous growth of wireless–makes the shift likely. Just one more bit of evidence convergence is real, and that choice and competition is coming from more quarters than we imagine. The development should put paid to any notion that there is any undue market power wielded broadcasters in advertising, and eliminate that as an argument for ownership controls. On the glass-half empty side, it could lead Congress to include cellphones in its ever-expanding plans for indecency restrictions. Stay tuned, this should be fun.