February 2006

Okay, this is off topic, but the sound of assorted Maryland residents burning the rubber off their tires, which I can hear from inside my home office, is beginning to annoy me. On the off chance that some of them have actual jobs that do something besides soak up tax money, and thus we would be better off if they make if out of the parking lot, some suggestions:

1) If stuck, do not spin your wheels. You are burning the tread off your tires and making ice.
2) Rock to get out of rut (forward, reverse, forward, reverse). Momentum is good.
3) If moving in deep snow, for Pete’s sake don’t stop (unless you are facing downhill).
4) Don’t do anything suddenly.
5) Easy on the salt. Salt makes puddles, which become ice.
6) Sand is good. Kitty litter, birdseed, and bunches of twigs make decent substitutes.
7) If you have a front wheel drive, devote more attention to digging out the front wheels than the back.

Sonia, anything to add?

Here’s a link to my assessment of Cory Doctorow’s take on Google’s video offering over at ipcentral’s blog. I think I’m becoming a smart-ass in my old age.

Jerry Ellig and I have been working on a study of cable franchising for the Mercatus Center that looks at the cost of franchising to consumers and what the FCC, Congress, and the states can and should do about it. Yesterday we released the bulk of it as a comment to the FCC’s franchising proceeding and as testimony to the Senate Commerce Committee, which will hold a hearing on the issue tomorrow. So if you’d like a sneak peek at the full study, check out our FCC comment as well as our Congressional testimony (PDF), which has legislative recommendations that aren’t in the comment. Our main conclusions:

  • Cable franchising costs consumers over $10 billion annually in higher prices and forgone benefits. By constraining competition, local video franchising imposes significant costs on two groups of consumers. Current cable subscribers pay higher prices than they would pay if there were competition, and potential customers forego cable TV service because they believe it is too expensive at current prices.
  • The FCC has the authority to preempt local franchising authority practices that act as barriers to entry and should do so.
  • An even better solution would be for Congress or the states to get rid of franchising altogether or streamline it as Texas has done.

Microsoft-only Government

by on February 13, 2006

This is inexcusable. After spending several billion dollars, the federal government apparently can’t manage to include Mac support in its website for online grant applications.

I rant a lot about open standards, but this is a perfect example of why they’re important. There’s nothing complex or challenging about building a website that works on both Macs and PCs. There’s a set of very clear standards that you can follow to ensure that your web site will work on all browsers. Sure, there are occasional incompatibilities, but there should be enough room in a budget that runs into the “tens of billions” to fix the occasional incompatibility.

There’s no excuse for requiring someone to acquire a particular operating system or web browser in order to participate in a government program. While we can debate whether the government should be required to use open standards for internal business, in cases like this where the government deals with the general public, they should be required to adopt open standards where ever they are available.

Last week I outlined a few of my concerns with the FCC’s new a la carte report. I was relieved to see that others are raising similar issues with the report.

For example, Fortune senior writer Marc Gunther published an essay today entitled “Why A La Carte Cable TV is a Nutty Idea.” And Kansas City Star TV Critic Aaron Barnhart released an essay on Friday entitled “The Indecency Wars: Book II.” Gunther and Barnhart share similar concerns about the new report.

First, Gunther and Barnhart agree that the FCC’s report is remarkably ambiguous on several key issues. Gunther notes that:

“the FCC report is filled with so many ‘mights’ and ‘coulds’ that it’s impossible to know whether unbundling would drive down rates. The FCC admits that it lacks data ‘about what a la carte prices would be for individual networks.'”

Barnhart agrees and is even more scathing in his criticism of the report’s ambiguity:

“If you actually read the report, you’ll be amazed at how little [Chairman Kevin] Martin actually asserts as fact. There are a thousand “coulds,” “mights” and “mays” the cumulative effect of which is to create the perception it has refuted the Powell report line by line. In reality, Martin’s report has more fudge in it than Grandma’s cupboard.”

Ouch!

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Douglas Lichtman on DRM

by on February 13, 2006 · 4 comments

Douglas Lichtman of the University of Chicago has a sensible paper on digital rights management technology:

Legal rules in every area of human interaction are implemented through a combination of powerful public mechanisms and weaker but less costly private ones. With the advent of DRM, copyright law is today no different. The task now is not to legislate DRM out of existence, but instead to follow the model adopted in every other arena: calibrate copyright law such that it harnesses the very real advantages of technological enforcement while at the same time keeping an appropriately wary eye on what might turn out to be overly aggressive uses.

This is exactly the way the issue should be approached. My only quibble is with the idea that there are people trying to “legislate DRM out of existence.” All we DRM critics are trying to say is that it ought not be singled out for special legal status in statute. There isn’t a federal fence-hopping statute, and there shouldn’t be a federal anti-circumvention statute.

In particular, I hope that Prof. Lichtman pursues this line of inquiry further:

With respect to DRM in the form adopted by iTunes, meanwhile, maybe copyright law should adopt nuanced rules like those that today limit the scope of the privilege of self-defense. The commonality here is that in both instances self-help ought not be allowed to become too common. Frequent self-defense would give rise to a vigilante state; widespread iTunes-style restrictions would reduce hardware competition by in essence making it impossible to enter the hardware market without simultaneously entering the relevant content business as well.

This is, I think, the most compelling critique of the DMCA: not that it gives content owners too much control over their own content, but that it needlessly balkanizes media technologies into mutually incompatible platforms controlled by companies like Apple and Microsoft.

Prior to the enactment of the DMCA, we had “nuanced rules” governing the intersection of copyright and technology. The Supreme Court, in its 1984 Sony Betamax decision, stressed the need to insure that the monopoly granted by copyright law did not interfere with “the rights of others freely to engage in substantially unrelated areas of commerce.” The courts were doing a pretty good job of striking that balance.

But the DMCA threw that evolving body of law out the window, replacing it with a blanket anti-circumvention rule. That rule has allowed the monopoly granted by copyright to bleed into monopolies in “substantially unrelated areas of commerce,” such as MP3 players, DVD players, televisions, etc. All repealing the DMCA would do is restore the courts to its proper role of fashioning “nuanced rules” that properly balance competing interests as the Supreme Court did in Sony and Grokster.

A Specious Analogy

by on February 11, 2006 · 12 comments

James DeLong makes a rather silly analogy between DRM and shopping carts:

Shopping carts [at my local grocery store] can be wheeled out to the trunk of your car in the parking lot. Much more convenient. The cart bears a notice: “Take this beyond the parking lot and the wheels will lock.”

Clearly, this is some kind of wireless ditigal technology–DRM, in fact.

So I began thinking. Don’t shopping carts want to be free? Shouldn’t it be fair use to wheel the cart to my home? After all, there are lots of them, so I would not really be depriving another shopper of the use of a cart.

This is, rather obviously, not true. If you wheeled your cart to your home, there’s a pretty good chance you wouldn’t wheel it back. Over time, stores would run out of carts and need to buy more of them. The marginal cost of a shopping cart is not (as he bizarrely asserts later in the post) zero, or anything close to it. So it’s economically inefficient for someone to take a cart home and lose it. Good public policy requires that taking a cart off the premises be treated as theft.

But how that relates to DRM, or the debate over the DMCA, is a mystery to me. Here’s a better analogy: a law that flatly prohibited anyone from disabling such anti-theft technology, regardless of the reason. So if, for example, I happened to park my car at the very corner of the parking lot, and the people who set up the technology goofed and made the wheels lock up before I reached my car, it would be a federal crime to drag my cart the last few feet to my car in order to unload my groceries. Or, as another example, if the grocery store sold me one of their surplus carts, should it be a federal crime for me to remove the wheel lock after the sale?

The argument against DRM isn’t that consumers have a right to infringe copyright. (well, some fringe critics make that argument, but not me) The argument is that it needlessly prevents people from doing things that are otherwise completely legal. Like transferring a DVD to your iPod to watch on the road. Or playing a DRMed song on a high-end stereo system that doesn’t support that particular DRM format. Or including a short clip from a DRMed song in a presentation.

“Stealing” music by uploading it to or downloading it from a P2P service always has been illegal, and it would continue to be so if the DMCA were repealed, just as stealing a shopping cart has always been illegal. The analogous Issue is whether we need blanket federal legislation outlawing all circumvention of wheel locks, regardless of the purpose. I don’t think that’s good policy, and I suspect DeLong wouldn’t either.

It seems that the cable industry has once again become everyone’s favorite public policy punching-bag. The “government-knows-best” crowd is practically foaming at the mouth about the need for “Net neutrality” mandates on cable’s broadband offerings, censorship of speech on various cable channels or programs, and “a la carte” mandates for cable’s video lineup.

On this last item, the FCC has just today released a revised version of an earlier staff report conducted during Chairman Michael Powell’s tenure. The Powell era FCC report revealed that a la carte would raise prices and hurt program diversity. By contrast, today’s report, which new FCC Chairman Kevin Martin requested, argues that the old report got it completely wrong and that a la carte would lead to lower prices and not hurt diversity. So, within the span of 18 months, we have an expert regulatory agency coming to diametrically opposed conclusions on the same issue. (Makes you wonder about those old theories of scientific bureaucracy!) What are we to make of these contradictory results?

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I find myself unimpressed by this site urging people to contact their Congresscritter and support network neutrality. We’re told:

This broadband assault would reduce your choices and stifle the spread of innovative and independent ideas that we’ve come to expect online. It would shift the digital revolution into reverse.

Internet gatekeepers have already:

  • Blocked services: In 2004, North Carolina ISP Madison River blocked their DSL customers from using any rival Web-based phone service.
  • Blocked content: In 2005, Canada’s telephone giant Telus blocked customers from visiting a Web site sympathetic to the Telecommunications Workers Union during a contentious labor dispute.

    If these media giants get their way, they’ll shut down the free flow of information and dictate how you use the Internet forever.

  • That sounds at least moderately ominous. Let’s dig a little deeper:

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    The “Workaround”

    by on February 9, 2006

    Research in Motion has released information about what they call a “workaround” for NTP’s patents:

    Currently, when the [Network Operations Center] determines that a BlackBerry device is outside of a wireless coverage area, it queues the message and resends the message when the BlackBerry device becomes available, without interaction with the BlackBerry Enterprise Server (or BlackBerry Internet Service).

    With the BlackBerry Multi-Mode Edition software update, the NOC no longer queues messages. If a BlackBerry devices is out-of-coverage, the NOC will inform the BlackBerry Enterprise Server (or BlackBerry Internet Service) that the messages cannot be delivered at that time. The BlackBerry Enterprise Server (or BlackBerry Internet Service) will be queue the messages until it is notified by the NOC that the BlackBerry device is available.

    Does this “work around” NTP’s patents? I have no idea. Here’s what’s claimed by one of NTP’s patents:

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