March 2006

New FTC Survey Shows Video Game Enforcement Improving

by on March 30, 2006 · 4 comments

In my recent paper on “Fact and Fiction in the Debate over Video Games,” I pointed out that one of the reasons that many lawmakers were stepping-up efforts to regulate video games was because of the supposed failure of the industry’s voluntary ratings system. In particular, many critics claim that the ratings system is not enforced effectively at the point-of-sale.

As a result, Senators Hillary Clinton, Joseph Lieberman and Even Bayh argue that federal legislation like their proposed “Family Entertainment Protection Act” is needed to “put teeth in the enforcement of video game ratings” because “young people are able to purchase these games with relative ease.”

Good news: A new survey out by the Federal Trade Commission (FTC) today shows that the enforcement system is working better than ever before and that it’s not so easy for kids to buy games on their own.

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Sen. Brownback Turns Up the Heat on the Video Game Industry

by on March 29, 2006 · 4 comments

Unfortunately, as I predicted would be the case in my National Review editorial earlier this morning, today’s hearing on video games in the Senate Judiciary Committee turned out to be quite a one-sided show trial.

Senator Sam Brownback called the hearing to blast the game industry for what he called “graphic,” “horrific,” and even “barbaric” level of violence we supposedly see in games today. Violent video games, he argued, are becoming “simulators” that train kids to behave violently and even kill cops.

And his proof? As I suspected would be the case (and, again, predicted in my editorial) it largely came down to two key games: “Grand Theft Auto” and “25 to Life.” Sen. Brownback decided to show a few clips from these games and one other title (“Postal”) to supposedly illustrate just how violent games are today. Now make no doubt about it, these games do contain some truly sickening, despicable acts of simulated violence. I don’t know why a game developer feels compelled to show thugs beating prostitutes with a baseball bat, or a criminal shooting cops with a sniper rifle, or someone torching a dead corpse and then urinating on it to put out the fire. It’s all very sick and it’s quite sad that someone is squandering their creative talents on the depiction of such disgusting, disrespectful acts of violence.

But let’s get back to the key point and ask a question that ABSOLUTELY NO ONE EVEN BOTHERED DISCUSSING AT THE HEARING. Namely: Are these games indicative of all video games out there today?

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It’s Official: FCC Doesn’t Know the Time of Day.

by on March 28, 2006

The indecency fines imposed recently by the FCC have raised a lot of eyebrows, for their inconsistency as well as severity. (See Adam Thierer’s excellent discussion here.) Now, however, the FCC’s basic competence is at issue. According to Communications Daily, among the fines handed down by the Commission two weeks ago were several on stations in Indiana which aired the CBS show “Without a Trace.” Turns out however, that the stations aired the shows at 10 pm, when such content is allowed, not at 9 p.m. as the FCC believed. Apparently, the ever-vigilant regulators at the Commission didn’t know that most of Indiana is in the Eastern, not Central, time zone.

Certainly, Indiana’s time zones are confusing–the state is split between two time zones, and doesn’t go on Daylilght Savings Time. But, really, how hard could it be for the FCC to look these things up? A good Google search would have provided the answer, as would the maps in the front part of any phone book. (No doubt the FCC has lots of phone books around.)

The extra effort would seem well-justified–the stations involved were fined some $162,000 for their “violations.” That kind of money could buy an awful lot of watches.

The episode is (or should be) embarrassing to the Commission, and troubling for the rest of us. If the regulators can’t even get the time of day right, what are the odds they are getting the harder questions right? One more reason to question the whole notion of FCC speech regulations.

Perhaps it’s time for a change.

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More on the French DRM Legislation

by on March 28, 2006 · 16 comments

Solveig Singleton links to this article about the French DRM proposal. I agree with its conclusion, but it strikes me as rather naive:

Like most such legislation, this bill is ill-conceived and should not pass. The reason for this is simple: it would weaken any DRM scheme, almost to the point of superfluity, and would serve only to increase piracy…

But deeper analysis shows that the provisions do nothing but undermine DRM. The problem is that the type of information necessary to achieve interoperability is also precisely the information necessary to render DRM useless: encryption algorithms, keys, content metadata, and so on. DRM would be reduced to the tiniest of speed bumps, easily surmountable with utility software that would become readily available. The boundaries between such “interoperability utilities” and circumvention software (hacks) would be erased, and the difference between legitimate and illegitimate uses of those technologies would revert to plan old copyright law–which is where we started before DRM came into being.

He’s right: the information necessary to achieve interoperability is the same information necessary to render DRM useless. But it’s not like that information is presently a secret. To the contrary, it’s already widely available, both to hackers and to any mainstream company that cares to do a bit of reverse engineering. In fact, it’s only a bit of an exaggeration to say that “the tiniest of speed bumps, easily surmountable with utility software” is a pretty good description of DRM as it exists today.

So while I don’t think companies should be required to share details of their proprietary products with rivals, my objection is mostly a matter of principle. As a practical matter, mere information disclosure isn’t likely to have much of an impact on anything.

The scary part, I think, is that sooner or later this may give judges authority over the design of software products. Because Apple changes its DRM scheme pretty regularly to deter hackers. The next step on this regulatory path is for rivals to complain that Apple doesn’t disclose those changes promptly enough. And at some point, I’m afraid that we’ll get to the point where a French judge has to sign off on any format changes before Apple can go forward with them, so rivals have time to modify their products. I don’t want the French courts to be telling Apple how to build their products.

This is the beauty of simply repealing the anti-circumvention rule (or in the French case not enacting one): companies would be free to implement interoperability features if they wanted to, but the cost of doing so would be entirely on their shoulders. The state wouldn’t be forcing Apple to open up its platform, but it wouldn’t be forcing other companies to leave it closed, either. Both Apple and its competitors would have to rely on self-help, not the courts, to make their business plans work.

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Mon Dieu! Don’t MiniTel Apple

by on March 27, 2006

French legislators recently approved a bill that will force technology companies such as Apple Computer to share proprietary technology with rivals. Such a move is not only a recipe for disaster but completely unnecessary.

The digital music market has always been a tumultuous place. For a long time, Hollywood and Silicon Valley battled over how to sell music while avoiding the theft of digital goods. Now that there’s a truce and Apple’s iTunes store just sold its 1 billionth legally downloadable song, it’s more than a little ironic that the French government wants to essentially steal Apple’s intellectual property.

“The French implementation of the EU Copyright Directive will result in state-sponsored piracy,” Apple said in a statement. “If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers.”

It’s not a given that a standardized platform would promote music piracy as Apple implies, but it is the case that if France’s bill passes the Senate in May, the country will be endorsing the theft of Apple’s intellectual property by its rivals. That’s not a good outcome and one might wonder what is motivating the French to take such drastic action.

Read more here.

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Who’s your daddy?

by on March 26, 2006 · 4 comments

Bridget Dooling and I have an article in this weekend’s Wall Street Journal. It’s the Rule of Law column and, not surprisingly, it’s on orphan works. Here’s a bit:

Fiddling with copyright terms and registration, however, would require not only the abrogation of several international intellectual property treaties, but also the political will in Congress to stand up to movie and publishing lobbies. Luckily, a much simpler solution is possible, and an orphan works component can be snapped into the existing copyright system. Congress can create an affirmative defense–along the lines of fair use–for those who copy a work after trying unsuccessfully to locate the copyright owner.

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Steve Jobs on Music Choice

by on March 24, 2006 · 2 comments

Steve Jobs is just a fountain of anti-DRM quotes. You might recall his 2003 comment that protecting digital content was impossible. Then there’s this comment from 2002:

Apple CEO Steve Jobs offered a critical view of the recording industry in an interview, following Apple’s acceptance of a technical Grammy award from the National Academy of Recording Arts and Sciences last week. As reported by Don Clark of The Wall Street Journal, Jobs suggested that recording labels need to make it easier for consumers to use their own music however they want.

“If you legally acquire music, you need to have the right to manage it on all other devices that you own,” said Jobs.

I guess that by “all other devices,” he meant “devices manufactured by Apple.” And “however they want” meant “however the DRM maker wants them to.” Or maybe he changed his tune after he realized that DRM would help to make him the most powerful man in the music industry.

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What Digital Divide? Some Surprising Results in New Study

by on March 24, 2006 · 2 comments

Claims that new video competitors will “redline”–i.e. avoid building out in selected inner-city or minority areas–remain a major stumbling block to video franchise reform in Congress. This was underscored yesterday in a letter by the Congressional Black Caucus sent to Reps. Barton and Dingell calling for anti-bia rules in any legislation. (As reported in Communications Daily (subscription)).

But do providers really have an incentive to redline? Certainly there are economic reasons not to build everywhere at once, but race or geography may have little to do with it. According to a just-released survey by Steve Pociask’s American Consumer Institute, African-Americans may be more profitable customers for video providers than others. At 78 percent, the total African-American subscription rate is one point above the national average. More striking, almost half of those subscribers are signed up for premium channels, compared to 31 percent overall. And a quarter of African-American subscribers have used pay per view features in the past six months, compared to only 19 percent of all cable subscribers.

Similarly, geography may not matter as much as many think. Urban subscribers subscribe to pay TV at almost the national average, and 38 percent of those urban subscribers sign up for premium channels, as opposed to only 17 percent of suburbanites. Rural subscribers, by the way, have the lowest subscription rate, although even they use more premium services that suburbanites.

Income, not surprisingly, does make a difference, with 64 percent of households making $25,000 or less subscribing to pay TV, as opposed to 77 percent of the population at large. But again, premium channels are a different story. Thirty percent of these lowest-income subscribers receive premium channels, almost exactly the national average.

This of course doesn’t mean providers will build out everywhere at once–economically, it makes sense to stagger the buildout. But the factors that determine that buildout may be more complex, and less predictable, than many assume.

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Everything That’s Not Required is Forbidden?

by on March 23, 2006

There are a lot of political debates in which one side believes that a particular activity ought to be compulsory, while the other side believes it ought to be prohibited. For example, conservatives liberals want to teach evolution in schools, while liberals conservatives want to prohibit the teaching of evolution in schools. The debate over filling birth control prescriptions is similar: conservatives think pharmacies should be prohibited from requiring their pharmacists to fill them, while liberals think pharmacists should be required to fill them.

Ordinarily, libertarians stake out a third position: that the activity in question should be neither prohibited nor compulsory. In the case of schools, they argue for giving parents more choices, so they can find a school whose curriculum matches their beliefs. In the case of prescriptions, they believe the pharmacy should be free to set whatever policy it likes, and the pharmacists are free to find a new job if they don’t like it.

That’s hard for non-libertarians to swallow, because they’re always more interested in the particular issue (should our kids learn evolution? Should women have access to birth control?) than the broader issue of whether the state should get involved at all.

So here’s another example of this kind of unlibertarian thinking. In his recent criticism of my paper, Mr. Ross seems to think there are only two options: either interoperability can be mandatory, or it can prohibited:

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Response to Patrick Ross

by on March 23, 2006 · 4 comments

In my initial response to Patrick Ross’s critique of my paper, I said that he appears to have failed to engage (or to simply not have grasped) my central arguments. Here is an example:

The paper also appears to embrace piracy. Take this example: “Shipping a carton of bootleg videotapes across state lines is expensive, time-consuming, and legally risky. Uploading a bootleg movie to a file-sharing network, in contrast, costs almost nothing, can be done in minutes, and is unlikely to lead to jail time. In the Internet age, people can infringe copyright from the comfort of their homes.” This is all factual. It also seems to be a compelling case for government to re-exert its traditional role of defining and enforcing property rights to ensure a functioning market. But the author seems to believe that this ease in piracy–and the decreased risk in jail time–means that the copyright owners should be willing to surrender some of their rights that were more easily enforced in an analog world.

I have no idea where he gets that conclusion. I do not in any way shrug my shoulders at piracy or say that peer-to-peer file sharing is just fine. I don’t claim that copyright holders have to give up rights they enjoyed in the analog world. This appears to be another example of question-begging on his part. He believes that permitting circumvention would increase piracy, so he projects that assumption on me and concludes that I’m also soft on piracy.

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