April 2006

Highlights from Monday’s Microsoft hearing at the CFI

by on April 24, 2006

Today’s hearing at the European Court of First Instance (CFI) focused on the Windows Media Player. Below are some key ideas that came up during the arguments.

On RealPlayer:
Some groups like ECIS–the European Committee for Interoperable Systems–attempted to argue that RealPlayer is dead. Their press release said this:

“Just as [Microsoft’s] strategy eliminated the Netscape Browser and now Real Player, unless stopped it will do the same to other technologies whenever MSFT deems them to be strategic to their business interests.”

Last I looked, RealPlayer was alive and well (and fighting with Apple over its proprietary music technology). I personally stopped using RealPlayer a while ago because I was tired of the spyware-like pop ups that Real delivered to my computer.

On browsers:
The EC attorney said that Microsoft’s browser has become stagnant because “it has a monopoly.” That’s got to be the loopiest statement I’ve heard in a while. Apparently the EC attorney is not aware of Safari, Opera, Flock, or my personal favorite, Mozilla (born from the original Netscape).

On the popularity of Windows designed by Eurocrats:
As of today, no PC manufacturer has shipped a single computer installed with Windows XPN (the n means no Windows media player). Translation: no one wants bureaucrats to design software for them.

On multiple choices for media players:
The EC seems to be assuming that consumers will only ever want to use one media player and that content providers will only want to offer their products in one format. This doesn’t make sense, at least at this point in the market’s evolution. Each media player has its merits, which is why many of us use different ones at different times. And, thanks to a nice presentation by Jonathan Zuck of the Association for Competitive Technology, the Court and all its observers got to see how fast, easy, and cheap it is for a content provider to offer up their wares in multiple formats at once (i.e, when you go to a site and it asks you if you want to use RealPlayer, Quick Time, Windows Media, etc). There are affordable translation programs like “ProCoder” or the one built into Apple’s “Final Cut Pro.” Jonathan’s demonstration showed that it took 3 steps and about 10 minutes to do the translation–a no-brainer for any content company. “It’s as simple as 1-2-3,” he said. But when the EC issued its Microsoft decision in 2004, it didn’t consider the costs or the ease of translation. It just assumed that there would be costs (the translation), but ignored the benefits (greater choice for consumers and hence the ability for content providers to grow their market and revenues).

The upshot:
It was an interesting day with both sides presenting their cases. Tomorrow, the judges start to ask questions and I’m sure those British attorneys wearing the judicial wigs will get extra hot heads. I’d better get to the gift shop and buy my Internet access cards before they sell out and I’m forced to send smoke signals.

Also, if you’re interested in listening to Podcasts of the event, Americans for Technology Leadership’s (ATL) Jim Prendergast has posted a few on ATL’s site.

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Google’s First Software Patent

by on April 24, 2006 · 8 comments

A couple of weeks ago, Patrick Ross mentioned a talk given in Brazil in defense of software patents:

GWU Law Professor John Duffy defended software patents. A good example of a software patent, he said, is Google’s first patent. It patents their search approach, which starts with a basic search, then involves a search within the search results based on popularity. That innovation has led the company to a market cap of $123 billion, but couldn’t be protected by copyright because the method could be written in a thousand different ways.

Intrigued, I wrote him asking for details. He kindly pointed me to Duffy’s PowerPoint slides.

I’m not impressed. Here, literally, is the slide making the argument about Google:

Patents can make you rich and famous.

Example: Google = $123 billion

Google is built on a a few key software patents.

Now, it’s probably not fair to judge a presentation from its PowerPoint slides. I’m sure Duffy’s presentation was far more nuanced than this simplistic rendering suggests. Still, even taking that into account, this is pretty weak sauce. You can’t just attribute Google’s market cap to its patent portfolio, as though that settles the matter. Duffy’s slide presents no evidence whatsoever that Google’s patent was key to its success. It’s the crudest kind of post hoc ergo proctor hoc fallacy.

It’s hard to see how Google’s story would have been any different in a world without software patents. The slides offer no evidence that any companies have actually been deterred by the existence of Google’s patent from producing a Google knock-off. If you examine the patent in question, it’s far too general to be of much use to someone wanting to do so. What makes Google so great isn’t the general concept of its search, but its superb implementation. They were the first company to take the general concept of treating links as votes and implement it in a way that could scale to billions of pages.

But of course, implementation details are protected by copyright. Which means that in a world without software patents, Google would have gotten along just fine.

Moreover, even if we assume that Google’s market cap is partly attributable to its patents (which I think is unlikely) that doesn’t prove that it’s a good thing. There are all sorts of government programs that make corporations wealthy. Ethanol subsidies have been good for ADM. Defense spending has been good for Northrop-Gruman. New York taxi medallions have been good for those fortunate enough to have one. The policy question isn’t whether these programs serve the companies that benefit from them, but whether they promote innovation and economic growth. I can’t see any reason to think that the availability of software patents makes future Googles more likely. To the contrary, the primary effect of software patents appears to be a kind of rent-seeking, wherein software trolls obtain software patents to extort legitimate companies, and legitimate companies are forced to acquire software patents (and retain lawyers) to defend themselves.

There might be an example of a legitimate software patent out there, but this sure isn’t it.

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Microsoft European court hearing begins Monday

by on April 24, 2006

I’m in Luxembourg today to watch the Microsoft hearing before the Court of First Instance. Two years ago, the European Commission found Microsoft guilty of abusing its dominant market position and imposed a record €497m ($613m) fine and ordered it to disclose key elements of its IP and offer a striped down version of Windows. The version of Windows that Microsoft was forced to put on the market hasn’t been popular and it will be interesting to see how that plays out this week. While this story is happening in Europe, it has broad implications for all American companies.

This is crossposted from www.soniaarrison.com where I am posting a bunch of comments from the hearings.

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AOL’s “Censorship”

by on April 22, 2006 · 12 comments

Declan has a long and interesting argument between Suresh Ramasubramanian, who’s the postmaster for several million email users, and Danny O’Brien, an EFF activist coordinator.

A couple of weeks ago, AOL’s email system briefly blocked any email that had the dearaol.com URL in it. EFF responded by accusing AOL of deliberate censorship:

“This proves the DearAOL.com Coalition’s point entirely: left to their own devices, AOL will always put its own self-interest ahead of the public interest in a free and open Internet,” said Timothy Karr, campaign director of Free Press, a national, nonpartisan organization working on media reform and Internet policy issues. “AOL wants us to believe they won’t hurt free email when their pay-to-send system is up and running. But if AOL is willing to censor the flow of information now to silence their critics, how could anyone trust that they will preserve the free and open Internet down the road? Their days of saying ‘trust us’ are over–their credibility is zero, zip, nada.”

But as Ramasubramanian persuasively argues, it’s likely this was an honest mistake on AOL’s part: a few AOL users probably got unsolicited emails from DearAOL’s “send this to a friend” feature and flagged them as spam. AOL’s system probably concluded from that that dearaol.com is a spam address and started blocking emails that mention it. AOL fixed the problem within a matter of hours.

Ramasubramanian rightly takes EFF to task for crying censorship without making any attempt to resolve the problem with AOL first. Administering email for tens of millions of people is a difficult job. It’s especially difficult when those users are clamoring to reduce the amount of spam in their inboxes. We can and should criticize AOL when its system screws up, so that consumers are aware of any problems, (personally, I much prefer email servers that leave the spam-filtering to the client side) but it’s not helpful or reasonable to immediately become confrontational about it.

I think this accentuates what makes the DearAOL campaign wrongheaded in the first place. EFF is rightly vigilant about censorship by the government because we only have one government and it has immense power. We can’t afford to give the government the benefit of the doubt because if the government abuses its power it has the potential to shut down the expression of views it disapproves of. Once we give up a freedom to the government, we may never get it back.

The AOL situation is very different. There are plenty of ways to communicate outside of AOL’s email service, so it’s unlikely that AOL would have much success preventing the discussion of ideas it doesn’t like. Moreover, unlike the government, AOL has competitors. If it begins doing obnoxious things with its email, its customers can switch to alternative ISPs. Moreover, many consumers want AOL to filter their email in order to prevent spam and viruses from being transmitted on their networks.

Civil liberties organizations like EFF and the ACLU properly take a confrontational posture any time they see signs that the government is trying to stifle free expression. But the same posture simply isn’t appropriate when they’re dealing with private companies. As I’ve written before that I don’t think this is the sort of thing EFF should be getting tangled up in in the first place. EFF’s core competence is in resisting censorship by the government. The tactics that work well against government censorship come across as unreasonable and cartoonish when directed at a private company.

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Get One of These, Now

by on April 21, 2006 · 2 comments

Do you have a working carbon monoxide detector with a digital readout? If not, you might want to consider getting one. A good one. We have one, and yesterday it stopped me from going to sleep and never waking up. (Note: Readers who have any regard for my intellect will find it evaporate upon reading this story. Bear in mind that I have never made any claim to be especially smart, although from time to time someone who knows me will make the mistake of thinking so; I just read too much and ask too many questions).

We’d recently had a new furnace and air conditioner put in to our retro chic 70’s townhouse. There was a lot of wrassling with duct work. I noticed a hole in some of the older pipes, but didn’t think much of it; the hole was right front and center, and I’d assumed that whatever pipes it was in couldn’t possibly be the exhaust pipes… I mean, that would mean that the installers had been insane. Then a handyman working in our basement noticed the same thing, and told me that yes, those were the exhaust pipes, and I really needed to get someone to look at them. I called the furnace guys, who assured me that a small hole wouldn’t be a problem. I made them promise to send someone out anyway. It was Thursday, and they said they would send someone Monday. After all, we weren’t using the furnace…

Friday afternoon, after putting the Grub down for his nap and lying down myself, I was feeling oh so sleeeeepy, very sleeepy, sort of like I’d been hit on the head by a brick. I was just drifting off when the carbon monoxide detector, which is right next to my bed, starts shrieking at me. Furious, because it’s LOUD and immediately wakes up the Grub, I yank it out of the wall, open the windows, and (here’s where the idiocy comes in) I lie back down to take my nap. (Background: over the last couple years we have been plagued by false alarms from our smoke detectors, so that sort of explains my idiocy, but not quite, because it’s obvious when a smoke detector is giving a false alarm, but not at all with a CO detector, which is the whole point of having one). All I can think of is how tired I am, and how annoyed I would be if the Grub won’t fall back to sleep again. Then just by chance my husband calls. Now I’m REALLY annoyed because the phone just stops me from drifting off again and again wakes up the Grub. It’s my husband. We have a short conversation about how our respective days are going. I happen to mention that I’m annoyed because it is too noisy and the Grub isn’t napping. We

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Alcohol Liberation Front

by on April 21, 2006 · 8 comments

Would you like to meet the men and women behind the Technology Liberation Front? If you live in the DC area, here’s your chance! Several of your favorite TLF contributors will be getting together for a happy hour on Thursday April 27 from 5-7 PM at the Gordon Biersch Brewery in Chinatown, just across the street from the MCI Center (or whatever they’re calling it these days–damned mergers!). We’d love to have a few of our readers join us.

If you’re planning to attend, please leave a quick comment so we’ll have an idea of how many people to expect.

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Rutledge on Franchise Reform

by on April 20, 2006 · 2 comments

On Tuesday I had the pleasure of helping to show Dr. John Rutledge around Missouri. Rutledge was an architect of President Reagan’s economic policy in 1981, and today he’s actively involved in helping bring together American capital with Chinese businesses in the interests of promoting economic growth in both countries. Here’s his take on Missouri’s cable franchise reform debate:

Alice, who drives a cab for Best Taxi, told me “My cable bill is too high.” The Missouri Senate is sitting on a bill that would make it easier for new entrants in providing video services across the state. Similar laws, already passed in Texas, and Indiana have triggered price wars between new entrants and incumbent cable companies that have pushed prices for consumers down by about 50%. The legislators could give everyone in the state a $50/month tax cut and make Missouri more attractive for businesses at the same time. Wonder why they aren’t getting it done? The state Senator who is holding up the bill with the threat of filibuster is a former owner of cable stations. Now there is a coincidence. When I told this story to a receptionist she said, “I thought they were supposed to work for us.”

At a press conference with the Missouri Chamber of Commerce, Rutledge talked about the fact that in many cases, the lack of telecommunications infrastructure in the United States makes it easier to outsource service jobs to India and China than to a small town in America. He argued that franchise reform would be an important spur for increased infrastructure investment, which will have a positive economic impact that will extend far beyond the cable TV industry.

Of course, this is an issue that’s relevant beyond Missouri. We hear a lot about how the broadband market isn’t competitive enough. Well, this is one sure-fire way to increase broadband competition.

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Epstein’s New Paper

by on April 20, 2006 · 14 comments

Richard Epstein has a new report on intellectual property. Epstein is a brilliant legal theorist (seriously–several of his books are classics of libertarian scholarship) but unfortunately, I think he analysis of IP issues–especially technology related IP issues–is hampered by his lack of familiarity with the underlying domain. Take this passage about open source, for example:

One ongoing question is how well open source stacks up against traditional proprietary software. Much depends on the scale of the enterprise. The decentralized methods for open source work well with small systems, but are difficult to maintain as the network expands–a problem that any proprietary system also faces in integrating backwards to existing products while introducing new products. In addition, loose cooperatives must organize to fend off outsiders claiming that the entire system incorporates their trade secrets or IP. The present SCO litigation, for example, puts the entire Linux system at risk on these grounds, prompting the formation of a litigation committee to coordinate the common defense. Right now at the heart of the movement lies a commercial joint venture spearheaded by well-established firms like IBM, Intel, and Hewlett-Packard, which develop service and proprietary programs that operate on top of an open source infrastructure. The new development gives ample testimony that no loose assemblage of voluntary contributors will be able to carry the day any longer.

To be honest, I’m not sure I follow the third sentence. I think that to the contrary, in many ways open source scales better than proprietary development models, because it takes advantage of the decentralized, spontaneous processes to solve problems rather than relying on hierarchical, top-down processes. Of course, generally speaking, large corporations like dealing with other large corporations for the IT needs, so it’s not surprising that IBM does a lot of business selling open source software (along with some of their own proprietary software) to Fortune 500 companies. But that’s not because open source can’t solve the technical problems of large companies. It’s simply that “open source,” as an idea, doesn’t have a sales force and can’t meet with corporate IT directors. IBM does, and can, so it tends to get the IT contracts. But most of the value was created by the volunteers who built the underlying software.

He then claims that “at the heart of the open source movement” are IBM, Intel, and HP. He doesn’t elaborate, but I assume he’s equating “open source” with “Linux.” This is misleading for several reasons. First of all, those companies might be spending the most money on Linux-related products, but they’re hardly the core of the Linux community. Linux is still developed by a decentralized group of mostly-volunteer programmers from a wide variety of institutions, led by Linus Torvalds. They probably don’t seem significant to Mr. Epstein because they don’t have PR departments or billion-dollar balance sheets, but they’re the ones who control the direction of the core product. The work of IBM, Intel, HP, and their ilk is largely focused on making Linux work better on their particular systems, as well as building software on top of Linux to meet the needs of particular clients. Obviously, that’s often helpful to the overall project, but it hardly puts Big Blue “at the heart” of the Linux effort.

But the broader point is that Linux is just one out of dozens of major, successful open source products that are used by millions of people every day–and most of them receive far less corporate support than does Linux. Most of them are programs that Epstein has probably never heard of–projects with names like Apache, Samba, Perl, Python, gcc, MySQL, KDE, Gnome, FreeBSD, OpenSSH–but that make up the “plumbing” that make the Internet work. Each of these projects has a core team made up of, well “a loose assemblage of voluntary contributors.” Some of them get corporate support, but that support is incidental to the projects’ viability in most cases. I can’t think of any recent developments that prove that the open source model will not “be able to carry the day any longer.” To the contrary, the open source development model continues to demonstrate its vitality by churning out spectacular products without significant corporate subsidies.

Now, obviously it wouldn’t be fair to expect a 50-something law professor to be intimately familiar with products like gcc and FreeBSD. Linux is the product that gets the most press, and IBM is the Linux contributor that gets the most attention, and so Epstein naturally assumes that IBM is the biggest driver of open source software.

It’s an understandable error, but these kinds of blind spots are dangerous when you’re doing public policy analysis. If you misdiagnose the source of innovation, you’re likely to misunderstand the institutions required to promote it. Computer geeks are the ones closest to the ground of high-tech innovation. When they’re shouting from the rooftops about problems with our IP system, I think the law professors of the world ought to pay a bit more attention to what they have to say.

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Here We Go Again

by on April 19, 2006 · 8 comments

Cory Doctorow has a great post about the merits of network neutrality legislation:

What we’re talking about here is getting the FCC to write up rules dictating what firewall rules ISPs can and can’t have. I’m an ISP right now–my laptop is WiFi rebroadcasting the Ethernet Internet access I’m getting at my hotel. Anyone can be an ISP. Do we really want the Feds to tell us what we can and can’t do with our network configurations? Do we believe that they can move fast enough and smart enough to do a meaningful job of it?

Art Brodsky at Public Knowledge responds:

This is not about someone picking up a Wi-Fi signal in a hotel room and considering that to be an ISP. This debate doesn’t apply to Cory in his hotel room, and if that’s his concern, the definition of an ISP could be tightened to clarify he’s not offering service to the public as the law considers it. The current legislation, and the Net Neutrality debate, applies to the network operators which have the ability to discriminate.

Obviously, the FCC isn’t going to regulate Cory Doctorow’s laptop. But with all due respect to the otherwise astute Art Brodsky, these are precisely the kind of questions that’s likely to transform a seemingly clear standard into hopeless muddle once it’s turned over to the FCC. For example, is the hotel an ISP? What about Starbucks, which provides Internet access to hundreds of thousands of people through wireless access points? What about airport WiFi services?

And regardless of how the FCC decides those questions (and you can bet there’ll be intensive lobbying and litigation over the question) it will amount to the FCC deciding what firewall rules those ISPs are allowed to employ. Is the ISP allowed to take aggressive measures to block spam and spyware? Can it block peer-to-peer file-sharing services? Can purchase network equipment that increases the “jitter” in its networks, thereby discouraging VoIP services? If not, is the FCC going to make up a list of approved networking gear?

Now, I’m sure that for each of those questions, Brodsky has a reasonable answer and would tell us that Congress needs to “tighten up” the relevant definition to make sure that the FCC doesn’t come to an unreasonable conclusion. But that’s not the way politics works.

When Congress passed the 1996 telecom bill, it created a distinction between a “telecommunications service,” which was regulated under common-carriage rules, and an “information service,” which was mostly deregulated. The distinction seemed pretty clear at the time: telecom services carry voice, while information services carry data. But of course, it only took a couple of years before people started carrying voice over their data line, and transmitting data over old copper phone lines. The distinction became incoherent, and required a decade of litigation to resolve.

I’m sure that given the current state of technology and the current configuration of the telecom industry, Brodsky has a clear understanding of who’s an ISP and what counts as “discrimination.” It’s possible he’s right, although I’m skeptical. But even if he has a clear idea of how the rules should apply today, he can’t possibly be sure that the definitions Congress comes up with now will make sense in 10 years. Perhaps Cory’s laptop won’t be declared an ISP, but it’s a safe bet that some company will come along whose ISP status is ambiguous and lead to a lot of unnecessary litigation.

Frankly, I don’t understand what the big hurry is. Comcast and AT&T can’t break the neutral Internet overnight, even if they wanted to. Congress can always come back and pass new legislation if network discrimination becomes a serious problem. But in an industry that’s evolving as rapidly as this one is, let’s not cement today’s concepts into a law that will be in force for a decade or longer.

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Why the MP3.com Decision Was Never Appealed

by on April 19, 2006

In my DCMA paper I note in passing the sad case of MP3.com, which settled its copyright lawsuit after losing its case in district court, and before it could appeal the case. What I didn’t realize is the reason the case wasn’t appealed.

I was delighted to receive an email from Michael Robertson, the founder of MP3.com (who has since founded Linspire and MP3tunes), who read the paper and wrote to explain why they didn’t appeal the case:

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