May 2006

Mind the Spin

by on May 10, 2006 · 10 comments

Art Brodsky of Public Knowledge blogs about the fantastic success of the British telecom market:

The advertisement on the wall in the subway station was hard to believe–a broadband service with 24 meg download for about $45 per month. That was the good news. Unfortunately, the service isn’t available in the U.S. The ad was on the wall of tube stop in London and the company, Be, http://www.bethere.co.uk is British. Just to rub it in a little, it gets better. There is also a cheaper option, about $25 per month, which still gets you the 24 mbps download, but with a slower upload speed. This in a city in which a bottle of water will set you back about $2.25.

Now, let’s contrast that combination of price and service with an ad in today’s Washington Post, in which Verizon will sell you the blinding speed of 768 kbps for $17.99 per month with a yearly contract.

And for one more bit of shopping–Verizon’s FIOS service, their fiber optic super-speedy, up to 30 mbps version. What will that cost you? According to the Verizon web site, up to 30 mbps can be had for between $180 per month and $200 per month.

Sounds pretty terrible! In the United States, you have to pay about 4 times as much for slightly more bandwidth, or you can pay slightly less for 1/30 the bandwidth. However, with a little bit of research it becomes apparent that Brodsky might be cherry-picking his examples just a little bit.

Let’s start with the high end. For $45–exactly the same price as Be’s unlimited plan–you can get FiOS from Verizon at a speed of 15 megs down and 2 megs up. That’s clearly slower downstream, although not incredibly slow, and slightly faster on the upload speed.

As for the low end, in my area Charter’s offering you a 3 Mbit service for $19.99 for the first six months, after which it goes up to $29.99. 24 is obviously a lot more than 3! At least, until you read the fine print: Brodsky doesn’t mention that the low-end $25 Be plan has a 1 GB download cap. That means that if you download at full speed, you get to saturate your 24 mbit connection for a whopping 5 and a half minutes every month. If you shell out another $5/month, you can get another 5 GB, which means you can download at full speed for half an hour every month. Clearly, this plan is not designed for people who would make much use of the full 24 mbit link.

I’d like to learn more about the British model. It does sound like they have more compeition which is intrigueing. But in any event, if you do an apples-to-apples comparison, it doesn’t look to me like the British are very far ahead of us in price/performance.

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On Linux DVD Players

by on May 10, 2006 · 16 comments

Ms. Singleton has wrapped up her two-part critique of me and my paper. She takes a few more personal jabs at me than I think was called for, but she also make some substantive arguments. I’m going to keep my focus on the latter.

Singleton makes two broad points: first, CSS licensing is not a barrier to the creation of Linux DVD players, and in any event, Linux DVD players are a tiny market so we shouldn’t be too concerned about them. And secondly, DRM is a more effective piracy deterrent than I say it is. I’ll address her first point here, and come back to the second point in a future post.

I want to start by stepping back for a bit of perspective. In my paper, I claimed there were no Linux software DVD players. It turns out that isn’t true. There appear to be two DVD-playing programs for desktop Linux operating systems: One for the Linspire version of Linux, and the other for TurboLinux. (She also mentions LinDVD, which is designed for proprietary set-top boxes, not general-purpose computers, which was what I was talking about the in the paper)

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Just What Consumers Need

by on May 10, 2006

David Berlind points out a charming feature of the new BitTorrent movie-distrubtion network: its DRM scheme apparently isn’t compatible with the other DRM schemes already on the market. His reaction to that is about the same as mine:

To go with yet another proprietary DRM technology when the market is already full of exisiting non-interoperable ones that are screwing it up is quite an unnatural act and evidence that either Warner Bros., the Motion Picture Association of America (MPAA), or the movie industry as a whole have no clue how to right a ship that’s about sink as it floods with stupidity.

So. Let’s see. I need PlaysForSure-compliant technology to playback content X, FairPlay-compliant technology to playback content Y, and Bittorrent technology to playback content Z. Why don’t we bring back BetaMax and VHS while we’re at it?

He mentions Sun’s DReaM as an alternative, but as I’ve written before it’s not clear to me how that would be an improvement. DReaM would simply be a fourth (or fifth if you count Google’s DRM) incompatible DRM scheme. The fundamental problem here is that Hollywood is prioritizing (ineffective) piracy-fighting higher than giving their customers products they’ll actually want to buy.

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BitTorrent and Piracy

by on May 10, 2006 · 2 comments

Apropos the discussion of peer-to-peer technologies below, I have to say that the headline of this Forbes article, “WB Sails With Tech Pirate,” is rather obnoxious. Here’s how the article concludes:

However, BitTorrent raised $8.75 million last year in a bid to transform itself from the leading developer of piracy software into a legitimate company that distributes content on the Internet.

BitTorrent is a software tool for efficient file distribution. Do a lot of people use it to commit copyright infringement? Sure. But the same can be said of many other Internet technologies. Indeed, most users who download illegal files with BitTorrent find those files using web-based directories of files available for download. It makes as much sense to say that the web is “piracy software” because many people find illegal BitTorrent trackers using web-based search engines.

Just like the Web, BitTorrent has plenty of legitimate uses. Many open source projects, including SUSE Linux and OpenOffice, use BitTorrent to distribute their software to save money on bandwidth. Blizzard’s World of Warcraft distributes software updates via BitTorrent.

Finally, the Forbes article seems to have difficulty distinguishing between the company and the technology. BitTorrent-the-technology is open source software which anyone is free to use to distribute any type of content. BitTorrent-the-company runs a search engine that allows users to find Torrent files for download. BitTorrent removes links to illegal files as they’re discovered. The fact that some people use BitTorrent to distribute illegal files is no more the company’s fault than it’s Apache’s fault if somebody uses their web server to distribute infringing files.

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Network Neutrality in Practice

by on May 10, 2006 · 24 comments

Larry Lessig periodically links to this 2000 article in the Prospect about network neutrality. In it, he makes the closest thing I’ve seen to a convincing argument that network neutrality regulation was responsible the Internet’s growth:

But there is one part of the Internet where end-to-end is more than just a norm. Here the principle has the force of law, and the network owner cannot favor one kind of content over another or prefer one form of service over another. Instead the network owner must keep its network open for any application or use the customers might demand. Competitors must be allowed to interconnect; consumers must be allowed to try new uses. In this part of the Internet, “open access” is the rule.

This part of the Internet is–ironically enough–the telephone network, where because of increasing regulation imposed by the D.C. Circuit Court of Appeals in the 1970s–leading to a breakup of AT&T by the Justice Department in 1984 and culminating with the Telecommunications Act of 1996–the old telephone network has been replaced with a new one over which the owner has very little control. Instead, the FCC spends an extraordinary amount of effort making sure the telephone lines remain open to innovators and consumers on terms analogous to the terms required by an end-to-end principle: nondiscrimination and a right to access.

The argument here is that by ensuring that any consumer could call any ISP in his or her area code, the FCC’s regulation of the telephone network had the unintended consequence of imposing a de facto network neutrality rule on telecom companies, thereby ensuring that the Baby Bells couldn’t leverage their ownership of phone lines to control the Internet.

This isn’t a crazy argument. I’m rather annoyed that my local telco, SBC (now AT&T) requires me to get Yahoo-branded Internet service, even if I’d rather connect via another ISP. The fact that anybody could become an ISP by connecting to the public phone network indisputably had a positive impact on competition among ISPs.

Still, this argument doesn’t strike me as being quite right.

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Multicast and Network Neutrality

by on May 9, 2006

Robert X Cringely has an interesting article about the future of digital content distribution and peer-to-peer networks. I think his big thesis–that the existing one-to-many, end-to-end model for distributing video content won’t scale–is right. But I think he’s missing a few things when he points to peer-to-peer technologies as the savior.

Here’s the technical problem: Right now, if ABC wants to deliver 20 million copies of Desperate Housewives over the Internet, it woul have to transmit the same stream of bits 20 million times to its ISP. The ISP, in turn, might have to transmit 5 million copies to each of 4 peers. Those peers, in turn, might have to transmit a million copies to each of 5 of its peers. And so on down the line, until each end user receives a single copy of the content. That’s wasteful, because sending 20 million redundant copies of a file uses a lot of bandwidth.

In a perfect world, ABC should only have to transmit one copy to its ISP, and the ISP, in turn, should only have to transmit one copy to each interested peer, and so on. Each Internet node would receive one copy and transmit several, until everyone who wants a copy is able to get one. Geeks call this multicast. It’s theoretically part of the TCP/IP protocol suite, but for a variety of technical reasons I don’t fully understand, it hasn’t proved feasible to implement multicast across the Internet as a whole.

However, there are plenty of quasi-multicast technologies out there. One of the most important is Akamai’s EdgePlatform. It’s a network of 18,000 servers around the world that serve as local caches for distributing content. So when a company like Apple wants to distribute 20 million copies of a file, it doesn’t have to transmit it 20 million times. Instead, it transmits the content to Akamai’s servers (and presumably Akamai’s servers distribute it among themselves in a peer-to-peer fashion) and then users download the files from the Akamai server that’s topologically closest to them on the network.

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Event: E-Commerce Symposium

by on May 9, 2006

What do contact lenses, wine, and caskets all have in common? Online sales of these products have been heavily regulated online, often because bricks-and-mortar incumbents have lobbied for laws that protect them from Internet-based competition. New research on this topic will be presented at a daylong symposium presented by the Mercatus Center at George Mason University, in collaboration with the George Mason University School of Law. Legal and economic scholars will present papers on topics such as the current status of legal and regulatory barriers, their impact on consumers, and their implications for competitive federalism. Ken Starr will give the keynote address. Check out the full agenda after the jump.

The event will take place on Wednesday, May 24th, 8 a.m. to 5 p.m., at the George Mason University Arlington campus. For more information and to RSVP, visit the event page.

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Then and Now

by on May 9, 2006

Patrick Ross has a good post about the Warner Bros. announcement that they’d be distributing their content via BitTorrent:

Kudos to Warner Bros. for working out distribution of movies on BitTorrent. The BitTorrent technology truly is amazing, but unfortunately like so many new technologies in the digital world it was quickly embraced by those disrespectful of intellectual property before legitimate market forces could move in. Kudos also to the folks behind BitTorrent for working with studios to help its service respect artists’ rights.

That said, I won’t be using this new service, although I purchase Warner Bros. movies (I own all 4 Harry Potter DVDs). I want to watch movies on my TV, not my computer, and so far Warner Bros. is doing the same thing you find with the movie download services; recording permitted only onto DVD for backup, and the DVD can only be played on the original computer. The motion picture industry needs to move in the direction of the recording industry, which licenses services that permit the downloading of songs and the transfer of those songs onto other devices, including CDs.

I wonder if Ross realizes that the ease with which consumers can transfer their music between devices is primarily the result of the fact that the CD was invented before the advent of DRM technology. The recording industry did their best to outlaw the MP3 player, but that effort failed because without DRM on CDs, the DMCA didn’t apply. Once consumers got used to being able to play their music on the device of their choice, Steve Jobs realized that he had to provide similar functionality in order to get consumers to buy music online. The music industry didn’t give consumers that freedom on purpose, they were dragged kicking and screaming into doing so.

How would history been different if the industry had prevailed in Diamond? Although the recording industry would have eventually gotten around to licensing MP3 players, I think it’s hard to deny that the pace of innovation would have been hampered. The increasingly balkanized video marketplace gives us a hint of how the music marketplace would have evolved had the RIAA won. Hollywood is so terrified of piracy that they’ve failed to license any video-download services that actually give consumers what they want: an affordable, hassle-free way to watch content on their TVs. Hollywood will come to its senses eventually, but consumers will suffer from a depressed pace of innovation in the meantime.

Personally, I don’t think Ross should have to get anyone’s permission to watch he’s purchased on his TV. He should be able to download a conversion tool that would allow him to burn the movies onto a DVD for watching with any DVD player. Not only would that be extremely convenient for Ross and others like him, but it would also likely make the home video device market more innovative, as consumer electronics firms would have the freedom to build devices that use video content in new ways, just as the first MP3 players did to audio content in the late 1990s. Sadly, such devices are illegal under the DMCA, so we’ll probably never know what we’re missing.

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Ice Cold Beer and Red Hot Surveillance

by on May 9, 2006

Your Nanny State and your Big Brother are getting together for a drink – and the drink’s on Intelli-Check. Heineken USA has announced proudly that they are going to use Intelli-Check-equipped mobile scanners to verify the ages of drinkers at events where their products are sold.

Surely, this pleases and appeases groups like Mothers Against Drunk Drivers (but don’t hold your breath for these neo-prohibitionists to settle their war against drinking just because alcohol sellers are encouraging responsibility).

If MADD needed any encouragement to support automated age verification, they must have gotten it along with the corporate contribution that Intelli-Check sent along. Indeed, MADD and Intelli-Check are a team. The Intelli-Check Web site also touts the state laws that give affirmative defenses to merchants who use scanners to prove the age and identity of people purchasing alcohol and tobacco products.

So alcohol sellers are being corralled into electronic identity verification. Young drinkers are being corralled into it too, and being conditioned to carry and show identification as a matter of routine.

Thing is, this routine is the groundwork for the surveillance system that everyone should be concerned with. Particularly as identification is conducted by machine, the opportunities to record information about people expand. Of course, Intelli-Check promotes limits on the use of data that is collected via their scanners but, just as surely, the scanners are technically capable of collecting all data on a card. It’s a simple matter of changing policy to convert the system from age verification to comprehensive surveillance.

Our identification and credentialing systems are designed for the benefit of institutions and not individuals. As I argue in my forthcoming book, these systems should share only the information necessary to complete transactions. Need proof of age? You should be able to provide proof of age, not ID.

The technology already exists. The Clear card proves to the Transportation Security Administration that people are approved to use Registered Traveler lines at the Orlando airport, but it doesn’t identify travelers to the TSA. If the feds can handle that in the national security context, your local ABC should be able to handle it for booze control.

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Friday Morning Cato Smackdown

by on May 8, 2006 · 2 comments

Last week was the Cato debate between Cato scholars Roger Pilon and Bob Levy on the NSA surveillance issue. Like Ricahrd Epstein and Mark Moller, my sympathies were with Bob Levy, who argued that the president can’t simply ignore FISA when he decides it interferes with his conduct of the war on terrorism.

I’m not really qualified to get into the constitutional questions, which Levy handled ably, but I did want to comment on Pilon’s substantive argument about why the program was necessary. He quoted two people to make his case. First, he quoted the following from a Wall Street Journal article by Judge Posner:

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