June 2006

What’s the hottest topic in the tech/media world today? Neutrality regulation? DRM? Wiretapping? No, its Guy Goma. Remember him? He’s the “wrong Guy” who was interviewed live on BBC a few weeks ago by mistake. Goma–a Congolese-born IT job applicant was waiting for a job interview at BBC’s offfices, when he was mistaken for Guy Kewney, an Internet policy expert whom BBC had meant to interview. (see here for my earlier post on this.)

Turns out that Goma’s time in the spotlight didn’t end with that appearance. He now has his own website–guygoma.com–featuring Goma’s worldwide media coverage, Goma’s followup interview on BBC (this time they intended to talk to him), a Goma news feed and e-mail update list.

At the same time, it seems Guy still hasn’t gotten a job (its unclear whether he ever even got the job interview he was waiting for.) But he’s working on it – the website features an on-line petition to “urge the BBC to give Guy the job he applied for, or a better one.” The petition now has close to 6,000 signatures from around the world, and growing fast. The comments on the petitition are effusive: ” a national hero,” “a legend,” “a true star.”

No telling where this Goma-mania will end. But certainlly Goma is making the most of it, parlaying few minutes of accidental airtime into a virtual movement.

He certainly will get a job. But if he doesn’t, perhaps he could join us here at TLF. We could use his media savvy.

Earlier this week, Swedish authorities raided the offices and server racks of “Pirate Bay,” an extremely popular Bittorent tracker site with millions of page views per day, as part of an investigation into possible copyright infringement charges against the site’s operators. Pirate Bay stored and indexed thousands of “torrent” files, which point to files that are shared by users’ Bittorent clients. By opening a torrent, a user is able to download the files to which it points, such as a movie or computer application, and quickly begins serving to other users what has already been downloaded. As its name implies, Pirate Bay was used almost solely to facilitate piracy of copyrighted works.

For what it’s worth, the operators of Pirate Bay contend that they have violated no law because they did not serve copyrighted materials, merely pointers to such. They may be right. In any case, the site is down for now (though its operators maintain it will be back in a few weeks). What I’m wondering is, how do “copyfighters” feel about this?

Continue reading →

Those of you in the DC area (or who will be next week) may want to stop by Heritage for what should be an interesting panel discussion on video competition. Our featured speaker is Anaheim, CA mayor Curt Pringle, who is one of the (too) few local officials who have actually welcomed video competition to their cities. He will be followed by the irrepressible Tom Hazlett of George Mason University and by Mike Sullivan, chief technology advisor to Sen. John Ensign, a leading voice for competiton in the Senate.

Festiviites will begin at 11 am, with food to follow. You can RSVP here. And those of you who can’t make it can always tune in via Internet from here.

Amateur-to-Amateur

by on June 2, 2006

I want to put in a belated plug for Greg Lastowka and Dan Hunter’s Cato Policy Analysis, “Amateur-to-Amateur: The Rise of a New Creative Culture.” They do a fantastic job of describing how the rise of the Internet has enabled the emergence of a new model for cultural production.

They walk the reader through the “supply chain” of the culture industry (creating new works, selecting works for publication, producing copies of the work, distributing them to consumers, and promoting them) and shows how technolog is radically decentralizing each of them. Fifty years ago, only wealthy people and commercial movie studios could afford the technology needed to create professional-quality videos. Today, you can do the same thing with a few thousand dollars of equipment, and the cost of that equipment drops every year. Twenty years ago, if you wanted to become a nationally-known pundit, you needed to spend decades working your way up through the ranks of a large, hierarchical media organization like the New York Times. Now, as Julian explains, you just start a blog, and the size of your audience is limited only by the quality of your work. A decade ago, creating an encyclopedia required hiring dozens of full-time employees to solicit and edit articles. Today, a far more comprehensive encyclopedia is being produced by volunteers, and it’s available for free on the Internet.

Some people dismiss these developments as anomolies, or at least as isolated incidents. Blogs, Wikipedia, open source software, and the rest are just manifestations of people having too much free time on their hands, the theory goes–the real work is still done in hierarchical, commercial enterprises. What Lastowka and Hunter do a good job of demonstrating, I think, is that these phenomena deserve to be regarded as a new form of production on par with the 20th century’s industrial production model. It’s in its early stages yet, so naturally it still accounts for only a minority of cultural products, but that’s not surprising, given that industrial production methods had a 100-year head start.

I do have a criticism of the paper, however.

Continue reading →

The Christian Coalition now has a whole section on its website devoted to network neutrality regulations. Unfortunately, the letter from president Roberta Combs is chock full of misleading arguments, as well as some outright errors. For example:

Since its birth, the Internet has existed on phone lines, which were covered under what are known as “common carrier” regulations, (or “net neutrality”), which prevented discrimination by network providers based on content or where a call originated. This principle carried over to the Internet and helped make it a dynamic engine for free expression and economic growth.

I’m not sure what “has existed on phone lines” is supposed to mean. The Internet has always used a variety of interconnection technologies. In any event, as I’ve written before, common carrier regulations have never applied to the Internet backbone. Nor has it applied to cable modems or to dedicated high-speed lines like ISDN or T1 lines.

She goes on to raise wildly implausible scare stories:

Under the new rules, there is nothing to stop the cable and phone companies from not allowing consumers to have access to speech that they don’t support. For example, a cable company with a pro-choice board of directors could decide that it doesn’t like a pro-life organization using its high-speed network to encourage pro-life activities. Under the new rules, this could happen–and it would be legal!

Sure, it would be legal. But it would also be commercial suicide, as millions of irate pro-lifers would switch to their local Baby Bell and call their Congresscritters. It’s ludicrous to think that any large telco would think about pulling that kind of stunt.

Finally, the letter trots out the only three examples of alleged network discrimination that the pro-regulatory side has been able to muster: The first was in Canada, and involved blocking a site that Telus subsequently got shut down by a court order for violating the privacy of its employees. The second was probably an accident, and was quickly corrected. And the third is a case in which the FCC’s authority was sufficient to address the problem.

In short, there’s nothing new here: Combs is repeating the same misleading arguments as left-wing sites like MoveOn.org. Which is a shame, because there are some smart telecom experts at conservative think tanks who I bet would have been happy to set her straight.

Business Week reports on the sad state of MovieLink, the music-download service created by major Hollywood studios that’s been getting a less-than-stellar reception from consumers. It seems that the studios want out of the download business, but they can’t find anyone to buy the thing:

Last year, Movielink brought in Salem Partners LLC, a Santa Monica-based investment banking firm to find buyers. It was Salem Partners that brought Blockbuster to the table, according to a source close to Movielink, although the deal was vetoed by one of the five Movielink studio board members. Salem Partners would not comment.

Another potential buyer early on was former Warner Bros. (TWX) home video chief Warren Lieberfarb, who put together a group of investors but couldn’t get the studio’s approval. The key roadblock: The studios’ refusal to change the terms of existing agreements to offer films for download, including an insistence that the films not be “burned” onto discs that could be played in DVD players.

Studios have long since resisted allowing burning, for fear that large DVD retailers like Wal-Mart Stores (WMT) and Blockbuster would rebel, threatening the huge sums studios now get from them. And for those movies that the studios would allow Movielink to sell, Hollywood would only offer a short-term, one-year deal to Movielink’s buyer. That frustrated buyers who worried that the studios would change their mind down the road.

Not surprisingly, potential buyers of the site want a service that consumers will actually want to use. And not surprisingly, consumers don’t seem too excited about buying movies they can only watch on their computers screens, not on their TVs or DVD players.

We sometimes hear that without digital rights management technology, Internet-based music and movie services wouldn’t be possible. Yet this appears to be a case where DRM is the primary obstacle to the creation of a successful movie-download business: Business Week says that MovieLink only has enough cash in the bank to last about another year.

(Hat tip: TechDirt)

I received an email from Patrick Ross charging that yesterday’s post about the broken window fallacy misrepresented his views:

Your “broken window” argument falls apart when you look at my full post. I was criticizing Benkler for using traditional dollars-exchange-hands analysis when it comes to the size of the content industry (with flawed numbers, as I pointed out) yet also saying that it doesn’t matter what dollars-exchange-hands amounts are when discussing Wikipedia and SETI@Home. In other words, I pointed out he was selectively choosing metrics based on what backed any given argument. If anyone ignored Bastiat it was Benkler.

I’ll quote the relevant portion of his post and let you judge for yourself:

Continue reading →

The data retention issue is joined. “Data retention” is the idea of requiring companies to hold on to data about their customers in case the authorities later find it would be useful to them.

I don’t think enough can be said about what a perversion of law enforcement in the United States this would be. Because the Fourth Amendment inconveniently requires the government to have reasonable grounds to investigate people, Congress and the Department of Justice are considering outsourcing the task by requiring the corporate sector to conduct mass surveillance.

In a series of articles, Declan McCullagh of C|Net News lays out the latest. A project of law enforcement that has already taken root in the supposed privacy haven of Europe, data retention is a major increment toward a Big Brother state.

There will be plenty to say if this goes forward, but a few things are worth highlighting:

  • There is no sound distinction between collecting “traffic data” and collecting “content.” Indeed, traffic data – records of phone calls, connections to the Internet, and so on – can be very revealing information. Once ISPs are required to collect and keep one, they are bound to end up required to collect and keep the rest.
  • There is no intellectual distinction between retaining data for a short time and retaining data for a long time (and the cost of doing so will drop). The government’s original demand – a brief window into Americans’ data, “for further review” – will expand along the time dimension, ineluctably, and we will not be able to bargain with Internet service providers for privacy protections that deep-six past embarassments and pecadilloes.
  • Information is not just “there” for the taking. Some in law enforcement may believe that information, once produced, should be available to them. Not true. Information has qualities equivalent to property. We constantly hoard it, share it, hide it, and broadcast it in the course of directing our lives. A government mandate that prevents this takes power from all of us. And does so in direct contravention of founding principles.

The data retention issue reminds me of an instance several years ago when a FINCen official said to me that they only wanted information-parity with the private sector – unaware, apparently, that the law for good reason places a specific disability on the government in this area.

Soon computer viruses, spyware, and other malware may be a thing of the past.

If, that is, you pony up an extra $50 per year to Microsoft. This week, the software giant (obligatory cliche) announced a Windows Live OneCare, which promises to provide subscribers with “round-the-clock protection and maintenance–virus scanning, firewalls, tune ups, file backups, the whole nine yards.” This comes after years of demands from customers that the company shore up its operating systems and focus more attention on security.

Then again, regular major security flaws haven’t done much to erode Microsoft’s market share, and so perhaps there is some justification for making security an add-on service rather than a part of the operating system itself.

But one factor in the decision to sell Windows Live OneCare live, according to several industry analyst, is that Microsoft is aiming to avoid the attention of the antitrust squad. According to at least one commentator, this restrained competition is laudable:

It’s fair to argue that something like OneCare ought to be built into Windows. But think about what would happen next: The competition would probably find its air supply cut off, as people flee from the cost and complexity of adding third-party replacements for something built into Windows. And recent history has shown that Microsoft tends to slack off if it doesn’t feel a competitive threat–witness how Windows Media Player and Internet Explorer stagnated until iTunes and Firefox got Microsoft’s attention.

With OneCare, Microsoft is trying to clean up its own mess while preserving competition. That’s especially important in the security-software market, where many of the companies that have dominated it so far seem to have adopted Microsoft’s worst habits of sloth.

Remember that the ostensible purpose of antitrust law is to protect consumers. When companies become monopolists, the argument goes, they can raise prices and extract undue sums from their customers, while innovation, and the consumer benefits that come with it, stagnates.

But here, it’s consumers that are getting the short end of the stick. For fear of the antitrust boys (and perhaps because the market will bear it), Microsoft has essentially unbundled what was traditionally a part of an operating system–strong security to protect users’ files, networks, and operating environment–and is now selling it as a separate service for $50 per year. (Among UNIX-derived operating systems, for example, including advanced security auditing tools is the norm.) If antitrust concerns are behind this decision, then antitrust is costing security-conscious consumers, by my calculations, $50 per head per year.

That’s protection? It seems more like a protection scheme. One wonders whether Microsoft isn’t exactly upset that it can hint about antitrust concerns as its reason for unbundling security so as to avoid consumer ire.

Even if not in the U.S., Microsoft surely would have run into antitrust problems in the EU, where antitrust authorities are much keener to meddle, especially when a U.S. firm is involved. Recall that the company’s last settlement with the EU gave birth to “Windows N,” a version of the operating system without a bundled media player. (Not surprisingly, “N” has not exactly been a hit with consumers, leading to the joke that the ‘N’ stands for ‘no one.’)

Inadvertently, this time, the antitrust enforcers may have just created yet another version of the popular operating system: Windows NS. ‘NS’ stands for ‘no security,’ and it’s likely the version that you’re using right now.

Better than restrained competition–the sort of term that makes any economist nervous–is plain competition, unburdened by the threat of arbitrary government meddling. Without the antitrust hatchet hanging overhead, Microsoft’s OneCare might well just be a part of the operating system, correcting (perhaps; hopefully?) a series of flaws in the design of its products that have frustrated users for years.

Schneier on NSA Spying

by on June 1, 2006 · 2 comments

Online security expert Bruce Schneier has an excellent article on the NSA spying program:

Data mining works best when you’re searching for a well-defined profile, a reasonable number of attacks per year, and a low cost of false alarms. Credit-card fraud is one of data mining’s success stories: All credit-card companies mine their transaction databases for data for spending patterns that indicate a stolen card.

Many credit-card thieves share a pattern–purchase expensive luxury goods, purchase things that can be easily fenced, etc.–and data mining systems can minimize the losses in many cases by shutting down the card. In addition, the cost of false alarms is only a phone call to the cardholder asking him to verify a couple of purchases. The cardholders don’t even resent these phone calls–as long as they’re infrequent–so the cost is just a few minutes of operator time.

Terrorist plots are different; there is no well-defined profile and attacks are very rare. This means that data-mining systems won’t uncover any terrorist plots until they are very accurate, and that even very accurate systems will be so flooded with false alarms that they will be useless…

Finding terrorism plots is not a problem that lends itself to data mining. It’s a needle-in-a-haystack problem, and throwing more hay on the pile doesn’t make that problem any easier. We’d be far better off putting people in charge of investigating potential plots and letting them direct the computers, instead of putting the computers in charge and letting them decide who should be investigated.

By allowing the NSA to eavesdrop on us all, we’re not trading privacy for security. We’re giving up privacy without getting any security in return.

(Hat tip: Derek)