November 2006

RIP Milton Friedman

by on November 16, 2006 · 2 comments

I was very sad to learn that Milton Friedman passed away today at the age of 94. Cato president Ed Crane has a great podcast celebrating Friedman’s life. I think he’s probably right that Friedman was the greatest champion of liberty in the 20th century.

He was probably the most important force behind the revolution in monetary policy that has banished stagflation to the history books. And he was instrumental in convincing the Nixon administration to end the draft.

But most important, from my perspective, is that he worked tirelessly at effectively communicating the ideas of liberty to non-academics. He had a column in Newsweek in the 1970s, created a PBS documentary on free markets in 1981, and produced several books on economics and political philosophy aimed at the educated lay reader. Here’s just one of the hundreds of interviews he gave promoting individual liberty during his long and prolific career:

Liberty has lost a great champion.

Congressional Roundup

by on November 16, 2006

Via Ed Felten, here’s a good write-up of the implications of the election for tech policy issues. For the most part, it looks like the change in leadership won’t have major effects on recent legislative fights. It looks like we can expect more government funding for basic research and more government regulation of private companies’ privacy practices. Apparently Democrats are more hostile than Republicans to allowing more high-skilled workers into the country.

There’s hope on copyright and e-voting reforms, but it looks like those will hinge on who gets key committee assignments and how much political capital they expend. Rep. Holt is the voice of reason on e-voting, and Reps. Boucher and Lofgren are supporters of DMCA reform. All are Democrats. But it remains to be seen if the new chair of the House Administration Committee, Juanita Millender-McDonald, will see Holt’s legislation as a priority. And as we’ve discussed before Boucher may or may not get to chair the IP subcommittee.

This is probably the most depressing part of the forecast:

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Knowledge is a wonderful thing, and the more we can do to give people access to knowledge the better off the world will be. That’s always been the vision underlying Nicholas Negroponte’s bold “One Laptop Per Child” (OLPC) Initiative, which aims to put $100 laptops in the hands of people across the globe (especially in less-developed countries).

It’s a noble goal and one that’s almost impossible to argue with in theory. But, like everything else in this world that begins with good intentions, at some point you have to get around to dealing with basic economics, political realities and other technical issues. And those are the sort of growing pains that the OLPC project is experiencing right now. James Surowiecki brilliantly documents all this in an excellent article in this month’s MIT Technology Review entitled “Philanthropy’s New Prototype.”

Surowiecki provides a short history of other philanthropic endeavors from the past century, such as Andrew Carnegie’s remarkably successful campaign to bring public libraries to even the smallest American communities. He then compares Negroponte’s OLPC Initiative to those efforts. Surowiecki notes that OLPC is ambitious not only in its goal of putting a laptop into the hands of every child, but in the way it proposes to structure the program to make it happen.

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This is brutal:

The hosts seem surprised that you can’t email or download music from a server. And they’re not impressed with the “clunky” design of the Zune. “Why don’t they get some decent design people?” Miles O’Brien wonders.

From my perspective, though, the most interesting comment was when Andrew Ross Sorkin emphasizes that “If you have bought songs on iTunes, on Apple for example, it doesn’t play here. And even worse, if you bought songs on Napster or some of the former Microsoft-compliant devices, it also doesn’t work here. So you have to start your library all over again, unless you have it all on CD to begin with.”

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Best Buy has forced BlackFriday to take down information about its upcoming sale prices. I agree with Matt:

This is absurd. We’re inching toward companies being able to prevent newspapers from publishing any sort of adverse information just all on vague copyright grounds. Facts are facts and people are entitled to circulate them.

Best Buy (ab)used the DMCA’s notice-and-takedown provisions to force the prices off the web. Alas, this is not the first time this sort of thing has happened. Four retailers pulled the same stunt back in 2002.

This is a serious problem with copyright law that doesn’t have a clear solution that I can see. It’s fairly common for a big company to send cease and desist letters to small companies or individuals alleging copyright infringement. Much of the time, the law is on the side of the little guy, but even hiring a lawyer to make the appropriate argument in court is far more expensive than complying with the letter’s demands. A good first step, though, would be to scale back the draconian statutory damages that now apply to copyright infringement. It might also be good to either have an expedited process to get frivolous copyright lawsuits dismissed or some kind of loser-pays provision for frivolous copyright lawsuits.

Although some people blame this sort of thing on the DMCA, it’s not clear to me that the DMCA is the culprit. The ultimate problem is the underlying copyright liability, which would exist with or without the DMCA’s notice-and-takedown provisions.

Gigi Sohn has a rebuttal to the Cary Sherman’s article on the Digital Freedom campaign, which I criticized earlier this week:

The collective amnesia the entertainment industry has about its past and recent attempts to limit consumers’ rights and technological innovation is nothing short of startling. Beginning with the piano roll at the start of the 20th century, continuing with radio, TV, the VCR, MP3 players and digital video recorders (remember Replay TV?), entertainment companies have tried either to legislate or litigate innovative new technologies out of existence.

Today in Congress, the recording industry is going after the digital audio devices, arguing restrictions are needed to prevent “theft.” But given that there’s no way to take music off of digital receivers, where’s the theft? It’s in the industry perception that if you can legally record music and can organize that music as you wish, then you won’t buy the CD.

As if their legislative campaign was not enough, the record companies are suing XM Radio because it permits consumers to easily record the music they pay for, and Hollywood is suing Cablevision because it provides a TiVo-like service in which the programs you choose to record reside on its servers. Even though the unanimous Supreme Court victory in the Grokster case gives the entertainment industry even more tools with which to fight real copyright infringement, it continues on a legislative and litigation strategy intended to limit lawful activities.

I think it’s important to keep in mind this history when debating present-day entertainment industry efforts to ban devices they perceive as piracy-promoting. They present their proposals as common-sense efforts to control piracy, but they said the same thing about their efforts to outlaw the VCR and the MP3 player. Their efforts to ban XM receivers with record functionality isn’t an anomoly–this is their knee-jerk reaction to every new media technology that comes along.

Thanks to reader Steve R. for the pointer.

There is an absolutely intriguing discussion going on over on the Second Life blog today about a new threat facing this popular virtual reality world. (If you are not familiar with Second Life, see this Wired magazine “travel guide” for this virtual world.)

It seems that Second Life users are growing increasingly concerned about the spread of a program or bot called “CopyBot,” which allows the instantaneous and perfect reproduction of virtual objects / property created inside of Second Life. As Daniel Terdiman points out over on CNet News.com today: “That includes goods such as clothing that people purchase for their in-world avatars, and even the virtual PCs that computer giant Dell announced Tuesday it is going to sell in the digital world.”

The folks at Linden Labs, creators of Second Life, posted a note about all this entitled, “Copyrights and Content Creation in Second Life.” It does a lousy job of trying to explain how copyright law works in the real world but suggests that Second Lifers who feel they have been wronged might want to look into how the DMCA could help them out. The post goes on to note that:

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It occurs to me that the popularity of blanket patent cross-licensing agreements among software firms is pretty strong evidence that software patents don’t do much to incentivize creativity. This isn’t how healthy patent or copyright markets behave. For example, when’s the last time two big Hollywood firms announced blanket cross-licensing deals for their movie libraries, wherein each promises not to sue the other for copyright infringement if they pirate each others’ movies? Or how often do pharmaceutical companies sign blanket cross-licensing agreements permitting each to produce the other’s drugs without paying for them? Or, for that matter, how often do software companies sign blanket cross-licensing agreements for their software copyrights?

The reason these things almost never happen is that movie copyrights and drug patents represent genuine economic assets with clear boundaries. A movie copyright protects the right to distribute a particular movie. A drug patent represents the right to manufacture a particular drug. And a software copyright represents the right to distribute a particular bit of code.

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It’s been over a week now and it’s interesting to meter the reaction to the Microsoft and Novell deal. Popular, mainstream reaction has been generally positive–this could create a win/win for the companies, and consumers will benefit form the partnership. But for those more steeped in the open source community, there have been charged responses that indicate a chasm. Some see the agreement as legitimizing open source, at least in the eyes of the broader (Windows-dominated) marketplace. Others view this as a deal with the devil that will ultimately hurt open source and the GPL. The recent Samba team response is clear: the GPL is a zero-sum game–you exploit open source software for your gain to the detriment of others (ie. the "community"). Under Samba’s view, the Microsoft & Novell deal doesn’t enlarge the pie, but only unfairly redistributes it.

Is this the same sort of broad ideological split that separates money-making capitalists from share and share-alike Marxist communists? Or is the split more indicative of a narrow divide about what is better for software innovation, closed (or patented) or open software? Or even narrower still, are we only talking about whether the Microsoft/Novell arrangement violates the specifics of the GPL? I don’t really know–and perhaps a complete response incorporates answers to all three questions.

Tim points to the threat of a split in his post last week. He states:

Microsoft is laying the groundwork for splitting the open source community in two. On the one hand, you’ll have a handful of "open source" companies that sell products like Linux under the umbrella of cross-licensing agreements with Microsoft and other big patent holders. On the other hand, you’d have the rest of the open source community. This would give Microsoft cover to sue medium-sized open source firms and say "all we’re asking is for company X to go legit like Novell." Once they’ve collected a few scalps, they might be able to scare the business community away from buying open source software from vendors that haven’t joined the protection racket.

As I said in my post on this, I welcome these patent agreements. The Microsoft/Novell covenant not to sue is an example of market participants contracting around or within the patent and copyright legal system to reduce the transaction costs of negotiating, monitoring and enforcing licenses. Far from creating a legal cloud, unilateral or bilateral IP agreements work to create a workable opening for innovative developments in an already existing cloud of assertible (if not all enforceable) IP rights.

But I can’t agree with Tim on the following, when he describes the MS / Novell agreement:

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By far the biggest e-voting disaster this election was in Florida:

Florida law requires a recount in all five counties in the district. But all eyes are on Sarasota County, where touch-screen voting machines recorded that 18,382 people – 13 percent of voters in the Nov. 7 election – did not cast a vote for either Republican Vern Buchanan or Democrat Christine Jennings. That rate was much higher than other counties in the district.

As the votes were being counted late Monday, Jennings took the first steps toward appealing the election with an emergency petition asking a judge to have Sarasota’s voting equipment and data secured as evidence due to “alarming aberrations” in the county’s vote tallies. The campaign wants an independent audit of the county’s voting system.

“Maybe we are going to have to do a do-over. It may be the only solution if we cannot do an adequate recount,” Jennings’ attorney Jeffrey Liggio said.

The stark reality is that they can’t recount the output of e-voting machines. A recount involves individually inspecting each ballot and determining the voter’s intent. With e-voting, there are no ballots to inspect. The contents of the computers’ memory are all you get. You can “recount” that all you want, but it doesn’t provide any kind of independent verification of the result.

State officials Monday acknowledged problems with the lack of a paper trail.

“I do see some interesting things that are happening in regards to votes that seemed to have disappeared or people didn’t vote,” said Chief Financial Officer Tom Gallagher, a member of the state Election Canvassing Commission that ordered the recount. “You don’t know if they chose not to vote or whether they didn’t, and possibly a paper trail would show more clearly.”

Computer security experts like Avi Rubin have been saying this for years. Maybe their arguments will be more persuasive now that it’s no longer a hypothetical problem.