Keeping politicians' hands off the Net & everything else related to technology
Gene Healy reports that John Mueller’s new book, Overblown: How Politicians and the Terrorism Industry Inflate National Security Threats, and Why We Believe Them, is out. I can’t wait to read it. Unfortunately, it will probably make the indignities of airport security even more depressing.
I’ve never understood the point of making you turn off electronic devices on airplanes. I mean, if there are electronic devices out there that interfere with onboard navigation on planes, shouldn’t we be doing something more aggressive about it than simply asking nicely?
Last week, my friend Brooke was kind enough to link approvingly to my post on the phantom threat of network discrimination. Brooke agrees with me that those who think “Verizon is just itching for the opportunity to detect and block every packet of data it carries that mentions the Second Amendment” are nuts.
She goes on to offer an example of a case where network discrimination would be beneficial:
One fear, however, didn’t make Tim’s list; it’s the fear that the ISPs will do exactly what we think they’ll do, which is to introduce tiered pricing for content delivery…
Suppose some new tech-tinkering über-geeks come up with a search engine even better than Google. Because they lack brand recognition, they need to keep expenses at a minimum while word of mouth slowly spreads about their better quality. In net neutrality America, they cannot keep expenses down by opting for lower quality delivery than that offered by Google. Delivery speed is not a viable option for competition; everyone has to ship at the $11 rate. Now imagine that one of the über-geeks is a trust fund baby. He’s so sure that his product is superior, he invests his trust fund in über-geeks, Inc. so they can buy higher speed delivery than Google offers, thus giving Google a serious competitive run for its money. Sadly this too is not an option in net neutrality land.
Prices and price flexibility are essential to competition. The fear that content competition will suffer without regulation is absurd on its face. Indeed, net neutrality regulation will rob new innovators and content creators of the very tools that would make challenging already established businesses possible. It’s little wonder then that the already established businesses–like Amazon, E-bay, and Google, to name a few–are fighting for net neutrality tooth and nail.
This week I’m going to consider NTP’s patents on wireless email. Fresh from its settlement with Research in Motion (makers of the BlackBerry), NTP has sued Palm on Monday over the same patents:
Apparently, the $612.5 million that patent holding firm NTP got out of RIM for its questionable patents wasn’t enough. The company (really, a group of lawyers) has filed a lawsuit against Palm as well. Apparently, the firm is claiming patent violations on the same five patents it used against RIM, as well as two additional ones. However, considering that the US Patent Office has given final rejections to two of the patents in the RIM case and indicated it’s likely to reject the rest, it would seem like NTP doesn’t have much of a leg to stand on. It’s unclear what the other two patents are, though they could be from some new deals NTP has cooked up to get its hands on more patents for the sole purpose of squeezing money out of companies. As for the rejected patents, NTP has indicated that it will appeal the patent rejections–so perhaps they hope to cause enough trouble for Palm while they drag out the process that it’s forced to settle as well.
This is a horrible misuse of the patent system, and is simply taking hundreds of millions of dollars away from what should be a developing market and putting it in the hands of a bunch of greedy lawyers who have done nothing to help move the technology forward in the market place. If you don’t recall, NTP was a holding company that owned some disputed exceptionally broad patents on a concept that was basically “wireless email.” An earlier company had tried to do something with the patents, but failed in the marketplace. RIM came along and successfully innovated in the marketplace (while being a bit of a patent menace itself), and suddenly NTP claimed that no one could do wireless email without paying them for the privilege. The patents were incredibly broad and perfectly obvious and never should have been granted (something the USPTO later would admit in rejecting them). Yet, due to the increasing uncertainty over the lawsuit, and the pressure that put on RIM’s stock, the company was forced to settle, taking money away from R&D efforts and sales and handing it over to the lawyers at NTP so they could turn around and sue more companies that were actually successfully innovating and building products and services people wanted.
Mike’s analysis is exactly right. Here is the original patent. It’s important to emphasize here that there was never any allegation that RIM or Palm ever copied anything from NTP or its anyone else associated with these patents. By all accounts, RIM and Palm developed their products completely independently. But that’s irrelevant in patent law: once one company “invents” something–even something as broad as “Hey, maybe we could transmit emails wirelessly!”–and gets a patent for it, no one else is allowed to build that invention without permission from the patent holder.
That’s clearly absurd in a case like this, where the scope of the patent is so broad as to encompass an entire industry. Yet despite the evident absurdity of these patents, and despite the fact that the patent office is now scrambling to correct its mistakes, NTP is still able to extort hundreds of millions of dollars from other companies. And, as Mike points out, it’s truly perverse that our patent system is transferring hundreds of millions of dollars from innovative companies to a pack of greedy lawyers who have never developed a useful product in their lives.
I almost choked on my morning coffee when I saw the headline last week that Novell and Microsoft announced a deal to make their software work together. As someone who once employed VMware to use Word on a machine running Linux OS, I have to say that I was both surprised and thrilled. And, as someone who closely followed the Microsoft antitrust cases in both the US and Europe, I was astounded. I wish I could call Judge Jackson right now and ask him why he thinks these two competitors who once looked to be arch enemies are now joining forces (Novell accused MS of antitrust violations and sued over WordPerfect). But of course Jackson didn’t think Microsoft had any competitors, so perhaps he wouldn’t really understand the question.
The fact that Microsoft and Novell are now teaming up to provide consumers with something they have been clamoring for (interoperability) is proof that the marketplace can deliver benefits to consumers without government help even if the two competitors have a bad history.
Techdirt points out an especially serious example of e-voting gone wrong:
In one of the stories we spotted yesterday about e-voting glitches, it was amusing to see (at the very, very bottom) the idea that “no major problems” were reported for e-voting in Florida. Florida and Ohio, of course, are the two places where e-voting stories have raised the most questions, and there had already been a number of reports of e-voting problems in Florida voting last week when their early polls opened. So, it looks like ABC may need to revise that “no major problems” report, as the EFF points us to a report saying that 13% of the electronic responses in Sarasota County included no vote for Congressional Representative. That means that somewhere between 8,000 to 10,000 people who voted for other things, like governor, appear to have not voted for House Representative–and no one seems to have a good explanation. It’s certainly possible that all those people decided to go “none of the above,” but it seems unlikely–especially since similar undervoting was not seen in other counties covered by the same Congressional district. Also, there were complaints all day about the e-voting machines not properly recording votes in that county. So, while people are asking for a recount… there’s nothing to recount since the machines did not record the votes. Amusingly, the EFF also notes that the very same county had a referendum on the ballot about the e-voting machines, and the people overwhelmingly voted to scrap the machines and bring back paper ballots. So what was it the press was just saying about no major glitches with e-voting?
One of the things that makes computers incredibly useful is that automate routine tasks so they can be done without human supervision. That’s fantastic for most tasks, but it’s a disaster when the task at hand is recording votes, because it means that if there’s a programming bug, it will do things the same wrong way with each and every voter. And because the counting process is totally opaque, no one notices until it’s too late.
E-voting machines may streamline the voting process, but that’s actually not a benefit at all. A slow, labor-intensive voting process means there will be more human eyes around to spot mistakes early enough that they can be corrected. But because we delegated the process to a computer, there were no human beings in a position to notice the problem.
With this afternoon’s concessions of defeat by Senator George Allen and Conrad Burns, the GOP’s loss of the Senate is official. Tech policy played little role in this political earthquake, despite much early rhetoric by neutrality regulation supporters that it would be a big part of the debate. Yet, ironically, the final two dominoes to fall were both members of the Senate Commerce Committee, and key players in tech policy debates. Allen in particular will be missed by free-market supporters, as well as the tech industry (he ranked number one in the Senate on tech policy in a recent CNET survey.) Burns, a longtime communications subcommittee chair, had a more mixed record. He was an early supporter of telecom reform, but in recent years seemed to focus more on protecting rural state perks.
The headline news, however, is the change at the top of the committee. Senator Ted Stevens–who was made famous by Jon Stewart and YouTube for describing the Internet as a “series of tubes”–is out.
Supporters of markets will shed few tears over Steven’s ejection from the chairman’s seat. The champion of Alaska’s “bridge to nowhere,” proponent of a $3 billion scheme to subsidize television, and author of a telecom bill with $5.2 billion more in subsidies, he hardly represented Adam Smith’s values. We are tempted, in fact, to crack a smile.
But not too big a smile. While Stevens may be out, he is replaced by Daniel Inouye of Hawaii. Although of different parties, Stevens and Inouye always had a close working relationship–Stevens, in fact, always referred to Inouye as his “co-chairman.” While Stevens would be hard to beat in the pork department, Inouye is no shirker (its a fair bet he can take credit for the special rules for “states comprised entirely of islands” in this year’s telecom legislation).
This isn’t to say there aren’t differences. Stevens, for instance, was somewhat opposed to neutrality regulation, while Inouye somewhat supportive. But in many other areas, it’ll be hard to spot a difference. In fact, on many issues–such as telecom subsidies–Inouye could be more successful at getting Stevens’ agenda adopted than Stevens was.
As I suggested earlier, settle in for a few interesting years.
I’m getting a lot of calls from reporters this week asking about what the Democratic takeover means for technology policy issues and First Amendment matters. My answer on both counts: Not much.
On the free speech front, the results of this election will probably have very little effect. Democrats and Republicans are now birds of a feather on these matters. Democrats used to be considered the party of the First Amendment, but I have a hard time finding any defenders of the First Amendment left in that party. I spend as much time dealing with new speech regulations from Democrats like Hillary Clinton and Joe Lieberman as I do any Republican in Congress. Thus, I suspect that, despite the shift in power, Congress will continue pushing for more media and Internet regulation just as they have been for the past 10 years. It’s a never-ending cycle and the only competition left between the two parties is the race to see who can regulate faster and more extensively than the other.
On the communications and broadband regulatory front the differences may be a bit more pronounced between the parties, but not too much so. To try to get a better feel for what Democratic rule might bring us I thought I’d take a look at a few items in the “Innovation Agenda” they produced before the election. (It can be found online here and here is the PDF).
From what I see it here, it sounds like the Democrats believe that spending a lot of taxpayer dollars on federal pork projects is the best way to improve America’s technological competitiveness.
Jim Harper persists in posting hist best stuff over at that other blog instead of here. Yesterday, he noted that one of the big losers in New Hampshire’s state legislative races was the REAL ID Act:
Jeb Bradley was one of “several Washington officials . . . urging state senators to support Real ID” when the state legislature was considering a bill to reject it. He was defeated by Carol Shea-Porter, a surprise victor who enjoyed little help from national Democrats. Here’s Shea-Porter speaking at an anti-REAL-ID rally.
Representing the Second District, Charlie Bass was an original co-sponsor of the REAL ID Act, and he touted that fact on his Web site. His replacement is Paul Hodes. Hodes is not a full-throated critic of REAL ID, but he did tell AP, “I do not favor creating a new central federal database using the permanent images of these documents. . . . A piece of paper is not the solution to securing our borders from terrorism. We need to better coordinate our existing law enforcement databases and watch lists.”
The Republican leadership of the state senate gutted and killed New Hampshire’s bill to reject REAL ID earlier this year. In a debate Monday, Republican Senate President Ted Gatsas said “There’s no question REAL ID makes sense.” Ted Gatsas will no longer be Senate President. Democrats took control of the New Hampshire State Senate for only the second time since 1911. Gatsas’ re-election bid was too close to call overnight, but it now appears he narrowly beat back his Democratic opponent.
As to REAL ID opponents, Governor John Lynch was re-elected. Voters gave control of the New Hampshire Executive Council (an additional legislative body that would have to approve the acceptance of federal funds for implementing REAL ID) to Democrats for good measure.
I don’t really understand why opposition to REAL ID would be considered a Democratic issue. Aren’t the Republicans supposed to be the party of federalism?
The once and future chairman of the House Energy & Commerce Committee, John Dingell, recently supported strong net neutrality regulation (to prevent “private taxation of the Internet”) and opposed cable franchise reform. Now he has warned the FCC that it ought to postpone consideration of the AT&T-BellSouth merger until next year. These positions suggest Dingell believes there are benefits of regulation.
Perhaps he does. Yet, this is the same man who forcefully advocated deregulation when Congress debated the Telecommunications Act of 1996. During the floor debate on Aug. 2, 1995, Dingell noted:
… the rates of AT&T, MCI, and Sprint fly in perfect formation. They fly like the formation of the nuts and bolts in an aircraft, all tied together by invisible forces, which has led to a situation where they all make money and nobody gets into that because of the behavior of Judge Green and his law clerks and a gaggle of Justice Department lawyers and three floors of AT&T lawyers, who have been foreclosing the participation of any other person in or outside of the telecommunications industry.
Regulation, although meant to benefit consumers, was exploited by the regualted entities to maintain higher prices even though computers and fiber optics were driving down the cost of providing service.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
