The Bush administration has been dealt another setback in litigation over its NSA surveillance program:

In this particular case, one of the plaintiffs, the Al-Haramain Islamic Foundation, claims that the government froze its assets during an investigation prompted by a warrantless wiretap, a claim that is verified by classified documentation (referred to in the judge’s decision as the Sealed Document) inadvertently given to the plaintiff. The government claims that national security would be threatened if the government confirms or denies the assertion that Al-Haramain was the subject of wireless eavesdropping. The basis for government’s argument extends from the belief that a suspect who knows himself to be a target of government surveillance could “change his pattern of behavior, jepordizing the ability to collection intelligence information.” The judge points out that the government’s argument is irrelevant in this case, because “the government already inadvertently disclosed the Sealed Document to plaintiffs, thus alerting the individuals or organizations mentioned in the document that their communications have been intercepted in the past.”

The government also claimed that, should the lawsuit be allowed to move forward, national security would be at risk, simply because certain details of the case could potentially be accumulated to reveal additional details. Known as the “mosaic” theory, the government’s argument is “that any disclosure of any information related to the Surveillance Program or the Sealed Document would tend to allow enemies to discern, and therefore avoid, the means by which surveillance takes place under the program.” The judge rejected this assertion, because he does not think that the case will necessitate public disclosure of “information regarding the al Qaeda threat” or “non-public details of the Surveillance Program.”

Any terrorist stupid enough not to worry about the U.S. government eavesdropping on him is probably stupid enough not to be a serious threat. And you could make the same argument about any surveillance program.

Indeed, that’s why Congress set up FISA in the first place. They wanted to give the executive branch a leak-proof forum for getting judicial oversight of its top-secret surveillance activities. If the Bush administration had gone through the FISA process, or lobbied Congress to change the FISA process to accommodate their new program, they wouldn’t be in this situation. But instead, they chose to simply ignore the law and conduct their illegal surveillance program without judicial oversight. The chickens are now coming home to roost.

Quick plug: I have a new article up at Tech Central Station in which I argue that reports of TV’s demise at the hands of the Internet are greatly exaggerated. A teaser: “The success of the iTunes Music Store and the iPod has not spelled the end for radio broadcasting or CDs, and the same is likely to be the case in the video market. Satellite radio, iPod and iTunes have shown, however, that consumers are hungry for new ways to access and consume media. The telephone companies’ efforts to roll out robust broadband networks in order to compete with cable, helps get everyone closer to a competitive market. Not only will these networks offer new services and increased broadband capacity, but the burgeoning competition will also spur cable companies to make upgrades of their own, as well as lower their prices.”

Why Amazon Unbox is Lame

by on September 8, 2006 · 12 comments

Amazon has unveiled its long-rumored video download service. I share Randy Picker’s skepticism about the service’s potential for success:

You get content through the Amazon unbox video player, which is the control center for managing downloads and control over the content. Once the show or movie is downloaded, you can watch it on your computer or on an approved video device (but no iPods or Macintoshes and nary a word about Linux). And if you know how to do it, you can hook your computer up to your television and watch the TV show there.

All of that is reasonably straightforward, until you start to break it down. Although this is video on demand, you need to plan your demand a day in advance. Amazon estimates that it will take more than seven hours to download a two hour movie over a 750 kbps line. The system does implement progressive download, meaning that you can start watching immediately as the content comes, but at these download rates, you’ll run out of content quite quickly.

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Every week, I look at a software patent that’s been in the news. You can see previous installments in the series here. One of the amazing thing about the software patent issue is just how pervasive software patent litigation is. When I started this project, I was afraid I’d have to scramble to find a new controversy to write about each week. Boy was I wrong. Most weeks, like this one, all I’ve had to do is run a Google News search for “software patent” and there’s new lawsuit on the first page of results. This week’s dispute is between i2 and SAP over seven patents related to project management software. Here is the oldest of the seven patents.

This patent is akin to the Guatemalan database patent and the Friendster patent I covered in previous weeks: it seems to simply describe a software product in great detail, as if a list of mundane features constitutes an invention.

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If you’re a video game fan then by now you’ve heard the troubling news that Sony has announced there will be yet another delay in the eagerly anticipated launch of its PlayStation 3 gaming console. As a headline in the London Times read: “This year’s must-have toy is cancelled for Christmas.” (Needless to say, that’s about the last headline you want to read if you’re in the Sony marketing or PR department!) The new delay will mostly impact European customers, but North American customers will apparently see fewer boxes shipping our way during this holiday season when the box is set to launch here.

As a video game fanatic and former business school student, I must say that this entire episode has turned into quite an interesting case study of how three major competitors go about launching major new business technologies / platforms. Microsoft has taken the “KISS” (keep-it-simple-stupid) approach with their new XBOX 360 and offered a unit without any digital HDMI connections or a built-in high-def disc drive. (A HD-DVD “sidecar” player is scheduled to be offered later this year but the price has not yet been announced). And MS even offers a bare-bones “core” model of the XBOX 360 without a hard drive for just $299, $100 less than its premium $399 unit.

As a result, the company was able to get its system on the market back in November of last year, a full year earlier than Nintendo and Sony’s new systems are due to hit store shelves. Millions of consumers, including some like me who grew tired of waiting for Sony’s PS3, have made the plunge and purchased a XBOX 360. This constitutes a huge advantage for MS in the platform wars. Some predict that 10-15 million XBOX 360s will be sold before Sony finally gets around to pushing out the PS3 in some markets.

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I’m pleased to see that Tim Wu took the time to respond (here and here, scroll down to the bottom of the comments) to my recent posts on his paper on Hayek and intellectual property. Here’s what he had to say on the spectrum issue:

The point made by Tim Lee is decent. It is certainly true that the FCC would have to state some kind of standard to make possible permissionless entry into the spectrum market (as it does for the garage band used by 802.11b). In addition, private actors could, if they wanted, similarly allow permissionless use of spectrum. The question is why they would want to.

In general I cannot understand the strength of Jerry’s and others’ objection to the substance of rules that would create permissionless market entry into the spectrum market. In my view, reflected in that paper, permissionless market entry is one of the holy grails of an effective market system.

Perhaps Jerry will jump in with his thoughts, but I think it’s crucial here to distinguish between short-range and long-range spectrum. For short-range transmission, Wu’s argument has a lot of merit because short-range wireless applications are nearly non-rivalrous. Cordless phones and WiFi seem to work quite well in an unlicensed environment.

A big part of the reason for this is that there are only a handful of people who want to transmit short-range signals in any given geographical location. There are only half a dozen WiFi networks within range of my apartment, and I live in a dense urban environment. Because I’m only competing with a handful of people, informal sharing mechanisms work pretty well. In this case, the WiFi protocol can operate on several different “channels,” and access points self-organize by selecting a channel where their signal won’t interfere with others (at least that’s my rather limited understanding of it–geeks please correct me if I’m wrong).

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Peter Suderman of the Competitive Enterprise Insitute has penned a nice editorial on the regulatory threats facing MySpace and other social networking sites. In the essay he notes that “a mandatory [age] identification law would likely require the development of some sort of national identification system, and it would still be unlikely to be fully successful. ” He continues:

Moreover, calls to develop such an identification system would create the possibility for an array of unforeseen consequences, as there are inherent dangers in requiring minors to publicly register their identities. By creating a centralized ID database, such requirements would render minors’ personal information more vulnerable. Do parents really want their kids forced to give out personal data for public use?

Good point. Indeed, there are many dangers associated with requiring identify verification for minors before they get online, and policymakers must realize this becuase for many years they have worked hard to shield information about minors from the rest of society. There are various privacy laws on the books that tightly restrict the release or sharing of information about minors. So why change the rules for social networking? It seems to me like we’d be opening a major can of worms if we did.

Also, check out the outstanding summary of everything that’s been happening on the social networking regulatory front over at the 463 blog. And here’s a recent speech I did on the topic when I debate two state attorneys general at a major conference in D.C.

Forbes has a profile of Mark Shuttleworth and Ubuntu. What I found most interesting about it is the financials:

Ubuntu now has 4 million users, half of which are governments, universities and a smattering of businesses. It adds new ones at a rate of 8% per month. After its public release in October 2004, Ubuntu quickly deposed Red Hat’s Fedora as the most popular version of Linux on DistroWatch, a Web site that caters to Linux users. Ubuntu works in 22 languages, and Canonical, the company Shuttleworth set up to distribute his software, will send a free Ubuntu CD anywhere in the world. New users rave about the simple user interface, which has gained recent converts in a couple of well-known bloggers who switched from Apple Computer’s OS X.

In May, Sun Microsystems announced plans to offer Ubuntu on Sun’s Niagara chips, which power its newer Sparc servers. While Sparc servers aren’t a particularly big market, the stunt made clear that Shuttleworth aims beyond home hobbyists.

Canonical has burned through $15 million of Shuttleworth’s money in two and a half years. He says that it will take him at least another two years to even know whether it has a chance to become profitable, and that it may never return his investment. But that doesn’t matter. He’s paying all the bills either way, along with setting up a $10 million endowment for the Ubuntu Foundation that’s earning interest for a day when his attentions may drift elsewhere.

I mean no disrespect to Mr. Shuttleworth when I say this, but $15 million is a shockingly small amount of money with which to build a full-featured desktop operating system. Microsoft’s advertising budget for each version of Windows is an order of magnitude larger than that. Apple pulls in hundreds of millions of dollars with every release of Mac OS X, while Microsoft makes billions of Windows.

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A reoccurring theme of many of my posts on this blog is the very real danger of policymakers–both here and abroad–attempting to extend traditional media content controls to new media outlets and technologies. My PFF colleague Patrick Ross has just released an excellent new report entitled “Do’s and Dont’s for Global Media Regulation: Empowering Expression, Consumers and Innovation,” which summarizes some of the most serious threats to new media that are developing in Europe, Australia and Canada.

Patrick’s new study builds on two other important papers he authored on Europe’s dreadful “Television without Frontiers” initiative, which Patrick has appropriately labeled “Content Regulation without Frontiers.” Patrick’s alternative vision focuses on achieving legal symmetry between old and new media by deregulating down instead of regulating up. He also warns policymakers about the dangers of continuing to distinguish between different types of content delivery or platforms, and to be careful not to discourage migration of content from one type of platform or device to another.

Anyway, read the whole study for more details.

C. Boyden Gray, a fellow reader of Sir Henry Maine, on chemical regs in Europe, from the WSJ.