Here’s Patrick Leahy’s take on network neutrality:
The last thing we should do is fix a problem that does not exist. We should also carefully examine any approach that would allow law enforcement agencies to set technology mandates, particularly given the challenges we have seen this year in the FBI’s own mishaps in its technology development.
The federal government so far has successfully allowed the Internet to flourish by avoiding design mandates and other limitations. We all must keep that important lesson in mind… The United States developed and nourished the Internet, and the world watches whenever we attempt to regulate it.
Oops, I’m sorry. That’s not about network neutrality, it’s another quote from his CALEA statement. My mistake. When it comes to network neutrality, Leahy seems quite comfortable with fixing problems that don’t yet exist.
The DC Circuit Court of Appeals has ruled that VoIP-based telephone companies are subject to CALEA, the 1994 law mandating that phone companies install infrastructure to facilitate court-ordered wiretaps. The FCC has set a deadline of May 2007 for all VoIP providers to comply.
Back in October, when the FCC first announced its intention to expand CALEA to cover VoIP providers, Sen. Leahy, one of CALEA’s sponsors, objected:
Congress recognized the unique architecture of the Internet and explicitly excluded it from the scope of CALEA’s surveillance design mandates, and we did that to allow Congress to re-visit the appropriateness of such an extension as the Internet developed. Any extension of CALEA–a law written for the telephone system in 1994–to the Internet in 2005 would be inconsistent with congressional intent.
I don’t think it’s obvious how the courts should have ruled here. Vonage does present itself as an alternative to a traditional phone line, and it does interface extensively with the PSTN. Although I’d rather the federal government have as little power over the Internet as possible, it’s not clear to me that Vonage and its ilk shouldn’t be classified as telephone companies.
What is clear, though, is that the FCC’s definitional headaches will only get worse. Skype is very careful to emphasize that it’s not a replacement for phone service, and the vast majority of Skype users call other Skype users without using the PSTN. There are pure VoIP services like Apple’s iChat and Google Talk that don’t interface with the PSTN at all. And then there are services like XBox Live that allow users to chat with one another during video games. If the FCC is going to start requiring Vonage and (perhaps) Skype to comply with CALEA, they’re going to have to decide how “phone like” an application has to be before it gets classified as such.
And of course, CALEA’s not the only regulatory scheme that applies to phone companies. We’ve also got Universal Service fees, E911 service, and probably others. If the FCC piles too many requirements on services it classifies as “phone like,” it’ll lead to the fragmentation of phone connectivity, as “pure” VoIP applications refuse to interface with the PSTN for fear of triggering all those regulatory obligations. That will mean that grandma with her land line can’t call junior on his Google phone. That wouldn’t be the end of the world, but it’s probably not what the FCC is trying to accomplish.
Never mind fees for priority broadband service. What this nation really needs is a fee on anyone still using the term “trickle-down economics.” In a post yesterday on Digital Destiny, Jeff Chester of the Center for Digital Democracy pulled the Commodore-era cliche out of his white hat, in a blogpost entitled “Memo to Heritage’s James Gattuso: The era of trickle down media economics is over.”
The trickle down era is over? Well, ok. I never said it wasn’t. I never said trickle down at all. I honestly don’t know what “trickle-down media economics” even means.
Chester’s memo follows an earlier post criticizing my recent Heritage Foundation paper on neutrality regulation as “a litany of rationalizations and under-developed analysis.” Sensing that he disagreed with me on some points, I read on to see where my paper had gone wrong. But he didn’t say. Instead he focused on Heritage’s funding, promising a substantive response in “our next post.”
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Another day, another absurd software patent: Ars reports that Nintendo has patented the concept of instant messaging in games:
In the claims section, the patent describes a chat system that uses a remotely stored buddy list, supports multiple statuses, broadcasts information about active gaming activities, displays notification of events including the arrival of new e-mail messages, facilitates transmission of player preferences, and enables users to communicate with each other either with voice or text messages. Keep in mind that this patent does not cover game-oriented chat in general; it specifically describes a console gaming chat mechanism that displays game information and uses a buddy list.
Sure, instant messaging and computer games had been around for several years when Nintendo filed for this patent in 2000. But combining them was truly a stroke of genius!
The New York Times reports that European regulators are becoming increasingly concerned about the development of the music-download market:
Government consumer protection agencies in Norway and Sweden want Apple to remove restrictions that prevent customers from playing music they bought through iTunes on devices made by other companies.
And in Britain, one of the largest digital music markets, the British recording industry’s trade association, known as B.P.I., told a Parliamentary committee on Tuesday that iTunes music should be made compatible with other portable music devices. It was the first time the group had taken a public stance on the issue.
Early last year, European Union competition regulators opened an investigation into Apple’s pricing practices at the behest of Britain’s Office of Fair Trading. Users of the British iTunes Web site are charged 99 pence, or $1.82, for most iTunes tracks, while French users are charged 99 euro cents, or $1.25.
“European regulators are clearly concerned that consumers need to get a fair deal when they buy music online,” said Struan Robertson, a British-based technology lawyer at Pinsent Masons. “Since we share very similar competition laws across the E.U., a domino effect could cause changes across the Continent.”
I suspect that these regulators will come up with bad policy proposals; government regulators almost always do. Certainly, mandating that Apple change its format, or share proprietary details of its format with other companies, would be bad policy, opening the door to the politicization of the digital music industry.
But I can’t say I’m shocked at their concern. The DMCA (and in Europe, the EUCD) have had the unintended consequence of giving Apple a monopoly on iTunes-compatible MP3 players. And so it’s not crazy for them to be looking into ways to remedy the problem.
But the right way to deal with the problem is to repeal the law that caused the problem in the first place, not to add another layer of regulations on top. Because those regulations, too, will have unintended consequences. If you repeal the DMCA and the EUCD, makers of competing MP3 players will reverse-engineer FairPlay and add the capability to play iTunes songs. No further government oversight will be required. But if you pass additional regulations, we’ll have to come back in another decade to figure out how to deal with the unintended consequences of those regulations.
Not only is eBay lobbying to impose government regulations on the Internet, but they’re lobbying for more draconian restrictions on Internet gambling, too. Radley Balko gives them a a well-deserved spanking in his Fox News column:
Goodlatte’s bill bans the use of financial services to facilitate Internet gambling sites. It’s already illegal to operate a gaming site on U.S. soil. But most experts agree it’s still legal to “place” a bet. Goodlatte wants to put up a wall between the domestic “bet placing” and the offshore “bet taking,” which FirePay and Neteller make possible.
If banks and other financial institutions are going to be responsible for policing what their customers do online, as will happen should Goodlatte’s bill become law, it’s safe to assume that they’ll comply by simply banning all transactions with offshore payment services.
Which means that Goodlatte’s bill’s main effect will be to shield PayPal, a domestic company, from foreign competitors (foreign competitors that, ironically, are doing exactly what PayPal’s founders envisioned).
What’s more, the letter eBay government relations director Brian Bieron sent to Goodlatte announcing the company’s support of his bill actually goes above and beyond what any gambling foes in Congress have called for. Bieron in fact calls for the actual prosecution of Internet gamblers themselves, a policy which could only be enforced by allowing law enforcement officials to essentially begin monitoring everyone’s online activity, including tracing visited websites back to IP addresses.
Instead of lobbying for the so-called “the First Amendment of the Internet,” perhaps they should show more concern for the actual Bill of Rights.
Each week seems to bring another exuse for me to pen an entry in my ongoing “Media DE-Consolidation” series. This week it’s the Tribune Co. According to a front-page story in today’s Wall Street Journal, the 160-year-old media / newspaper giant is considering spinning off its broadcasting group, which includes 26 TV stations (including my beloved WGN-TV in Chicago on which I watched countless Cubs games growing up). I find this interesting for two reasons:
(1) Most newspaper owners are making a push for the FCC to relax the newspaper-broadcasting cross-ownership rule so they can own both papers and stations in the same market. But this move by Tribune would signal a retreat by a major company in the opposite direction. So perhaps this will take the steam out of the dereg effort at the FCC.
(2) However, let’s not forget that the Tribune Co. long ago received waivers to hold papers and stations in key markets such as Chicago and Los Angeles and the resulting combinations certainly haven’t done anything to negatively impact media diversity in those towns. So, it’s difficult to see what harm would come from allowing others to combine newspaper and broadcasting operations.
Regardless, the push for media DE-consolidation continues and the Chicken Little media critics are nowhere to be found. Any time an operator even mentions the idea of buying more properties, the media critics go bananas and scream for government regulation. But when major operators start spinning off entire divisions, the critics don’t say a peep. They fail to appreciate how dynamic media markets are and how investors, consumers and technological change is the greatest check on market power, not ham-handed government regulations.
I participated in a major conference yesterday sponsored by the New America Foundation (NAF) and the Kaiser Family Foundation (KFF) entitled “Beyond Censorship: Policies and Technologies to Give Parents Control over Children’s Media Content.” The event featured an impressive collection of lawmakers, regulators, corporate leaders and public policy experts who gathered to discuss, as the conference agenda stated, “who is responsible for protecting kids from inappropriate media–industry, the government, or parents armed with new technologies?”
I thought it might be worth transcribing a few of my notes here since others might be interested in what was said. I did the same thing in February after I participated in a similar conference that Stephen Balkam of the Internet Content Rating Association (ICRA) hosted at Yahoo headquarters in Sunnyvale, California. Incidentally, I’m going to be co-hosting a similar event with Stephen and ICRA next week in Brussels entitled “Protecting Children AND Free Expression in Our New, Digital Content World.” EU Commissioner Viviane Reding will be on hand to deliver a keynote address and then we’ll be hearing from many others on these issues.
What follows below is a brief summary of yesterday’s NAF / KFF discussion over the span of the 3-hour event.
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David Berlind wonders why Apple hasn’t sued Real or Navio for reverse-engineering FairPlay, Apple’s iTunes copy protection scheme:
I’m wondering how many more commercial enterprises have to reverse engineer Apple’s digital rights management technology (so as to emulate the iTunes Music Store as a source of iPod-compatible protected content) before it activates the laywers on that front. Today, two companies–RealNetworks and the recently launched Navio–have commercial offerings in the market that involve a reverse engineering of Apple’s DRM (or should I call it Apple’s DNA given how crucial it is to the long term success of the company) to the point that they can serve protected content that’s compatible with Apple’s iPods and iTunes. The existence of such copycats marginalizes Apple.
Originally, it looked as though Apple’s legal eagles were going to lower the boom on Real. Then, instead of following through, it updated its DRM technology in hopes of disabling Real’s hack. Real stayed in technical lockstep but has somehow managed to stay out of Apple’s legal cross-hairs. Now, Navio is in the game and thinks that it’s safe because of the way Apple dropped its case against Real. But does that mean Apple won’t try again? How can it not? I see another suit coming. Either that, or more iTunes Music Store knockoffs.
There’s a crucial legal distinction that Berlind is missing here: as far as I know, no one has hacked FairPlay to make their devices compatible with iTunes. All the reverse engineering efforts–including Real and Navio–have gone in the opposite direction: making Apple’s device (the iPod) compatible with their music store. The distinction is crucial.
The DMCA makes it illegal to “circumvent a technological measure,” which it defines as “to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner.” The “without the authority of the copyright owner” is the important bit. If you’re the copyright owner–or his licensee–you can reverse engineer to your heart’s content. It’s only if you’re decrypting someone else’s content that you have to worry about DMCA liability.
What that means is that the lock-in created by the DMCA only works one way: if you’ve got a music store, you get to decide which devices can access the music. But if you’ve got a playback device, anybody can hack your device to put their music on it.
Ars reports on the likely battle over Slingbox, a device that plugs into your TV and lets you watch TV content on the road. Major League Baseball doesn’t like the device because it allows users to evade the geographical restrictions of its licensing agreements with cable operators.
I’m having trouble seeing the legal argument against Slingbox. It only allows users to watch content they’ve already paid for (in the case of cable or satellite) or that’s broadcast over the air for free. It doesn’t facilitate re-distribution to others or commercial-skipping. If any device is modeled to pass Sony with flying colors, this is it.
On the other hand, the courts do make mistakes. Slingbox bears a striking resemblence to My.MP3.com, which was killed off in a poorly-reasoned decision by a district judge. MP3.com was another service that allowed users to more conveniently consume their legally acquired content. As I’ve written before, MP3.com was prevented from appealing the decision by the requirement to post a bond for the excessive statutory damages imposed by Judge Rakoff. If this does go to court, I hope it will provide an opportunity for the courts to repudiate the MP3.com decision.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.