January 2007

One of the cool things about having a blog is having readers who know more than you do. (Or, conversely, maybe the frustrating thing about reading TLF is that we often don’t know what we’re talking about) Anyway, reader Jim Lippard notes some problems with my recent space posts:

NASA hasn’t been doing a whole lot of commercial space business for the last few years–there were no shuttle flights from the destruction of Columbia on February 1, 2003 until the launch of Discovery on July 26, 2005 (STS-114). It had some of the same issues as Columbia, so there wasn’t another flight until July 4, 2006 (STS-121). STS-115 launched on September 9, 2006, STS-116 launched on December 9, 2006. STS-117 is scheduled for mid-March 2007.

Of recent years’ shuttle launches, only STS-116 launched satellites, and it was the first to do so since STS-113 (launched November 24, 2002).

If you need a satellite launched in a hurry, NASA is not the place to go… you’re better off going with Sea Launch, a consortium managed by Boeing, that is the company that puts satellites into orbit for XM, EchoStar, and DirecTV.

So far as I can see, NASA is the U.S. Postal Service of satellite launches, while Sea Launch is the FedEx. It doesn’t look to me like NASA is inhibiting private space companies at all.

I stand corrected. I would be very interested in knowing more about how Sea Launch and NASA’s launch costs compare.

Bezos in Space

by on January 4, 2007

Cool! Amazon.com founder Jeff Bezos has announced the first test flight of a series that he hopes will culminate in a vehicle capable of taking astronauts into space:

Despite the inflationary effects of NASA subsidies, it seems that the cost of private space travel are beginning to drop to the level where it’s in the reach of private individuals.

I found this post, from our friends over at Public Knowledge, rather puzzling. Art Brodsky thinks that the FCC’s decision to mandate that local franchise authorities approve franchise requests within 90 days “won’t help consumers.” But after reading his post twice, his argument strikes me as underwhelming. He acknowledges that…

There’s general agreement in principle that competition can benefit consumers. In the rare examples so far of competition in video, the over-priced cable services have had to lower their rates to compete with telephone company entrants. A cynic might say that over time, as telephone companies enter the market, that a nice, comfy duopoly will settle in and price decreases will moderate. For now, the idea of cable having some serious competition is good.

So what’s the problem? He notes that the FCC may have exceeded its authority, which is an important point but hardly evidence that the proposal is harmful to consumers. The real meat of his objection seems to be that…

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DRM as Central Planning

by on January 4, 2007 · 8 comments

The document I discussed in my previous post also provides concrete examples of a point I’ve made before: DRM is the technological equivalent of central planning. In their efforts to prevent piracy, the Windows A/V system is becoming more and more monolithic, with the operating system performing more and more functions that would traditionally be performed by third party software, and prohibiting third party software from overriding those functions. Monolithic software has many of the same flaws that centrally planned economies do: the thousands of third-party software developers out there have local knowledge about what their customers want that Microsoft does not possess. Hence, the more Microsoft centralizes decisions about what A/V features the OS will have, the more likely they’ll screw up and fail to provide needed functionality. That gives you lovely outcomes like this:

As well as overt disabling of functionality, there’s also covert disabling of functionality. For example PC voice communications rely on automatic echo cancellation (AEC) in order to work. AEC requires feeding back a sample of the audio mix into the echo cancellation subsystem, but with Vista’s content protection this isn’t permitted any more because this might allow access to premium content. What is permitted is a highly-degraded form of feedback that might possibly still sort-of be enough for some sort of minimal echo cancellation purposes.

The requirement to disable audio and video output plays havoc with standard system operations, because the security policy used is a so-called “system high” policy: The overall sensitivity level is that of the most sensitive data present in the system. So the instant any audio derived from premium content appears on your system, signal degradation and disabling of outputs will occur.

And, even more frightening, this:

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David Levine links to this fantastic summary of the new copy protection standards in Windows Vista, and the many problems those standards are likely to cause. Here’s the upshot:

In order to work, Vista’s content protection must be able to violate the laws of physics, something that’s unlikely to happen no matter how much the content industry wishes it were possible. This conundrum is displayed over and over again in the Windows content-protection requirements, with manufacturers being given no hard-and-fast guidelines but instead being instructed that they need to display as much dedication as possible to the party line. The documentation is peppered with sentences like:

“It is recommended that a graphics manufacturer go beyond the strict letter of the specification and provide additional content-protection features, because this demonstrates their strong intent to protect premium content”.

This is an exceedingly strange way to write technical specifications, but is dictated by the fact that what the spec is trying to achieve is fundamentally impossible. Readers should keep this requirement to display appropriate levels of dedication in mind when reading the following analysis.

What we see throughout the document, is the kind of thrashing that inevitably occurs when an industry’s management orders its engineers to do something that’s technically impossible. They’re forced to go to ever-more-heroic lengths to accomplish the impossible goal, leading to more and more bad design decisions. The result, in this case, is that the quality of all the A/V across the entire operating system is degraded any time there’s any “premium” content being displayed and a single “non-secure” device is installed on the computer. All this effort still isn’t going to stop copyright infringement, but it’s going to be a major pain in the ass for consumers.

Mozilla Rakes It In

by on January 3, 2007

Via Mike Linksvayer, the Mozilla Foundation has reported that it took in $52.9 million in revenues in 2005, mostly from “our search engine relationships,” which I think mostly means payments from Google to have their search engine be the default in the FireFox toolbar. This more or less confirms rumors that were reported last year on Mozilla’s revenues.

This is fantastic news, and given that the search engine wars show no sign of abating, I have to imagine they earned similar revenues in 2006. This provides a big pot of money they can use to promote further improvements to FireFox and Mozilla’s other products, or to spend helping to support the work of open source developers working on other projects.

I occasionally see critics of open source software complain that their lack of revenues proves that “the market” has rejected open source software. But here we have a pretty clear counter-example. The Mozilla community has created a product that’s so valuable that they’ve stumbled upon a “business model” for it–almost by accident–that’s worth $50 million. And given that this is a product that’s given away for free to tens of millions of users, it’s a safe bet that if you could put a dollar figure on the total wealth created by the Mozilla project, it would be a lot larger than that.

Whose Import Is It Anyway?

by on January 3, 2007 · 6 comments

My former colleague Dan Griswold has a typically lucid article over at The American on iPods and the trade deficit:

As I was admiring the cool design and user-friendly functions on my boys’ new Nanos, I noticed an inscription on the back: “Designed by Apple in California. Assembled in China.” That’s a more clever label–and a more accurate depiction of economic trends–than the “Made in China” we see stamped on so many imported shirts, shoes, toys, and consumer electronics.

To those obsessed with the trade balance as a zero-sum scorecard, another imported, $200 Nano merely adds to our growing bilateral trade deficit with China and knocks a few more Americans out of jobs. Wouldn’t we be better off, they ask, if the whole thing were made and assembled at home by American workers?

The answer is a definite no.

As with other high-tech devices, iPods are assembled in China, but the real guts of the device–the brand name, the design, the engineering, the most sophisticated components–come from the United States and other countries outside of China. Like trade in general, importing iPods from China creates a win-win scenario for people in both countries. Assembling the devices is relatively high-paying work in China, so the Chinese workers and their economy do benefit to some extent. But Americans benefit even more from the deal–even, in the long run, the tattooed and pierced erstwhile clerks from Tower.

Quite so. “The trade deficit” is little more than an accounting abstraction. It could be symptomatic of problems with the American economy, such as a large budget deficit or anemic growth in our export industries. But the fact that American consumers are getting a lot of affordable goods overseas isn’t inherently troubling–especially when a substantial amount of the value in those “imports” was actually produced by American workers.

My attempts to grapple with the question of how to measure the economic impact of illicit copying, for your reading enjoyment.

What He Said

by on January 3, 2007

Matt Yglesias has a sensible post about space exploration. He quotes President Kennedy, who said:

But why, some say, the moon? Why choose this as our goal? And they may well ask why climb the highest mountain. Why, 35 years ago, fly the Atlantic? Why does Rice play Texas?

Matt responds:

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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. This week, Mike at Techdirt has done my job for me:

There’s been quite a trend lately of companies who had otherwise completely failed in the marketplace to suddenly reinvent themselves as “patent licensing firms” and then go and sue everyone who actually was able to successfully innovate in the market. The latest entrant is Intertainer, a company that was fairly well known for a few bubble years, but was unable to find a real market for their online video distribution system. They blamed the movie industry for colluding against them (a lawsuit on that issue never went very far, nor did the antitrust investigation it helped trigger), but are taking it out on the tech industry. The company, which has long since been out of business, is back from the dead suing Google, Apple and Napster, claiming they all violate a patent the company holds on digital downloads. Go ahead and read through the patent and help us all understand what is new or non-obvious in the patent. The patent was filed (provisionally) in March of 2001, by which point it’s hard to believe that the idea of distributing content electronically wasn’t well known. I worked for a company in 1998 and 1999 that did many of the things described in the patent, and we were far from cutting edge at the time. The best comment in the article, though, goes to Eric Goldman, an expert in high tech law, who notes: “I have the same problem with this patent as so many of the patents of the dot-com boom days: I don’t know what it means.” Intertainer missed the market. It happens. It’s a part of business. It would be nice if they could now leave those who succeeded alone to continue innovating, rather than wasting everyone’s time and money on a pointless lawsuit over a silly patent.

What he said.