March 2007

The Other America

by on March 26, 2007 · 6 comments

During our TLF happy hour last week (you can listen to the “live-from-the-bar” podcast here!), I got into a debate with some of my TLF colleagues about the future of physical versus non-physical media. I was making the argument that the impending death of physical media at the hands of intangible, digital storage has been greatly exaggerated. One of the points I made was that some people just love to “kick the tires” of their media and have something to look at and store on a shelf, whether it be a CD, a DVD, photo albums, a book or anything else. Even though I’m increasingly an all-digital storage guy like most of my TLF colleagues, there are still a lot of people out there who think different than us and prefer the old way of doing things. (I wrote about all this at greater length here).

But there’s another reason that physical media has a future: A lot of people just don’t give a damn about digital technology and the Internet at all. Really, it’s true! Just check out the results from this recent survey by Park Associates:

A little under one-third of U.S. households have no Internet access and do not plan to get it, with most of the holdouts seeing little use for it in their lives, according to a survey released on Friday. Park Associates, a Dallas-based technology market research firm, said 29 percent of U.S. households, or 31 million homes, do not have Internet access and do not intend to subscribe to an Internet service over the next 12 months.

The second annual National Technology Scan conducted by Park found the main reason potential customers say they do not subscribe to the Internet is because of the low value to their daily lives they perceive rather than concerns over cost. Forty-four percent of these households say they are not interested in anything on the Internet, versus just 22 percent who say they cannot afford a computer or the cost of Internet service, the survey showed. [emphasis added]

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Having smart readers is great! Check out the comments to my post on wireless commons, wherein TLF reader who actually know what they’re talking about elaborate on the strengths and weaknesses of unlicensed spectrum and mesh networks. For example:

In general, the concept of spectrum commons is intuitively appealing. Unlicensed spectrum has already proven its value with the proliferation of WiFi and the spectrum commons approach dangles the possibility of extending the promise of unlicensed spectrum to a near utopian degree. This is always presented as an superior alternative to the sclerotic bureaucracy of the FCC making decisions on spectrum use. However, in the real world where people are actually building modems, radios and consumer devices, the regulatory context of the FCC provides more than just an economic model of how spectrum is used (i.e. spectrum as property with markets vs unlicensed or common spectrum). It also provides a technical context for engineers who design and build the technology. RF is pretty wacky stuff and although increasing computational power and antenna technologies are of critical importance and key enablers to new wireless architectures and protocols, they don’t eliminate the world of cavity filters, intermodulation distortion, adjacent channel interference, etc.

Ultimately, the either/or approach is problematic. Spectrum commons, like unlicensed spectrum before it, hold great promise and regulatory bodies should embrace it by making spectrum available. But it’s also 10 or 20 years away from being ready for primetime. There’s a lot of usable radio spectrum. The real answer is to embrace and enable multiple approaches and philosophies of spectrum usage.

More good stuff here.

The Parents Television Council (PTC), a media activist group that routinely petitions Congress and the FCC for greater content regulation, recently released a new poll which they say proves that the V-Chip and parental control technologies have been a failure.

Their poll finds that only 11% of those surveyed said they used the V-chip or their cable box parental controls to block unwanted content from their television during the past week. And that result is virtually unchanged from a poll they took last September asking the same question. Therefore, the PTC concludes that recent efforts by broadcasters and cable companies to spend hundreds of millions of dollars educating families about these parental control tools have been a failure. And, unsurprisingly, the PTC feels that this again shows the need for government regulators need to step in and do more national nannying for us.

As I’ll make clear in a moment, the V-Chip and current television ratings are certainly not perfect. And I have no doubt that household usage of these tools is quite low for reasons I’ll get into. But let me first address what appears to be a rather glaring methodological deficiency of this PTC poll which makes it difficult to take seriously.

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Don Marti has an excellent analogy to help illustrate what’s wrong with software patents:

If Victor invents something, and I describe it in prose, I’m not infringing. If he invents something and I build it as hardware, I am. But if I do something in between between hardware and prose—”software”— where do you draw the line of where he can sue me? If Dr. David S. Touretzky doesn’t know where you draw the line between “speech” and “device” how should the courts know?

All of the arguments for software patents work just as well for prose patents. Just as a software patent covers the algorithm, not the code, a prose patent could cover the literary device, sequence of topics, or ideas used to produce some effect on the reader…

The debate over software patents isn’t just an attempt to set one arbitrary line between the patentable and the unpatentable. It’s about resisting the slide toward higher and higher transaction costs that happens when patents creep into places where they don’t make sense. We have algorithm patents but not prose patents because lawyers and judges use analogies and other prose inventions more than they use algorithms.

Quite so. I think the reason you see such violent and near-unanimous dislike for software patents among computer programmers is that it’s not an abstraction for them. For most people, software is just a magical icon that sits on their desktop and does stuff when they double click on it. The question of whether software should be covered by patents is akin to debates over who owns the moon: intellectually interesting, but not really relevant to their day-to-day lives. But what computer programmers see is that widespread enforcement of software patents would mean that a significant portion of their professional lives would suddenly require regular consultation with lawyers. This pisses them off in precisely the same way—and for precisely the same reasons—that patents on plot devices, analogies, literary styles, and other prose concepts would piss off writers.

Based on my reading of the complaint, Tim Wu’s speculation on Viacom’s strategy seems about right:

Viacom seem to be preparing to argue that, since Youtube plays such a role in hosting the videos, and doing things like screening porn, the videos are not, in fact “user-directed content,” the hosting of which is protected by 17 U.S.C. 512(c).

The main challenge for that argument is the text of 512(c), which protects “user-directed content” or “the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.”

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So after a long hiatus I’ve finally gotten back to reading The Wealth of Networks, and am nearing completion. I continue to find Benkler’s treatment of “spectrum commons” frustrating. Here’s how he describes the issue on page 403:

As chapter 3 explains, by the time that legislatures in the United States and around the world had begun to accede to the wisdom of the economists’ [arguments for spectrum property rights], it had been rendered obsolete by technology. In particular, it had been rendered obsolete by the fact that the declining cost of computation and the increasing sophistication of communications protocols among end-user devices in a network made possible new, sharing-based solutions to the problem of how to allow users to communicate without wires. Instead of having a regulation-determined exclusive right to transmit, which may or may not be subject, to market reallocation, it is possible to have a market in smart radio equi9pment owned by individuals. These devices have the technical ability to share capacity and cooperate in the creation of wireless carriage capacity. These radios can, for example, cooperate by relaying each other’s messages or temporarily “lending” their antennae to help neighbors to help them decipher messages of senders, without anyone having exclusive use of the spectrum.

This rather surprised me, since I didn’t remember chapter 3 explaining any such thing. Looking back, I found a brief discussion of the economics of spectrum commons that (as I’ll explain below the fold) falls far short of justifying the stark claim that the need for spectrum commons “had been rendered obsolete” by technological developments by the late 1990s.

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A national security letter recipient speaks out about the pernicious effect of the gag order that accompanies the letters:

Living under the gag order has been stressful and surreal. Under the threat of criminal prosecution, I must hide all aspects of my involvement in the case — including the mere fact that I received an NSL — from my colleagues, my family and my friends. When I meet with my attorneys I cannot tell my girlfriend where I am going or where I have been. I hide any papers related to the case in a place where she will not look. When clients and friends ask me whether I am the one challenging the constitutionality of the NSL statute, I have no choice but to look them in the eye and lie.

I resent being conscripted as a secret informer for the government and being made to mislead those who are close to me, especially because I have doubts about the legitimacy of the underlying investigation.

The inspector general’s report makes clear that NSL gag orders have had even more pernicious effects. Without the gag orders issued on recipients of the letters, it is doubtful that the FBI would have been able to abuse the NSL power the way that it did. Some recipients would have spoken out about perceived abuses, and the FBI’s actions would have been subject to some degree of public scrutiny. To be sure, not all recipients would have spoken out; the inspector general’s report suggests that large telecom companies have been all too willing to share sensitive data with the agency — in at least one case, a telecom company gave the FBI even more information than it asked for. But some recipients would have called attention to abuses, and some abuse would have been deterred.

Hat tip: Lippard

Ars has a typically exhaustive review of Windows Vista. The short version: Microsoft has now achieved technological parity with Mac OS X, circa 2001, by implementing features (vector-based graphics, high-level object-oriented APIs, separating UI design from code) that were first introduced by NEXTSTEP in 1989. Interestingly, even if NeXT had patented these technologies, it probably wouldn’t have mattered much because the relevant patents would be on the verge of expiring by now.

Here’s another quote from How Progressives Rewrote the Constitution, on page 18:

The classical liberal joins the libertarian in a full-throated condemnation of state power used to create or perpetuate economic monopolies and private cartels in what would otherwise be competitive industries. The touchstone of the analysis that follows, therefore, is this: state power that may be used to limit monopoly power should never be converted into a force that creates or perpetuates monopoly power.

My last post probably came across as snarky, but I’m quite serious. Several DMCA defenders (although perhaps not Epstein himself) have argued that the DMCA’s lock-in effects are an argument in favor of the DMCA, a position that seems to me to stand in stark contrast to the sensible position that Epstein articulates here: that state monopolies should always be regarded with great skepticism. If it’s economically beneficial to prohibit people from building iTunes-compatible music players, would it also be economically beneficial to ban the sale of after-market auto parts? If not, what’s the difference?

I suspect the answer, in at least Epstein’s case, is that he doesn’t understand that prohibiting circumvention of DRM is equivalent to giving the DRM vendor a monopoly on compatible devices. Indeed, he seems to believe that it’s possible to “make it illegal for anyone to take actions that disable encryption devices” while allowing “for reverse engineering key elements of programs solely to insure ‘interoperability’ of some independent program.” As I’ve argued before, that’s not how DRM works: Prohibiting circumvention amounts to granting a monopoly over compatible devices.

To be fair, the error originated not with Epstein but with the drafters of the DMCA, who also seemed to believe (or at least hoped the world would believe) you could draw a meaningful distinction between circumvention and interoperability. Still, special interest groups often advance legislation that purports to do one thing but actually does something entirely different. Indeed, this kind of rent-seeking is one of the central themes of Epstein’s own work in other areas of the law. So it’s frustrating that he so blithely accepts the the copyright lobby’s fatuous justifications in this case.

Richard Epstein on the DMCA?

by on March 23, 2007

Richard Epstein in How Progressives Re-wrote the Constitution, page 15:

[The classical liberal legal regime protects] the freedom to engage in market competition—to make offers to business with others. The private voluntary contracts that may result are postiive-sum games for the parties to them, and whatever harm ordinary contracts of sale and hire wreak on competitors (and it is a real harm, no doubt) is more than offset by the gains to the parties and to consumers. We are all systematically better off, therefore, in a regime in which all can enter and exit markets at will than in a social situation in which one person, armed with the monopoly power of government, can license or proscribe the actions of others.

I wonder how he would apply this analysis to the market for iTunes-compatible music players.