June 2007

The Fairness Market: Putting Money Where Your Free Speech Is

by on June 5, 2007 · 0 comments

Ever since the American Spectator reported a few weeks ago that the House leadership would “aggressively pursue” reinstatement of the FCC’s old Fairness Doctrine, there’s been lively speculation as to whether the regulation will really be brought back to life. Despite much discussion, Dem leaders have — pardon the pun — maintained complete radio silence.

So how to determine the likelihood of this actually happening? Through markets of course. Yesterday, the online “prediction market” InTrade.com opened a market on the question of whether the fairness doctrine would be brought back by the end of this year. Essentially the system works like a stock market, with investors buying and selling future contracts on the event, which will pay a set sum if the event occurs.

So far there haven’t been any contracts completed — the market is just one day old. But bids so far have ranged from 10 to 20 or so (translating into a 10-20 percent chance of regulation.

That seems high to me – I don’t think reinstatement is that likely for 2007 (2007 is another story). But I’m not sure I’m willing to bet on that.

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Spectrum Collusion?

by on June 5, 2007 · 0 comments

The Washington Post reports on an effort by Public Knowledge, Google, and others to change several parameters of the upcoming 700 MHz auction:

The groups called on the FCC to require that the winners of a chunk of the spectrum allow “open access” — sell access to competitors on a wholesale basis. The open access requirement would allow a nearly unlimited number of competitors to offer wireless broadband services, said Gigi Sohn, president of Public Knowledge.

The groups also want the FCC to conduct anonymous auctions — where bidders wouldn’t know whom they’re bidding against. In the past, large wireless carriers have used transparent auctions to drive up prices on chunks of spectrum being bid on by small competitors, said Gregory Rose, an econometrician and game theorist working with open access proponents. In many cases, many larger carriers then dropped their bids after the smaller carriers were eliminated, he said.

Some carriers have also engaged in retaliatory bidding against other companies that bid on spectrum they were interested in, he said. The retaliating bidder will bid on spectrum the second company is interested in, “as a signal to say, ‘back off on the license I want, or I will drive the price of the license you want through the roof,'” Rose said.

As I wrote last week, I’m skeptical about the FCC telling the auction winners what to do with the spectrum once they’ve purchased it. But requiring that the bids be anonymous strikes me as a sensible idea. As I understand it (and I haven’t looked into the relevant research in any detail), in a less-than-liquid market like this, the details of the auction rules matter quite a bit. We should all be able to support the idea that the auction rules should be carefully designed to minimize the potential for collusive behavior by bidders.

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Software Patent of the Moment: Map Search Engine

by on June 5, 2007 · 0 comments

I’ve gotten too busy to do my weekly software patent series, but if I were still doing it, this would be a great installment. Mike Masnick says this is the patent in question:

A database search system that retrieves multimedia information in a flexible, user friendly system. The search system uses a multimedia database consisting of text, picture, audio and animated data. That database is searched through multiple graphical and textual entry paths. Those entry paths include an idea search, a title finder search, a topic tree search, a picture explorer search, a history timeline search, a world atlas search, a researcher’s assistant search, and a feature articles search.

A search engine that lets you search using multiple types of media and multiple criteria? It’s no wonder Britannica is legendary for its innovative products.

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Free Software and Offshoring

by on June 5, 2007 · 10 comments

Here’s one other section of Braden’s post that I found problematic:

You don’t have to be a Nobel prize-winning economist to understand that an emphasis on building an ICT sector around inexpensive labor will drive wages down. In a global economy, a worker in a lesser developed country could live on just dollars a day. A race to the bottom is the kind of race the EU will wish it hadn’t entered, let alone run.

The FLOSS study authors say that developers will be so inexpensive that even small and medium-sized companies will hire them to work in-house, which they say will help local employment. However, in a globalized race to the bottom, it’s not a stretch to say that the EU would lose to even cheaper programmers in China, India and the former Soviet bloc. In the U.S., for example, the cost savings of IT offshoring in 2004 reached $7.0 billion, according to a study by ITAA — a 36.2% savings rate…

By increasing demand for FLOSS through preferences and mandates, the EU will find that in a “Flat World”, lower cost developers from other countries would rush to fill that demand. The result is more likely to be an increase in offshoring to China and India—not job creation in the EU.

I think it’s debatable if free software will drive down programming wages, or if most of those jobs can be outsourced to China in either event. But let’s assume he’s right about both of those things. When he writes that this would be “a race to the bottom is the kind of race the EU will wish it hadn’t entered, let alone run,” he seems to be suggesting that such a “race to the bottom” would be a bad thing. It seems to me that this is at odds with the principles of basic economics.

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Internet Safety Month, Part 5: Search Engine Filters and Portals for Kids

by on June 5, 2007 · 14 comments

In this fifth installment of my series to coincide with “National Internet Safety Month” (Here are parts 1, 2, 3 and 4), I will be outlining search engine filters and kid-friendly web portals.

Safe Search Tools
Parents can use tools embedded in search engines to block a great deal of potentially objectionable content that children might inadvertently stumble upon during searches. For example, Google offers a SafeSearch feature that allows users to filter unwanted content. Users can customize their SafeSearch settings by clicking on the “Preferences” link to the right of the search box on the Google.com home page. Users can choose “moderate filtering,” which “excludes most explicit images from Google Image Search results but doesn’t filter ordinary web search results,” or “strict filtering,” which applies the SafeSearch filtering controls to all search engine results.

Similarly, Yahoo! also has a SafeSearch tool that can be found under the “Preferences” link on the “My Web” tab. Like Google, Yahoo! allows strict or moderate filtering. Microsoft’s Live Search works largely the same way. Other search engine providers such as AltaVista, AskJeeves, HotBot, Lycos, and AllTheWeb, also provide filtering tools. Working in conjunction with other filters, these search engine tools are quite effective in blocking a significant amount of potentially objectionable content.

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Free Software as Professional Development

by on June 5, 2007 · 16 comments

I thought Braden made some good points in his post yesterday about free software in Europe, but I thought this argument was a bit wide of the mark:

OTJ training has always been a great way to learn programming skills. But is working on FLOSS projects the only way to learn how to code? Buried in a footnote (#48), the report says that “perhaps” OTJ training works for proprietary software too. However, it is a different kind of experience, according to the authors. They say FLOSSers can start in their teens and can learn at home, whereas developers of proprietary software have to learn on the job or start their own firms.

Does FLOSS actually promise new and better ways to learn how to write software? Not really. Aspiring developers have always been able to learn programming skills pre-employment and on their own time. And there’s always been a network of online resources and training material for developers of proprietary software (think: Novell and Microsoft developer certifications).

It’s obviously possible to pick up some programming skills using online resources and proprietary developer certifications, but there are some important differences that make free software decisively better when it comes to developing job skills. In general, practice is more useful the closer it is to the real thing. When you contribute to an open source project, you’re making real changes to real code that are being used by real people. You learn about software development in its full complexity and nuance. There’s just no way that an MSDN training manual can compete with that, no matter how well-written it might be.

Secondly, your contributions to a free software project can often lead directly to paid opportunities helping clients to integrate the software you’re working on into their environment and customize it for their needs. I rather doubt anyone is able to get consulting work based on the example programs they write on their MSDN certification test.

Finally, your contributions to a free software project can allow you to stand out in a way that an MSDN certification cannot. By necessity, a certification program focuses on whether you’ve learned a fairly fixed set of skills. You can demonstrate basic competence through an MSDN certification, but it’s difficult to stand out from the pack. In contrast, when you contribute to free software, it provides a much more nuanced basis on which to evaluate your performance. The MSDN certification shows you studied for a test. The free software contribution shows you can actually produce working code. I have trouble imagining a competent IT manager being more impressed by an MSDN certification than a significant contribution to a free software project.

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Ever Hear of Killer of Sheep?

by on June 4, 2007 · 0 comments

I hadn’t. According to the Washington Post‘s Ann Hornaday (via DCist), it was an instant landmark in American cinema when made by filmmaker Charles Burnett’s as his master’s thesis at UCLA in the 1970s. It was never released because the soundtrack had too many classic songs in it, making widespread screening too expensive.

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2nd Circuit rules in FCC indecency case

by on June 4, 2007 · 2 comments

gavelThe Second Circuit Court of Appeals handed down an important 53-page decision today in the case of Fox Television Stations v. Federal Communications Commission. This was the indecency case involving the FCC’s new policy for “fleeting expletives.” [The “Janet Jackson case” is taking place in the 3rd Circuit Court of Appeals and oral arguments will be held in September.]

In a 2-1 decision, the Second Circuit ruled that “the FCC’s new policy sanctioning “fleeting expletives” is arbitrary and capricious under the Administrative Procedure Act for failing to articulate a reasoned basis for its change in policy.” As a result, the FCC’s order is vacated and remanded to the agency. Specifically, the Court held:

We find that the FCC’s new policy regarding “fleeting expletives” represents a significant departure from positions previously taken by the agency and relied on by the broadcast industry. We further find that the FCC has failed to articulate a reasoned basis for this change in policy. Accordingly, we hold that the FCC’s new policy regarding “fleeting expletives” is arbitrary and capricious under the Administrative Procedure Act.

The decision goes on to demonstrate how, over just the last few years, the FCC has arbitrarily thrown out 30+ years worth of precedent on this front in order to greatly expand the scope of its regulatory authority over speech on broadcast TV and radio.

While the decision was reached solely on the procedural issues at hand, the Court had some very important things to say about the First Amendment-related concerns that were raised by the networks and the other groups and individuals who filed in the case. I filed a joint amicus brief in the case along with John Morris and Sophia Cope of the Center for Democracy & Technology. And, as I explain below, I was happy to see that many of our concerns were taken seriously by the court when discussing the free speech implications of this case.

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Wu Responds on Wireless Carterfone

by on June 4, 2007 · 0 comments

You should be sure to check out Tim Wu’s smart comments on my Wireless Carterfone article.

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Open Source Software Developers: Cheaper by the Dozen?

by on June 4, 2007 · 6 comments

Are FLOSS developers the future promise of a competitive ICT sector in the EU because they are…cheaper?

That’s the main point of Section 7.4 of the EC’s FLOSS report (Skills Development and Employment Generation), which argues that not only are FLOSSers faster and better than programmers using commercial software, they’re cheaper, too.

This analysis here is another in a series of blog posts on the EC FLOSS report. Previously, I’ve discussed how the report is a call to action for Europe’s policymakers, that FLOSS’s popularity is growing, and that many FLOSS developers live in the EU. The report’s authors claimed that FLOSSers work faster (ie. are more productive),  but as I discussed in FLOSS: The Software Hare that Beats the Proprietary Turtle?, the data didn’t really support that claim. In my last post I concluded that there was only a weak correlation that firms that contribute to FLOSS derive more revenue, on average, than non-contributing companies, and even if there were, the study was devoid of any cause/effect analysis.

By analyzing the EC FLOSS study, I’m not trying to beat up on FLOSS. Overall, the almost 300 page report is more interesting than it appears at first glance, and is actually a good case study on how / how not to devise a study to prove a public policy point. Instead, what really interested me was that the EC sponsored a study advocating for old fashioned industrial policy of preferences and antitrust actions aimed at promoting FLOSS over proprietary software.

Markets aren’t perfect, but government manipulations of supply and demand to achieve a particular result are notorious for very low payback. Moreover, the ICT industry has been a remarkable success in its own right and has driven productivity improvements in nearly every
sector, without the guiding hand of industrial policy like that being called for in the FLOSS study.

Getting back to the meat of this post, the study states that FLOSS developers should be less expensive because just about any teenager can become a FLOSS programmer through informal apprenticeships and learning on their own.

Here’s the logic: increase the supply of workers while holding demand constant, and wages will fall. This is simple economics, but what are the more intricate effects of FLOSS employment generation when it is married to a pro-FLOSS EU industrial policy? Would a FLOSS-driven ICT industry help the EU pursue its Lisbon strategy to increase jobs and growth?

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