July 2009

Goog MS logosI don’t get it. Technology journalist Robert X. Cringely, whose work I typically greatly admire, had a confusing editorial in the New York Times yesterday entitled “Chrome vs. Bing vs. You and Me” in which he makes what appear to me to be contradictory statements about the impact of the Google-Microsoft wars. Commenting on Google’s recent move into the OS world and Microsoft’s launch of Bing, its new and improved search platform, Cringely argues:

This is all heady stuff and good for lots of press, but in the end none of this is likely to make a real difference for either company or, indeed, for consumers. It’s just noise — a form of mutually assured destruction intended to keep each company in check.

That statement itself is hopelessly contradictory. If two companies are engaged in such a heated war “to keep each [other] in check,” isn’t that by definition something that could make a difference for consumers? Indeed, what Cringely goes on to say seems to confirm that in my mind:

So why does Google even bother? To keep Microsoft on its toes. […]

So Google Chrome and Chrome OS and Android are all intended to keep Microsoft on the defensive and less likely to push its own Big Red Button. This makes even more sense given the recent advent of Microsoft’s Bing search technology, which performs precisely the same competitive control function against Google. Bing hasn’t a hope of toppling Google as the premier search engine and Microsoft knows it. To date, Bing’s success has actually been at the expense of Google’s competitors, not Google itself. But thanks to Microsoft’s deep pockets and fierce screwball reputation, Bing has already accomplished its main purpose: reminding Google executives who they’re messing with.

Hey, what’s wrong with all of this?!  Of course, it may be true, as Cringely argues, that, “Some company with a new idea and no legacy products to defend will eventually arise to clean Microsoft’s clock. Or maybe Microsoft’s market will simply disappear as PC’s are subsumed into cars and mobile phones, possibly leaving Windows behind in the process.” But what’s wrong with Google putting the pressure on in the meantime? And why shouldn’t we love the sound of Microsoft putting more pressure on Google with Bing? I’ve been using Bing a lot lately (I’ve made it my new Firefox search default, in fact) and have been very impressed. Even if it doesn’t win back market share lost to Google in recent years, it really does keep Google on its toes and innovating.  And that’s a great thing.

Moreover, what would Cringely prefer? For both companies to just cede traditional territory to the other and roll over and play dead? I’m not sure how that would benefit anyone.

His confusing editorial ends with still more contradiction, arguing that, until some other independent innovators arise to truly topple Microsoft and Google, “these [two] companies will posture, spend a little money on research and development, and keep each other in check, while reporters and publications pretend that it matters.”  Again, Robert, it does matter. The money spent on R&D (which is not “a little” amount, I might add) and the pressure they place on each other by encroaching on each other’s core competencies, is important to the market, consumers, and future innovation. Cringely should be praising these developments, not complaining about them.

We often talk about the problem of having all 50 states impose different regulatory requirements on the Internet, with the most restrictive standard effectively applying to all Internet actors.Fortunately, in the U.S. such efforts can be stamped down either by invoking the “Dormant Commerce Clause” (DCC) in court or by passing “preemptive federal regulation.”  (Unfortunately, most who complain about patchwork approaches, both in industry and the advocacy community, usually forget about the DCC and move right to federal legislation.)

But what about the 195 independent countries in the world (to say nothing of their regional/local subdivisions)? What if they each tried regulating Internet activity? Our friends at the Center for Democracy at Technology report on a scary precedent set by a Belgian court in March when it ruled that Belgian law applied to Yahoo! merely because Belgian citizens could access Yahoo! Mail. Thus, the court ruled that Yahoo! violated Belgian law when the company refused to hand over user data in response to an email from a Belgian prosecutor. CDT rightly applauds Yahoo! for insisting that the Belgians “follow established diplomatic and legal processes in order to gain access to user information.” But as the post notes, the really scary prospect is that of one country asserting authority over every site or service on the Internet that can be accessed in their country.

If this precedent stands, it’s likely to cause, at the very least, many companies to limit access to their sites or services by persons from countries with burdensome regulatory approaches. Even if those foreign laws are well-intentioned and laudable—such as efforts to punish fraud (as in the Belgian case) or to crack down on, say, child porn or protect user privacy)—the result could be to balkanize Internet services.  This would be especially unfortunate, given the incredible importance of services that might previously have seemed “un-serious” like Twitter or Facebook as “technologies of freedom.” CDT notes the danger to Internet freedom:

To understand how problematic this ruling is, we need only imagine how the governments of China, Iran, Vietnam or other repressive regime of your choice may decide that the precedent set here is one well worth following. Such actions undermine Belgium’s moral authority since, after all, it would only be hypocritical for Western democracies to criticize such radically overbroad assertions of jurisdiction by other nations.

At George Mason University a while back, I was treated to a preview of some economic research; this time, a paper studying whether or not consumers read the fine print. “Does Anyone Read the Fine Print? A Test of the Informed Minority Hypothesis Using Clickstream Data.”  Authored by Yannis Bakos, Florencia Marotta-Wurgler, and David Trossen. The conclusion: in online software sales, no one does. Barely anyone. Less than one percent.

Well, of course not. Continue reading →

Mill On LibertyJohn Stuart Mill’s On Liberty turns 150 this year. Published in 1859, this slender manifesto for human liberty went on to become a classic of modern philosophy and political science.  It remains a beautiful articulation of the core principles of human liberty and a just society.

Anyone familiar with the book recognizes the importance of the opening chapter and Mill’s “one very simple principle” for “the dealings of society with the individual in the way of compulsion and control, whether the means used be physical force in the form of legal penalties, or the moral coercion of public opinion”:

That principle is, that the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinions of others, to do so would be wise, or even right. These are good reasons for remonstrating with him, or reasoning with him, or persuading him, or entreating him, but not for compelling him, or visiting him with any evil in case he do otherwise. To justify that, the conduct from which it is desired to deter him, must be calculated to produce evil to some one else. The only part of the conduct of any one, for which he is amenable to society, is that which concerns others. In the part which merely concerns himself, his independence is, of right, absolute. Over himself, over his own body and mind, the individual is sovereign.

Mill went on to outline “the appropriate region of human liberty,” and divided it into:

  1. liberty of conscience, in the most comprehensive sense; liberty of thought and feeling; absolute freedom of opinion and sentiment on all subjects, practical or speculative, scientific, moral, or theological. The liberty of expressing and publishing opinions may seem to fall under a different principle, since it belongs to that part of the conduct of an individual which concerns other people; but, being almost of as much importance as the liberty of thought itself, and resting in great part on the same reasons, is practically inseparable from it.”
  2. liberty of tastes and pursuits; of framing the plan of our life to suit our own character; of doing as we like, subject to such consequences as may follow: without impediment from our fellow-creatures, so long as what we do does not harm them, even though they should think our conduct foolish, perverse, or wrong”
  3. freedom to unite, for any purpose not involving harm to others”

Bringing it altogether, he argued:

The only freedom which deserves the name, is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it. Each is the proper guardian of his own health, whether bodily, or mental and spiritual. Mankind are greater gainers by suffering each other to live as seems good to themselves, than by compelling each to live as seems good to the rest.

To this day, I do not believe there has been a more eloquent or concise summation of the central principles of libertarianism than those passages from Chapter 1 of the book. But what many fail to remember or appreciate is the equally powerful second chapter of Mill’s treatise, “On the Liberty of Thought and Discussion.” It was a bold defense of freedom of speech and expression that was many decades ahead of its time. And it still has lessons and warnings worth heeding in our modern Information Age.

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“Liberty upsets patterns.” That was one of the many lessons that the late Harvard philosopher Robert Nozick taught us in his 1974 masterpiece “Anarchy, State, and Utopia.” What Nozick meant was that there is a fundamental tension between liberty and egalitarianism such that when people are left to their own devices, some forms of inequality would be inevitable and persistent throughout society. (Correspondingly, any attempt to force patterns, or outcomes, upon society requires a surrender of liberty.)

No duh, right? Most people understand this today–even if some of them are all too happy to hand their rights over to the government in exchange for momentary security or some other promise.  In the world of media policy, however, many people still labor under the illusion that liberty and patterned equality are somehow reconcilable. That is, some media policy utopians and Internet pollyannas would like us to believe that if you give every man, woman, and child a platform on which to speak, everyone will be equally heard.  Moreover, in pursuit of that goal, some of them argue government should act to “upset patterns” and push to achieve more “balanced” media outcomes. That is the philosophy that has guided the “media access” movement for decades and it what fuels the “media reformista” movement that is led by groups like the (inappropriately named) Free Press, which was founded by neo-Marxist media theorist Robert McChesney.

Alas, perfect media equality remains an illusive pipe dream. As I have pointed out here before, there has never been anything close to “equal outcomes” when it comes to the distribution or relative success of books, magazines, music, movies, book sales, theater tickets, etc.  A small handful of titles have always dominated, usually according to a classic “power law” or “80-20” distribution, with roughly 20% of the titles getting 80% of the traffic / revenue.  And this trend is increasing, not decreasing, for newer and more “democratic” online media.

For example, recent research has revealed that “the top 10% of prolific Twitter users accounted for over 90% of tweets” and  “the top 15% of the most prolific [Wkipedia] editors account for 90% of Wikipedia’s edits.” As Clay Shirky taught us back in 2003 in this classic essay, the same has long held true for blogging, where outcomes are radically inegalitarian, with a tiny number of blogs getting the overwhelming volume of blogosphere attention.  The reason, Shirky pointed out, is that:

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Yesterday this list of 11 undocumented features of Google Chrome OS was posted on Woot!. It’s too funny not to share:

  1. Your family photos are accompanied by text ads for skin care and diet plans.
  2. Removes all Falun Gong references from your files.
  3. Every month, the hard drive is automatically defragged and investigated for anti-trust violations.
  4. Invests in, develops, acquires, and abandons your best ideas.
  5. Integrated tax preparation software includes “I’m Feeling Lucky” deductible button.
  6. Changes your icons daily, forcing you to look up which obscure scientific figure is having a birthday.
  7. Spends 20% of its time not doing what you tell it to do.
  8. Prevents all evil activity unless it is deemed to be for the good of the shareholders.
  9. Masseuse comes by every Monday afternoon.
  10. Constant crashes won’t bother anybody as long as it’s labeled “Beta”.
  11. “Beta” status won’t expire until 2038.

But seriously, we love Google (so please don’t lower our PageRank for my having posted that).

The Recovery Accountability and Transparency Board has finally made the first big move toward building Recovery.gov. According to Federal Times:

GSA announced last night that it has awarded a contract for the Recovery.gov redesign; the $18 million contract went to Smartronix, a Maryland-based IT firm. It beat out 58 other bidders.

The first part of the contract is worth about $9.5 million through January; other options, which extend through January 2014, are worth another $8.5 million or so.

Does anyone have a link to the actual contract? I’d like to know what we’re getting for $9.5 million. The core functionality of USASpending.gov, which is supposed to track all federal spending, was acquired for less than $1 million. In a recent Mercatus briefing paper I took a look at the spending transparency sites of 10 states and the most expensive one cost $300,000. So what is this $9.5 million website going to have on it? Is Smartronix also building out the central reporting database at FederalReporting.gov?

Quick drum bang: Make the raw spending data available and you will see corporations, non-profits, newspapers, and opengov nerds put up dozens of Recovery.govs with more features than the RAT Board can conceive or afford.

UPDATE: Crack reporter Aliya Sternstein at Nextgov has been doing a fantastic job covering the Recovery.gov story and she reports today that the RAT Board promises to make all the raw data available. Also in her piece, FederalReporting.gov has its own contractor, CGI Federal. So, that can’t account for the $9.5 million price tag. Still looking for the contract.

UPDATE 2: Folks have been saying that Smartronix beat out 58 other bidders for the contract. That is not correct. If you read the GSA release carefully, they say “59 companies were eligible to compete for the award.” There were reports last week that there were only two bidders. Today Jason Miller said on the radio that he could only confirm 3 bidders, including Smartronix.

In an earlier post, I mentioned an important new online child safety task force report that has just been released from the “Point Smart. Click Safe.” Blue Ribbon Working Group. It’s a great report and I encourage you to read the whole thing. It was my great pleasure to serve on this task force, and as we started finalizing our conclusions and recommendations, I started thinking about how much of what we were finding and recommending was consistent with what past online safety task forces had also concluded.

By way of background, over the past decade, five major online safety task forces or blue ribbon commissions have been convened to study online safety issues. Two of these task forces were convened in the United States and issued reports in 2000 (“COPA Commission”) and 2002 (“Thornburgh Commission“). Another was commissioned by the British government in 2007 and issued in a major report in March 2008 (“Byron Review“). Finally, two additional online safety task forces were formed in the U.S. in 2008 and concluded their work, respectively, in January (“Internet Safety Technical Task Force“) and July (“Point Smart. Click Safe.“) of 2009. [And yet another task force — the Online Safety Technology Working Group — was recently formed and has now gotten underway.]

In a new PFF white paper, “Five Online Safety Task Forces Agree: Education, Empowerment & Self-Regulation Are the Answer,” I walk through a chronological summary of each of these past task forces [click on covers of each report below to read them in their entirety] and highlight some of the similar themes and recommendations from them.

COPA Commission cover Thornburgh Commission cover Byron Commission report cover

ISTTF cover Point Smart Click Safe report cover
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Wired Magazine editor Chris Anderson has an important new book out, “Free: The Future of a Radical Price.” He focuses on the economics of free services, building on the excellent analysis of thinkers like Mike Masnick (whose 2007 essay, “The Grand Unified Theory on The Economics of Free,” succinctly sums up the concept).free-chris-anderson

Following up on his book, Anderson has a new op-ed up on CNN.com in which he explores how the emergence of free services in the digital age has raised new challenges for antitrust regulators:

Now Google has Microsoft-like dominance in search and search advertising. What should it not be allowed to do? That question may come to define this era of antitrust law. When [Christine] Varney was confirmed, she withdrew the Bush administration’s report setting relatively conservative standards of antitrust enforcement and declared, “The Antitrust Division will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers…

Varney and her team of economists and lawyers are no doubt tangling with the question of how to enforce antitrust laws in a way that ensures an “even” playing field for competition without causing consumers to lose access to free services that are growing more abundant by the day.

But there’s a more important question that Varney should be asking: what actually constitutes market dominance in the age of free? Is the fact that a firm has a substantial share of a distinct marketplace a reliable indicator of dominance? And if the result of firms achieving high market share is an explosion of free goods and services, is it even in consumers’ interests for government to go after “dominant” firms?

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Over the July 4th weekend, websites in the United States and South Korea were under heavy assault.  As the New York Times reported:

The Treasury Department, Secret Service, Federal Trade Commission and Transportation Department Web sites were all down at varying points over the holiday weekend and into this week, The A.P. reported, citing officials inside and outside the American government.

The Washington Post, which was also attacked over the weekend, reported that 26 government and commercial sites were targeted in attacks that the National Intelligence Service are calling “elaborately prepared and executed at the level of a group or a state.” Officially, no one is pointing their finger at North Korea, but the targets of the attacks and other recent provocations from the North make it a very likely suspect.

But what’s truly scary isn’t who is attacking US computers, but how. The only real cost of an attack such as this one is writing an effective bit of malware that can spread itself around, compromise tens of thousands of machines, and allow an attacker to call on this army of unwilling silicon conscripts whenever it wishes.  When viewed from the hundred-billion-dollar heights of nation-state budgets, this cost is essentially zero.

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