December 2009

The European Commission today announced the settlement of its antitrust case against Microsoft concerning the inclusion of Internet Explorer in its operating system. In the settlement, Microsoft has agreed to offer a “browser ballot” in its Windows 7 operating system, which Adam Marcus and I commented on in November.

It’s a relief to see that the European Commission is bringing to a close this chapter in the seemingly endless epic of its antitrust persecution of Microsoft. The Commission should have recognized that Internet Explorer’s rapidly falling market share made it unnecessary to meddle in software creation. Still, I suspect that it’s only a matter of time before the Commission hauls another Microsoft or some other innovative American tech titan into court on trumped-up charges.

Worse, such mandates could easily extend to require “ballots” for choosing one’s default search engine, media player, instant messaging client, email provider, and so on. That kind of bureaucratic interference with the delicate art of interface design will only serve to discourage Microsoft and its many competitors from including useful new features in their offerings, thus harming consumers.

Do This

by on December 16, 2009 · 12 comments

Watch this video. Then type “My choice for the winner” in the comments.

Pass it on.

The headline strikes fear: “House Takes Steps to Boost Cybersecurity,” says the Washington Post.

What boondoggle are they embarking on now?

Cybersecurity is hundreds of different problems that should be handled by thousands of different actors. The federal government is in no position to “fix” cybersecurity, as I testified in the House Science Committee earlier this year.

But this is a good news story. Realizing that its own cybersecurity practices are not up to snuff, the House of Representatives will be ramping up training for its staff.

Better awareness of the ins and outs of securing computers, data, and networks will disincline Congress to undertake a rash, sweeping “overhaul” of the systems and incentives that produce and advance cybersecurity.

A new study in the December 2009 Archives of Ophthalmology reports the beginnings of a new public health epidemic: a dramatic increase in nearsightedness (myopia).  The authors compared the prevalence of myopia in Americans aged 12-54  in 1971-72 and 1999-2004. Prevalence of myopia increased from 25 percent of the population in 1971-72 to 41.6 percent in 1999-2004 — a 66.4 percent increase!  Myopia increased for both blacks and whites (the only two racial categories investigated in the study) and for both men and women (the only two gender categories investigated in the study).

According to the article, genetics and environment both play a role in myopia. It cites several previous studies showing that people with more education are at greater risk, presumably because they’re more likely to spend a lot of time doing “up-close” work like reading and using computers. The authors note that although it’s easy to treat myopia with contact lenses or eyeglasses, the costs of having 25 percent of the population with myopia are about $2 billion per year. 

So stop reading this, get outside, and throw that football around! 

More seriously, I am counting the days until some advocate gloms onto this study to justify a tax on e-mails and social networking, the same way advocates have cited the costs of obesity, alcoholism, and smoking to justify higher taxes on “sins” like soda pop, alcohol, and cigarettes. (Yes, a soda pop tax was under discussion to fund this year’s health care bill!) In fairness to the study’s authors, I should note that they suggest no such thing.

Education is a risk factor for myopia, but I doubt anyone would propose a tax on education as a cure. Education, after all, is generally regarded as a good thing that generates significant private and social benefits. E-mails, Facebook, and Twitter, on the other hand, have a “fun” aspect that makes it much easier to classify them as sins in the same category as getting drunk, smoking, and sipping Coca-Cola. They may also be addictive; anybody heard the term “crackberry”?

There are, of course, some counter-arguments:

  • The biggest costs of myopia are borne privately; they are not “externalities” imposed on unwilling recipients. I always wear glasses because I simply hate having blurred vision. My daughter asked for eyeglasses because she couldn’t read the blackboard from the back of the classroom. Bumping into and tripping over things are also costs of myopia that are borne almost completely by the person who has myopia. Those are pretty strong incentives to get it corrected or change behavior to reduce the risk of becoming myopic. Therefore, an e-mail or social networking tax would not likely have a marginal effect on myopia.
  • Social costs of myopia can be corrected with targeted, less restrictive alternatives. My state driver’s license has a restriction saying I have to wear glasses or contacts to drive. This controls the aspect of my myopia that poses the biggest risk of harm to other people.
  • To the extent that treating myopia is costly, we can find ways to reduce the cost. For example, James C. Cooper’s research has found that online vendors and warehouse clubs sell contact lenses for 20 percent less than other brick-and-mortar sellers. State laws or regulations that prevent online sales, or prevent warehouse clubs from selling contacts, increase the cost of treating myopia substantially. 
  • A majority of the population does not have myopia! For them, an e-mail tax would merely siphon money from their electronic wallets or induce them to cut back e-mail use with no effect on the social ills the tax is supposed to cure.  These folks are like the responsible majority who drink rum, cola, or both in moderation and just keep paying the taxes.

That last analogy reminds me —  those counter-arguments might apply to a lot of existing sin taxes too!

At a public forum held today by the Federal Trade Commission on “Sizing Up Food Marketing and Childhood Obesity,” activists called on Congress to pass legislation that would heavily curtail food marketing to children, including:

  • Rep. Jim Moran’s (D-VA) “Healthy Kids Act” (H.R. 4053) would direct the FTC to conduct a rulemaking and decide what kinds of foods could be marketed to children, and FCC to ban or seriously restrict broad categories of food and beverage ads shown on children’s programming.
  • Sen. Tom Harkin (D-IA) wants to repeal limitations a heavily Democratic Congress imposed in the late 1970’s on the FTC’s unfairness rulemaking authority over children’s advertising after the agency ran amok.
  • Rep. Dennis Kucinich (D-OH) intends to introduce legislation to essentially tax so-called “fast food and junk food” marketed to children by eliminating the current tax deduction.

It’s easy to pick on advertising as the cause of all of society’s ills, but there’s no hard evidence that food advertising is to blame for childhood obesity or that restricting food ads on television or the Internet will solve the problem.  Howard Beales, now at George Washington University’s business school, wrote the definitive law review article on this topic back in 2004, when he was Director of the FTC’s Bureau of Competition: Advertising to Kids and the FTC: A Regulatory Retrospective that Advises the Present.  It is a true masterpiece.

Dan Jaffe of the Association of National Advertisers, brings his extraordinary expertise on this issue to bear in his comments (full comments in Word doc) to today’s workshop, which update and expand on the themes Howard discussed in his 2004 article. As Dan describes in rich detail, industry is already responding to demands by parents and other consumers with healthier foods and self-regulation.

So, rather than restricting the free speech of advertisers, and thus diluting First Amendment rights in general, the FTC should use its existing authority to punish truly unfair and deceptive claims.  Governments and schools should focus on educating kids and parents about eating healthier and exercising more.

I’ve ranted in past blog posts about the inconvenience of Ticketmaster’s paperless tickets and have even called them the highway to ticket hell (a nod to AC/DC’s paperless tickets use). I’m in a ranting mood again today, particularly when I was thinking about how they’d frustrate a Christmas gift to my parents for a play or show (my parents love attending concerts & theater).

Ticketmaster may call it innovation, but I call it frustration. You can resell your townhouse, Toyota, or textbooks online. But there’s one product, that thanks to new technology, can’t be bought and resold–“paperless tickets“.

That almost anything can be bought and resold is a benefit to consumers, particularly in tough economic times. But with paperless tickets, instead of getting a paper ticket (or an email that you print up at home) you have to present 1) the credit card used to purchase the tickets, and 2) a government-issued photo identification for admittance. Paperless tickets have been used throughout the recent Miley Cyrus tour this year. She performed at the Verizon Center last month in Washington, DC and a local news story reported on the hardship it created for many fans:

A photo ID is also required, meaning Talia Levin couldn’t just take her mom’s credit card to the concert. Her mom had to swipe her through. “If you are older, then you can go by yourself, so it’s hard to have to go with your parents,” stated Talia Levin. “I refuse to buy into any artist who does this ever again,” said Talia’s mom, Melanie Levin. “I won’t do it.”

So what if I wanted to go online to buy concert tickets for my parents as a Christmas Gift? Would I have to go down to the arena to get them in–down in Atlanta??  Continue reading →

Today I visited the Federal Communications Commission meeting room to attend a workshop on “Speech, Democratic Engagement, and the Open Internet.”  Honestly, I think I was stuck in the Twilight Zone, because from what the speakers at this ridiculously one-sided panel had to say: (1) the First Amendment means something entirely different than what the Constitution says; and (2) the whole Internet world is set to go to hell unless government intervenes and saves us a litany of corporate conspiracies to “silence” us.

Seriously, I thought the FCC was trying to make their broadband workshops and Net neutrality proceeding “balanced” and “evidence-based.” This one was neither.  One speaker after another regaled us with spooky stories and asked us to imagine how their particular group or service would be “blocked” or “silenced” unless Net neutrality regulations were put on the books.  But no evidence was offered supporting their scary tales.

By the time Michele Combs of the Christian Coalition got done breathlessly delivering her conspiratorial rant, for example, I half expected her to ask “What would Jesus do?” about Internet regulation.  She really laid it on thick, suggesting that ISPs were hell-bent (excuse the pun) on blocking Christian messaging across multiple platforms.  Yeah, cause it would be a brilliant business strategy to piss off tens of millions of Christians in this country. Sure, that makes a lot of sense.

Continue reading →

Three months ago, when the DC Circuit struck down the FCC’s “Cable Cap”—which prevented any one cable company from serving more than 30% of US households out of fear that he larger cable companies would use their “gatekeeper” power to restrict programming—the New York Times bemoaned the decision:

The problem with the cap is not that it is too onerous, but that it is not demanding enough.

Even with the cap — and satellite television — there is a disturbing lack of price competition. The cable companies have resisted letting customers choose, a la carte, the channels they actually watch….

[The FCC] needs to ensure that customers have an array of choices among cable providers, and that there is real competition on price and program offerings.

Perhaps the Times‘ editors should have consulted with the Lead Technology Writer of their excellent BITS blog.  Nick Bilton might have told him the truth: “Cable Freedom Is a Click Away.”  That’s the title of his excellent survey of devices and services (Hulu, Boxee, iTunes, Joost, YouTube, etc.) that allow users to get cable television programming without a cable subscription.

Nick explains that consumers can “cut the video cord” and still find much, if not all, their favorite cable programming—as well as the vast offerings of online video—without a hefty monthly subscription.  (Adam recently described how Clicker.com is essentially TV guide for the increasing cornucopia of Internet video.)  This makes the 1992 Cable Act’s requirement that the FCC impose a cable cap nothing more than the vestige of a bygone era of platform scarcity, predating not just the Internet, but also competing subscription services offered by satellite and telcos over fiber.  That’s precisely what we argued in PFF’s amicus brief to the DC Circuit a year ago, and largely why the court ultimately struck down the cap.

Bilton notes that “this isn’t as easy as just plugging a computer into a monitor, sitting back and watching a movie. There’s definitely a slight learning curve.”  But, as he describes, cutting the cord isn’t rocket science.  If getting used to using a wireless mouse is the thing that most keeps consumers “enslaved” to the cable “gatekeepers” the FCC frets so much about, what’s the big deal?  Does government really need to set aside the property and free speech rights of cable operators to run their own networks just because some people may not be as quick to dump cable as Bilton?  Is the lag time between early adopters and mainstream really such a problem that we would risk maintaining outdated systems of architectural censorship (Chris Yoo’s brilliant term) that give government control over speech in countless subtle and indirect ways? Continue reading →

PacmanACT represents the interests of software companies, but today we’ve released a new paper trumpeting the virtues of hardware.

We highlight how software developers and computer chip makers increasingly depend on one another for better products. This symbiotic hardware/software relationship is crucial for the sort of exponential innovation we’ve grown accustomed to in the IT industry. And it is something ACT recently highlighted in a letter to the FTC signed by 37 software developers.

The old days of understanding computer processors and its effect on software was easy. Chips increased in clock speed (first in MHz, then in GHz) and this made software run faster. This worked well for years, but then it became apparent that high clock speed processors often ran idle because other system components couldn’t keep up. These processors also ran very hot, consuming lots of power and creating heat problems.

Today’s chips take a different approach. Chips now have processors with multiple cores (or CPUs) to separately but simultaneously handle independent tasks. In a survey of ACT members that we conducted for the paper, 58% of the respondents identified multicore technology as the processor advancement that has most improved their software products. One member said “multicore makes programming harder, but when my apps leverage it, they can do more.”

But how do programmers know what to do so they can better leverage processor designs such as multicore? Every major chip manufacturer worth a grain of sand has established support programs and created tools for the developer community. Sun has its Sun Developer Network, Intel has a Software Partner Program (and just announced a new software development kit (SDK) for its mobile Atom processor), and AMD has the CodeAnalyst Performance Analyzer to analyze software performance and help developers optimize applications.

In some ways it seems like chip manufacturers are sucking up to software developers. Continue reading →

Auletta GoogledI just finished Ken Auletta’s latest book, Googled: The End of the World As We Know It, and I highly recommend it. Auletta is an amazingly gifted journalist and knows how put together a hell of good story.  It helps in this case that he was granted unprecedented access to the Google team and their day-to-day workings at the Googleplex. I’m really shocked by the level of access he was granted to important meetings and officials–over 150 interviews with Googlers, including 11 with CEO Eric Schmidt and several with founders Sergey Brin and Larry Page.  That’s impressive.

The book shares much in common with Randall Stross’s excellent Planet Google: One Company’s Audacious Plan to Organize Everything We Know, which I reviewed here earlier this year.  Both books recount the history of Google from its early origins to present. And both survey a great deal of ground in terms of the challenges that Google faces as it matures and the policy issues that are relevant to the company (privacy, free speech, copyright law, etc).

What makes Auletta’s book unique is the way we taps his extensive “old media” world contacts and integrates such a diverse cast of characters into the narrative — Mel Karmazin (former Viacom, now Sirius XM), Bob Iger (Disney), Howard Stringer (Sony), Martin Sorrrell (WPP), Irwin Gotlieb (Group M), and even the Internet’s “inventor”–Al Gore!   Auletta interviews them or recounts stories about their interactions with Google to show the growing tensions being created by this disruptive company and its highly disruptive technologies.  There are some terrifically entertaining anecdotes in the book, but the bottom line is clear: Google has made a lot of enemies in a very short time.

Indeed, the book is as much about the decline of old media as it is about Google’s ascendancy.  What Auletta has done so brilliantly here is to tell their stories together and ask how much old media’s recent woes can be blamed on Google and digital disintermediation in general. “If Google is destroying or weakening old business models,” Auletta argues, “it is because the Internet inevitably destroys old ways of doing things, spurs ‘creative destruction.’ This does not mean that Google is not ambitious to grow, and will not grow at the expense of others. But the rewards, and the pain, are unavoidable,” he concludes. Continue reading →