Articles by Adam Thierer 
Senior Fellow in Technology & Innovation at the R Street Institute in Washington, DC. Formerly a senior research fellow at the Mercatus Center at George Mason University, President of the Progress & Freedom Foundation, Director of Telecommunications Studies at the Cato Institute, and a Fellow in Economic Policy at the Heritage Foundation.
Last week I wrote about how excited I was to learn that Microsoft would soon be announcing an eagerly awaited movie / video downloading service for its XBOX 360 gaming console. And now we have the details of their new business model. And, in my opinion, it looks like a winner for MS, content developers and consumers alike.
Beginning on November 22nd–the second anniversery of the XBOX 360 launch–XBOX users will be able to use their “Microsoft Points,” which can be earned or purchased on the XBOX Marketplace, to download movies and TV shows from affiliated partners. The first round of deals MS cut were with CBS, MTV Networks, Paramount Pictures, Turner Broadcasting System Inc., Ultimate Fighting Championship (UFC), and Warner Bros. Home Entertainment.
More deals are sure to follow, but that’s quite a bit of content already. I look forward to downloading Comedy Central and VH1 shows in particular, in addition to all the movies they’ll be offering. And my kids will love all the Nickelodeon and Nicktoons stuff that is on there. (A list of all the content companies involved in the deal can be found here).
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Here’s what I’ve been waiting for since the day I bought my Microsoft XBOX 360. If these rumors are true, Microsoft could soon be making downloadable high-definition movies available via its XBOX Live / XBOX Marketplace service. You’ll need a pretty fast Internet connection, of course, but luckily I do via Verizon’s outstanding FIOS (fiber) service. I currently download all sorts of HD movie trailers and game demos via the XBOX Marketplace and they look great and work perfectly. I can just leave my XBOX running overnight and order up a bunch of content and it’s all sitting there when I wake up in the morning. Or I can just download that content while I’m playing games and the system notifies me once the clips and demos have finished downloading.
So, it’s only natural that Microsoft would want to take the next step and allow users to download entire movies at some point. This would be a welcome alternative to the somewhat cumbersome MovieLink and CinemaNow systems that I’ve looked into. They don’t have much HD material on their services.
Microsoft will also be willing to work with the studios to ensure secure delivery and proper compensation, so I don’t see any copyright concerns here. Importantly, however, the XBOX 360 does not have HDMI or DVI digital outputs, only analog component video connections. Consequently, some users are still concerned that studios might down-res HD video content in the future via the “image contraint token” copy protection scheme. So far the studios have not felt the need to do that, however. But they might in the future if illegal redistribution of copyrighted content becomes a bigger concern. Right now, it’s just too hard to pirates to move big high-def files around on current generation networks, so it’s not a big deal yet. Read this IGN.com story for more details.
Regardless, I hope Microsoft makes this happen, and soon. I have already pre-ordered Microsoft’s upcoming HD-DVD sidecar ($199) from Amazon and it is due to be delivered in a few weeks. It will play next-generation movies of the HD-DVD format, but that still doesn’t give me a Blu-Ray solution. So, I’m hoping that I’ll be able to download all my HD movies via my XBOX Live connection in the future instead of having to purchase a Blu-Ray player.
Now it looks like I’ll next need to go buy that rumored 100GB hard drive for the XBOX if MS makes it! That 20-gig drive I’ve got now won’t be able to hold too many HD movie downloads.
In recent blogs, I’ve been documented the troubling reports of government losing laptops and compromising private information. And as I mentioned in another report, Rep. Tom Davis (R-VA), the Chairman of the committee, has introduced H.R. 6163, the “Federal Agency Data Breach Protection Act” to try to get this problem under control, although the legislation would really do nothing of the sort.
Sadly, there’s more news to report on this front.
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We’ve spent a lot of time here on the TLF discussing our reservations about age verification and data retention mandates. We object on many grounds, but privacy and data security concerns are typically at the top of our list.
Government officials or others supporting mandatory data collection / retention always assure us that our personal information will be secure and that it will not fall into the wrong hands. And then something like this happens in Utah and reminds us why we were right to be concerned:
In a jaw-dropping embarrassment, the state of Utah has mistakenly divulged e-mail addresses of kids on its so-called child-protection do-not-e-mail list–a registry proponents claim is foolproof. The gaffe stems from four citations the state issued recently against companies it alleges sent e-mail to children’s addresses on its do-not-e-mail registry promoting alcohol, gambling and pornography.
According to court papers, when Justin Weiss, director of legislative affairs for the E-mail Sender and Provider Coalition, requested copies of the citations from Utah, the state complied but failed to redact the e-mail addresses of the children in the complaints. “I have no personal knowledge of how many other unredacted copies may have been sent out to other individuals that made information requests like mine,” said Weiss in an affidavit.
State officials are reportedly mortified over the incident. “A fair amount of trust has been placed with us and this is not a good thing,” Utah’s Department of Commerce Director Francis Giani reportedly told the Salt Lake Tribune. “I’m sick about it.”
As you should be. But I also hope others heed the lesson here: Despite government assurances to the contrary, government-collected personal information is never perfectly secure. That’s why we must always be vigilant about limiting how much personal information our government can get its hands on. Read Jim Harper’s fine new book,
Identity Crisis: How Identification is Overused and Misunderstood, to learn more about these dangers.
New York Times media business reporter Richard Siklos penned an excellent column yesterday entitled “In a Blurry World, Ownership Is Yesterday’s News.” “It is hard to find any public policy question that feels less relevant by the minute than whether one person or company should be permitted to own television stations and newspapers in the same market,” he argued.
That’s because, as I pointed out in my book on media ownership last year,
Media Myths: Making the Debate over Media Ownership, there has been an explosion of media competition and diversity that makes this entire debate seem somewhat silly and even bizarre at times. Critics want us to believe that a handful of puppet-masters in New York or Hollywood are pulling all the strings and force-feeding us propaganda. It’s all a bunch of hooey. And even the traditional media sectors where some of the media “barons” have more control of ownership, it really doesn’t amount to a hill of beans. As Siklos points out:
“[W]hat does it say about the appeal of cross-ownership that The [New York] Post has lost money since the News Corporation’s chairman, Rupert Murdoch, acquired it for the second time, in 1993, and that Mr. Murdoch, whose roots are in ink and paper, has otherwise quit the newspaper business in the United States in favor of television, cable channels and the Internet?”
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Washington Post technology columnist Mike Musgrove reminds us in his column today that the video game industry’s voluntary ratings system–the Entertainment Software Rating Board (ESRB)–continues to come under fire in Washington and in the states. Musgrove notes that:
“Earlier this year, Sen. Sam Brownback (R-Kan.) was one of several lawmakers who introduced bills that would take the video game rating system away from the ESRB, but those bills never made it out of committee. Last week, at a summit on video games, youth and public policy, Rep. Betty McCollum (D-Minn.) trashed the game industry’s ratings system and called for a new, independent system. Brownback and McCollum agree that the current system–because it’s run by the game industry–can’t be trusted.”
This is nothing new, of course. I have written extensively about the politics of video game regulation and discussed how the video game ratings system has been criticized for a number of supposed shortcomings. Most recently, I wrote about Sen. Hillary Clinton (D-NY) and Sen. Joe Lieberman’s (D-CT) “Family Entertainment Protection Act” (FEPA, S. 2126), which would create a federal enforcement regime for video games sales and require ongoing regulatory scrutiny of industry ratings and practices. (Note: There was also a House version of the bill).
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Several installments of my “media deconsolidation” series have dealt with problems at AOL-Time Warner (see parts 8, 12 and 14). That’s because when this marriage was struck back in 2000, media critics where in full-blown Chicken Little mode over the deal. Critics claimed the AOL-Time Warner deal represented “Big Brother,” “the end of the independent press,” and a harbinger of a “new totalitarianism.”
What a joke. It’s just another sign how irrational people get about media ownership issues. Reality is rarely so exciting. In fact, as the latest news on the AOL-Time Warner front proves, reality bites for many traditional media operators. Like so many other companies who are struggling to adjust to our modern world of media abundance, user-generated content and digital everything, AOL-Time Warner is struggling to make “synergy” work.
Unfortunately, synergy isn’t working out so well for them. The company had lost a staggering $99 billion in market cap by January of 2003 and shortly thereafter Time Warner decided to dump AOL from their corporate name altogether. This summer, Time Warner President Jeff Bewkes went so far as to declare the death of synergy, famously calling it “bullshit.” And this week Jonathan Miller, chief executive of AOL, admitted to the U.K.’s Sunday Telegraph that the Time Warner board is indeed mulling over a break-up of the company. When asked by the Telegraph about the possibility of an AOL-Time Warner divorce, Miller said that “It’s possible, going forward. It’s not a discussion that Time Warner has a problem with understanding or engaging in. Until we were on this present course, it wasn’t even the right discussion. Now it becomes more interesting.”
It’s only a matter of time before it’s finalized. I wonder what all those media kooks will say then. I’m sure that they’ll find something to complain about.
James recently pointed out that The Economist had editorialized about how America’s recent Internet gambling ban, The Unlawful Internet Gambling Enforcement Act of 2006, would actually do little to deter online betting. This week, Business Week picks this silly law apart. As Business Week’s Catherine Holahan reports:
Indeed, the new law will do little to stop online gambling, say gamblers, betting companies, and industry analysts alike. Instead, the law will drive out regulated, publicly traded companies like PartyGaming, the Gibraltar-based parent of PartyPoker, and make way for private gambling companies and banks based in nations where such industries are loosely policed at best. As a result, the new law could ultimately make billions of dollars in U.S. online gambling transactions more difficult to trace, and increase the likelihood that funds end up in criminal hands. “It leaves an opening for some of the more unscrupulous companies coming in from unregulated places,” says Frank Catania, past director of New Jersey’s Division of Gaming Enforcement and president of Catania Consulting Group.
The exodus is under way–and the companies that are on the way out are those with the most financial transparency. PartyGaming, 888Holdings, and SportingBet, all of which are traded on the London Stock Exchange, have said they’re exiting the U.S. market. Roughly 70% of PartyGaming’s $319 million in second-quarter sales and 50% of 888 Holdings’ revenue came from the U.S.
Private online gambling companies, on the other hand, have been defiant in the face of the new law, arguing it does not apply to them and cannot be enforced. Bodog Entertainment Group, which operates a Costa Rican online gambling site, has no plans to bar U.S. customers. “We’ve structured our business in such a way that we’ll have no problems adapting to any changes in the online gaming environment,” says Bodog founder Calvin Ayre. Similarly, PokerStars released a statement saying its lawyers had “concluded that these provisions do not alter the U.S. legal situation with respect to our offering of online poker games.
Now you know why our TLF colleague Tom Bell labels the measure “The UnInGEn-ious Act.” Read his excellent analysis here and here.
This is an example of exactly the sort of sting operation that Hance and I have been saying we need a lot more of to solve the online child predator problem. Law enforcement officials have arrested 125 people nationwide as a result of a massive sting operation to root out Internet child pornography. According to the Reuters report: “Those arrested are accused of using a commercial Web site to access videos and images of hard-core pornography involving children as young as infants engaged in sexual activities with adults, according to federal officials.”
“When I say ‘hard-core’ pornography, I am talking about child pornography that includes images of children as young as six months involved in bondage and sodomy,” U.S. Attorney Christopher Christie said. “This type of depraved conduct is something a civilized society cannot tolerate.”
Amen to that. This now becomes a good case study to see if our government is really serious about this issue. Will our government do the right thing and put these scumbags behind bars for a long, long time, or will they give them a slap on the wrist and let them walk after just a few years of hard time, meaning they’ll be out on the streets and behind keyboards again soon?
As always, I say lock ’em up and throw away the key. Again, that’s the more sensible approach than the current move to regulate the Internet and social networking sites through intrusive age verification schemes or data retention mandates.
I am shocked (shocked!) to hear that politics is interfering with Google and EarthLink’s muni wi-fi plans in San Fran. On his blog, Davis Freeberg discusses how a bunch of San Fran “nuts and fruits” (his term, not mine) have turned out at planning meetings to make silly demands of Google and EarthLink before they are allowed to launch service:
“Some of the crazier demands that were suggested at the meeting included a “requirement” for every San Francisco renter to sign a lease addendum with their landlords before being allowed to install a WiFi card in their PC, forcing Google to agree to transport kids back and forth to the Zoo in their Google busses and a requirement for EarthLink to pay the electrical costs for running computers in order to prevent brownouts.
… Despite the announcement made last April free WiFi instead has turned out to be vaporware thus far with Google and Earthlink discovering that dealing with the local San Francisco political scene is about as fun as being set up on a blind date with Mike Tyson after being rubbed down in meat sauce.”
Over at TechDirt, Mike has more coverage of the unfolding fiasco. And the latest issue of MIT Technology Review includes a story by Mark Williams on the San Fran wi-fi follies entitled “Golden Gate Lark.” I found the concluding paragraph of his report particularly interesting because it goes beyond politics and gets to the real reason I think most muni wi-fi projects are doomed to fail–they will probably be obsolete before they are even launched:
“In January 2005, the city of Orlando pulled the plug on its free downtown Wi-Fi service because only 27 people a day were accessing it, at a cost to the city of $1,800 a month, according to the Orlando Sentinel. Though San Francisco’s potential network might be larger, that only makes questions of design more urgent: the city could discover too late that its network was too expensive, too spotty, or already dated.”
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.