Wired’s Brian Chen writes today about the “damage” caused to Apple’s competitors and there own developers by products announced at yesterday’s WWDC keynote, making several claims that are bit dubious, the most suspect of which was this claim about Apple’s new cloud-focused trio:

Now, here’s why iCloud, iOS 5 and Lion pack such a deadly punch against so many companies: Together, they strengthen Apple’s lock-in strategy with vertical integration.

While I don’t doubt that Apple is indeed going to deal a very deadly punch to many competitors with their version of cloud computing for consumers, I think using the term “lock-in” is going to far.  True lock-in would mean driving consumers down a one-way street where their data can’t be moved to another platform (think Facebook prior to late last year) or driving up switching costs through cancellation fees ala the telecom industry.  Apple, on the other hand, is offering consumers a truly compelling user experience, not holding them hostage.

For example, files created in Pages—one of the iCloud-enabled apps—can be exported and uploaded to Google Docs. Similarly, your iTunes downloads can be added to your Amazon or Google music locker.  Meanwhile Apple’s mail and calendar offerings use open standards and that data can also be easily moved to other platforms.

Yet Chen isn’t alone in this lock-in theory, The Wall Street Journal’s Rolfe Winkler has advanced the same thinking in a piece published yesterday:

What makes Apple’s latest product compelling isn’t unique technology; both Amazon.com and Google have Internet-based storage offerings. Rather, it is that Apple is doing more to lock in customers. According to IDC analyst Danielle Levitas, as they surrender more digital property to Apple servers, users become more likely to buy future generations of Apple products. Moving it all is complicated.

Certainly it’s true that moving large amounts of data from one service to another won’t be pretty, but is this a consequence of the specific choices made by Apple, or is this just part of the brave new world of cloud computing?

Aside from a few uber geeks building self-hosted cloud repositories for their own use, the world of all-my-data-everywhere-at-all-times is going to be facilitated by companies offering increasingly sophisticated and deeply integrated ways of making use of your digital detritus.  Users are bound to become accustomed to one set of visual vocabularies, functionalities, and workflows and some may find it hard to move to a competitor as a result.  But unless authorities ban product integration and force consumers to construct their own data syncing solutions piece-by-piece, these rather minor switching costs seem inevitable.

Open standards and low-commitment software-as-a-service offerings make the web an appealing place for geeks who always want the coolest, most advanced bit of software.  But, to the average consumer, getting all of those web-based widgets to work together is a daunting and often perplexing task.  If Apple can solve that consumer pain, that’s a win, not a loss—even if it falls short of the geek ideal.

Here’s a quick excerpt from an interesting press release sent out over PR Newswire last week—it sounds like someone is angling for a fat government contract:

EMC® announced the 2011 Data Hero Awards winners and finalists First annual Data Hero Visionary award goes to Vivek Kundra, the first Chief Information Officer (CIO) of the United States of America

EMC just happens to be huge provider of cloud storage solutions, which they’re actively trying to sell to the public sector, and apparently already have.

Kundra, of course, was honored:

I’m truly honored to be recognized for this 2011 Data Hero visionary award. The modern economy is powered by data and technology. That’s why we strive to find innovative paths to lower government cost, engage citizens and institute radical transparency to bring them closer to their government and to help move us all forward, together.

I really like the way he worked in the bit on “radical transparency.”  It’s not as though if you say something enough, it magically changes reality, but that doesn’t stop the flow of awards.

Be on the lookout for an EMC press release involving a massive federal government cloud computing project.

Wired reports that a recent federal court decision would make it possible for a private-sector employee to be found in violation of the the Computer Fraud and Abuse Act for simply violating their employer’s data policies, without any real “hacking” having occurred. This not only applies to data access, like grabbing data via a non-password-protected computer, but also to unauthorized use, such as emailing or copying data the employee might otherwise have permission to access.

On face, this doesn’t seem entirely unreasonable. Breaking and entering is a crime, but so is casually walking into a business or home and taking things that aren’t yours, so it seems like data theft, even without any “hacking,” should be a crime. For the law to be otherwise would create a “but he didn’t log out” defense for would-be data thieves.

But what about unauthorized use? Is there a physical property equivalent of this? Could I be criminally liable for using the corporate car to drag race my against my neighbor, or would I only be fired and potentially sued in civil court? Does this new interpretation CFAA simply expand the scope of this law into realms already covered, perhaps more appropriately, by statutes that specifically address trade secrets or other sensitive information in a broader way that doesn’t involve computing technology?

Judge Tena Campbell noted in the dissent that under the ruling, “any person who obtains information from any computer connected to the internet, in violation of her employer’s computer-use restrictions, is guilty of a federal crime.” So, perhaps this is a case of the court overreaching in an incredibly dramatic fashion.

I hope my lawyerly co-bloggers can weigh-in on this issue.

HT: Ryan Lynch

From the Politico’s “Politico 44” blog:

President Obama finally and quietly accepted his “transparency” award from the open government community this week — in a closed, undisclosed meeting at the White House on Monday. The secret presentation happened almost two weeks after the White House inexplicably postponed the ceremony, which was expected to be open to the press pool.

The same post also contains a great quote from Steve Aftergood, the director of the Project on Government Secrecy at the Federation of American Scientists, who said that the award was “aspirational,” much like Mr. Obama’s Nobel Peace Prize.

When am I going to receive a Pulitzer to encourage me to write better blog posts?

Early in President Obama’s term it became clear that efforts to close the revolving door between industry and government weren’t serious or the very least weren’t working.  For a quick refresher on this, check out this ABC news story from August of 2009, which shows how Mr. Obama exempted several officials from rules he claimed would “close the revolving door that lets lobbyists come into government freely” and use their power and position “to promote their own interests over the interests of the American people whom they serve.”

The latest example of this rapidly turning revolving door is covered expertly by Nate Anderson at Ars Technica:

Last week, Washington, DC federal judge Beryl Howell ruled on three mass file-sharing lawsuits. Judges inTexas, West Virginia, and Illinois had all ruled recently that such lawsuits were defective in various ways, but Howell gave her cases the green light; attorneys could use the federal courts to sue thousands of people at once and then issue mass subpoenas to Internet providers. Yes, issues of “joinder” and “jurisdiction” would no doubt arise later, but the initial mass unmasking of alleged file-swappers was legitimate.

Howell isn’t the only judge to believe this, but her important ruling is especially interesting because of Howell’s previous work: lobbying for the recording industry during the time period when the RIAA was engaged in its own campaign of mass lawsuits against individuals.

The bolding above is my own and is meant to underscore an overarching problem in government today of which Judge Howell is just one example. In a government that is expected to regulate nearly every commercial activity imaginable, it should be no surprise that a prime recruiting ground for experts on those subjects are the very industries being regulated.

I love listening to podcasts, yet I’m increasingly disappointed with popular tech news podcasts like CNET’s Buzz Out Loud, which despite being staffed by tech journalists, consistently fail to grasp the basic economics of the Net.  The latest case of this arose on Episode 1360 of “BOL,” which took on the recent dispute between Comcast and Level3 over their peering agreement.

To provide some background, Comcast and Level3 have had a standard peering agreement for years, meaning the balance of incoming and outgoing traffic on either side is so similar that the two have simply agreed to exchange data without exchanging any dollars.

In the past, Comcast and Level3 had a different arrangement. Comcast paid Level3 for access to their network in a “transit” agreement.  This sort of agreement made sense at the time because Comcast was sending a lot more traffic over Level3’s network than it was taking in from Level3, hence it was a net consumer of bandwidth and was therefore treated by Level3 as a customer, rather than a peer.

Now, the tables have turned thanks to Level3 taking on the huge tasks of delivering Netflix streaming video, which takes an impressive amount of bandwidth—up to 20% of US peak traffic, according to CNET.  So, logic and economics compel Comcast to start charging Level3, as Level3 is now the net consumer.

None of this background was understand by the folks at Buzz Out Loud, which probably explains why the hosts acted as though this peering dispute was a sign of the coming Internet apocalypse, decrying the action on the podcast and summarizing their feelings on the action in the episode’s show notes by stating:

We break down the Level 3 and Comcast battle–no matter how you slice it, it’s still very, very, VERY bad for the Web.

No, it’s really, really, REALLY not.In fact, Comcast has actually been rather nice to Level3, according to Nate Anderson at Arstechnica:

Comcast “was able to scramble and provide Level 3 with six ports (at no charge) that were, by chance, available and not budgeted and forecasted for Comcast’s wholesale commercial customers.”

Anderson goes on to explain that Comcast then had to consider how this affected their agreement with Level3:

After providing these six additional ports, Comcast concluded that the existing settlement-free peering agreement with Level 3 was still (barely) valid, but if Level 3 really wanted another 21 to 24 ports, this was simply too much traffic. Level 3 would have to pay for those ports like any commercial paid peering customer.

To sum up, the two companies used to be exchanging bits at a roughly one-to-one ratio, that ratio has changed, so therefore one is charging the other for delivering some bits.  Simple, right?

Yet somehow Buzz Out Loud has managed to turn this mundane non-news into a Chicken Little story and they even went so far as to suggest that Comcast may be scheming shut off Netflix traffic entirely in order to favor their own content, especially now that they’re in the process of merging with NBC.  To say that this is a baseless theory is an understatement.

Buzz Out Loud often ducks criticism by noting that they’re just a podcast, that they’re reporting on “buzz” not hard facts, and that they’re really supposed to be entertaining.  Fine, but if BOL is really supposed to be the Daily Show of tech podcasts, then they shouldn’t make grand pronouncements on what’s good or bad for the web, especially when the basic facts of a given situation aren’t understood.

But I’m sure this isn’t the last net neutrality doomsday scenario that Buzz Out Loud will concoct out of something humdrum.  This sort of thing makes me wonder how much of the current debate on neutrality is grounded in a solid understanding of the underlying principles of the Net and how much is based on this sort of misinformed, ignorant, lazy “journalism.”

After freak-outs and backpedaling, Microsoft has revised its stance on the so-called “hacks” of the Kinect.  Wired’s Tim Carmody reported on Monday that Microsoft seems to have indicated that it won’t be taking legal action against anyone who has found new and “unsupported” uses for the Kinect.  Shannon Loftis and Alex Kipman—two Microsofties involved in the creation of the Kinect—were featured on NPR’s Science Friday and when asked if anyone would “get in trouble” for their Kinect creations, they responded with “No” and “Nope, absolutely not” respectively.

This is a refreshing change of course from Redmond.  Embracing your most enthusiastic fans and harnessing their creative power for the betterment of your product certainly makes a heck of a lot more sense than prosecuting those folks under the DMCA.

To be fair, Carmody notes that Microsoft had reason to hold off on taking this stance immediately.  Microsoft wanted to verify that the Kinect was being used as-is, as opposed to anything in the XBOX 360 being modified.  This is incredibly important, because, as Carmody succinctly notes:

If Kinect’s whole-room camera, robust facial-recognition software, and portal for video and audio chat are seen as insecure, it’s a nightmare.

Too true.  Microsoft’s sensitivity on the topic is easy to understand when this massive security concern is taken into consideration.  However, it seemed evident from the get-go that all of these “hacks” had nothing to do with hijacking the XBOX’s software for the Kinect, but rather simply plugging the hardware it into another device entirely—namely a PC running Windows or Linux.

So, kudos to Microsoft on sorting out their feelings when it comes to the Kinect.  Too bad they had to do so in public.

Kinect has been hacked, or has it? If you’ve been following the story about the release of Microsoft’s new controller-free interface for the XBOX 360, you’re probably a bit confused as to exactly has happened. But don’t worry, so is Microsoft.

Shortly—very shortly as a matter of fact—after Kinect was released last week, enterprising nerds snatched up the $150 device and started repurposing its exception hardware for all sorts of unintended purposes. Rather than waving their hands frantically in their living rooms and unintentionally injuring loved ones (HT Brooke Oberwetter), these geeks were using Microsoft’s innovative camera technology to create new ways of interacting with their computers, methods for capturing 3D objects, and iPhone-like image manipulation—and that’s just the beginning.

Microsoft’s reaction to an enthusiastic group of incredibly tech-savvy consumers taking such an interest in their products? First, Redmond issued a warning about the dangers of hacking.

According to Gamespot’s run-down of Microsoft’s evolving reaction the company first issued this statement to CNET:

Microsoft, however, seems actively hostile to the idea. “Microsoft does not condone the modification of its products,” a company spokesperson said. “With Kinect, Microsoft built in numerous hardware and software safeguards designed to reduce the chances of product tampering. Microsoft will continue to make advances in these types of safeguards and work closely with law enforcement and product safety groups to keep Kinect tamper-resistant.”

Shortly after this statement was released, a slightly softer statement was issued:

Kinect for Xbox 360 has not been hacked–in any way–as the software and hardware that are part of Kinect for Xbox 360 have not been modified. What has happened is someone has created drivers that allow other devices to interface with the Kinect for Xbox 360. The creation of these drivers, and the use of Kinect for Xbox 360 with other devices, is unsupported. We strongly encourage customers to use Kinect for Xbox 360 with their Xbox 360 to get the best experience possible.

So, Microsoft has softened its tone in rather short order, abandoning its talk of law enforcement and instead taking the bold of position of “we won’t support your hacked Kinect.”

But what could Microsoft do anyway? Microsoft could attempt to shut down hackers using the DMCA. Even though none of the DIY Kinect-heads out there claim to have modified the hardware—which Microsoft itself acknowledge in the quote above—software involved in getting the Kinect to play nice with PCs running Windows, Linux, or OS X may circumvent anti-tampering provisions integrated into the device by Microsoft. This sort of circumvention could trigger the DMCA, turning these awesome hacks into contraband and the awesome—if not pathetically nerdy—hackers into outlaws.

Though what good would pursuing these hackers in court do for Microsoft? Their handling of the Kinect hacks have already been a textbook example of how not to run your PR department, and a lawsuit would make matters much worse, taking away attention from an awesome products and instead focusing public attention on Microsoft suing a bunch of well-meaning nerd

Apple would have never issued a statement of the kind the Microsoft did, let alone the two different versions. Instead, why not just let hackers be hackers, score yourself some geek cred by turning a blind eye to a small group of folks doing really innovative things with your product? Or better yet, why not run your own contest for the best hacks of the Kinect with the hopes that you might be able to buy up some geek’s homebrew infrared awesomeness and make your product even better?

But of course, Microsoft is Microsoft, and not Apple, let alone a cool crowd-sourcing company like Lego. So we may have to brace ourselves for Microsoft protecting its cross-subsidized Kinect by attacking the people who seem to love it most.

Special Thanks: I was inspired to post today after a guilt trip that seemed to last about as long as the flight I’m currently on (thanks, gogo infligth Internet!) from fellow TLFer and my newest Mercatus colleague, Adam Thierer.  Thanks for the inspiration, Evil Spock.

I thought I’d add a little addendum to my post below.  I just think it’s cute how Google demanding a neutral wired Internet and a non-neutral wireless Internet totally serves its self-interest.

A neutral wired net was fine for them because edge-caching, private back-hauls, and other workarounds were available to them.  They look like selfless champions of Internet ideals, but are meanwhile using every instrument at their disposal to gain an edge on the competition (as well they should, being a for-profit company).

Then this whole wireless craze comes along and the wireless Net doesn’t lend itself to those sorts of workarounds, so they need a new strategy.  Prioritizing packets is the only way for Google to gain an edge in this space, so they have to “compromise” their “principled” position on neutrality.

Funny how that worked out, huh?

Back in 2008 I wrote a lot about the kerfuffle that surrounded Google’s “OpenEdge” program, which was seen as an affront to net neutrality. Here’s a couple of the better posts on the topic:

Google’s Internet “Fast Lane”

Google’s OpenEdge Could Dramatically Reduce Google’s Impact on the Internet’s Core

That debate seems pretty similar to today’s, in that the issue was largely misunderstood, overreactions were plentiful, and semi-socialist nonsense about the Net belonging to “the people” was momentarily viewed as reasonable.

I hope that this blow-up passes just like the 2008 controversy did.

This debate is different in terms of network architecture as Google likely intends to pay Verizon for prioritization of its services over others, making the network decidedly non-neutral.  But I think that’s a good thing.

Why?  Because in 2008, Google’s dollars flowed into edge caching servers, not into wired networks themselves.  While this relieved of some traffic near the core as I’ve outlined in the post linked to above, it didn’t give wired network providers any more resources to build more robust networks.

Thankfully, the “Voogle” deal is different. In this case, dollars will flow directly to network building companies, who will hopefully use that money to build out capacity. If other companies choose to join Google and live life in the fast lane, all the better.  The more content providers pay the carriers, the easier it becomes for the carriers to lower their prices to consumers and engage in a good ol’ fashioned price war.  Either that, or prices will remain stable, but service quality will go up thanks to additional income for capital investment.

Of course, carriers (being the spawn of Satan according to pundits like Jeff Jarvis) could always decide to use the extra cash to fly around on corporate jets, smoke cigars, and laugh at poor people, but I think there’s still enough competition in the market to encourage them to invest a few of the dollars from this new revenue stream into 4G, LTE, W-Max and other next generation technologies.

If this agreement becomes the way things are done over the next few years, it’ll mean the big guys will have an advantage, but so what?  Edge-caching already gives big guys an advantage in the wired world (not to mention their multi-acre server farms) and that hasn’t destroyed Internet civilization as we know it.  If anything, it’s made the Internet better for all of us.  It’s likely that a non-neutral wireless system will do the same thing.

Ed Roberts, designer of the first commercially successful personal computer, died yesterday in Georgia at the age of 68.

Roberts founded the MITS company in 1970 and in 1975 developed the first personal computer, the Altair 8800.  Soon Bill Gates and Paul Allen came calling, and later sold their first commercial software to Roberts.  The Altair also served as the catalyst for the Homebrew Computer Club whose members included Apple Computer co-founders Steve Jobs and Steve Wozniak.

Roberts took a risk on an untested market and launched the PC revolution.  He was a true entrepreneur and will continue to be a hero to geeks like me.

Harry McCracken at PC World has posted some very kind words about Roberts.  Bill Gates and Paul Allen have also posted a statement at thegatesnotes.com.

Because of some recent skepticism about the economic viability of open-source software (and because of an upcoming presentation I’m giving on the topic), I’m calling on the TLF readership to give me some examples of companies—from big-name brands to small design shops—that are making money through creating or contributing to open-source software projects.

I’m not just looking for millionaires like Matt Mullenweg of WordPress, I’m also looking for examples like design shops contributing to the development of projects like Drupal, independent developers promoting themselves through successful open-source products, or small-scale software support companies who also give back to the code base.

Please leave a comment with as many examples as you like.

Reihan Salam of National Review Online has a great piece on the US Trade Representative’s Special 301 Watchlist today.  Salam points out that this list, which is supposed to identify nations that are a threat to intellectual property, may include Brazil, India, and Indonesia not because of any piracy occurring there, but because of their use of open-source software.

That inclusion is being pushed for by the International Intellectual Property Alliance, a group which includes the MPAA and RIAA.  This is, of course, a brazen move by US corporations to force these developing nations to use their expensive proprietary software instead of the cheaper open-source alternatives.

This is exactly the kind of thing libertarians should abhor—government being co-opted by corporations so that policies can be made in order to defend their interests, instead of our rights.

Thanks to Salam for recognizing me and Tim Lee in the form of a link to a recent blog post on Tim’s site, Bottom Up.

For more on the USTR’s Special 301 watchlist, check out this post by Mike Masnick at TechDirt.

photo credit: Flickr user HarshLight

Mike Kirkwood of ReadWriteWeb recently wrote a piece asking the question “Will One Company Become the Dominant Player in Cloud Computing?” Kirkwood offered a series of arguments both for and against the idea of the market being one where a “natural monopoly” might occur and a few of his arguments are worth exploring in greater depth.

Addressing the potential for vendor lock-in (think Outlook .PST files), Kirkwood points out that cloud customers may demand data portability:

If customers demand solutions where they can move from vendor to vendor freely, it will impact the landscape. Companies with cloud solutions in the marketplace could be required by these customers to remove barriers to moving data and services between different entities.

Kirkwood should know that this is already happening.  CRM solutions like HighRise by 37Signals and cloud-based office solutions like Google Apps already have these features built in.  One of the biggest reasons that many companies are moving to cloud-based applications is because they’re weary of being locked-in to solutions that hold their data hostage.  It’s doubtful that these exit doors will disappear when things like office suites, CRMs, accounting software, and other software categories are almost exclusively offered as cloud applications or web apps.  Customers already expect and will continue to demand the freedom to move their data around—a new culture of data portability is being created as a part of the shift to the cloud and that consumer expectations may be permanently altered because of it.

So long as data is portable, it seems doubtful that any vendor will be able to gain anything near a monopoly status through the use of tired proprietary software shenanigans.   Huge capital expenses, like those associated with setting up an Exchange server and installing the latest version of Outlook on hundreds of desktop machines is also a thing of the past.  The massive upfront costs are being replaced by cheap subscription models that easily scale as a firm’s need for a given sort of software grows.  This means switching to a new vendor in the cloud involves little more than an export and important of data, followed by an email supplying co-workers with a new URL, username, and password.

The one area that Kirkwood doesn’t explore which may have some potential for a would-be monopolist is exploiting possible network effects—the idea that everyone uses brand X because everyone else uses brand X.  This makes sense when you think of something like Facebook, where the sole value of the product is derived from the fact that a lot of people use it—otherwise why would anyone use the abysmal site?  But does this sort of logic apply to accounting software?  Would I choose to use something from Intuit instead of FreshBooks because my friends use it?

No, but I might choose a software titles because my potential employees are more likely to already be familiar with it and those potential hires might choose to learn one software title over another because employers are more likely to be using it.  This is the kind of a snowball effect that could give one vendor an advantage that has nothing to do with the quality of their product.

But here too I see the culture of the emerging cloud applications market being a strong force against this kind of software/employee compatibility lock-in argument.  Aside from wanting to flee the world of proprietary standards, expensive servers, in-house IT staff, client-side software, and other technological nightmares that come with so many non-cloud applications, companies are fleeing the world of terrible user interfaces.  The cloud based-apps that I use—BaseCamp, HighRise, MailChimp, Google Apps, FormSpring, WuFoo, Mint, as well as many others—are all orders of magnitude less daunting and needlessly complex than something like the UX abomination that is the Microsoft Office suite.  (Hint: If the “plain and simple” guide to your software runs 384 pages, you’re doing it wrong.)

Cloud software creators seem to actually care about user interface, somewhat negating the notion of user training related network effects—fostering what I will now officially dub “user portability.”  Again, one could argue that when some software categories become predominantly cloud-based, and cloud software creators are not longer selling the concept of web software itself along with their specific services, that this emphasis on user interface could be phased out in favor of making more “ribbons.”  But because of the new culture of data portability, user portability is likely to be maintained as well because bad user interfaces will be punished through losing customers to a better UX that is just a export, import, and quick staff-wide email away.

I’m really interested to hear my fellow TLFers and our readers’ thoughts on this issue.  Is the cloud a near-perfect market or am I just a naive idealist who doesn’t see the vapory beginnings of a future cloud monopoly looming in the distance?

Mashable has reported that “The Internet” has made the list of Nobel Peace Prize nominees this year.  This prize has already had its fair share of controversial and sometimes even comical nominees and recipients, but this sort of nomination is disappointing in a whole different way—it ignores the fact that individual human beings actually invented the technology that created the Internet.

The sentiment behind this nomination, popularized by Italy’s version of Wired, is understandable.  The Internet has had such an effect on the world in such a short amount of time its impossible to calculate the enormity of its effects on science, the arts, or politics.  It has generated a mountainous amount of wealth, exposed the barbarism of tyrannical regimes worldwide, and has made more knowledge accessible to more people than ever before.

But people like Tim Berners-Lee or Roberty Taylor should be considered for the prize given their tremendous contributions to Internet technology.  Both Berners-Lee or Taylor have already been recognized for their contributions to technological progress—Berners-Lee has an alphabet soup of honor-related suffixes after his name—but awarding the Nobel Prize isn’t just about accolades, it’s also about money.  The 2009 prizes were roughly $1.4 million each, which would be a nice sum for a foundation dedicated to the advancement of Internet technologies, like Berners-Lee’s World Wide Web Foundation.  When considering this, its clear that awarding the prize to an individual would do a lot more good than if the concept or idea of the Internet received the prize.

Even so, Web 2.0 evangelists, prominent intellectuals, and even 2003 Nobel Peace Prize winner Shirin Ebadi have backed the notion of the prize being awarded to the Internet itself—a new campaign is calling this “A Nobel for Each and Every One of Us.”  While the power of the Internet does indeed flow from its uniting “each and every one of us,” the technology that allowed this miracle to exist was invented by people like Berners-Lee and Taylor who dedicated years of their lives to the advancement of human understanding.  Even in this era of wise crowds, social networks, and “collective intelligence,” this sort of individual accomplishment should be recognized.

If you’d like to nominate any other person involved in the advancement of Internet technology for the Peace Prize, please drop a name in the comments.

Google’s policy blog just announced that Google, along with several other companies around the world, has been subjected to Chinese-sponsored cyber attacks.  As a result, Google will stop censoring the search results on Google.cn and as a consequence, may close its Chinese offices.

This decision is refreshing.  Despite over two decades of easing restriction on its people, Chinese regime remains brutally oppressive and continues to commit heinous crimes against its own people.  In a world that’s all too eager to look the other way so it can cash-in on China’s economic boom, Google has decided to forgo profits and take a stand against this oppressive regime.

I hope that many other companies follow Google’s lead.  Perhaps even the US government could do so, but so long as China owns one out of every four dollars of foreign-held US debt, Google shouldn’t count on it.

Vivek Kundra, the Obama administration’s Chief Information Officer, may want to turn his attention to the The Financial Crisis Inquiry Commission, which begins its public hearings tomorrow. Here’s a screen shot of the Commission’s website as of 11:02am EST today:

I also grabbed a copy of the PDF-only Notice of Open Meeting, as the site, located at http://www.fcic.gov, is scheduled to launch in its full form later today.  This is according to Ray Lehmann, Senior Editor with SNL Financial who spoke to a representative of the Commission this morning.

Launching a site for a Commission the day before it holds its first hearing is unacceptable.  The “page and a PDF” placeholder above, which cannot be found using any of the major search engines, hardly makes up for this.

A good CIO should outline clear guidelines about how and when sites go live, especially in an administration that professes to have a strong commitment to making government more transparent.  Either Kundra hasn’t established these protocols or the FCIC isn’t following them.  Either way, Kundra needs to do his job and make sure this sort of slap-shod approach to making government information available on the web is no longer accepted.

Kundra was recently named 2009 CIO of the year by Information Week for his efforts to modernize the antiquated hulk that is the federal IT infrastructure. It would seem he still has much work to do.

Thanks to Jim for providing a great analysis of Jonathan Rosenberg’s “The Meaning of Open” from Google’s Policy Blog.  I wanted to throw in my two cents without derailing the comments on Jim’s post.  I hope you’ll this new thread of discussion interesting.

While I enjoyed reading Rosenberg’s post and found myself nodding in agreement with many if not most of his points, it would have been nice if Rosenberg were a little less cheeky about this close/open symbiosis that is the real defining quality of Google.  Rather than dismissing the closed nature of Google’s search/ad business with these lines:

The search and advertising markets are already highly competitive with very low switching costs, so users and advertisers already have plenty of choice and are not locked in. Not to mention the fact that opening up these systems would allow people to “game” our algorithms to manipulate search and ads quality rankings, reducing our quality for everyone.

Both of these arguments have some merit as explanations for why Google’s search/ad business isn’t open-source or an “open system,” but neither serve as a reason to grant Google an exemption from Rosenberg’s “open systems win” credo.

Instead of prescribing that the rest of the world adopt total openness, Rosenberg could have taken a more nuanced position, leaving room for the kind of proprietary money-makers Google relies on and that we’re not likely to see disappear from the software world anytime soon, if ever.  This sort of model, one which harnesses the profit-making potential of closed systems while funding satellite projects that take advantage of the iterative, peer-reviewed process of  open-source development is fascinating and makes for a much more interesting conversation than Rosenberg’s simplistic open-only philosophy.

Still, I think Google needs some defending and their business model/philosophy deserves to be looked at for what it really is, not what it is presented it to be.

Unlike Microsoft and other primarily closed-source companies, Google has been shockingly friendly to the open-source community and Rosenberg is right to brag about the millions of lines of code they have contributed to the community and the variety of tools they have made available to developers.  We should applaud Google for efforts like the Data Liberation Front (love the name) which is working to make easy exits from web services the norm, rather than the exception to the rule.  Despite its other flaws, this essay is brimming with examples of products and practices that should please open-source developers.  So let me be the first to say, “Goodonya Google!”

We also shouldn’t begrudge Google for keeping Search/AdSense/AdWords closed as that $20 billion (and growing) in annual revenue pays for a lot of free web services and funds many of the big projects that Rosenberg mentions.  That closed system has also kept a lot of engineers well-paid and happily productive, not to mention a nearly innumerable collection of data centers humming along with staggering efficiency.  Perhaps search innovation has suffered because Google has locked away it’s secrets, but then again perhaps nothing like the quality of Google’s searches would exist today without its closed-source cash machine.

But that really is the question here, isn’t it?  If Rosenberg is right and “open systems win,” why is there no (viable) open-source alternative to challenge Google’s dominance of search?  Switching your search engine is nearly cost-free, so why haven’t we seen Richard Stallman launch the GNUGLE project yet?

It could be that in some rare instances, the cathedral method of software development really is better than the bazaar (see Eric S. Raymond for clarification).  It makes sense that when confronting a problem like search—one that can only be solved through combining tremendous capital investment in physical equipment with software development—that a well-funded, centrally-organized firm like Google is better than a loosely-organized community of developers.

It may also be that Google’s congregation of developers is so large, that it has become a cathedral and a bazaar at the same time.  Meaning that Google may have a large enough number of fast and relatively independent developers to mimic how an open-source community operates while at the same time retaining the coordination abilities and financial resources of a large firm.

Then again, as the old adage goes, “Linux wasn’t coded in a day.”  Perhaps it’s only a matter of time before we see Google fall to devotees of the philosophy it can’t quite live up to.

This speculation brings me to a much larger point, a point that Rosenberg might have made in his essay had he been more frank about Google’s open/closed hybrid approach.  Rather than pushing for a one-size-fits-all openness policy for all developers, Google should be pushing for the meta-openness that is a free market chock-full of competition—something we’ve never had and likely never will, but it’s still an ideal worth pursuing.

Taking this position will always be wiser than adopting Rosenberg’s impossible credo.  Freedom to compete allows for the merits of open and closed—or Google’s unique brand of both—to be determined through consumer choice, rather than political wrangling and influence peddling, which rarely if ever produces ideal (or even remotely acceptable) outcomes.

This brings me back to the most powerful element of Jim’s post—that we needn’t fear folks like Rosenberg who occupy the Googleplex.  Instead we should fear the lobbyist and lawyers that occupy Google’s New York Avenue “Lobbyplex” in DC.  Despite the rhetoric about openness, it’s no doubt that Google’s policy pushers are working for one thing—and it’s not the not the progress of all mankind, or even the open-software/free-software movement—they’re working for the best interests of Google.

My colleague Jerry Brito and I are attending the annual meeting of the State Policy Network in Asheville, NC.  In the process, we’ve heard a lot of things said about open-source software that we don’t agree with, and some things that are just plain wrong.

The reasons for this are obvious.  There are a lot of folks who have an interest in talking down open-source CMS solutions—namely because they sell proprietary, closed-source systems.  But, there are non-interested parties out there who have given rave reviews to open-source solutions.  For example, Drupal and WordPress have consistently won CNET’s Webware Awards. The White House now runs on Drupal, the New York Times runs its blogs on WordPress, and sites that we have built, including those for CEI, the Mercatus Center, America’s Future Foundation, Stimulus Watch, and OpenRegs.com, are built using open source tools, and they have been very successful. Bottom line, one can’t say that using open-source software is never the answer.

So how do you decide what to use? What you have to consider are the relative merits of each approach.  Some web projects may be so unique that you’ll want to have a developer build a custom solution for you. You might also find a proprietary solutions that fits your needs perfectly. However, most public policy groups have very similar needs—publishing and promoting papers and press releases, creating profiles of their experts, highlighting past and future events, etc. For these cases, it’s very likely that there is an open-source solution available at a no cost, and with a large pool of independent developers who can implement it for you. And it’s certainly the case that open-source solutions can be infinitely customized to meet unique needs.

The main difference we want to point out, however, is that when you choose a proprietary solution, you’re not just tied to that solution, but to a vendor as well. Look carefully at their contracts, it will be quite clear that they own the software that runs your website. If you need to change or add functionality to your site, you need to go to that particular vendor. With an open-source solution, there are hundreds of developers you can turn to. You can keep your site exactly as it is, and simply change your contractor. Your platform is not tied to any vendor.

In the event you wanted to move to a new platform, open-source systems have the advantage that they operate with standard technologies with which all developers are familiar, making it very easy for a developer to transfer your content to a new platform. To move from a proprietary platform means your new developer has a steep learning curve ahead of him.

A great place to start thinking about open-source CMS solutions is the annual Open Source CMS Market Share report released by Water & Stone, a PR firm that analyzes the state of the open-source community.  It outlines what various open-source solutions can do, the size of their community, the number of sites running the CMS and various other facets of the software.  For example, the report shows that thousands of sites have been deployed using Drupal and WordPress.  These are thousands of users putting these platforms to the test and as a result improving them.  How many thousands of sites are deployed using your proprietary vendor’s solution?

These thousands of users create countless add-ons and plugins that can alter or expand the core functionality of the basic CMS.  This means that when new technologies or services become popular—think Facebook or Twitter—add-ons are quickly available for expanding the functionality of your site.  Add-ons for WordPress even make it possible to turn turn a WordPress site into a podcasting platform, bulletin board, research database, or even a social networking site.  These are just a handful of examples of the literally thousands of similar easy-to-implement add-ons for open-source platforms.  Why reinvent the wheel when these solutions are available for free?

Certainly open-source isn’t always the right choice—proprietary solutions have their applications—but when considering relationships with vendors, customization, future flexibility, and the incredible cost savings, open-source is likely the best solution for most public policy groups.

If you’d like to learn more about open-source solutions and how they might be used for your public policy group, feel free email me at cord.blomquist@gmail.com.

The imagination of the open source community never ceases to amaze me.  But these days the sheer number of people using open source solutions makes the previous statement akin to saying “people never to cease to amaze me,” which they don’t.  However, with thousands of a developers adapting open platforms to problem I never knew existed, I should get used to the constant stream of innovations.

WordPress has become an especially vibrant community that often throws total curve balls my way when I’m looking at lists of plugins, which I all-to-frequently do. Today, I discovered two particular gems worth sharing.

TextImage and Censortive, two plugins compatible with the most current versions of WordPress, are ingenious little bits of programming for skirting around the “Great Firewall” and any other attempts to censor the Net.  The two plugins work by turning some or all of the text of a blog post into .PNG images of those words—making them readable by humans, but not by machines set to filter out web pages featuring forbidden words like “Falun Gong” and “Dalai Lama.”

While TextImage will image-ify your whole post—the fail-safe way around the censors—Censortive allows users to create a list of likely-to-be-censored terms which will then be replaced with images of those words. This means that text is still search-able, but words considered off-limits by big brother won’t set off any flags at your local office of the cultural ministry. Simply Brilliant!

Recent history has shown us that regimes in Egypt, Iran, and Australia can’t control content for long, thanks to quick and easy workarounds like these.  It’s a shame that they keep trying.

This clip from Fox News shows why more reporters need to contact the experts here at TLF:

The “security expert” being interviewed in the clip, Robert Siciliano, doesn’t seem to understand what cookies do. He claims that “cookies closest cousin is spyware.” Siciliano also implies that the Obama Administration might somehow be in league with Google to gather our private information.

I think there may be some valid concerns with cookies being implemented on certain government sites, but this sort of hyperbole only feeds into the baseless fears that already exist about technology.

I should note that Judge Andrew Napolitano provides some interesting analysis on the topic after the Siciliano interview, which is included in the clip.

Hat tip: dvorak.org/blog

My comments on the new Microsoft/Yahoo ad deal appears below. Please ignore the date.

From the Portland Press Herald:

Wanted: 250 Maine drivers willing to let a stranger put a black box under their dashboard. The reward: $895 and the opportunity to speak their minds about the highway tax experiment to a researcher. University of Iowa researchers are seeking 250 motorists in Cumberland, York and Sagadahoc counties willing to have a computer tracking system installed in their cars for 10 months. The system could someday be used to tax drivers according to the number of miles they drive, rather than the amount of gasoline they consume.

This is not only gets the award for most Orwellian government program of the week, but also the irony in incentives bonus prize. The new tax is meant to make up for the loss in gas revenue from more fuel efficient cars and folks using less gas during the recession. In doing so, this black-box tax would essentially be punishing motorists for driving more efficient cars, which is supposed to be a goal of the gas tax (other than raising revenue).

Bottom line: If you need more money for highways, build more tolls or raise the gas tax, don’t track your citizens.

Greg Elin (@gregelin) of the Sunlight Foundation schools you on government trasparency in under 5 minutes:

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.

Despite my reservations about Chris Anderson’s Free, I will say that this attack and future attacks of the same kind can be best understood as a unique twist on Anderson’s theme.  Anderson believe the challenge of the future of tech is to “manage for abundance” rather than to concern ourselves with scarcity—after all, tech prices are plummeting.

This is a novel and perhaps thrilling idea when it comes to the falling costs of publishing and otherwise spreading ideas, bu it’s a very chilling notion when we consider that the price of cyber-warfare is also plummeting.  Even when DDOS attacks don’t involve a simultaneous effort to pilfer private data, they can still represent huge losses for countries subjected to them—the cost of lost sales, interruptions in the transfer of funds, and hobbled productivity could easily cost billions of dollars, while the attacker pays very little.

There already is a Moore’s Law of sorts for cyber security, or more accurately, cyber-security failure.  Citing the AP again (they do of lot of that these days), the Times relayed that the number of known breaches of American government computers doubled between 2006 and 2008 to over 5,000 compromised machines.  Moreover, the July 4th attacks utilized only 22,000 computers—a big number, but not as big as it could have been.  Moore’s Law would seem to dictate that the next round could easily involve 100,000 or 500,000 machines—many running faster than current generation of recruits.

DDOS attacks are a cheap (hijacking is free), relatively hard to trace, and very effective way for a state or non-state actor to inflict meaningful economic losses on others.  Combine this with a more sophisticated efforts to steal data, and it becomes even more worthwhile.

In short, with the cost of cyberwarfare approaching free, we should consider how to “manage for abundance.”

Image Courtesy of Flickr User Pieter Baert

I’ve been reading many critiques of Wired editor Chris Anderson’s new book, Free, after first reading Malcolm Gladwell’s review in The New Yorker.  Gladwell’s piece is fantastic as it illuminates just how wrong Anderson’s central claim really is.  Anderson writes that:

In the digital realm you can try to keep Free at bay with laws and locks, but eventually the force of economic gravity will win.

Gladwell quickly dismisses this by pointing out that YouTube, one of Anderson’s case studies, is set to lose $500 million next year.  As Gladwell puts it ” If [YouTube] were a bank, it would be eligible for TARP funds.”

But Anderson’s wrong-headedness goes beyond this one case.  Gladwell likens Anderson’s naivete about online distribution to that of Lewis Strauss, the former head of the Atomic Energy Commission, who Anderson himself quotes in Free.  Straus famously—and as Gladwell points out, quite inaccurately—predicted that “our children will enjoy in their homes electrical energy too cheap to meter.”  Gladwell points out that just as Strauss failed to realize that fuel was just one of many inputs to the distribution of power, Anderson fails to realize that while the price of transistors may be plummeting at logarithmic rates, other costs associated with digital distribution remain fixed or are increasing.

Anderson’s responds to this critique in a post on Wired.com that fails to answer nearly any of Gladwell’s points, but instead asked why Gladwell felt “threatened” by Anderson.  I doubt he does.

To those who have been regular readers of Wired, all of this should come as no surprise.  The unambiguous mismanagement of Wired.com is the greatest illustration that Anderson doesn’t really understand the web.

Joel Johnson, a former Wired.com employee, has a great post on Boing Boing about this very issue—a post which I discovered by reading a Gawker post entitled “The Case Against Chris Anderson.”  The irony of Johnson’s account of working at Wired.com—and those of several commentors to the post, also former Wired.com employees—is that Anderson, the author of a book on how giving things away for free makes sense, has mismanaged an outlet that should be doing just that.  Comment #7,# 10, #14, #16—a dialogue between Anderson and former Wired.com employees— are particularly worth reading.

But we needn’t rely on the words of disgruntled former employees to show that Anderson doesn’t get the web, take it from Anderson himself.  When speaking about Wired and Wired.com in 2006 Anderson said:

A monthly magazine like ours — which combines long-form journalism, lavish design and high-end photography — really shows paper at its finest. Online, the design is lost, the photos become thumbnails, and you have to click through as many as 16 screens [to read the longer articles].

This betrays just how ignorant Anderson is about the web—he’s squandered the opportunity to make Wired.com one of the most innovative sites on the web today. Gawker’s Nick Douglas responded to this by quipping “In other words, Wired can’t find a decent web designer.”

As if all of this wasn’t enough, Anderson’s attempt to explain away the unattributed Wikipedia quotations in his book not only call into question his ethics, but also his understanding of how to properly work with information found on the web, which in turn calls into question any claim of authority on the subject matter of the book.

Several folks in the blogosphere have pointed out that another quotation which Anderson uses in the book is taken out of context. “Information wants to be free,” as famously spoken by Stewart Brand at the 1984 Hacker Conference, is incomplete.  Stewart’s full statement was:

On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.

It’s that fight between expensive information and nearly free distribution that needs to be explored.  Anderson could have drawn on his own struggles with Wired.com as a way to address this theme.  Instead, we’re left with a book that seems flawed from the outset.

All of this adds up to Free not being worth its very non-free cover price.  However, the blogosphere’s cataloging of the missteps of the author, and the ironic way which they actually illustrate the changing nature of information-based products, makes for very interesting reading indeed.

I received a mailing (see poorly taken iPhone photo) from Comcast a few days ago and I thought it was worth talking about from a libertarian perspective.

I’m all for companies taking advantage of the digital changeover to make a little extra scratch, so long as they’re honest in doing so.  This mailer never explicitly lies, but it’s not exactly forthcoming about what the digital conversion really means and it certainly didn’t mention the possibility of buying a converter box to continue getting broadcast TV for free.

Instead, the octagenarians who occupy most of the other units in my building were met with this sort of language:

If you use an analog TV with an antenna and did not get the right equipment to receive a digital signal, you lost those broadcast channels after that date.

Followed by:

Q: How do I get my signal back? A: There are several options, but the easy answer is to call Comcast…

First, I think that’s factually innacurate.  It’s easier to drive 30 miles to a neighboring city to buy a converter box than to setup and then play the waiting game for the Comcast guy, but I guess the people who didn’t catch on about the conversion have nothing but time.  My second beef is that the first sentence, the one about how you “lost those broadcast channels” seems to be awkwardly worded on purpose.  It seems to be written in a way that’s intentially confusing, as thought Comcast were trying to obfuscate the fact that those TV signals are still out there—they’re not really “lost”—and you just need to spend $40, once.

Of course Comcast is in the business of selling people cable, so flauting the advantages of an over-the-air converter box isn’t in their interest.  I don’t feel like anything in this mailing was fraudulent or illegal, but it could be seen as trying to lead people to believe that cable was maybe, just perhaps, the only way to get their broadcast TV back.

You hear it all the time.  People complain that they can’t get away from Facebook, Twitter, or even email—that the technology we own ends up owning us, or some similar cliche line about the digital dystopia that is consuming our humanity one bit at a time.  I can’t stand these people.

Thankfully there are people like my colleague Tyler Cowen who realize that—despite cultural reflexes that would have us do otherwise—we should embrace these new technologies as means to be more selective about what information we absorb and therefore welcome the increased volume of bytes into our lives.  In his new book Create Your Own Economy: The Path to Prosperity in a Disordered World, he explores technology as a vehicle to help you determine what you really value, not a series of a email-powered torture devices.

To make the material even more interesting, the book uses autism as a touchstone—one the chapters is even entitled “Autistic Politics”—as autism proves to be an effective analogy when talking about ways of absorbing and processing information.

For more about the book, you can visit the site I just finished building—CreateYourOwnEconomy.org—or pick up the book at Barnes & Noble, AbeBooks, or Amazon.com.

Google recently experienced failures of its core services — a phenomenon that quickly spawned the hashtag “googlefail” on the popular social networking platform Twitter.  These failures show that a company once thought of as the odds-on favorite for dominating the global market in all things web — the monolith of Mountain View — is looking more and more like a search-only player.

Big firms consistently fail to use their “market dominance” to take over adjacent markets, something that should give antitrust warriors in the Obama administration reason for pause.  The renewed call for tough antitrust enforcement comes at a time when Google, a poster-child for market dominance, simply can’t leverage its position at all.

Google Apps Google’s most recent outages, along with past outages of Google’s “GMail” email service, show that Google is not yet in a position to use its popularity in search to take on the likes of Microsoft Office and other productivity suites.  Only last year outlets such as USA Today, ABC News, and PC World speculated that we may see a war between the GooglePlex and Redmond over the productivity space.  Continued outages, not to mention the failure to improve Google Apps functionality, makes this seem very unlikely today. #dominancefail

Streaming Video YouTube was also part of today’s #googlefail.  When Google bought YouTube in 2006 the purchase had to be approved by the FTC.  Looking back, this seems just silly.  Not only has YouTube failed to become a money-making behemoth, it’s failed to make a money at all.  It seems clear now that while consumers absorb a lot of YouTube clips, the real money — the only money — is in premium content such as Hulu’s ad-supported video, iTunes’s piecemeal sales, or Netflix’s  subscription model.  While Hulu’s profitability is unknown, none of these competing video sites seem to be as incredible a loss-leader as YouTube.  The FTC may have approved the Google-YouTube merger more quickly had it known YouTube would turn into a video money pit — one that could be seen as a competitive disadvantage to Google. #dominancefail

Smart Phones While not part of the recent #googlefail problems, the G1 phone has failed to become a strong competitor to RIM’s Blackberry line or the iPhone.  Granted, RIM has been around for years and the iPhone has been on the market for nearly two full years, yet the G1 has still experienced dismal sales considering Google’s considerable clout and credit with the tech set.  Piper Jaffrey projects that iPhone sales will top 45 million units this year.  Compare that to the G1 — heralded as the first of many phones using Google’s Android operating system — which is trailing at a distant 5th in the smart phone sales rankings. #dominancefail

Google’s failures aren’t the result of failings specific to Google, but rather evidence that companies that become excellent in one field aren’t necessarily capable of achieving excellence in another.  Rewiring even a portion of a multi-billion dollar company to provide a totally new product is a near impossible task.  The incentive structures, hiring practices, corporate culture and myriad other factors necessary to be world-class in one endeavor may be very different for another.  In short, market advantage is not much of an advantage in today’s economy, but instead can prove to be an incredible hindrance to expanding into new markets.

This is especially true in the tech industry where barriers to entry are low, investor eagerness is high, and new competitive spaces are opening constantly.  This is why big players emerge so quickly — like Google — and fade so fast.  Think AOL, AltaVista, Compuserve, etc.

So, rather than focus on how to punish big players in a given market, the Obama administration should focus on how to free up capital markets to allow money to flow to the best technologies so that competition remains vibrant.  Repealing onerous regulations like Sarbanes Oxley that make it harder for companies to go public would be a good start.  Refraining from locking-up capital markets further by layering on morepseudo-accountability rules is also key.  Additionally, as the Cato Institute’s Jim Powell points out, allowing venture capitalists to do their jobs — something Mr. Obama’s budget discourages — is key for competition and furthering innovation.

If any additional evidence is needed that big firms don’t always stay big and can even fail, members of the administration need only visit Google News…if it’s up.

As many outlets reported last week, Disney’s ABC Enterprises has bought into Hulu, which had been a joint-venture of NBC Universal, News Corp., and investor Providence Equity Partners.  Like other large media platforms before it, Hulu should brace for the possible antitrust implications of its increasing number of content deals—many of them exclusive, at least as it applies to online streaming video—especially considering the Obama’s administration’s stance on antitrust policy.

Many media commentators are already using the kind of language we associate with past media antitrust cases.  Nate Anderson of ArsTechnica predicted Hulu’s forthcoming “lock” on the market saying:

The Disney deal makes it far more plausible that Hulu—mocked when it launched only last year for its name and its business plan—will dominate online streaming of premium content.

Caroline McCarthy of CNET pointed out that the Disney deal has Hulu fraternizing with prior antitrust targets:

Apple CEO Steve Jobs is Disney’s single biggest shareholder, having sold animation studio Pixar to the company in 2006.

McCarthy makes an apt point as Hulu is looking more and more like the iTunes of television, an honor which Mr. Jobs likely hoped would have gone to iTunes itself.

This all makes for fertile ground for a Justice Department and FTC that are breaking with the prior administration’s antitrust policies.  As then candidate Obama declared last May in a Reuters story:

We’re going to have an antitrust division in the Justice Department that actually believes in antitrust law. We haven’t had that for the last seven, eight years.

The outlook looks especially bad for Hulu considering the Obama administration’s stance on competition policy for the media sector in particular.  In June of last year, then candidate Obama spoke with John Eggerton of Broadcasting & Cable about the direction he would take American antitrust policy:

Under current rules, the media market is dominated by a handful of firms. The ill effects of consolidation today and continued consolidation are well-documented—less diversity of opinion, less local news coverage, replication of the same stories across multiple outlets, and others. We can do better.

However, in the same interview, Mr. Obama gives us reason to believe that a FTC or DoJ under his guidance might not pursue such action against Hulu.  As part of his answer to a question on net neutrality, Mr. Obama said:

The Internet is a powerful, democratizing tool. There are very low entry barriers for the delivery of services over the Internet, and public debate is unfettered by either the network owner or any single dominant voice.

Even so, Hulu’s runaway success over the last year and its growing number of exclusivity agreeements mean that it could see some of the added scrutiny that Mr. Obama believes is necessary in the world of media.  Of course, there are thousands of arguments as to why an actual antitrust case would lack any real merit—the availability of media in other formats such as broadcast or DVD, the number of non-exclusive deals Hulu has signed, the low barriers to entry and low costs for others to offer similar streaming video services—yet these arguments have failed to impress judges and administrations in the past.