I was generally impressed with Tim Wu’s paper on Hayekian analysis of intellectual property, but I did want to note one place where his analysis goes off the rails:
A second example is broadcast spectrum reform, which has been under consideration for about a decade in the United States. The question is whether broadcasting at certain frequencies should be propertized. In other words, the question is whether some firm should own the alienable rights to broadcast between frequencies X and Y. The impact of the government’s decision whether to grant property rights or not will have important decisional consequences. Granting no rights will create decentralized market entry for spectrum-dependent projects or technologies. Any entity willing to make the investment may develop a project that depends on access to spectrum, albeit at the cost of many failed projects. Granting government-specified licenses or property rights, conversely, makes some kind of hierarchical decision structure possible in the first place. That is, we should expect to see greater screening of spectrum-dependent projects or technologies before they are launched.
Which is better is slightly ambigious. For some uses of spectrum there may be good arguments for a hierarchical, centralized authority who decides what the spectrum will be used for, perhaps to ensure public safety. But otherwise, whether we want propertized spectrum depends on whether there is any argument that spectrum-dependent projects be carefully screened. Absent risk the public, the answer must sometimes be no.
This strikes me as rather misguided. As Jerry has explained in this space before, the difference between spectrum and ideas is that spectrum is rivalrous and scarce, whereas ideas are not. Complete decontrol is never an option–somebody has to pick the rules governing how the resource will be consumed, and the only question is who will make the rules.
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Every week, I look at a software patent that’s been in the news. You can see previous installments in the series here. This week’s patent comes courtesy of Techdirt, who reports that Apple has settled a lawsuit with the owner of this patent. Here’s the abstract:
I just read a fantastic paper by Tim Wu about the implications of Hayek’s insights about decentralized decision making for intellectual property policies. In the standard debate over intellectual property, supporters of stronger protections tout to the ability of IP regimes incentivize creativity, while critics point to the dead-weight losses incurred when the monopolist prices its products above marginal cost.
But Wu argues that this discussion misses an important consideration: in addition to propping up the price of intellectual creations, intellectual property regimes like patent and copyright centralize the decision making processes of creative industries. Take the case of Netflix’s patent on Internet-based video rental. This patent appears to give Netflix the exclusive right to decide who may offer online video rental services, at least those that have interfaces similar to Netflix’s own. That effectively means that anyone who wants to enter the online video rental business (such as Blockbuster) must get a license from Netflix to do so.
In a world of perfect information, that might not be a big problem. Netflix has every incentive to develop the online video rental industry. After all, Netflix wants to maximize its revenues, and a larger, healthier online video rental market means bigger licensing revenues for Netflix. Hence Netflix has every incentive to develop new and better online video rental features, and to license its patent to third parties who have the capability to expand the market. If Netflix were omniscient, giving Netflix a monopoly over online video rental might actually make the market more efficient, as Netflix could reduce wasteful competition.
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I’ve got a new article in the Hearland Institute’s IT&T News about the NSA’s spying programs:
An even bigger issue with mass surveillance by software is the way it would transform the principle of judicial oversight. Under current law, law enforcement officials must request a warrant from a judge for each suspect they wish to monitor. The judge examines the evidence for each suspect individually, and grants a warrant only if he or she finds probable cause that the suspect is guilty.
Automated surveillance, however, would involve a computer program monitoring tens of millions of individuals with no judicial oversight at all. Even more troubling, after the software had produced its list of suspects, the judge would be asked to approve human surveillance of the list the software produced, even though many of those on the list are probably innocent.
Constitutional rights depend on bright lines, so judges are not forced to make arbitrary judgment calls about when someone’s rights have been violated. But such bright lines would be extremely difficult to draw once the traditional “probable cause” standard has been abandoned.
This is a recurring pattern I’m noticing a lot in my public policy research. You can also see it the abuse of the “blight” loophole for eminent domain abuse. Because there’s no clear definition of the term, over time the exception has swallowed the rule. As a result, we get monstrosities like these. Secure rights require bright lines. And bright lines are impossible when surveillance decisions are made by computer programs with thousands of lines of code.
Check out this ad I saw earlier today on Freedom to Tinker:
Do the doctrines of contributory and vicarious liability apply to the DMCA’s anti-circumvention provisions? If so, I bet the RIAA and MPAA’s lawyers are drafting up the lawsuit as we speak!
I have to admit that my reaction to the idea of inviting a scholar from the Discovery Institute to participate on TLF was pretty similar to those of the majority of our readers. The Discovery Institute’s intelligent design shop has a well-deserved reputation for peddling pernicious nonsense. See here for an excellent summary by Daniel Dennett of why intelligent design is a cynical shell game (scroll down a bit). More importantly, from my perspective, the intelligent design crowd at Discovery has repeatedly misrepresented and misquoted their opponents, refused to acknowledge errors in their work, made hypocritical charges, and generally presented their case in bad faith. See here, here, here, here, here, here, and here for a few of the many examples.
However, I don’t think we can immediately jump to the conclusion, as some commenters have, that anyone who works for DI should be automatically shut out of public policy fora such as this blog. My former colleagues Adam and Jim, whose judgment I trust on this sort of thing, have known Haney for years. They tell me that he’s a smart and intellectually honest guy with worthwhile things to say about technology policy. He was invited to participate on the basis of their personal knowledge of his work, not because of any particular love for the Discovery Institute.
We at TLF blog as individuals, not as representatives of our respective organizations. You’ll all have the opportunity to get to know Haney and his writing and form your own judgment about his credibility. This blog is read by a lot of smart and technically savvy people. If he plays fast and loose with the facts, I have every confidence that you guys will catch it and call him to task. So will I.
Julian worries that bringing Haney on board will “lend their crackpot ideology some sort of legitimacy by association.” But I think the point has been made: Haney has been put on notice that a large number of our readers don’t like his employer and will view his work with suspicion. Haney will have to work hard to earn your trust. If he succeeds, it will be despite his institutional affiliation, not because of it.
So I say welcome aboard, Mr. Haney. Jim and Adam speak highly of your work, and I’m looking forward to reading more of it.
Ed Felten points to a Boing Boing post giving details about Microsoft’s decision to drop HD video support from the 32-bit version of Vista. An anonymous Microsoft employee says:
Media Player won’t play HD-DVD and Blu-Ray, but you’ll still be able to play them (on XP, even) with third-party programs like WinDVD and PowerDVD, in full HD.
Why? Because the media companies are willing to certify WinDVD and PowerDVD, but they won’t certify Windows, basically for the reasons described. The other problem is indemnity – Microsoft has much deeper pockets and the risks of someone hacking Windows and getting the Microsoft keys is too high; Microsoft’s payouts to the studios would be enormous. The DRM contracts essentially say that you forfeit all money lost to the studios if your key is hacked. The money “lost” to the studios is of course calculated using the estimate most favorable to the studios – i.e. every copy downloaded off LimeWire is a full-price loss. Intervideo (WinDVD) and Cyberlink (PowerDVD) are small companies and figure they’re not the largest targets, or they’ll just go bankrupt and start again as a new company. Cyberlink is based in Asia, and suing them would be pricey.
The screwball thing about all this is that essentially the same risks of hacked drivers and whatnot exist with PowerDVD and WinDVD; there’s no good reason for the studios to certify them if they really are worried about people using the PC to copy movies.
This guy and Felten both speculate on why the policy is so confused, but I don’t actually think it’s that mysterious. What we’re seeing here is a case study in what happens when you create a large bureaucracy and charge it with performing an impossible task. In this case, Hollywood executives are trying to accomplish two fundamentally incompatible goals: (1) Make their products widely available and (2) make sure no illicit copies get release to peer-to-peer networks. When you charge a bureaucracy with performing an impossible task, it’s
inevitable that the resulting policy will be incoherent. The best the bureaucracy can do is make various token decisions in the directions of accomplishing the stated goal–some of which will inevitably be inconsistent or flatly contradictory to others.
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Every week, I look at a software patent that’s been in the news. You can see previous installments in the series here. This week’s patent received extensive publicity this week when a judge slapped a $25 million fine on Microsoft for “misconduct,” including treating the patent holder, z4 Technologies, as “a small and irrelevant company that was not worthy of Microsoft’s time and attention.” Which as far as I can tell, it was, aside from the fact that it happened to have a patent on the kind of copy protection Microsoft uses in Windows XP.
There are two closely related patents at issue. The older of the two is Patent #6,044,471, “Method and apparatus for securing software to reduce unauthorized use.” (Strangely enough, the other patent was filed in 2002 and issued in 2004. It’s hard to see how Windows XP, released in 2001, could infringe it.)
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The TSA has posted a helpful web site detailing what now not allowed on airplanes:
We encourage everyone to pack gel-filled bras in their checked baggage. We recognize the sensitivity of the issue and we are reaching out to key women’s medical associations to assist passengers and make information available to them while respecting their privacy. Passengers with medical gel prosthetics will be permitted through the security checkpoint.
Please keep in mind, that while we can not provide an exhaustive list of items that covering all eventualities, all liquids, gels, or aerosols of any kind are prohibited at security checkpoints, in airport sterile areas, and aboard aircraft. You can pack these items in your checked baggage.
We ask for your cooperation in the screening process by being prepared before you arrive. We also ask that you follow the guidelines above and try not to over-think these guidelines. Please pack liquids, gels, and aerosols in your checked baggage even if you do not normally check a bag.
The last thing we’d want is
sheep passengers who think too much.
The most depressing thing about that web page is that the fact that they bothered to create it probably means these rules are not going to go away any time soon.
Cory Doctorow points to an article (that’s currently slashdotted) about Microsoft’s plan to disable high-def video playback in 32-bit versions of Windows Vista. It seems that there are too many ways to hack around Microsoft’s copy protection scheme in the 32-bit version, so Microsoft has simply thrown in the towel and told a substantial fraction of its customers that they’re out of luck.
As Doctorow notes, this creates an interesting perverse incentive, since movies downloaded from illegal file-sharing sites will work just fine. Is Hollywood trying to drive its customers into the arms of pirates?
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