The DC Circuit Court of Appeals has ruled that VoIP-based telephone companies are subject to CALEA, the 1994 law mandating that phone companies install infrastructure to facilitate court-ordered wiretaps. The FCC has set a deadline of May 2007 for all VoIP providers to comply.
Back in October, when the FCC first announced its intention to expand CALEA to cover VoIP providers, Sen. Leahy, one of CALEA’s sponsors, objected:
Congress recognized the unique architecture of the Internet and explicitly excluded it from the scope of CALEA’s surveillance design mandates, and we did that to allow Congress to re-visit the appropriateness of such an extension as the Internet developed. Any extension of CALEA–a law written for the telephone system in 1994–to the Internet in 2005 would be inconsistent with congressional intent.
I don’t think it’s obvious how the courts should have ruled here. Vonage
does present itself as an alternative to a traditional phone line, and it does interface extensively with the PSTN. Although I’d rather the federal government have as little power over the Internet as possible, it’s not clear to me that Vonage and its ilk shouldn’t be classified as telephone companies.
What is clear, though, is that the FCC’s definitional headaches will only get worse. Skype is very careful to emphasize that it’s not a replacement for phone service, and the vast majority of Skype users call other Skype users without using the PSTN. There are pure VoIP services like Apple’s iChat and Google Talk that don’t interface with the PSTN at all. And then there are services like XBox Live that allow users to chat with one another during video games. If the FCC is going to start requiring Vonage and (perhaps) Skype to comply with CALEA, they’re going to have to decide how “phone like” an application has to be before it gets classified as such.
And of course, CALEA’s not the only regulatory scheme that applies to phone companies. We’ve also got Universal Service fees, E911 service, and probably others. If the FCC piles too many requirements on services it classifies as “phone like,” it’ll lead to the fragmentation of phone connectivity, as “pure” VoIP applications refuse to interface with the PSTN for fear of triggering all those regulatory obligations. That will mean that grandma with her land line can’t call junior on his Google phone. That wouldn’t be the end of the world, but it’s probably not what the FCC is trying to accomplish.
Another day, another absurd software patent: Ars reports that Nintendo has patented the concept of instant messaging in games:
In the claims section, the patent describes a chat system that uses a remotely stored buddy list, supports multiple statuses, broadcasts information about active gaming activities, displays notification of events including the arrival of new e-mail messages, facilitates transmission of player preferences, and enables users to communicate with each other either with voice or text messages. Keep in mind that this patent does not cover game-oriented chat in general; it specifically describes a console gaming chat mechanism that displays game information and uses a buddy list.
Sure, instant messaging and computer games had been around for several years when Nintendo filed for this patent in 2000. But
combining them was truly a stroke of genius!
The New York Times reports that European regulators are becoming increasingly concerned about the development of the music-download market:
Government consumer protection agencies in Norway and Sweden want Apple to remove restrictions that prevent customers from playing music they bought through iTunes on devices made by other companies.
And in Britain, one of the largest digital music markets, the British recording industry’s trade association, known as B.P.I., told a Parliamentary committee on Tuesday that iTunes music should be made compatible with other portable music devices. It was the first time the group had taken a public stance on the issue.
Early last year, European Union competition regulators opened an investigation into Apple’s pricing practices at the behest of Britain’s Office of Fair Trading. Users of the British iTunes Web site are charged 99 pence, or $1.82, for most iTunes tracks, while French users are charged 99 euro cents, or $1.25.
“European regulators are clearly concerned that consumers need to get a fair deal when they buy music online,” said Struan Robertson, a British-based technology lawyer at Pinsent Masons. “Since we share very similar competition laws across the E.U., a domino effect could cause changes across the Continent.”
I suspect that these regulators will come up with bad policy proposals; government regulators almost always do. Certainly, mandating that Apple change its format, or share proprietary details of its format with other companies, would be bad policy, opening the door to the politicization of the digital music industry.
But I can’t say I’m shocked at their concern. The DMCA (and in Europe, the EUCD) have had the unintended consequence of giving Apple a monopoly on iTunes-compatible MP3 players. And so it’s not crazy for them to be looking into ways to remedy the problem.
But the right way to deal with the problem is to repeal the law that caused the problem in the first place, not to add another layer of regulations on top. Because those regulations, too, will have unintended consequences. If you repeal the DMCA and the EUCD, makers of competing MP3 players will reverse-engineer FairPlay and add the capability to play iTunes songs. No further government oversight will be required. But if you pass additional regulations, we’ll have to come back in another decade to figure out how to deal with the unintended consequences of
those regulations.
Not only is eBay lobbying to impose government regulations on the Internet, but they’re lobbying for more draconian restrictions on Internet gambling, too. Radley Balko gives them a a well-deserved spanking in his Fox News column:
Goodlatte’s bill bans the use of financial services to facilitate Internet gambling sites. It’s already illegal to operate a gaming site on U.S. soil. But most experts agree it’s still legal to “place” a bet. Goodlatte wants to put up a wall between the domestic “bet placing” and the offshore “bet taking,” which FirePay and Neteller make possible.
If banks and other financial institutions are going to be responsible for policing what their customers do online, as will happen should Goodlatte’s bill become law, it’s safe to assume that they’ll comply by simply banning all transactions with offshore payment services.
Which means that Goodlatte’s bill’s main effect will be to shield PayPal, a domestic company, from foreign competitors (foreign competitors that, ironically, are doing exactly what PayPal’s founders envisioned).
What’s more, the letter eBay government relations director Brian Bieron sent to Goodlatte announcing the company’s support of his bill actually goes above and beyond what any gambling foes in Congress have called for. Bieron in fact calls for the actual prosecution of Internet gamblers themselves, a policy which could only be enforced by allowing law enforcement officials to essentially begin monitoring everyone’s online activity, including tracing visited websites back to IP addresses.
Instead of lobbying for the so-called “the First Amendment of the Internet,” perhaps they should show more concern for the actual Bill of Rights.
David Berlind wonders why Apple hasn’t sued Real or Navio for reverse-engineering FairPlay, Apple’s iTunes copy protection scheme:
I’m wondering how many more commercial enterprises have to reverse engineer Apple’s digital rights management technology (so as to emulate the iTunes Music Store as a source of iPod-compatible protected content) before it activates the laywers on that front. Today, two companies–RealNetworks and the recently launched Navio–have commercial offerings in the market that involve a reverse engineering of Apple’s DRM (or should I call it Apple’s DNA given how crucial it is to the long term success of the company) to the point that they can serve protected content that’s compatible with Apple’s iPods and iTunes. The existence of such copycats marginalizes Apple.
Originally, it looked as though Apple’s legal eagles were going to lower the boom on Real. Then, instead of following through, it updated its DRM technology in hopes of disabling Real’s hack. Real stayed in technical lockstep but has somehow managed to stay out of Apple’s legal cross-hairs. Now, Navio is in the game and thinks that it’s safe because of the way Apple dropped its case against Real. But does that mean Apple won’t try again? How can it not? I see another suit coming. Either that, or more iTunes Music Store knockoffs.
There’s a crucial legal distinction that Berlind is missing here: as far as I know, no one has hacked FairPlay to make their devices compatible with iTunes. All the reverse engineering efforts–including Real and Navio–have gone in the opposite direction: making Apple’s device (the iPod) compatible with their music store. The distinction is crucial.
The DMCA makes it illegal to “circumvent a technological measure,” which it defines as “to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner.” The “without the authority of the copyright owner” is the important bit. If you’re the copyright owner–or his licensee–you can reverse engineer to your heart’s content. It’s only if you’re decrypting
someone else’s content that you have to worry about DMCA liability.
What that means is that the lock-in created by the DMCA only works one way: if you’ve got a music store, you get to decide which devices can access the music. But if you’ve got a playback device, anybody can hack your device to put their music on it.
Ars reports on the likely battle over Slingbox, a device that plugs into your TV and lets you watch TV content on the road. Major League Baseball doesn’t like the device because it allows users to evade the geographical restrictions of its licensing agreements with cable operators.
I’m having trouble seeing the legal argument against Slingbox. It only allows users to watch content they’ve already paid for (in the case of cable or satellite) or that’s broadcast over the air for free. It doesn’t facilitate re-distribution to others or commercial-skipping. If any device is modeled to pass
Sony with flying colors, this is it.
On the other hand, the courts do make mistakes. Slingbox bears a striking resemblence to My.MP3.com, which was killed off in a poorly-reasoned decision by a district judge. MP3.com was another service that allowed users to more conveniently consume their legally acquired content. As I’ve written before, MP3.com was prevented from appealing the decision by the requirement to post a bond for the excessive statutory damages imposed by Judge Rakoff. If this does go to court, I hope it will provide an opportunity for the courts to repudiate the MP3.com decision.
Virginia Postrel points out the shameful behavior of the National Kidney Foundation in the organ debate:
When I first got interested in organ donations, I naively thought that the foundation would be in the business of doing everything possible to encourage kidney donations. I was terribly wrong. The group vehemently, and successfully, opposed a bill that would have allowed tests of incentives for organ donors. (CEO John Davis brags here, scroll to second item.)
So determined is the NKF that kidney donors should never, ever, in any way be compensated for their organs–no matter how many kidney patients current policy kills–that the organization is now trying to stamp out public discussion of the idea. When they heard that AEI is planning a conference on the subject for June 12, they wrote a letter to AEI president Chris DeMuth suggesting that the conference shouldn’t be held.
And my friend Chaim Katz points out that South Carolina governor Mark Sanford vetoed legislation that would have given the survivors of an organ donor a $1000 tax credit. Sanford cited the NKF’s opposition in his veto message.
I can’t imagine what kind of twisted logic would lead an organization ostensibly dedicated to increasing “the availability of all organs for transplantation” to oppose such a common sense measure to increase the supply of organs. I suppose that once we allow widows to claim tax write-offs for their husbands’ organs, we’ve started down the slippery slope to prisoner organ harvests and baby farming.
Via Techdirt, here’s another example of a pointless software patent battle. Creative sued Apple claiming that the iPod violated its patent on the concept of organizing music hierarchically (as if no one had thought of that before). Apple returned fire by claiming that Creative had violated four user-interface patents, and last week they filed a second suit alleging three more infringements of its patents.
What I want to know is: how do defenders of software patents explain Apple’s actions? After all, if those seven patents are valid, that means that Creative has been “stealing” Apple’s intellectual property in seven separate respects. There’s no doubt that if Creative had been violating Apple’s
copyrights, say by using bootlegged copies of iPod software in their products, Apple would have wasted no time in suing them. Yet faced with an analogous situation with software patents, Apple has simply sat on its intellectual property.
Here’s my theory: software patents are little more than legal harassment devices. They’re typically so broad that any given product is covered by dozens of them, and so vague that it’s impossible to be sure which products are covered by any given patent. Large companies know that they’re violating dozens of their competitors’ patents, and that their competitors are violating dozens of theirs. They don’t sue because they understand that the result would be a zero-sum legal quagmire that could drown them both in legal fees.
Mike Masnick’s analogy for this is perfect: nuclear stockpiling. Everyone wants a big patent portfolio to use as ammunition in a possible patent war, but they understand the consequences of starting such a war with another big company would be suicidal for both parties. Creative launched a lone nuclear warhead at Apple; it’s about to discover just how painful a full-blown nuclear exchange can be.
The Progress and Freedom Foundation has a new study out by Michael Einhorn (who also did a Cato study on DRM last year) urging Canada to adopt stronger anti-circumvention laws. I have to admit I’m having trouble figuring out what his argument is. He describes the state of the marketplace in great detail, but he never gets around to explaining in any detail why the world would be worse without anti-circumvention rules like the DMCA.
Case in point: one of the longest sections, titled “The Music Services,” surveys the most popular DRM-based music services. We’re told that the growth of online music stores demonstrates “the potentialities of DRM.” Yet he doesn’t really make the case that things wouldn’t be working so well without DRM. He doesn’t mention the rapid growth of DRM-free eMusic. Nor does he mention My.MP3.com, a DRM-free service that attracted hundreds of thousands of users before it was shut down by the industry in 2000.
The closest we get to an argument is the statement that the growth in music sales occurred because “the labels feel safe enough with the security” provided with DRM to allow their catalogs to be used online. He apparently believes that without the DMCA, the labels would have refused to permit their music to be released in digital formats online. But that’s absurd: the labels have been releasing virtually every song they produce in a high-quality DRM-free format since the early 1980s. It’s called the CD. If Einhorn’s argument were true, we would have expected them to begin phasing out CDs as soon as DRMed alternatives became available. But of course they haven’t done so.
Continue reading →
I have a hard time writing about stories like this one without getting shrill. ZDNet is reporting that Net2Phone is suing Skype for violating its “point-to-point internet protocol” patent.
What does it cover?
A point-to-point Internet protocol exchanges Internet Protocol (IP) addresses between processing units to establish a point-to-point communication link between the processing units through the Internet. A first point-to-point Internet protocol includes the steps of (a) storing in a database a respective IP address of a set of processing units that have an on-line status with respect to the Internet; (b) transmitting a query from a first processing unit to a connection server to determine the on-line status of a second processing unit; and (c) retrieving the IP address of the second unit from the database using the connection server, in response to the determination of a positive on-line status of the second processing unit, for establishing a point-to-point communication link between the first and second processing units through the Internet. A second point-to-point Internet protocol includes the steps of (a) transmitting an E-mail signal, including a first IP address, from a first processing unit; (b) processing the E-mail signal through the Internet to deliver the E-mail signal to a second processing unit; and (c) transmitting a second IP address to the first processing unit for establishing a point-to-point communication link between the first and second processing units through the Internet.
Where to begin? This describes an absolutely pedestrian networking protocol. There’s nothing remotely novel or non-obvious about two computers communicating directly with each other without using a server. I don’t even understand what the “invention” is supposed to be. If you asked a random CS major how to implement a peer-to-peer network application, he’d probably come up with a description like this in about 10 minutes.
Some people seem to think that these kinds of bad software patents are anomalies–that there are good ones as well, and that we ought not to throw the baby out with the bath water. Yet I’ve seen news accounts of more than a dozen examples of bogus patent suits in recent months, but I have yet to see an example of a legitimate software patent. There’s an awful lot of bath water here, and I’m having trouble seeing the baby.
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