Articles by Tim Lee

Timothy B. Lee (Contributor, 2004-2009) is an adjunct scholar at the Cato Institute. He is currently a PhD student and a member of the Center for Information Technology Policy at Princeton University. He contributes regularly to a variety of online publications, including Ars Technica, Techdirt, Cato @ Liberty, and The Angry Blog. He has been a Mac bigot since 1984, a Unix, vi, and Perl bigot since 1998, and a sworn enemy of HTML-formatted email for as long as certain companies have thought that was a good idea. You can reach him by email at leex1008@umn.edu.


Hands Off the Net!

by on December 29, 2005

I’m rather confused about what exactly the network neutrality folks want. Because it’s hard to believe they’re really looking for what they seem to want in this article.

The draft bill, floated recently by Republicans on the House Energy and Commerce Committee, contains “network neutrality” provisions intended to prohibit telecom and cable companies from blocking or impeding competitors on their high-speed networks. But the draft makes an exception for companies to offer multiple tiers, resulting in potentially faster transmission rates for them and slower speeds for competitors. Comcast, Time Warner and other major cable providers oppose all mandatory neutrality restrictions but abide by voluntary guidelines. “Network neutrality is a solution in search of a problem,” said Brian Dietz, spokesman for the National Cable and Telecommunications Association. Those stances are drawing fire from Amazon.com, eBay, Google, Microsoft, Yahoo and other Internet players that fear the carriers will serve as gatekeepers. “Do you want the Internet … of the last 10 years, or do you want it to look like a cable system?” asked Gerry Waldron, an attorney representing a coalition of Internet companies. “They’re fooling around with the basic DNA of the Internet here,” added Art Brodsky, a spokesman for Public Knowledge. “What they’re trying to do is make it their Internet.” The coalition members said they recognize that communications carriers have a right to manage their networks to carry bandwidth-hungry video without interruption. “We don’t want to take them out of [that] business,” a source privately said, but added that carriers should not “pick and choose” who provides Internet video.

Now from a technical perspective, I sympathize with these guys. The layered, end-to-end nature of the Internet is an important design principle that deserves to be defended. But what they’re trying to do strikes me as more sweeping than merely ensuring that consumers have unfettered access to content on the web. The next-generation fiber networks being built by the Baby Bells are expensive, and if they want to set aside some portion of their bandwidth to provide premium services, that seems like a perfectly reasonable idea. Now, I suspect that from a business perspective, they’ll find that consumer will pay more for unfettered high-speed Internet access, especially once there are thousands of Internet-based TV channels not available through their IPTV service. But the fact is that without the investments the Baby Bells are making, those Internet TV channels might not even be possible.

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Whose A La Carte Is It, Anyway?

by on December 22, 2005 · 24 comments

James’s post in defense of a la carte makes me think that a big part of what’s going on in this debate is ambiguity and confusion regarding what exactly counts as “a la carte.” As my recent article suggests, most a la carte activists seem to imagine that, if the standard cable tier gives you 50 channels for $50/month, then you should be able to buy 10 channels for $10/month, or one channel for $1/month.

That is, of course, absurd. It would be great for consumers if it were possible, but the problem is that the cable companies would go bankrupt. It costs a lot more than $1 to deliver that one channel to the customer’s home. That’s why, if forced to adopt a “pure” a la carte model, channels would have to set the per-channel cost much higher than $1–probably more like $5-10 per channel. It should be obvious that consumers wouldn’t benefit from that.

But if we relax our definition of “a la carte,” it’s possible to imagine a model that could work. Consider a world in which every subscriber pays a $40 access fee, and then chooses channels “a la carte” for 25 cents apiece. This is, technically speaking, an a la carte system, and it would probably work just fine: at 25 cents apiece, most consumers would probably take 30 or 40 channels, roughly approximating the status quo. This could plausibly be called an “a la carte system,” and it might work just fine.

Now consider a third system, with one minor change: the cable company decides to throw C-SPAN into the basic package for free, and tacks on 6 cents to cover the subscriber fee. (If I remember correctly, this is what C-SPAN charges per subscriber) My question is: has this ceased to be an a la carte system? After all, consumers are now being “forced” to buy C-SPAN in order to get other cable channels. But it’s hard to imagine cable customer being outraged at a 6-cent hike in their bills.

What’s going on is that your monthly cable bill is actually paying for two things: the programming and the infrastrcture necessary to deliver the programming. What people don’t seem to understand is that the infrastructure is by far the largest fraction of the bill. According to this article, the average cable bill is $45 for 64 channels. Of that, $45, only $14 goes to cable networks for the cost of content. The remainder, $31, goes to cover the cable company’s own costs.

To bring this back to James’s article, I suspect the systems the Baby Bells are rolling out will be “a la carte” only in the third sense described above. There will doubtless be a basic access fee that will apply to everyone who gets the service. There’s also likely to be some content, such as C-SPAN and PBS, included for free with the basic IPTV service.

But the fact is, the current cable industry is already a la carte in this sense. There’s some content available with the basic package, and then there is other content–“premium” channels, pay-per-view content, on demand movies–that is offered “a la carte.” The only difference is a matter of degree: the Baby Bells might be putting less content in the “basic” bundle, while the cable companies are putting more.

If that’s how we’re defining the terms, it’s not clear what’s being argued about. Of course a la carte, defined in this loose sense, “works.” No sane person would claim otherwise. The debate is whether “pure” a la carte, in which there is no “basic” bundle, can “work.” I think the answer to that is clearly no, and I’ll be shocked if the Baby Bells ever offer such a pricing structure.

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Patent Office Saves the Day

by on December 21, 2005 · 2 comments

It’s good to see that the Patent Office has come to RIM’s rescue by hinting that it will be rejecting all of NTP’s patents in February. It seems that RIM’s gamble paid off. At this point, it would be an extremely boneheaded judge who would issue an injunction given that NTP now looks almost certain to lose on the merits. And that means that RIM has little reason to settle, and it’s looking increasingly likely that NTP won’t get a dime.

That’s heartening, but I hope this isn’t the end of the story. Policymakers ought to take this as an object lesson in the problems with the patent status quo. If NTP’s patents were invalid, then RIM shouldn’t have had to spend 4 years in court defending itself against charges of infringing them. Something’s busted and needs to be fixed.

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Will the Internet Destroy the Foreign/Domestic Distinction?

by on December 21, 2005 · 2 comments

Overall, I’m extremely critical of the Bush administration’s flagrant disregard for civil liberties in the wiretapping controversy. But I think this is an entirely understandable mistake. The New York Times reports that the NSA sometimes accidentally listens in on a domestic call because they mistakenly believe that it to be a foreign call.

As electronic networks become ever more sophisticated and globalized, policymakers are going to face more and more thorny challenges when it comes to regulations that are tied to the “location” where a particular action is taken. Already we see this with telecom regulation, where technologies like VoIP are allowing people to do an end run around 20th century regulations based on the physical location of someone’s phone line. I imagine that sorting out other laws–copyright, fourth amendment, privacy regulations, etc–will become equally difficult as the Internet continues to extend its reach into every aspect of our lives.

Indeed, in the long run, the traditional distinction between domestic and foreign surveillance may be complete eviscerated by the march of technology. After all, it’s trivial to disguise the true origins of a network connection. if terrorists know the NSA isn’t allowed to eavesdrop on domestic communication, they could easily set up a tunnel so that their communications appear to originate on a U.S. network. In that case, would it count as domestic surveillance to eavesdrop on their conversation?

I’m not sure what the right answer is, but it’s a type of question we’re going to hear a lot in the next few years.

(Hat Tip: Julian over at Andrew Sulivan’s blog)

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Second Class Citizens

by on December 19, 2005 · 4 comments

Perhaps the most striking thing about the Sensenbrenner bill is this passage:

PROFESSIONAL DEVICE.–(A) The term”professional device” means a device that is designed, manufactured, marketed, and intended for use by a person who regularly employs such a device for lawful business or industrial purposes, such as making, performing, displaying, distributing, or transmitting copies of audiovisual works on a commercial scale at the request of, or with the explicit permission of, the copyright owner. (B) If a device is marketed to or is commonly purchased by persons other than those described in subparagraph (A), then such device shall not be considered to be a ”professional device”.

“Professional” devices, you see, are exempt from the restrictions that apply to all other audiovisual products. This raises some obvious questions: is it the responsibility of a “professional device” maker to ensure that too many “non-professionals” don’t purchase their product? If a company lowers its price too much, thereby allowing too many of the riffraff to buy it, does the company become guilty of distributing a piracy device? Perhaps the government needs to start issueing “video professional” licenses so we know who’s allowed to be part of this elite class?

I think this legislative strategy is extremely revealing. Clearly, Sensenbrenner’s Hollywood allies realized that all this copy-protection nonsense could cause problems for their own employees, who obviously need the unfettered ability to create, manipulate, and convert analog and digital content. This is quite a reasonable fear: if you require all devices to recognize and respect encoded copy-protection information, you might discover that content which you have a legitimate right to access has been locked out of reach by over-zealous hardware. But rather than taking that as a hint that there’s something wrong with the whole concept of legislatively-mandated copy-protection technology, Hollywood’s lobbyists took the easy way out: they got themselves exempted from the reach of the legislation.

This reminds me of nothing so much as the McCain-Feingold campaign finance law. McCain and Feingold, like Sensenbrenner, faced a difficult problem: a straightforward reading of their legislation, which prohibited people from spending large sums of money on political advocacy, would seem to prevent corporate entities like the New York Times and Fox News from talking about politics in the closing weeks of the election. Clearly, that wouldn’t do. But rather than taking this as evidence that there was something fundamentally wrong with their approach, they simply created a class of journalists to whom the rules did not apply. If Michael Moore wants to spend a million dollars promoting John Kerry’s election, that’s free speech. But if you or I spent a million dollars on anti-Bush ads in the closing weeks of the election, we could wind up in jail.

Like McCain and Feingold, Sensenbrenner demonstrates a profound contempt for ordinary Americans, whom his legislation literally makes second-class citizens. It seems that he can’t imagine that ordinary consumers might ever have legitimate reasons to use “professional” video editing tools for personal projects. Consumers, after all, are just that–passive recipients of the culture made for them by the professional magic-makers of Hollywood. We wouldn’t want the riffraff to make culture of their own.

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DRM versus Artists’ Control

by on December 19, 2005

John at the Commons Music Blog has an artist’s perspective on the dark side of digital rights management technology. He highlights three reasons why he doesn’t use DRM to “protect” his content. I thought the first reason was particularly on point:

I detest not having control. “But,” say some, “DRM gives you control, not takes it away.” Silly rabbit. DRM is not something that can be grabbed from the aether and implemented. It’s run by a series of companies, each with different platforms and technologies implementing themselves in various ways… If I sold someone an MP3, I am quite certain that they will be able to use that MP3 on almost every computer, and in pretty much every portable device on the market. If I sell an Apple iTunes DRM’d file, that plays in iTunes, on a few cell phones, and the iPod. Speaking of Apple, they are currently in a dispute with the record industry to allow different pricing structures and usage terms, depending on the songs. They want Apple to share its DRM so that a multitude of devices (not just the iPod) will work with it. The labels can’t force them, because the songs that millions have bought are intricately tied to Apple’s DRM, for which they fought viciously. Now, they’re stuck. They’ve lost control.

This is an important point. DRM almost never gives artists control of their own work. Hell, DRM rarely gives record labels or movie studios control over the work they publish. Rather, DRM empowers third-party technology companies–Apple, Microsoft, Real, TiVo, the cable industry, etc–who didn’t produce the content their DRM “protects,” yet thanks to DRM they have the final say on how the content is used.

Obviously, no one forces artists, labels, and studios to sign deals with the likes of Apple and Microsoft. But given all the rhetoric about how DRM is about protecting artists’ rights, it should give us pause that, in practice, DRM almost never gives artists meaningful control over how their content is used, and that, in fact, some of the restrictions placed on consumers by DRM are directly contrary to the interests of copyright holders.

Think about it: when you purchase a song on iTunes, you’re pretty much only allowed to listen to the song with iTunes or an iPod. Who does that benefit, the artist who recorded the song, the label that distributed it, or just Apple? As I’ve said before, the recording industry is being taken for a ride.

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Your Ears are Analog Holes

by on December 19, 2005

A few years back, Julian Sanchez coined the phrase “reductio creep”:

So by now, everyone’s heard about the ludicrous case of the butterball who’s suing the fast food industry because they failed to inform him that shoving lots of cheeseburgers down your gullet will make you a very large and blubbery boy. (He thought “100% beef” meant it was healthy, y’see.) This is, of course, the sort of possibility people raised during the tobacco lawsuits of the 90s as an absurd analogy to holding cigarette makers responsible for the healthcare costs of people who knowingly chose to smoke. “What’s next?” we asked, picking what we thought was an extreme illustration, “suing McDonalds because you get fat?” I think we need a term for this sort of phenomenon, and I’m partial to “reductio creep.” Reductio creep is the process by which an insane extension of some principle, offered as a reductio ad absurdum of that principle, is soon afterwards realized.

Here’s the 2005 version of reductio creep: “plugging the analog hole.” Critics of the DMCA have long argued that one of the problems with DRM is that all digital content has to be converted into analog form in order for human beings to see or hear it, and analog signals can’t be wrapped in DRM schemes. “What are you going to do,” we asked (rhetorically, we thought), “outlaw analog audio and video?”

Some Congressmen, it seems, didn’t get the point. Once the phrase “analog hole” entered the policy lexicon, they started imagining that it’s a literal security hole could be plugged with legislation. As a result, they’ve crafted a horribly complex piece of legislation that mandates that all analog devices maintain and respect government-mandated copy-protection signals within the analog stream.

But applying quasi-DRM to analog devices isn’t going to prevent people from using the “analog hole” to strip copy-protection out of commercial content. I haven’t studied the specific copy-protection methods mandated in this legislation, but if it’s anything like past analog copy-protection schemes, (such as macrovision) any smart electrical engineering student will be able to build a device from standard electronics equipment to strip out the copy-protection encoding. Are we next going to start requiring electronics geeks to get government approval before they can order breadboards and DSPs?

More to the point, the legislation exempts audio equipment already on the market. That means that for the next two or three decades, at least, anyone who wants to circumvent this copy-protection scheme can simply buy used audio equipment.

Finally, many examples of the “analog hole” won’t be affected by this legislation at all. For example, people who smuggle a camcorder into a movie theater and record the movie aren’t going to be slowed down at all by this legislation. Same with people who stick a microphone next to their speakers and record music as they’re playing it. Yes, there will be some loss of quality, but once it’s been done it can be converted into digital format and reproduced an infinite number of times with no further loss of quality.

It’s important that opponents of this legislation not get sucked into treating the “analog hole” as an actual security flaw that can be “plugged.” The “analog hole” is a metaphor for the ease with which analog content can be copied and manipulated, regardless of what format it’s in. “Plugging” it isn’t a serious policy proposal; it’s a pipe dream for people who don’t understand how media technology works.

Update: Peter Suberman’s take on the analog hole is a must-read.

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New at Brainwash

by on December 19, 2005

In my latest Brainwash column, I take on the silly movement for “a la carte” cable programming mandates.

I focus pretty much exclusively on the economics of the situation. Unfortunately, I fear it won’t be terribly persuasive to a lot of the idea’s supporters, because at root, I think the a la carte issue appeals to some deeper emotional issues–people don’t like the idea that “their” cable dollars are going to pay for channels they don’t approve of. That argument doesn’t make a lot of sense, because there’s no reason to think that “family-friendly” programming would do better than the alternatives in an a la carte world, but when has an economics lesson ever changed anyone’s mind about a “moral” issue? As Adam has argued, the fundamental goal of a lot of a la carte activists is to crusade against smut, not to save consumers money, so the anti-smut activists are unlikely to care that “a la carte” is bad for consumers.

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The Economist Misses the Point on RIM

by on December 18, 2005 · 4 comments

Whoever wrote this disappointing article in The Economist doesn’t seem to have done his homework:

Distressed BlackBerry users argue that too many of the world’s workers rely on the device for the service to be shut down. But many of their jobs depend on the principle at stake in this case–that the courts should protect intellectual property because it rewards inventors by conferring a real title to an intangible asset. Business requires confidence that intellectual property will be respected and infringers brought to justice, regardless of whether the litigant is using the patent or not. Only with that security will firms patent and license their inventions, thus allowing others to use their ideas.

This argument rings incredibly hollow in light of the actual facts of this case. It’s undisputed that RIM invented its system independently of NTP, and NTP never brought it’s “inventions” to market in any significant way. In light of those facts, the last sentence gets the situation precisely backwards: the patent system is serving as an obstacle to the widespread use of the “invention” in question. In this case, at least, innovation would have been served just fine without any patent system at all.

Nowhere does the article mention what the patents actually cover, and there’s certainly no attempt to defend the patents on their merits. Yet considering such details is vital to understanding what’s at stake in this case. NTP’s patents don’t cover a genuine invention so much as an obvious combination of well-known previous inventions, namely email and wireless technology. It was all but inevitable that others would think of the same combination in short order. Indeed, it’s likely plenty of geeks had already thought about the concept but considered it too obvious to apply for a patent on it.

I think it’s hard for anyone who’s looked at the details to argue with a straight face that siding with patent trolls like NTP is vital to the health of the IT industry. Quite the opposite: spurious patents have become a major drag on high-tech industry, with companies like NTP leeching off the wealth created by genuine innovators like RIM.

The Economist thinks that the principle at stake in the RIM-NTP battle is whether patents should be protected, but that’s silly. Hardly anyone is advocating that the patent system be repealed in its entirety. Rather, NTP critics are seeking reforms that will ensure that only genuine inventions–those that are genuinely useful, novel, and nonobvious–receive legal protection. Some want the obviousness requirement tightened up. Others (such as me) argue that certain classes of patents, such as those for software and business methods, never meet these standards and so should be excluded from patentability. In any event, there’s not much dispute that patents for legitimate inventions should be upheld, and that’s certainly not the principle at stake in this case.

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Conservative Corruption

by on December 17, 2005 · 4 comments

Franklin Foer’s article on Abramoff’s corruption of right-wing intellectuals is must-read background on the Bandow scandal. I think it really highlights the fact that conservatives and libertarians need to do a better job of self-policing. We have a natural tendency not to look too closely at our erstwhile ideological allies. I think a thorough housekeeping is in order: we need to not simply ignore “think tanks” and “journalists” that are little more than shills for special interests, but we need to actively dissociate ourselves from them and make sure we’re not tainted by their ethically dubious behavior.

Foer points out that all roads lead to Grover Norquist. As my personal contribution to the housekeeping, allow me to point out one of the most transparent front groups around, Grover’s Property Rights Alliance. As I hint at here and discuss here, this “think tank” is, in fact, no more than an excuse for the music, movie, and pharmaceutical industries to associate their pet issues with the public backlash against the Kelo decision. Reputable think tanks should stay as far away from them as possible.

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