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.


Groping in the Dark

by on December 9, 2005

James DeLong: “I am not a programmer.”

He can say that again!

He’s got a whole post on the implications of multi-threading for open source software. All he really proves is that he doesn’t understand the software development process:

IMHO, much of the general discussion of FOSS, Microsoft, patents, and other software issues has been based on an unspoken premise that software is a mature industry, with its great leaps of innovation behind it, and that public policy should be devoted not to fostering innovation but to turning software into a cheap commodity and to preventing its purveyors from milking products for which they have already recovered the creation costs. If this premise is wrong, if the situation is one in which massive leaps of creativity are needed, along with the funding for such leaps, then a great many currently popular policy recommendations–such as “no software patents” or “FOSS preferences”–go out the window.

It’s hard to even know where to start. I don’t know of anyone on the copyleft side who bases their support for FOSS on this “unspoken premise.” (although it is, by definition, unspoken, so who knows?) Open source advocates argue that their development model is a better way of fostering innovation because it allows for the collaboration of thousands of the brightest people around the world. They believe they are the cutting edge of software development, at least in certain domains. For example, there’s a reason that Apache, MySQL, PHP, and Perl are among the most popular tools in web development.

The policy implications he cites are just non-sequiturs, and they show the same tendency to misrepresent (or maybe just fail to understand) his opponents. Programmers oppose software patents because they impede innovation by requiring software companies to hire lawyers in order to navigate the patent landmine. As is explained here, software is different from other kinds of inventions. Now, DeLong might not find that argument persuasive. But he should at least do us the courtesy of characterizing our arguments accurately. If he’s going to knock down straw men, he should make some effort to choose straw men that are at least tangentiallly related to his opponents’ actual argument.

The “FOSS preferences” argument is equally nonsensical. That debate is about things like office software and mail servers. These are not applications at the cutting edge of high-performance computing. Whatever the merits of using commercial software in such circumstances, certainly promoting the development of better multi-threading software isn’t one of them. If someone proposes FOSS preferences in the military or the National Weather Service, then we can talk, but as far as I know no one has.

These errors, I think, are a symptom of DeLong’s general cluelessness about how software actually works. Virtually every sentence he writes about technology is confused. (As just one example, some of the highest-performance commercial operating systems are “basically a spin-off of 1970s Unix.” So what?) I could make this already too-long post even longer by fisking every sentence of his post and correcting all the confusion found therein. But what would be the point? DeLong clearly feels his understanding of law and economics trump geeks’ understanding of how the policies he advocates affect their profession.

When geeks complain that software patents are impeding their work, he misrepresents and belittles their arguments without bothering to understand them. When they point out that open source development methods have compelling advantages for certain kinds of applications, he misrepresents and belittles their accomplishments without really understanding them. When we complain about the fact that DRM technologies lock open source software out of access to digital media, he pats us on the head and tells us that open source software isn’t that great anyway.

The problem is that most of the people making policy are just as clueless about technology as he is. So when he makes clueless but plausible-sounding arguments, most of them can’t tell the difference. And because he’s got a JD from Harvard and most geeks don’t, his arguments tend to carry more weight than ours do.

He says he “wants to hear more from the tech community.” That’s great. I just wish he’d listen.

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Learning from the Old-Timers

by on December 8, 2005 · 2 comments

I don’t have a lot to add to Jim’s insightful post about software piracy and the varying approaches to it. I agree with Techdirt that the methodology they’re using appears to be bogus–obviously, not everyone who’s currently pirating software would purchase it if they weren’t able to get a pirated copy. Their hand-waving (and, to my mind, unpersuasive) response to this argument is on page 14 of their report.

I also agree with Techdirt and Jim that it’s unfortunate that the BSA is funding shoddy research, because I agree with their conclusion: software piracy is bad for all of us because it reduces incentives for software development. (whether cracking down on software piracy is the best use of scarce police resources is a more complicated question) Bogus research like this paper make it much easier for the anti-IP radicals of the world to merely dismiss everything the pro-IP side has to say, which I think is a mistake.

But if you’ll forgive me for jumping on my soapbox, I’d like to point out what the software industry is not doing, for the most part, in the face of widespread piracy of its products: it’s not resorting to anything resembling digital rights management, at least for ordinary consumer software. When I buy a copy of Office or Photoshop, I typically have to enter a serial number, but that’s about it. It doesn’t try to limit the number of times I can install the software on my computer. It doesn’t install spyware-like monitoring programs deep in the bowels of my operating system.

Continue reading →

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Cynicism at Sony

by on December 7, 2005

Ed Felten has a great post on the cynical logic of digital rights management as it played out in the Sony spyware case. It’s worth reading in full, but I can’t do better than to quote his damning conclusion:

Running through this whole convoluted tale are two consistent threads. DRM is used as a weapon not against infringers but against market rivals. And when companies use DRM to undermine compatibility, law-abiding customers lose.

Go read it.

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A La Carte Fairy Tale

by on December 6, 2005 · 28 comments

I’m baffled by the increasing popularity of the a la carte cable idea. The people supporting it seem not to have given any serious thought to the economics of the situation.

Cable companies are for-profit operations. Each year, they get a certain amount of revenue, (call it R) incur a certain amount of cost, (call it C) and the difference between the two is their profit or loss (call it P). If they lose money consistently, they’ll eventually go out of business.

Now, let’s assume for the sake of argument that P is relatively fixed in the long run. In a competitive market, companies tend to price their products so that they can cover their cost and get a “normal” return on their capital invested. If P rises too high, that will cause more competitors to enter the market (for example, a new satellite network, or build-out of fiber) driving prices back down to the normal level.

Now, what does a la carte cable do? To hear the rhetoric of its supporters, it will allow consumers to save money by only “paying for” the cable channels they use. The hip 20-something will get MTV but not Nickelodean, while the suburban couple with children will make the opposite choice. Since each is saving money by not being “forced” to purchase channels they don’t want, each will see their cable bills drop. In other words, a la carte cable, by the logic of its supporters, will cause R to drop. Cable companies will take in less revenue.

On the other hand, C won’t drop at all. In fact, it’s more likely to go up. The same infrastructure will need to be maintained, and some companies will need to install new hardware to support the a la carte functionality. Customer service costs, too, will probably rise as the ordering process will take longer. In short, the cable companies’ job isn’t made easier in any way by a la carte, so there’s no reason to expect their costs will go down.

But what about subscription fees? Won’t cable companies save money because they aren’t “buying” as many TV channels? Here, too, the savings are illusory. Cable channels are in an even more competitive market than cable TV services, so they don’t have a lot of extra profits from which to cover lost revenues. So if the number of subscribers goes down, they will be forced to raise their subscription rates to compensate. Even worse, because people are less likely to watch as much TV with a la carte, advertising revenues are likely to fall, which means even more will need to be made up through subscriptions.

So we’re left with the conclusion that R will go down significantly while C will stay the same or go up slightly. That’s a fairy tale. Cable companies do not have a giant pot of money at corporate headquarters with which to make up the losses imposed on them by a la carte cable. If forced to adopt a la carte, what they’ll do is simple: they’ll set the per-channel rates to generate the about same revenue as their previous pricing model. Instead of paying $60/month for 60 channels, you’ll pay, say, $10/month for each of your favorite 6 channels. The average consumer’s bill won’t change very much. The only difference is that he’ll be getting a lot fewer channels for his money.

The fundamental issue is that cable channels, like all intellectual property, is non-rivalrous. Once the cable company has set up the necessary infrastructure to deliver 100 channels, delivering 1 channel to the consumer is exactly as expensive as delivering 100. For that reason, it makes sense that every consumer would get every TV channel. Don’t watch MTV if you don’t want to, but it’s not costing you or society anything extra to have it available on your TV.

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Hackery

by on December 1, 2005 · 4 comments

As an employee of a right-of-center think tank, I’ve had my share of accusations thrown at me that I’m in the pay of corporate America, so I don’t say things like this lightly, but after reading the recently-founded Property Rights Alliance’s defense of the DMCA, I have to say: the RIAA and MPAA should ask for their money back. A few of the most obvious and embarrassing errors:

However, “fair use,” the term often identified with the right to use certain copyrighted intellectual property without permission from or payment to the patent holder, is deceptive rhetoric that masks the real effects of this term. Fair use is inherently perverse to patent holders, intellectual property corporations, and most importantly, to the American consumer.

Now, I’m not a lawyer, but I’m pretty sure there’s no such thing as a fair use doctrine in patent law. And in any event, HR 1201 doesn’t make any changes to patent law. It’s hard to see how you can even begin to have an intelligent discussion of the merits of Boucher’s legislation if you don’t even know the difference between a patent and a copyright. This was clearly written by someone who doesn’t have the first clue what he’s talking about. It continues in the same vein:

Fair use provisions stated in [HR 1201] allow for the manufacturing and dissemination of hacking devices that circumvent copyright protections and infringe on patents, so long as these products are “capable of substantial non-infringing uses.”

HR 1201 allows you to infringe patents? That’s certainly news to me. I suspect it’s news to Rep. Boucher as well. And strangely, the text of the bill does not include the word “patent.”

Then we have this gem:

Providing an exemption for any device that has non-infringement purposes effectively destroys all protections of copyrighted material.

I bet Justices Stevens and O’Connor will be surprised to learn that they abolished copyright law when they established precisely that standard in 1984. Who knew that America had no effective copyright protections until Congress enacted them in 1998?

I could go on, but you get the point. I vigorously support the right of corporate America to hire people to promote their point of view in the legislative arena. But for their own good, they really ought to choose hired guns who know what they’re talking about.

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Solveig Singleton is Making Sense

by on November 30, 2005 · 18 comments

Occasional TLF co-blogger Solveig Singleton has some very sensible comments about the pending lawsuits against Sony BMG. I largely agree with her that the actual damages of Sony’s actions are pretty small, and that these class action lawsuits are more likely to enrich lawyers than compensate consumers. I still think the lawsuits should go forward, however, especially given that Sony has yet to pull its other spyware, MediaMax, from the shelves, despite well-documented problems.

The part of her argument that I found most interesting was this paragraph:

It isn’t the technical characteristics of something alone that determine its legal treatment (whether or not we should think of it as an “attack”), it is partly the intent of the actors. Set aside the intent issue for a second and look at the tech. Is it really always clear what is a “pure” hacker tool and what is not? Isn’t it likely that in future programmers might well continue to experiment with “hacker tools” to see if they can use principles in those tools for a useful purpose? Isn’t the argument that there is such a thing as a purely useless and bad tech usually made by advocates of tech bans? Are we saying that all software always has to be easily removable and detectable? By everyone? What about security software or content filters used by parents or schools or employers? Suppose experts could find and remove it but not beginners? Suppose a DRM system was hard to find or hard to remove, but didn’t create a security vulnerability to outsiders? Or suppose it did, but was easy to find and remove? There are a million possible permutations of technology here–hard to imagine the legal system coming up with a top-down rule that makes sense for all of them, especially at this early stage of the game. Markets adapting after the fact are much more flexible.

I wholeheartedly agree. And I’m curious how Ms. Singleton would apply this reasoning to the DMCA. After all, the DMCA is a “tech ban” on a class of devices, namely “circumvention devices,” (which in practice means any devices that interoperate with DRM’ed devices without the permission of the DRM creator). It’s quite true that some “hacker tools” might be useful in software like parental controls. It’s equally true that some “circumvention tools” have legitimate uses as well. For example, as long as Hollywood refuses to create a DVD player for the Linux operating system, any software to play DVDs on Linux is by definition a “circumvention device.” Likewise, any utility to convert songs from the iTunes Music Store format directly to the Windows Media format (so they can be played on WM-based MP3 players from Dell, or Sony) is a “circumvention device.” I could give lots of other examples.

In short, the line between legitimate software and piracy tools isn’t clear-cut, and, to paraphrase Ms. Singleton, it’s hard to imagine Congress coming up with a top-down rule that makes sense for all of them. Which is why it was stupid for Congress to legislate such a rule in 1998. Markets adapting after the facts would, as she says, have been much more flexible.

So is there some distinction I’m missing? Or is Ms. Singleton a closet supporter of the DMCRA, which would repeal the “top down rule” Congress imposed on this market in 1998 and allow market actors to experiment with the potentially beneficial uses of circumvention technology?

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Property is Property

by on November 29, 2005

The bad news about Sony spyware keeps pouring in. We’ve already seen how the XCP software uses deceptive techniques to hide its presence from the user. Now we learn that Sony’s other DRM scheme, MediaMax installs itself on your system even if you click “decline” on the EULA that pops up on your screen.

This is trespass, plain and simple. No software should ever install itself on a user’s computer without some notification to the user and opportunity to decline. That’s doubly true for drivers, because if they have bugs, they can render your whole system unstable and even introduce security vulnerabilities.

I’ve been a little shocked to see pro-DRM libertarians shrug their shoulders at the recent revelations about Sony’s behavior. (and no, Sony hasn’t been “bending over backwards” to fix the problems) We libertarians believe that property rights are fundamental rights that everyone has a duty to respect. Even big corporations. We don’t think that trespass is OK as long as it doesn’t do too much damage.

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Shameless self-promotion

by on November 28, 2005 · 4 comments

Saturday’s Wall Street Journal has an excellent editorial by Jason Riley on the controversy over peer-to-peer file sharing (like everything at the Journal it’s behind a paywall):

The industry has every right to continue this behavior; downloading the new Harry Potter movie or Black Eyed Peas CD tracks without paying for them should satisfy any definition of intellectual-property theft. The more interesting question is whether litigation is the best long-term strategy for combating digital piracy.

He closes the piece with a couple of quotes by yours truly:

The lesson music and movie lobbyists take from their Grokster victory is to stay the course. But Tim Lee, a technology and intellectual-property expert at the Show Me Institute in St. Louis, says that suing tech companies and music fans ultimately is a fool’s errand. “I don’t think they [the entertainment industry executives] fully grasp the size of the challenge they face,” he says. “It will be an arms race. P2P networks will improve. The recording industry will find a new way to catch people, and P2P networks will find better ways to avoid getting caught.” The fundamental problem, says Mr. Lee, is that the Internet itself is a peer-to-peer network. If two willing people want to exchange files, you’re never going to be able to limit their ability to do so in a nation of 290 million people. Besides, you wouldn’t have time to sue them all even if you could catch them. The copyright laws we live by today were written to go after commercial piracy. They are based on the idea that you can use control of the ability to make copies as a basis on which to remunerate content providers. No one envisioned a time when we would all be in possession of computers that can make copies as freely and easily as we now can. Moreover, the copyright system is based on moral precepts that most people today accept. But will future generations raised with P2P technologies see piracy differently? “If I were a recording industry executive,” says Mr. Lee, “I would be looking very hard at business models that embrace P2P technology, not looking to lawyers to thwart it.”

I should mention that I’m nowhere close to having a viable alternative business plan to offer. And in the short run, I think the lawsuits might actually be an effective tactic, as it probably does have some deterrent effect. But it’s not a good long-term strategy.

One place to start, though, would be to seriously re-think their approach to copy protection. I’ve argued before that DRM technologies hamstring their paying customers while doing little or nothing to deter piracy. That’s certainly won’t stop piracy in its tracks, but it’ll at least give legitimate customers one fewer excuse to become pirates. I pitched this idea to Mr. Riley in our interview but it seems he wasn’t sufficiently impressed to include it.

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Copyright Placebo

by on November 23, 2005 · 2 comments

One of the most bizarre things about the DMCA debate is the way its advocates hyperventilate about the horrors that would ensue if anyone were ever allowed to circumvent DRM technologies, while conveniently ignoring the fact that many existing DRM technologies are as airtight as Swiss cheese. Ed Felten has a partial list of the ways that Sony’s MediaMax DRM scheme (for those who haven’t been following this closely, Sony uses two different DRM scheme, and this is the less spyware-like one) can be circumvented. And not a single one of these methods require any sophisticated “hacker” techniques–they involve such devious techniques as holding down the shift key while inserting the CD.

DRM advocates might counter that DRM acts as “guard rails” to encourage lawful users to obey the law, rather than locking up content to make piracy impossible. But if that’s true, why bring the law into it in the first place? MediaMax would be every bit as effective if the DMCA were repealed: casual users would still be deterred, while determined pirates are barely slowed down by the MediaMax DRM scheme.

As I’ve said before, the labels are in denial. Software like MediaMax isn’t an anti-piracy tool, it’s a security blanket for music industry executives. It won’t actually prevent people from infringing their copyrights, but it allows the record companies to feel like they’re “doing something” about the avalanche that’s overwhelming their industry.

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TiVo vs. Hollywood

by on November 23, 2005 · 2 comments

Well that was fast. As I predicted on Monday, the entertainment industry isn’t happy about TiVo’s iPod conversion service:

TiVo appears to be acting unilaterally, disregarding established rights of content owners to participate in decisions regarding the distribution and exploitation of their content,” an NBC Universal spokesman said. “This unilateral action creates the risk of legal conflict instead of contributing to the constructive exploitation of digital technology that can rapidly provide new and exciting experiences for the consumer.

One of the fascinating things about this quote is that it flies directly in the face of Supreme Court precedent. The Sony Betamax decision, probably the most famous decision in the history of high-tech IP law, was specifically about whether consumers had the right to “unilaterally” time-shift TV content. Hollywood argued they didn’t. Hollywood lost. Presumably, the legal analysis would be the same for the “space shifting” and “format shifting” at issue here.

However, I think TiVo would be on firmer legal ground if it offered the service for free. It’s easy to imagine the courts ruling that charging for the service makes the use commercial, and therefore more difficult to justify as a fair use. As I argued on Monday, what TiVo is profiting from isn’t so much a software service, as such, but an artificial monopoly on DRM circumvention created by the DMCA. That might affect the fair use analysis, because the decision hinged on the idea that a VCR was a “staple article of commerce.” The courts might conclude that software whose only purpose is to circumvent TiVo’s DRm scheme is not a staple article of commerce.

Ars Technica elaborates on the role of DRM technology in the dispute:

There another piece to this puzzle, too: the lack of universal DRM. The studios are unhappy because these files will not have any rights management attached to them. While TiVo is using unique watermarks that in theory would allow for them to identify the original source of content shared online, it doesn’t prevent people from making copies. TiVo’s native format used with other media players does have DRM, hence the lack of complaints. But with regards to Sony and Apple, TiVo can’t make them share their DRM technology, which means that TiVo has no way of offering protected content on the iPod or the PSP.

Apple has no reason to support other companies’ DRM, because they want to create as much incentive as possible for customers to buy video services from their own online store and play them on their iPods. As long as they are the market leader in both categories, the two product lines re-inforce each other.

I rather doubt that Congress intended to create platform monopolies for technology firms when it enacted the DMCA, but that’s precisely what the law is doing. As we’re seeing from TiVo’s dispute with Hollywood, TiVo’s DRM scheme doesn’t do much to benefit copyright holders. What it does is allow TiVo to control which devices are compatible with its own, and to charge consumers for the privilege of using their legally-recorded content as they see fit.

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